House of Commons

Thursday 16th December 2010 Commons Chamber

Thursday 16 December 2010

The House met at half-past Ten o’clock

Prayers

Thursday 16th December 2010 Commons Chamber

[Mr Speaker in the Chair]

BUSINESS BEFORE QUESTIONS

New Writ

Ordered,

That the Speaker do issue his Warrant to the Clerk of the Crown to make out a new Writ for the electing of a Member to serve in this present Parliament for the County constituency of Oldham East and Saddleworth in the room of Philip James Woolas Esq., whose election on 6 May 2010 has been declared to be void.—(Mr Alistair Carmichael.)

Oral Answers to Questions

Thursday 16th December 2010 Commons Chamber

The Secretary of State was asked—

[Fiona Bruce (Congleton) (Con)]

1. What assessment he has made of the potential contribution of bioenergy to the Government’s objectives for energy security and climate change.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

The Government believe that sustainable bioenergy, such as woody biomass, bioliquids and many other bioenergy forms, could contribute up to half the UK’s target of 15% renewable energy by 2020. That would deliver a greenhouse gas saving of 20 million tonnes of carbon dioxide equivalent by 2020. It would also improve the UK’s security of supply, as bioenergy is one of the few renewables that can generate energy on demand.

[Fiona Bruce]

Convert2Green, a biodiesel producer in my constituency, produces sustainable transport fuels from waste cooking oil. Those fuels currently benefit from a 20p fuel duty differential which is due to be abolished in April 2012, just three months after the renewable transport fuels obligation comes into effect. Will the Secretary of State consider the merits of an extension of the differential until the RTFO has had a chance to prove itself as a suitable support mechanism for the sustainable biodiesel industry?

[Chris Huhne]

The Government are keen to secure a more rapid development of all bioenergies, and the use of chip fat or any other cooking oil is certainly one option. I am afraid that the specific measure that my hon. Friend wishes me to warm to falls within the responsibility of the Chancellor of the Exchequer rather than that of my Department, but I am sure that the Chancellor is as mindful as I am of our commitment to becoming the greenest Government ever.

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

2. What recent representations he has received on Government support for deep geothermal energy production in the UK.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

My Department engages regularly with the deep geothermal sector, and believes that that exciting renewable energy source has considerable unexploited potential. I shall be meeting the key players in the sector in the new year.

[Sarah Newton]

I thank the Minister for his helpful response. Deep geothermal power could generate 10% of the United Kingdom’s energy needs. It is a tried and tested technology which provides energy in countries throughout Europe. The last Government did not support that type of power generation, and rejected calls for the introduction of a licensing structure similar to those of other European countries. What are the Government doing to provide support for this important energy sector?

[Gregory Barker]

My hon. Friend has fought a vigorous campaign on behalf of this exciting new form of energy. I am delighted to say that, at my direction, officials are actively examining the practical and legal aspects of an exploration licensing scheme covering geothermal heat and power projects, which will be vital to unlocking the true potential of this renewable energy source.

[Hugh Bayley (York Central) (Lab)]

3. When he last met representatives of (a) Ofgem and (b) energy suppliers to discuss consumer energy prices.

[Alex Cunningham (Stockton North) (Lab)]

11. What recent discussions he has had with gas and electricity suppliers on trends in energy supply costs to domestic consumers; and if he will make a statement.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

With permission, Mr Speaker, I shall answer Questions 11 and 12 with Question 3.

Department of Energy and Climate Change Ministers and officials meet both Ofgem representatives and suppliers regularly to discuss market issues. Ofgem monitors the market closely, and reports quarterly on retail prices. Its latest report shows large increases in estimated supplier margins—that is, profits—for the year ahead, which are mainly due to recent price increases. I am disappointed by that development, and I welcome the announcement of Ofgem’s review of the retail market. We are also taking other measures to encourage new market entrants to provide new competition.

[Mr Speaker]

I merely point out to the House that the grouping is with Question 11 only. Question 12 has been withdrawn.

[Hugh Bayley]

We are told that there is a global glut of gas. Will the Secretary of State explain why energy suppliers are increasing consumer prices by two, three and, in some cases, four times the rate of inflation? What are the Government doing to protect the old and vulnerable during what seems likely to be one of the coldest winters on record?

[Chris Huhne]

I am grateful to the hon. Gentleman for his question. The first and most important point is that Ofgem, as the regulator, ought to have considerable influence over the margin above the wholesale price, and that is the subject of the inquiry launched by Ofgem. If I remember the figures correctly, that margin has risen from about £65 or £70 on a typical bill to about £90, and that is what triggered Ofgem’s interest in the matter and the review. I have encouraged Ofgem to be firm with all the suppliers as to whether such margins are necessary to bring forward the investment we require in the sector, and we await with interest Ofgem’s review.

The hon. Gentleman also asked about the vulnerable. He may have seen that we have announced support through the warm home discount scheme, which will run both for the next year and the year after—and subsequently, I hope. It will provide discounts for the vulnerable. We are also continuing to make sure that energy efficiency measures are available, such as by extending the carbon emissions reduction target, so we can help the vulnerable get through what I know can be a very difficult period, particularly if there is a hard winter.

[Mr Speaker]

May I remind the House of my keenness to get down the Order Paper and accommodate as many Back-Bench Members as possible?

[Alex Cunningham]

According to the House of Commons Library, between 1996 and 2004 the number of households in fuel poverty fell from 6.5 million to less than 2 million, but now, in the face of massive increases in energy prices, it has nearly doubled again to more than 4 million. Does the Secretary of State agree that energy companies must cut prices now and reflect the reality when wholesale prices go down, and does he also agree that those companies should play a greater part in tackling fuel poverty?

[Chris Huhne]

This is a real problem, in part because fuel poverty reduction is an objective for which the Government are not solely in control. Clearly, as energy prices bounce around, people get brought into or leave fuel poverty. As part of the fuel poverty review, I want us to set clearly obtainable objectives to deal with the root causes of fuel poverty. One key issue is that those on the lowest incomes often have enormously variable energy bills—varying, in fact, by a factor of six. If they are in modern social housing they can have low energy bills, but they can have very high bills if they are in private rentals. We must deal with energy efficiency issues.

[Tony Baldry (Banbury) (Con)]

On energy prices, how will my right hon. Friend ensure that the carbon floor price encourages investors to put money into green energy and does not simply become a mechanism that substantially increases energy bills?

[Chris Huhne]

That is one element of the proposals we will be bringing forward later in the consultation document. Indeed, we will make a statement on it. The Treasury will consult on the carbon tax element today. It is one of four key instruments that we will suggest should play a part in reforming the electricity market, taken together with our price support measures and our very keen enthusiasm to encourage market entrants. As competition is the best guarantee to consumers, I believe we can ensure that we have the best possible deal for electricity and gas supply in future.

[Mark Pritchard (The Wrekin) (Con)]

May I congratulate my right hon. Friend on his success in Cancun? As energy and utility companies are not passing on falls in energy wholesale prices to consumers, is it not time we had a review of whether Ofgem has the powers to tackle those companies that seem to care very little about the poor and vulnerable, as the hon. Member for York Central (Hugh Bayley) rightly pointed out?

[Chris Huhne]

I am grateful to my hon. Friend for his kind remarks. There was an outstanding team effort at Cancun. The Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), who is responsible for climate change, and the rest of the team played a tremendous part in making sure the outcome was much more successful than we might have hoped even as recently as early in that week.

My hon. Friend the Member for The Wrekin (Mark Pritchard) is absolutely right to make the point he made. In my discussions with Ofgem, I have repeatedly raised the fact that we want it to be firm with energy suppliers and ensure our consumers are not being taken for a ride. Both the chairman, Lord Mogg, and the chief executive are very aware of that, and they are completely in line with our objective of making sure the energy suppliers are providing the best possible deal. The review is looking at precisely this issue. Ofgem does have substantial powers over suppliers and, of course, we can also trigger a competition review.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Labour Members are also pleased that Ofgem is looking into energy pricing. The Government seem to be in a funny place. They appear to accept that energy prices will increase and that that is a price the British public will have to pay, to a degree, for a greener future, but we know that prices rise for many reasons, as the Secretary of State acknowledged. Given the Government’s proposals to increase VAT from January, freeze pay, cut funding to public services and oversee huge job losses, increased energy bills will add to hardship. At the same time, the Government are abolishing Consumer Focus, which battles on behalf of consumers. We have heard lots today about the theory, but consumers are facing the challenges now. Even if energy market reform is successful, can the Secretary of State tell the House what plans he has to improve things for consumers now, as we approach a harsh winter and the measures that I mentioned?

[Chris Huhne]

The hon. Lady knows that the Ofgem review is a very real review into the margins being charged by suppliers and that Ofgem has considerable powers. If its review finds a real concern about the lack of competition in the sector—I believe that has been a widespread concern—we will move to ensure that behaviour is, in fact, pro-competitive in this area. One of the key objectives of Government policy is to bring more competition into this field, as that is the ultimate guarantee that consumers will get the best possible deal.

[Pat Glass (North West Durham) (Lab)]

4. When he expects to publish the results of his consultation on smart metering.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

There has been an excellent response to the consultation, with more than 300 replies having been received from a wide range of stakeholders, which have broadly welcomed the key proposals in the prospectus. The Government expect to respond formally to the consultation early in the new year.

[Pat Glass]

The Minister will be aware that smart meters, in themselves, are simply pieces of kit; on their own, they will not change behaviour or reduce energy consumption. What are the Government and the energy companies doing to educate consumers, because that is how we will reduce energy consumption?

[Charles Hendry]

The hon. Lady is right that the consumer experience is absolutely at the heart of the success of the smart meter roll-out. We are working very closely with Citizens Advice, Consumer Focus and other groups that represent consumers, including those representing older consumers, because the experience of consumers and making sure that they use smart meters most effectively to their advantage is at the core of what we are trying to achieve.

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

Crucial to obtaining the benefits of smart meters is ensuring that they are for everyone in this country, no matter where they live—no matter how remote and rural their location—and no matter what the construction of their house, even if it be with walls so thick that most signals will not get through. We need to be mindful that none of the early roll-outs of smart metering lock in a technology that will not be universal. Will the Minister ensure that his response to the consultation gives us a truly universal metering system?

[Charles Hendry]

I congratulate my hon. Friend on his tenacity on this issue and the way in which he continually pushes us to make sure that we keep it very much in our mind. We are involving Ofcom directly in our discussions and our approach to developing this area to ensure that exactly those issues are very much in our mind.

[Kevin Brennan (Cardiff West) (Lab)]

But what about smart meters that are being installed now which might be incompatible with the meters that will be installed in future? I thought that the Government were abolishing Consumer Focus, not working with it, as the Minister said in his earlier answer. What will he do to protect consumers now from those future costs?

[Charles Hendry]

One of the major operators is installing smart meters as we speak. It is installing many thousands every week, so we have to ensure that the regime we put in place for the longer term takes account of those issues. The operator is, to some extent, doing this at its own risk, because if the meters are not compatible with the longer-term solution they will, in time, have to be removed. The hon. Gentleman is right to say that we need to ensure that in all these areas the consumer interest has to be right, because if we do not get that right, this is the sort of programme that could get stuck in its tracks.

[Damian Hinds (East Hampshire) (Con)]

5. What support his Department is providing for community energy schemes; and if he will make a statement.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

The coalition wants local communities to share the business rates generated from large-scale renewable energy projects and to benefit from financial incentives for smaller renewables. DECC has also recently launched the community energy online website to provide advice and support for both communities and local authorities.

[Damian Hinds]

My hon. Friend will be aware of the greening campaign, which started in Petersfield in my East Hampshire constituency and has now spread to 200 towns and villages. What can he do to help such bottom-up community-based organisations as they go about providing facilitation and practical support to local groups that are looking to develop community energy schemes?

[Gregory Barker]

The greening campaign in my hon. Friend’s constituency is an excellent initiative. As he knows, community engagement in the energy sector will be vital to our vision of the development of energy in the UK in the coming decades. We are helping communities to access the planning system more effectively through the Localism Bill and giving them more information and advice with the new community energy online website. The finance mechanisms that we are putting in place with feed-in tariffs and the renewable heat incentive will be a great help.

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

In response to my question in the last DECC questions, the Minister suggested that all was light and joy in the photovoltaic sector and with the feed-in tariffs. Within days, however, he had called the sector in for an urgent meeting. Speculation is rife that he will rush forward a review, and the headlines shout, “Clouds gather over solar park gold rush”. If there is a genuine problem, why does not the Minister stop denying it, stop passing the buck and get on and fix it? After all, that is what he is paid for.

[Gregory Barker]

The hon. Gentleman is absolutely right—we inherited a real mess from the last Government with ineffective legislation. Just as with the national debt, it falls to this coalition to clear it up. I took action—I did not dither—and I have called in the industry. We will put a stop to the gold rush that might have developed as a result of Labour’s lousy legislation. We will not allow large speculators in field solar to soak up available funds that are intended for community and household projects.

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

6. What discussions he has had with representatives of business organisations on the carbon reduction commitment energy efficiency scheme.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

9. What plans he has for the future of the carbon reduction commitment; and if he will make a statement.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

My right hon. Friend and I regularly meet businesses to discuss climate change and energy issues. My officials are also discussing how to simplify the policy landscape with a wide range of CRC and climate change agreement participants. This will inform the proposals the coalition will bring forward next year.

[Mr Watts]

I thank the Minister for his response. On energy efficiency, will he assure me that the Government will include double glazing in their green deal? Will he meet me and Pilkington glass, from St Helens, to discuss the contribution that that company can make to energy conservation and the impact that VAT increases will have on future double glazing sales in the UK?

[Gregory Barker]

We want the green deal to be technology inclusive. Any technology or energy efficiency measure that can pass our golden rule of providing the savings needed will be considered very kindly. We want it to be inclusive and for it to drive innovation and technology.

[Bridget Phillipson]

What reassurance can the Minister give us that he will closely consider the Government’s position to ensure that the initiative works for businesses while also driving down emissions?

[Gregory Barker]

Does the hon. Lady mean the CRC?

[Bridget Phillipson]

indicated assent.

[Gregory Barker]

Absolutely. We had to take a tough decision on the CRC to end revenue recycling, as a direct result of the state of the public finances we inherited. We are talking closely with business and will be having further discussions in the new year to ensure that it remains an efficient measure of driving forward energy efficiency in businesses. We believe that there are billions to be saved in the private sector in that way.

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

This week, the Secretary of State was quoted as saying that he does not mind being seen as the Tesco of energy policy, with more for less—being greener for less. Tesco, however, is one of the organisations that will be stung by the changes to the CRC that have, in effect, made it a crude stealth tax for the Chancellor rather than an intelligent driver of energy efficiency. How did Ministers surrender their green credentials to the Treasury so easily and what does this stealth tax—described politely as a “bit of a bombshell” by a local government spokesman—mean for the public sector as well as for the private sector?

[Gregory Barker]

The hon. Gentleman is in denial about the appalling state of public finances that we inherited from the previous Government. Yes, the coalition is taking action to reduce the deficit—absolutely. That is why we are not the basket case that we would have been had the Labour party remained in Government. The CRC will help to drive energy efficiency. We know that about £1.6 billion is still paid by large companies in the UK as a result of energy inefficiency and we hope that this measure, which will become more effective, will help to drive greater efficiency in UK plc.

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

7. If he will make it his policy to provide long-term revenue support for renewables obligation certificates for marine renewable technology to ensure that developers and manufacturers locate themselves in the UK.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

We are committed to the establishment of a system of feed-in tariffs in electricity as well as to the maintenance of banded renewables obligation certificates. We have already brought forward the scheduled review of the renewable obligation by a year to give investors greater clarity and confidence. As part of the electricity market reforms, we will set out plans for support for marine and other renewables for the longer term.

[Andrew Percy]

The Minister will be aware that I represent not only the best constituency but one of the most tidal, with several major rivers including the Ayr, the Ouse, the Trent and parts of the Humber. Does he agree that the Humber area generally has huge potential in terms of marine and tidal energy, and will he commit to supporting the pan-Humber vision of making the Humber a centre for renewable energy?

[Charles Hendry]

My hon. Friend raises an issue that applies to many parts of this country. The United Kingdom has some of the highest tidal reaches of anywhere in the world and it is our determination that we should lead in marine technologies rather than follow others. Undoubtedly, the Humber has a significant contribution to make in that respect. Many areas could contribute to that process, which is why we are putting in place a marine energy programme with a view to leading to marine energy parks where those technologies can be taken forward.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Is the Minister aware that about two months ago, the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), met company and trade representatives in my constituency to discuss support for the renewable heat initiative, which I know the Secretary of State has also personally supported? We were expecting a statement last month, this month and now, I hope, in January. Will the Minister look into that and bring forward the statement? A lot of new work in Coventry and throughout the private sector depends on it.

[Charles Hendry]

I am not quite sure how renewable heat ties into marine and tidal technologies, Mr Speaker, unless it is very hot water indeed. We are working to bring that to a conclusion; we understand the pressure across the House for that clarity and we will provide it in the very near future.

[Andrew George (St Ives) (LD)]

Now that the wave hub plug is in place off the north coast of my constituency—a very exciting project that scales up for the first time wave energy—what will the Minister do to ensure that it is a great success? In Scotland, ROCs provide a far better return for projects. Will he work with me to ensure that this project is a great success and adds to renewable energy?

[Charles Hendry]

The project in Cornwall is one of two beacon facilities in the country, the other being in Orkney. That is exactly the approach that we want to take forward for marine energy parks, bringing together the relevant technological, academic and engineering skills that can encourage companies to stay in this country. We have been concerned that some companies have looked overseas to take their technologies forward and we have to put in place the right mechanisms to keep them here in the United Kingdom. Cornwall has a fantastic opportunity in that regard.

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

8. What recent discussions he has had with the Secretary of State for Environment, Food and Rural Affairs on mandatory carbon reporting for private companies.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I met my noble Friend the Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs in October to discuss this issue ahead of the coalition’s bringing forward further proposals in the new year.

[Gregg McClymont]

I thank the Minister for his answer, but legislation is already in place to oblige companies to report their carbon emissions. Will the Government use those powers to fight climate change—yes or no?

[Gregory Barker]

We will announce a robust way forward in the new year that will require a clear route map on how companies are required to report their carbon emissions, as they are required to do by the Climate Change Act 2008.

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

Will my hon. Friend ensure that, through the carbon reporting mechanism, the good work that water companies and others are doing by creating carbon sinks in peat bogs and water storage upstream is more widely known so that we can support it? One example of that is the Pickering pilot project in North Yorkshire, which also brings flood alleviation benefits.

[Gregory Barker]

As Chairman of the Environment, Food and Rural Affairs Committee, my hon. Friend is well known as an expert on the matter. She makes some very good points and I shall ensure that they are taken into account when we formulate policy on the way forward.

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

10. What estimate he has made of the change in the number of homes in receipt of assistance with heating and insulation improvements consequent on the proposed reduction in expenditure on the Warm Front scheme.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

The Warm Front scheme is expected to assist approximately 170,000 households in 2010-11. While we transition to the more ambitious green deal framework, DECC will fund a more targeted Warm Front scheme helping approximately 57,000 households in 2011-12 and a further 50,000 households in 2012-13.

[Diana Johnson]

Warm Front has helped more than 2,000 households in my constituency of Hull North, with energy efficiency measures that have reduced fuel bills and started to fight fuel poverty, but many more households still need help from Warm Front. What guarantee can the Minister give me and my constituents that the help, especially now that we have such severe winter weather, will be available over the next couple of years?

[Gregory Barker]

Over the next couple of years, we will be transitioning to the green deal. The fact of the matter is that Warm Front per se was not up to the scale of the challenge of renewing and refurbishing our homes in Britain. If we were to rely on Warm Front, at that rate of progress it would take 82 years to refurbish the 14 million homes we need to refurbish. We are going for a much more ambitious scheme—the green deal. It will be a real game changer and we shall introduce measures in legislation in the other place before Christmas.

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

The last time I questioned the Minister, he said that we really have to attack fuel poverty. National Energy Action recently forecast that fuel poverty is set to rise to 5.5 million households next year, the highest level for 15 years. That is one in five homes, yet yesterday we learned that this year’s money for Warm Front—a key weapon in tackling fuel poverty—has run out. This morning, we have heard about reviews, but with the bitterly cold weather, rising energy bills and the warm homes discount not due to kick in until next year, what are the Government actually doing now to attack fuel poverty?

[Gregory Barker]

The hon. Lady raises a very important point, but as I just said to her hon. Friend the Member for Kingston upon Hull North (Diana Johnson), Warm Front—the key weapon under the previous Government—signally failed. Under the previous Government, we saw fuel poverty more than double; it rose from 2.5 million in 2005 to 4.5 million now. Warm Front signally failed; we need to be far more ambitious. The green deal will be the game changer, and it will bring in billions of pounds. As for now, we inherited a Warm Front waiting time for installations of between three and six months. Anyone requiring heating to cope with the cold weather now cannot rely on Warm Front, and I am afraid they never have been able to.

[Andrea Leadsom (South Northamptonshire) (Con)]

13. What assessment he has made of the efficiency and effect on quality of life of onshore wind farms.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The electricity output from a wind farm is a key factor in determining if and where it will be built. The assessment of a planning application includes, among other things, an analysis of visual, landscape and noise impacts. We are constantly looking at ways to ensure that the analysis remains robust and protects the quality of life of people living close to wind turbines. We have already taken action to ensure that the issue of noise is addressed in a standard way across the country.

[Andrea Leadsom]

I thank my hon. Friend for that answer. Can he tell me what assessment he has made of the Danish state energy company’s recent decision to cease building further onshore wind farms, and a similar decision in France in the summer to restrict onshore wind farms, bearing in mind their impact on local communities versus their efficacy? Can he reassure me that in future we will take into account the impact on local communities, and that we will not force them to have wind farms where they do not fit the environment?

[Charles Hendry]

My hon. Friend will be aware that the United Kingdom is third from bottom in Europe on the electricity it gets from renewable sources, so the situation here is in no way comparable to that in most other European countries. We are absolutely committed to giving local communities greater say on the issues—that is at the heart of the Localism Bill. We are also determined that the host communities should realise real benefits.

[Miss Anne Begg (Aberdeen South) (Lab)]

Perhaps a solution to the question the hon. Member for South Northamptonshire (Andrea Leadsom) has just raised is to put the wind farm offshore. Will the Minister join me in congratulating a project in Aberdeen that yesterday secured €40 million of EU funding to build a centre just off the coast of Aberdeen that will develop technologies that can be used to improve the offshore wind sector?

[Charles Hendry]

I am delighted to join the hon. Lady in congratulating the company on that development. It is one of the areas of the country where there is the greatest potential, because the skills are already there in the engineering side of the oil and gas sector and the people who work in the area. We hope to see significant gains for the north-east of Scotland from developing those technologies.

[Nic Dakin (Scunthorpe) (Lab)]

15. What targets he has set for the provision of energy from onshore wind sources in (a) 2011 and (b) 2020.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The Government have not set a specific target for onshore wind energy generation. However, our lead scenario as set out in the national renewable energy action plan indicates that onshore wind capacity could be 15 GW by 2020. We are absolutely committed to deploying onshore wind in a way that takes into account the views of local communities and brings benefits to local people.

[Nic Dakin]

I thank the Minister for his answer. I know he is very committed to onshore wind energy generation and I welcome his passion. When does he expect major announcements to be made by companies as part of the round 3 onshore wind programme?

[Charles Hendry]

I thank the hon. Gentleman for the assiduity with which he advocates the interests of the Humber region and the role it can play in that regard. I was pleased to meet him and some of my hon. Friends and people representing the South Humber gateway last week to enable me to understand the case they are putting forward in that respect. We are delighted that such companies as Siemens, GE and Mitsubishi have committed themselves to major multi-million pound investments in the offshore wind sector, and we understand that some of those announcements are due to be forthcoming early in the new year.

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

16. What assessment he has made of the effects on the electricity grid of the weather of November and December 2010.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

Demand for electricity has been met in full by the normal functioning of the market during this cold period, when electricity demand has been approximately 5% to 10% higher than the seasonal norm. As is usual at this time of year, there have been a few localised disruptions. However, network operators have worked hard to ensure that those consumers affected were restored as soon as possible. We will continue to work with industry to monitor the situation over the rest of the winter.

[Andrew Bridgen]

I thank the Minister for that reassuring answer, but could he outline to the House what steps he and his Department are taking to ensure that there is sufficient capacity and supply in the system to cope with the predicted energy gap?

[Charles Hendry]

We are not anticipating an energy gap over this winter in electricity generation. I was at National Grid last week, and we are in daily contact. We are looking at the margins of supply, which remain robust. We are looking at the import capacity for gas. We are looking at the role that all those technologies can play. During these very cold periods, all the energy companies understand the need to keep their plant ready to generate, to ensure that demand can be met by supply.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

In order to maintain capacity margin over the longer period, what investigation is the Minister making of electricity storage as an additional way of ensuring that margins are maintained, and that supply that comes on stream at inconvenient hours is captured and restored at convenient hours?

[Charles Hendry]

We are looking at a whole range of different technologies. We are looking at the role of battery storage, hydrogen storage and pumped water storage which is already making an important contribution at Electric Mountain in Dinorwig in north Wales. We are also looking at the role that interconnectors can play, using perhaps pumped storage in countries such as Norway, to enhance our energy security. This is a way of ensuring that renewable energy can be used in such a way that it is there when the demand is there, and it will greatly enhance our energy security in the process.

[Robert Halfon (Harlow) (Con)]

17. What recent estimate he has made of the number of homes in (a) Harlow constituency and (b) England which could receive assistance from the Government's proposed green deal.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

The green deal will create a completely new market mechanism for driving energy efficiency installations in buildings, incorporating an entirely new obligation on energy suppliers. All 22 million homes, and within that all 35,699 homes in my hon. Friend’s constituency of Harlow, could potentially benefit from the green deal.

[Robert Halfon]

I thank my right hon. Friend for his reply. More than 850 households in my constituency are thought to be suffering from fuel poverty, and fuel prices are rising now. Will the Minister explain what the Government are doing specifically to warm up Harlow homes this Christmas and in the years ahead?

[Chris Huhne]

As my hon. Friend knows, the discount scheme available to people is a voluntary scheme. We are bringing forward the warm home discount bonus for next year, a scheme that will be clearly underpinned by legislation. In the short run, we are putting pressure on Ofgem, as I have previously described in the House, and Ofgem is putting pressure on the suppliers, to ensure that there are not excessive margins in the industry. In the longer term, which is the key if we are to deal with fuel poverty, we have to deal with its root causes. We cannot go on applying sticking-plasters, in the form of discounts or short-term help. The only long-term solution, as we have seen from the failure of the strategy to deal with fuel poverty over the last few years, when it has risen substantially, is to deal with the root causes by improving energy efficiency in the homes of those affected.

[Paul Flynn (Newport West) (Lab)]

rose—

[Mr Speaker]

With reference to Harlow, England or both?

[Paul Flynn]

In order to inform myself of the effects of the green deal on Harlow, I researched a website this morning, which states:

“The nuclear industry’s key skill over the past half-century has not been generating electricity, but extracting lashings of taxpayers’ money.”

That was on the website of someone called Chris Huhne. Does this person have any connection with the Secretary of State? Has he sold his principles for a Red Box?

[Chris Huhne]

The hon. Gentleman should be very aware that the coalition Government are committed to no public subsidy for the nuclear industry for some very good reasons, one of which is in the quotation that he so gracefully supplies to the House.

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

18. What recent discussions he has had with energy companies on domestic oil pricing.

I declare an interest, as my home is heated by domestic oil.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

I declare an interest, as mine is as well. We are in regular contact with energy companies, including the trade associations that represent those who supply domestic oil. Heating oil is a seasonal product, and its prices vary over the course of the year. I have spoken to the Office of Fair Trading about the price of heating oil, as the enforcement of competition and consumer law is a matter for the OFT, and it assures me that it is keeping a very close eye on the situation and is keen to receive evidence from hon. Members about any market abuse that they experience.

[Dr Coffey]

I thank my hon. Friend for that answer. Several constituents have contacted me about the price of oil. Mr Gander, in particular, relies on oil for his heating, but his supply is running low. A month ago the price was 39p a litre; it is now 71p a litre, and as a consequence he has switched off his heating system. Will my hon. Friend take up that issue throughout the Government to ensure that people are not frozen out of their homes this winter?

[Charles Hendry]

My hon. Friend raises an extremely important issue, which is about both pricing and the time that it takes to secure deliveries. People calling today who reckon they will be short of oil over the coming weeks are being told that they will not receive a delivery for three or four weeks. We are monitoring that situation day by day and are extremely aware that, if there is further snow ahead of Christmas, it could become very serious indeed. I ask my hon. Friend to provide evidence on those price increases to the OFT, so that it can investigate them.

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

19. What steps he plans to take to encourage the establishment of community-led low-carbon energy projects.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

Communities are where big society meets big energy, and the coalition intends to drive new community-led, low-carbon energy projects with strong financial incentives and better information and guidance. We have already acted to allow local authorities to sell the energy that they generate.

[Julian Smith]

Speaking to representatives of the excellent Settle hydro scheme in my constituency, I was struck by the amount of red tape that they have had to deal with to get the project off the ground, and the legal action that they have had to deal with from environmental groups. Will my hon. Friend make it as easy as possible for community energy projects to get off the ground in the coming 12 months?

[Gregory Barker]

The Settle micro-hydro scheme is exactly the sort of scheme that we want to see more of and encourage, but my hon. Friend is absolutely right: we need to make it easier for communities to take the initiative. That is why we are making it easier to get through the planning system and providing more financial incentives; and we have also launched a website to give people the information they need.

[Christopher Pincher (Tamworth) (Con)]

20. What recent progress he has made on facilitating new nuclear power stations without public subsidies.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

The Government are committed to removing any unnecessary obstacles to investment in new nuclear, and we have made good progress. We are consulting on the revised draft energy national policy statements, including the nuclear NPS; I made a decision recently, on regulatory justification in respect of the AP1000 and EPR reactors, which was subsequently approved by both Houses, with an enormous majority in this House; we laid the Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order 2010, which was subsequently approved by both Houses and published last week; there have been consultations on funded decommissioning programme guidance, and an updated waste transfer pricing methodology for the disposal of higher activity wastes; and regulators are on track to complete their assessment of the reactors going through the generic design assessment process.

[Christopher Pincher]

I am grateful for that answer. Given some of the comments from investors, can the Secretary of State confirm whether there is an appetite in the City to invest in new nuclear and whether we have the domestic skills to decommission our Magnox plants and build a new generation of new nuclear? Will he also confirm whether the planning regime is fit for purpose, so that we can ensure we meet our target of 16 GW of nuclear generating capacity?

[Chris Huhne]

From my contacts around the City, I believe that there certainly is an appetite to invest not just in new nuclear plant, but right across the range of low-carbon technologies. I hope that we will be able to describe that in greater detail in the statement later. On planning and other issues that could present obstacles, we are considering how to clear the way right across all the technologies we will need in a low-carbon future to ensure that that happens.

[Barry Gardiner (Brent North) (Lab)]

Achieving 16 GW of supply from nuclear, as the Secretary of State has demanded, would require one new reactor coming on stream every nine months from about 2018 onwards. The industry told the Select Committee on Energy and Climate Change the other day that that simply would not happen because there was neither the investment capacity in the City to deliver it nor, indeed, the skills available to build what is required. How will he ensure the continuity of supply that he seeks?

[Chris Huhne]

The hon. Gentleman knows that the market has always been composed of different views. He is citing one particular institution’s view, but that is not the common view of other investors in the City. The funds will be forthcoming and we will describe the incentives that we are putting in place for the low-carbon future that we want in the statement later today.

[Mr Mark Spencer (Sherwood) (Con)]

21. What plans he has to meet representatives of the heating industry to discuss the proposed green deal for energy efficiency.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I have recently met heating industry representatives and have invited the heating and hot water taskforce and the Heating and Hotwater Industry Council to be represented on the green deal stakeholder forums that I have established. I want the whole industry to be actively engaged with us on the green deal.

[Mr Spencer]

I am grateful to the Minister for his response. I was interested to hear his response to the question from the hon. Member for St Helens North (Mr Watts) on the consideration of glazing in the green deal. Will the Minister confirm that he will consider the replacement of old and inefficient heating systems in the green deal?

[Gregory Barker]

There will certainly be scope for heating systems to be included in the green deal. We want the green deal to be as technology-inclusive as possible, and we want to drive innovation. Any energy efficiency measure that costs less to install than it pays back over a specified period will be eligible. That includes heating measures.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

22. If he will assess the effect of recent winter weather on the heating bills of the elderly and others in the Newcastle upon Tyne Central constituency.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

Local area energy data are produced on an annual basis covering all homes in a local area. As such, it is not possible to assess short-term changes in energy consumption by specific household types. However, the latest information suggests that eligible households in the Newcastle upon Tyne Central constituency have received between one and three cold weather payments so far this winter.

[Chi Onwurah]

This week, Eaga—the green energy company that is headquartered in Newcastle—placed 1,400 people on notice of redundancy as a direct result of the 70% cuts to the Warm Front programme that the Government have implemented. Considering 18% of Newcastle constituents live in fuel poverty, will Newcastle not suffer twice over as a result of the Government’s approach to fuel poverty?

[Gregory Barker]

I am very sorry to hear about the redundancies at Eaga. That is very regrettable. Eaga still has to fulfil about 70,000 jobs this winter, between now and the end of the financial year. However, we need to get more investment into the energy efficiency sector in the long term, which means opening it up to the private sector and getting in billions not hundreds of millions. The green deal is the way forward to achieve that.

[Robert Halfon (Harlow) (Con)]

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

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

Since the last departmental questions, we have helped to secure an agreement at the United Nations climate change conference in Cancun. We have published the Energy Bill, which includes measures to boost investment in low-carbon electricity generation, to improve energy security, and to give companies better access to upstream oil and gas. The Bill also sets out the infrastructure of how the green deal energy efficiency programme will work, with particular reference to those in fuel poverty.

[Robert Halfon]

Given that Labour Members blame us for everything, including the weather, may I ask my right hon. Friend, in his capacity as climate change Minister, if he can do anything to ensure that we have a white Christmas in Harlow?

[Chris Huhne]

There are limits to my powers. I think that the most popular legislation that this House could ever bring forward would be a short Bill requiring it to rain only between the hours of 2 o’clock and 4 o’clock in the morning. Sadly, the technological capability to deliver quite such meteorological results is not yet with us.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There is huge interest, as colleagues can see, and I want to try to accommodate it, but we must have brief questions and brief answers.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Given the list that the Secretary of State just read out, one would think that he sees himself as Action Man, but we heard this week that he describes himself as Tesco Man. Last time I questioned the Government about green investment, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), reassured the House that plans for the green investment bank would be unveiled in the spring. Yesterday, I read that the Secretary of State has lost out to the Treasury and that this much-vaunted green investment bank is to be a fund with nowhere near enough resources to generate the £200 billion necessary for investment in green technologies. The question is whether the country has lost out. Given the impact on British business, job creation and the climate, a properly functioning bank cannot wait, and this confusion is very unhelpful to British business. Will he tell the House what is happening?

[Chris Huhne]

I am grateful to the hon. Lady for her question. I can assure her that this matter is still under review by Ministers on the time scale that we were anticipating. Much as I like and respect The Guardian, having worked for it for 10 years, I have to say that its report gave only a partial view of what I said. I said, among other things, that ducks quack and banks borrow and lend. The Chancellor of the Exchequer was the person who put forward the idea of the green investment bank when he was in opposition, and he knows very well what a bank is. I am absolutely convinced, therefore, that we will have an institution that does exactly what it says on the tin.

[Meg Hillier]

We still do not have certainty. We hear that the matter is “under review” but we believed that it was a Government commitment. I am proud to be the first Labour/Co-op shadow Secretary of State for climate change, and the Secretary of State has described himself as very happy to be the Tesco of the energy industry. Yet without the green investment bank, whichever model we choose, we will not see the benefits that we want to see. The Minister of State, the hon. Member for Bexhill and Battle, spoke earlier of the importance of community energy and smaller suppliers; we want energy to benefit all. We want to see this bank up and running, and the Secretary of State will have support from the Opposition if it gets going. Will he consider joining me, as the advocate of co-operative climate change, in working for the benefit of all, with the green dividend and green investment shared fairly through an up-and-running bank?

[Chris Huhne]

I agree that we have to look very carefully at the sources of finance for green investment. There are undoubted obstacles in the way of some of the technologies that are furthest away from the market, in particular, and that makes the very important case for the green investment bank. That—not the concept—is what is under review at the moment. The commitment to a green investment bank is clearly in the Government’s coalition agreement, and it was an idea of the Chancellor of the Exchequer. Some of the reports suggesting that the Chancellor would want to murder his own baby seem a little far-fetched.

[Ian Swales (Redcar) (LD)]

T7. Following on from that question, will the green investment bank include the proceeds of asset sales, as the Chancellor announced recently? Given the importance of green investment to the Tees valley, will the Secretary of State consider putting the administrative centre of the bank in the Tees valley?

[Chris Huhne]

I am grateful to my hon. Friend for his question about the siting of the bank, but that is a little premature given where we are at the moment. I am afraid that quite a long list of hon. Friends and others are advocating the benefits of that to their constituencies.

Capital endowment of £1 billion for a green investment bank was allocated in the comprehensive spending review in 2013-14. I have made it clear that we are continuing to look for asset sales. In our Department, we are looking for asset sales from URENCO, for example, but there are other asset sales across Government that could also be used. We will attempt to use that process to ensure that the institution has the proper endowment of capital necessary for its task.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

T2. The green deal is based on loans, which many of my constituents cannot afford, and it places the responsibility for tackling fuel poverty in the hands of the energy companies that have created a national rise in fuel bills of 139% since 2003. Will the Secretary of State explain how the green deal will help the poorest and most vulnerable in my constituency?

[Chris Huhne]

I am happy to answer the hon. Lady, because her question is based on a misunderstanding of the green deal. There is no requirement for anybody to take out personal finance to fund the green deal. The whole point is that finance will be provided for the householder. The company that provides the finance will recoup its return from the householder’s savings on their energy bills. In addition, we will reshape the carbon emissions reduction target and community energy saving programme obligations on energy suppliers into an eco-obligation, one of the key objectives of which will be to provide additional support to those in fuel poverty. Such people will therefore be able to go ahead with the green deal, even if the anticipated savings on their bills are not adequate to pay for the installation.

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

T8. When does the Secretary of State expect green deal finance to be extended to microgeneration?

[Chris Huhne]

The coalition agreement anticipated that we might extend green deal finance to microgeneration. We are working on the assumption that green deal finance will be available for insulation measures, because we have secured outstanding incentives for microgeneration through the feed-in tariffs, as was confirmed in the comprehensive spending review. Green deal providers will offer microgeneration proposals precisely because the incentives are so good.

[Pat Glass (North West Durham) (Lab)]

T3. Like the hon. Member for Suffolk Coastal (Dr Coffey), who is no longer in her place, many of my constituents who live in rural areas rely on heating oil, the price of which has more than doubled in the past two months. Companies are now refusing to deliver less than 1,000 litres, which is having a massive impact on families and on schools, colleges and hospitals. What will the Minister do now to deal with that exploitation?

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

I would be very grateful if the hon. Lady could give me more details, because we have also heard that some companies are asking people to take lower amounts so that the delivery lorries can get to more homes and more people before Christmas. That is obviously the sensible approach. I would be very concerned if companies were artificially raising the amounts that they expected people to buy at this time.

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

As we speak, severe weather is sweeping through the north of the country and heading south. Referring back to the Secretary of State’s remarks about Ofgem, will he stress in all his dealings with that body that for those living in the coldest parts of the country, such as the highlands of Scotland, a fair set of tariffs must be applied that are relevant to their circumstances? There is a real feeling of social injustice, which I believe is entirely justified.

[Chris Huhne]

I am grateful to my right hon. Friend for that question. As he knows, Ofgem is reviewing competitiveness in the market and the scale of the margins. In addition, a discount scheme is in place for those in fuel poverty, and we will underpin that. The Government are committed to preserving winter fuel payments, and to ensuring that cold weather payment schemes continue. Whatever the weather brings for us over the next few weeks, I hope that we will be in a position to help those who are most hard-pressed. I return to the fundamental point, which is that we have this problem every winter, again and again, and it is time that we dealt with its root causes through energy efficiency measures for those in rural poverty, rather than attempting constantly to put sticking-plasters on it.

[Hugh Bayley (York Central) (Lab)]

T4. Today the Secretary of State told the House that energy bills in private rented housing can be as much as six times higher than in modern social housing. Why do the Government not use the Energy Bill to require all private landlords to comply with minimum energy efficiency standards, and not just when a tenant requests it?

[Chris Huhne]

The Bill will allow us to move forward on F and G-rated homes, for example, if there is not a sufficient improvement in the private rental sector. There is clear provision for us to regulate to deal with the problem.

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

Referring again to Ofgem, in the past month crude oil prices have risen by 17% but consumers are paying 70% more. Is it not time that the Government took on the oil companies to ensure that my constituents get a fair deal on oil prices? Many of them have no choice but to have oil.

[Charles Hendry]

There are two aspects to the matter. Clearly it is seasonal, with demand going up at this time of year, which inevitably pushes prices up, as with turkeys, Christmas trees and so on. However, there is a fundamental problem in the oil market, because people are not getting deliveries when they need them, even when they order well ahead. We are therefore asking colleagues to give evidence to the Office of Fair Trading so that it can see whether there is evidence of collusion or inappropriate practices.

[Kelvin Hopkins (Luton North) (Lab)]

T5. Recent satellite photographic evidence shows that thousands of homes in my constituency are still not properly insulated and are pouring heat into the atmosphere. Given that the Government’s plan A for the economy is clearly already failing, would it not be sensible to have a national crash programme of home insulation as part of the Cabinet Secretary’s plan B?

[Chris Huhne]

The hon. Gentleman may have read recently about the crash programme to do exactly that in Australia. It resulted in large numbers of builders who were not properly trained putting nails through wires in people’s lofts and setting fire to houses. People died, and it was all over the front pages of the Australian tabloids. The result was that energy efficiency got the most appalling name. I intend that the green deal programme will avoid all those pitfalls and deal with the problem genuinely and thoroughly.

[Tessa Munt (Wells) (LD)]

Will the Secretary of State join me in welcoming the news of National Grid’s announcement yesterday that it will consult residents in the levels and moors in Somerset, Suffolk’s Stour valley and other parts of the country on undergrounding electricity power cables rather than using pylons? Will he congratulate residents on their peaceful and persistent campaign, which will ensure that residents in rural areas benefit from the technology that is taken for granted in urban areas, where undergrounding is standard practice?

[Charles Hendry]

I do indeed congratulate National Grid on undertaking a public consultation on whether the cost of undergrounding is acceptable to the public. I also welcome the research being carried out by the Institution of Engineering and Technology, because people in areas affected by new pylons need to be absolutely convinced of the relative pricing of overgrounding and undergrounding.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

T6. My constituents have faced an incredibly difficult winter, and they want to know what action the Government will take now, not in the future, to make energy companies bring down their prices.

[Chris Huhne]

The action that Ofgem is taking is now, not in the future. It is reviewing the matter and making it very clear to the energy companies that margins that are not justified by the economics will incur its wrath, the use of its powers and potentially a competition inquiry. I merely refer to my earlier answer about all the action that the Government are undertaking to try to ensure that people are protected in these difficult times through cold weather payments, winter fuel payments and the voluntary discount scheme. We want to ensure that the people are who most adversely affected are protected.

[Mark Pritchard (The Wrekin) (Con)]

Palm oil plantations are now seen as a new cash crop in various parts of the world, but they cause mass deforestation and a huge loss of wildlife habitats. What can the Secretary of State do to ensure that we have a global deal on palm oil plantation that is sustainable for wildlife and the world’s natural resources?

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

One of the real steps forward at Cancun was progress on rainforests and forestry in general. Within the package of measures that was agreed was clear text making it absolutely crystal clear that preserving biodiversity and preventing perverse consequences of supporting palm oil plantations would be a key part of rainforest protection and funding.

[Malcolm Wicks (Croydon North) (Lab)]

On energy security, will Ministers examine critically the supply obligation that we place on companies, given that the tendency to buy short term rather than long term, and sometimes on the spot market, means that there can be no absolute guarantee that the supply will be in place in critical and extreme times for the world?

[Charles Hendry]

That is an element of the Energy Bill. We will increase the supplier obligation to ensure that suppliers can meet demand at times of greatest demand. I have also spoken with other Governments—Qatar this week and Norway more recently—about how to secure more long-term contracts to provide greater security of supply and greater price predictability.

[Mr Tom Watson (West Bromwich East) (Lab)]

I am very concerned about what I have heard in the Chamber this morning. Hon. Members have said that there is a shortage in the supply of oil, that their constituents are going cold, and that schools and hospitals are losing out. We obviously have an oil supply crisis. The Minister of State, the hon. Member for Wealden (Charles Hendry), says that he wants suppliers to ration their oil, but will the Secretary of State take personal command of this situation, call in the oil supply companies and sort this out?

[Chris Huhne]

I have complete confidence in the Minister of State, my hon. Friend the Member for Wealden (Charles Hendry), who has responsibility for energy. He has been absolutely hands on in dealing with that matter and has kept me informed. I believe that the measures he is taking are absolutely appropriate, but we are watching the situation day by day to ensure that the heating oil supplies are there.

[Several hon. Members]

rose—

[Mr Speaker]

Last but not least, I call Caroline Lucas.

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

In the light of the role that the World Bank could play in establishing and managing the new green climate fund, which was set up following the Cancun agreements, will the Secretary of State comment on the current level of fossil fuel lending undertaken by the World Bank group, and will he support a major shift to lending for renewables instead?

[Chris Huhne]

The Government have repeatedly said, and I entirely agree, that the lending practices of the World Bank and other institutions must reflect the overwhelming need that we have as a globe to move towards a low-carbon economy. It is certainly dispiriting to find that that need was not reflected in some of the loans that were approved recently by the World Bank.

[Several hon. Members]

rose—

[Mr Speaker]

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

Business of the House

Thursday 16th December 2010 Commons Chamber

11:36

[Hilary Benn (Leeds Central) (Lab)]

Will the Leader of the House give us the forthcoming business?

[The Leader of the House of Commons (Sir George Young)]

The business for the week commencing 20 December will be:

Monday 20 December—General debate on firearms control. In addition, my right hon. Friend the Prime Minister plans to make a statement on the European Council.

Tuesday 21 December—Pre-recess Adjournment debate, the format of which has been specified by the Backbench Business Committee.

The House will not adjourn until the Speaker has signified Royal Assent. The House will meet at 11.30 am and be subject to Wednesday timings should it agree to the motion at the end of today’s business.

The provisional business for the week commencing 10 January will include:

Monday 10 January—Second Reading of the Armed Forces Bill.

Tuesday 11 January—Consideration in Committee of the European Union Bill (day 1).

Wednesday 12 January—Remaining stages of the Postal Services Bill.

Thursday 13 January—Remaining stages of the National Insurance Contributions Bill.

The provisional business for the week commencing 17 January will include:

Monday 17 January—Second Reading of the Localism Bill.

I should also like to remind the House that the business in Westminster Hall for 13 January and 20 January 2011 will now be:

Thursday 13 January 2011—A debate on the impact of the comprehensive spending review on the Department for Communities and Local Government.

Thursday 20 January 2011—A general debate on anti-Semitism.

May I take this opportunity to wish you, Mr Speaker, and all right hon. and hon. Members a very happy Christmas and new year, and to thank all those who have kept the House running smoothly this year, particularly the security staff, the police, the Serjeant at Arms and the team who have kept the House running without interruption? I should also like to thank the staff involved in providing services and a welcome to new Members following the general election, including the Clerks, the Officers and staff of the House, the Doorkeepers and the cleaners. A merry Christmas to all.

[Hilary Benn]

I thank the Leader of the House for his statement. Following the decision of the deputy Chief Whip this morning to break the convention that the party holding a seat moves the by-election writ in the case of seats declared void after an election, which is what happened in Winchester in 1997, can the Leader of the House confirm that nearly 1,000 students in Oldham East and Saddleworth are likely to be disfranchised in this by-election because they will not have returned to university by 13 January, which is the date that the coalition has picked, whereas they would have returned by 3 February, which is the date that we would have moved? Does this not show that the coalition is running scared of the judgment of students at the ballot box?

Does the Leader of the House have any news on when the Prime Minister will come to the House to explain why, week after week, he is breaking promise after promise? When he does appear, will he also explain something else? All summer long, he and the Chancellor have been telling us triumphantly that everyone supports their economic policy. Well, not any more they don’t! What are we to make of the leak of a memo from the country’s top civil servant, Sir Gus O’Donnell, telling the Prime Minister that in case plan A on the economy does not work, he needs to have a plan B? May we have a debate, therefore, on what plan there is to stop unemployment continuing to rise next year, as people in the public sector—including, as the people of Oldham will see, the 1,387 uniformed police officers in Greater Manchester who are to go—are thrown out of their jobs by the very Government they loyally serve?

Last week, the Justice Secretary, having told us he wants prisoners to have the vote, said that prison is not succeeding. A few days later, the Home Secretary flatly contradicted him when she said that prison works. When will the Prime Minister sort out this squabble? Perhaps he could set up a court—assuming he can find one that is still open—summon them both, hear the evidence and deliver a verdict. I suppose, technically, that would mean making a statement on which of these warring Cabinet Ministers is speaking for the Government.

Last week, the ConservativeHome website reported that there was a pretty difficult meeting of the 1922 committee, with a lot of cross MPs, on the subject of the Independent Parliamentary Standards Authority—I have to say that we all know the feeling. Following last night’s meeting, may we have a statement on what the Government plan to do about IPSA? The grumpiness on the Tory Benches shows that it is not so much the season of good will as seething ill will and loathing. One Tory MP said last night:

“The coalition is an imperial clique”.

I am open to suggestions on who on the Government Benches is Caligula and who is Nero.

The former head of the Prime Minister’s social mobility taskforce, the right hon. Member for Haltemprice and Howden (Mr Davis), talked of sheer hostility towards the coalition leadership. Apparently, he went on to say that it was about a lot of things, including fees and being taken for granted, but especially about the Liberal Democrats being allowed

“to say what they like and do what they like”.

I have a lot of respect for the right hon. Gentleman, but has he only just noticed that about the Lib Dems? They have been doing it for years. Will the Leader of the House therefore assure his Back Benchers that there will now be a debate on how to stop Lib Dem Members getting in the way of Tory Members’ upward ministerial mobility?

With all this unhappiness, Mr Speaker, may I join the Leader of the House in wishing you, the Deputy Leader of the House, all hon. Members and all the staff, who serve us so well, a merry Christmas and a happy new year? As for Christmas presents, I hope that everyone gets what they wish for, although I am sorry to say that, for Lib Dem voters, even though their stockings were hung by the chimney with care in hope that St Nicholas would soon be there, they will not be receiving that shiny new tuition fees pledge they were promised, because St Nick has let them down.

[Sir George Young]

I thank the right hon. Gentleman for his response, his Christmas wishes and indeed his Christmas card. Of course, for the Labour party this is always a time of giving. I have been looking through what he has been giving over the past few business questions—he digs deep into his sack each time. He has promised higher spending on child benefit and housing benefit, lower VAT in the new year and more university funding. We all applaud him on his festive generosity, but until the Labour party comes up with a credible way of paying for it all, it will have no more credibility than Santa Claus. I ask him—[Interruption.]People will not believe in the Labour party any more than they believe in Santa Claus unless the Opposition come up with some decent answers.

The right hon. Gentleman could have had a debate on the writ for the by-election. However, the Labour party chose not to do so, so it is a little rich of him to ask me for one now. The Opposition could have had a debate if they had objected an hour ago to the writ being moved. It is astonishing that they do not want the by-election to be held, when their own candidate has said:

“I can’t wait until polling day,”

so what is all the fuss about? The precedent from Winchester quoted by the right hon. Gentleman is simply not accurate. There is a collective loss of memory on the Opposition Benches about what happened in Winchester. The seat was previously held by a Conservative Member of Parliament, and the Liberal Democrat Chief Whip moved the writ. Therefore, in the most recent precedent of a seat being declared void, the Chief Whip of the party previously holding the seat did not move the writ.

Moving quickly through the other issues that the right hon. Gentleman mentioned, let me say that the Prime Minister is here every week to answer questions, and he will continue to do so.

On the Sentencing (Reform) Bill, the right hon. Gentleman will know that the Green Paper published last week was a collective document, published by the Cabinet and the Administration as a whole. In the robust evidence that my right hon. and learned Friend the Lord Chancellor gave to the Select Committee on Justice, he made it clear that there was not a cigarette paper between him and the Home Secretary.

On plan A and plan B, at least we have a plan A. The Labour party does not even have one coherent strategy on the economy. Indeed, yesterday the shadow Home Secretary, the right hon. Member for Morley and Outwood (Ed Balls), criticised the Leader of the Opposition for his performance at Prime Minister’s questions, saying that

“we have a huge responsibility to take these arguments to the country but we can’t do that if we are dividing amongst ourselves.”

On unemployment, the shadow Leader of the House will have seen the forecast by the Office for Budget Responsibility, which stated that unemployment is set to fall next year and every year thereafter, and that the fall in employment in the public sector is more than counterbalanced by the rise in employment in the private sector.

Finally, on IPSA, the position is absolutely clear. We had a useful debate on IPSA—I think on 2 December—and the Government abide by the resolution, passed without Division by the House at that time, that IPSA should be given an opportunity to review the regime and come up with an alternative by 1 April.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Many right hon. and hon. Members are seeking to catch my eye, but there is a statement to follow and then Backbench Business Committee business, so there is a premium on brevity from Back Bench and Front Bench alike.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

My right hon. Friend is aware—I have banged on about this enough times—of problems with flooding in my constituency, but we now have a new precedent. The Environment Agency has decided to spend £28 million flooding farmland in order to tick a box for Europe. It is nothing to do with this country; it comes from a European directive. There is now an entire village of people worried that they will be cut off and will have to be removed if the plan fails. This is not the first such case, but things are now getting extremely serious, so may I ask for Government time in which to debate what the Environment Agency is doing?

[Sir George Young]

Of course I understand the seriousness to which my hon. Friend refers and the anxiety in the village concerned. He will have an opportunity on Tuesday to raise the matter in the last debate of the year, but in the meantime, I will draw the matter to the attention of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and see whether any action can be taken at ministerial level to allay the concerns that he has expressed.

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

These being the last business questions before Christmas, may I again urge the Leader of the House to allocate more time to Back-Bench business, to compensate for the fact that the Session has been extended to April 2012? While he is working out how many more days to allocate to Back Benchers, can he also look at what days he allocates? The Government are still predominantly giving Back Benchers Thursdays on which to hold their debates, when really we would like a much clearer spread across the parliamentary week.

Finally, may I join the Leader of the House in wishing everybody a very happy Christmas? I would particularly like to wish the Doorkeepers well in the darts world championship, in which our very own House of Commons darts team is taking part. Will he join me in wishing them well on Sunday?

[Sir George Young]

On the first point, the hon. Lady is quite right to say that, because the Session is longer than it would normally be, there are implications for days allocated to private Members’ Bills, Opposition days and Back-Bench business days. Early in the new year, discussions will commence through the usual channels, and also involving the hon. Lady, to allocate more days because the Session is to run until spring 2012. On her point about Thursdays, roughly a third of the days allocated to her Committee have not been Thursdays, but I take her point. So far as the Doorkeepers are concerned, I hope they are as accurate with their arrows as they are in forecasting the time at which the House will rise.

[Anna Soubry (Broxtowe) (Con)]

Will the Leader of the House be so good as to ensure that time is set aside so that we may debate the Government’s Green Paper on sentencing as soon as possible, and long before the end of the consultation period, please?

[Sir George Young]

I note my hon. Friend’s interest in this matter. My hon. Friend the Member for Kettering (Mr Hollobone) had a debate on this important subject in Westminster Hall on Tuesday, and the Sentencing (Reform) Bill is going through the House, which will give Members ample opportunity to debate the Government’s proposals. The Green Paper makes it clear that, despite record spending, we are not delivering what really matters, and society has the right to expect the criminal justice system to protect it.

[John McDonnell (Hayes and Harlington) (Lab)]

I welcome the written statement this morning about the detention of asylum seekers’ children, but may I express my disappointment that it was a written statement rather than an oral statement? May we have an oral statement or a debate on this matter in the new year? My fear is that, although we are transferring children from the large detention centres, we might simply be transferring them to smaller detention units.

[Sir George Young]

I am grateful for the hon. Gentleman’s welcome for the written ministerial statement. Any Government have to strike a balance between written ministerial statements and oral statements, given the impact that a number of oral statements can have on the business of the House. He makes a strong case for that matter being debated, however. The alternative to Yarl’s Wood, whose closure I am sure he will welcome, has been piloted, and he might have heard Martin Narey of Barnado’s on the “Today” programme welcoming this initiative while recognising that there needs to be some secure accommodation available in the days before deportation. Also, the hon. Member for North East Derbyshire (Natascha Engel), the Chair of the Backbench Business Committee, might have heard his bid for a debate on the policy.

[David Tredinnick (Bosworth) (Con)]

Can my right hon. Friend tell me whether he had any say, as Leader of the House and on behalf of the House, on the routing of the recent demonstrations outside the House? Given that it is possible that Parliament square will be restored under the provisions of the Police Reform and Social Responsibility Bill, does he agree that it would be unwise to put large numbers of demonstrators into the restored square?

[Sir George Young]

The answer to the first question is no; that was an operational matter for the police, and I did not have any say. My view is that it would be wrong to allow encampments in Parliament square, and the whole point of the clauses in the Bill is to restore the square to the position it was in when my hon. Friend first joined the House—namely, a square in the middle of an historical capital city surrounded by Westminster abbey, this building and other significant buildings—rather than being despoiled by a shanty town.

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

I thank the Leader of the House on behalf of all Members for his support throughout the year on a number of issues. He will be aware of the great anxiety surrounding Tuesday’s pre-Adjournment debate, as it is fast approaching becoming a car crash. Will he now, even at this late stage, speak to the Backbench Business Committee to ensure that all Members get genuine answers from the Deputy Leader of the House in that debate, and that it does not become a shambles?

[Sir George Young]

At this moment, the hon. Gentleman is a lot closer, physically, to the Chairman of the Backbench Business Committee than I am, and she will have heard his question. What is proposed is a pilot, and the Committee is anxious to hear hon. Members’ views on the proposed format, which will give the Government more certainty about the issues that are being raised, and therefore a better opportunity to respond, although it is slightly less flexible. I very much hope that the Parliamentary Secretary, Office of the Leader of the House of Commons, my hon. Friend the Member for Somerton and Frome (Mr Heath), who will be replying to the debate, will have adequate time at the end of the debate to respond to all the issues that have been raised, but that will depend on discipline being exercised during the debate to give him adequate time to address the House at the end.

[John Stevenson (Carlisle) (Con)]

The 2012 Olympics will be a significant sporting event and, on the back of that, there will undoubtedly be a significant boost to tourism. Will the Leader of the House make a statement telling us how the Government will ensure that the boost to tourism will also benefit the tourism industry in constituencies such as Carlisle?

[Sir George Young]

This Government are very anxious, as were the previous Government, that the benefits of the Olympics should filter out to all parts of the country. The London Organising Committee of the Olympic Games and Paralympic Games has established the nations and regions group to ensure UK-wide engagement and to maximise the legacy from London 2012. The group is working directly with representatives from each of the nations—and, indeed, the regions—to realise the sporting, economic and cultural benefits of the 2012 games. My hon. Friend’s constituency and the wider north-west stand to gain from the wide range of opportunities created by the games.

[Valerie Vaz (Walsall South) (Lab)]

Female genital mutilation affects more than 20,000 women and girls in this country, some of them as young as 12 months old. A brilliant midwife, Alison Burns, has set up a clinic in the west midlands on her own initiative to deal with this matter. May we have an urgent debate on why there has not been a single prosecution, despite the fact that the Female Genital Mutilation Act 2003 makes this practice illegal?

[Sir George Young]

The hon. Lady has raised a valid issue, and of course I will raise the matter with the appropriate Secretary of State. I think I am right in saying that she has one of the debates on Tuesday, on women and human rights, at which time she might have an opportunity to touch on that matter, but I will certainly ensure that she gets a reply on that specific issue from whichever Minister replies to that section of the debate.

[Mr Alan Reid (Argyll and Bute) (LD)]

May we have a debate on the Department for Work and Pensions contract for cashing benefit cheques? The contract is currently held by the Post Office and, whereas other competitors might be able to put in cheaper bids, they cannot possibly match the Post Office on quality. Paypoint, for example, has no outlets on many of the islands or anywhere in rural north Argyll. In the recent terrible weather, the Post Office made a big extra effort to keep its branches supplied with cash, and it deserves to keep this contract.

[Sir George Young]

I commend my hon. Friend on raising this issue, and I have seen his early-day motion on the subject. As he probably knows, the Government have yet to announce the contract, but I shall draw his comments to the attention of my right hon. Friend the Secretary of State for Work and Pensions.

[Mr John Spellar (Warley) (Lab)]

May we have a debate as soon as possible on the conventions of this House? Conflict is inevitable in Parliament—even the geography of the Chamber reflects that—but we have rules and conventions to keep it within manageable limits. If, however, political parties gratuitously break those conventions for short-term party political advantage, as the Lib Dems have done today, that has serious implications for Parliament, and that matter needs to be examined in greater detail, rather than in the cavalier manner that it was dealt with today.

[Sir George Young]

I reject the accusation that anything has been done in a cavalier manner. As I said in response to the right hon. Member for Leeds Central (Hilary Benn), the convention that has been followed in this case exactly replicates the convention that was followed the last time a seat was declared void, which was in the constituency of Winchester.

[Henry Smith (Crawley) (Con)]

Following the recession, many over-50s in my constituency are, regrettably, finding it very difficult to get back into work, and I know that that issue extends across the country. I would be grateful if time could be found for a debate on encouraging employers to look kindly on re-employing those who find themselves out of work over the age of 50.

[Sir George Young]

My hon. Friend makes a good point. He will know that we are introducing a new Work programme from early next year, and my right hon. Friend the Secretary of State for Work and Pensions is anxious to ensure that job seekers of all ages get the tailored and personalised support that they need to get back to work. I will draw my hon. Friend’s remarks to the attention of the Secretary of State.

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

Last week, during the tuition fees debate, the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts) probably inadvertently misled the House when he said that there were more Scottish university students studying in England than there were English university students studying in Scotland. According to the latest figures, 11,805 Scottish students were studying in English universities, while in the same academic year, some 22,510 English students were studying in Scottish universities. I know that the Leader of the House takes these matters very seriously. Can we now expect a statement from the Minister to put that right?

[Sir George Young]

It is certainly the case that, if a Minister has inadvertently given inaccurate information to the House, the appropriate action should be taken and the record should be set straight. If one of my hon. Friends did indeed give the wrong information, that will happen, and I will draw the hon. Gentleman’s remarks to the attention of the appropriate Minister.

[Andrew Stephenson (Pendle) (Con)]

Will the Leader of the House allow us a debate on the local government finance settlement, which was announced earlier this week, now that councils have had time to digest the news? There is real concern in my constituency about the way in which the transitional grant has been calculated. The calculation of Pendle’s revenue spending power for 2010-11 is significantly understated. It does not include several amounts that were included in revenue grants received last year. If those amounts were included, the transitional grant would be boosted by more than £1 million.

[Sir George Young]

As a former local government Minister, I know that there is no way of coming up with a draft settlement that satisfies every single local authority. As my hon. Friend will know, we are consulting on the proposals announced on Monday, and if he or members of his local authority have comments to make about the settlement, they should make them. There will be an opportunity to debate the final settlement when it is laid before the House next year.

[Fiona Mactaggart (Slough) (Lab)]

Will the Leader of the House invite the Home Secretary to come to the House again to correct comments that she made about public order policing in her statement last Monday? She informed the House then that protesters

“who remained peaceful and wished to leave via Whitehall were able to do so.”—[Official Report, 13 December 2010; Vol. 643, c. 665.]

When I pressed her on that, she confirmed it. Since then an e-mail has been passed to me by, among others, my right hon. Friend the Member for Oxford East (Mr Smith), which reports that peaceful protesters spent hours trying to leave and being prevented from doing so by police. Although the police told them that they could leave, they actually prevented that from happening. Will the Home Secretary come and tell us the truth about the policing of the demonstration?

[Sir George Young]

The hon. Lady will have an opportunity to raise the issue with my right hon. Friend the Home Secretary during the next session of Home Office questions. In the meantime, I will of course draw her remarks to my right hon. Friend’s attention and establish whether she wishes to respond to them.

[Mr Lee Scott (Ilford North) (Con)]

Will my right hon. Friend allow Government time for a debate on the provision of health and education for children with special needs, who are some of the most vulnerable children in our society?

[Sir George Young]

I commend the work that my hon. Friend has been doing on this issue for many years. The Government believe that the most vulnerable children deserve the highest quality of care. We expect a Green Paper on special educational needs to be published very soon, and we would welcome his comments on it.

[Mr David Lammy (Tottenham) (Lab)]

May we have a debate on the Olympic legacy? It has become clear that one of the bids involves a complete dismantling of the legacy to athletics, and that is important to the House. Moreover, much that Legacy Trust UK is doing is being done behind closed doors, in secrecy. It is of grave concern that one bid involves the building of a supermarket on the Olympic site: that cannot be right. We need a debate to discuss the legacy for the young people of this country.

[Sir George Young]

I agree with the right hon. Gentleman. Of course we need a legacy for young people after the Olympics. I cannot promise an early debate, but I will draw his remarks to the attention of my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport. The matter might also be a worthy subject for an Adjournment debate.

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

Many of us look forward not only to the royal wedding, but to finding out what title will be bestowed on Prince William. Will the Leader of the House remind the Privy Council that the dukedom of Monmouth has been vacant since 1685, for reasons best glossed over? I am sure that the residents of that county would be delighted to be associated with the royal wedding in any way possible.

[Mr Speaker]

I am sure that the hon. Gentleman was seeking a statement on the matter.

[Sir George Young]

My hon. Friend risks opening a bidding war in the Chamber among other hon. Members who wish their constituencies to be recognised in the same manner. Let me simply say that, although I note his remarks, the issue is way, way above my pay grade.

[Mr David Hanson (Delyn) (Lab)]

May we have another early debate on the funding of universities? As the Leader of the House will know, in Wales—my area—the Welsh Assembly Government are not applying fees. Next week the Scottish Government will probably decide not to do so either, as will the Northern Ireland Government. Why are the Conservative-Liberal Democrat Government picking on English students?

[Sir George Young]

I honestly think that the House has had adequate opportunities to debate tuition fees this month. There has been an Opposition day debate on the subject, as well as a full day’s debate on the order and the regulation last week. The discrepancy between what happens to English students and what happens to other students flows from the devolution settlement.

[Mark Pritchard (The Wrekin) (Con)]

Ghana, one of the most stable democracies in Africa, is about to pump its first commercial oil, worth $400 million a year. Does my right hon. Friend agree that that wealth needs to be passed to the whole country, and that the Parliament of Ghana needs to work together to ensure that legislation and regulation are in place to ensure that that happens?

[Sir George Young]

Like my hon. Friend, I welcome the commencement of oil production in Ghana. I hope very much that the revenue will be used for the benefit of all the citizens of that country, and will be managed with a view to Ghana’s future prosperity.

[Clive Efford (Eltham) (Lab)]

I am sure that the right hon. Gentleman would not wish to disfranchise students in the Oldham East and Saddleworth by-election. Will he join me in encouraging the relevant Secretary of State to make a statement to the House today, so that, before the Christmas holidays, students are made aware that they can register for postal votes in that by-election?

[Sir George Young]

If the hon. Gentleman was worried about the timing of the by-election, he could have registered his objection an hour ago when he had an opportunity to do so. He did not, and we heard earlier that Labour Members wanted to “bring it on”. No one has been disfranchised.

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

I am very concerned about the possible impact on service personnel at RAF Marham in my constituency. Given the level of speculation about air bases this week, given that the economic and military case has been made in favour of RAF Marham and given that that appears to be the view of the Ministry of Defence, may we have a statement so that we can have some certainty on the issue?

[Sir George Young]

I understand my hon. Friend’s anxiety. She says that something may be “the view of the Ministry of Defence”, but my understanding is that no decision has been made. Some consequences of the strategic defence and security review, which was published in October, have implications for a number of bases, including the one in my hon. Friend’s constituency, but I understand that no decision will be made until the spring, when of course the House will be informed. However, the strong case that my hon. Friend has made repeatedly in the Chamber on behalf of RAF Marham will have been heard.

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

May we have an urgent statement from the Business Secretary on the disgraceful situation in Scotland, where TNT, DHL and other delivery companies are currently refusing to make deliveries? RL Engineering Services in my constituency contacted me this morning because it needs a part in order to rescue a Ministry of Defence tug stuck in the Kyle of Lochalsh, but the companies are refusing to deliver it. Can the Business Secretary take some action to ensure that the situation does not continue?

[Sir George Young]

If the matter is indeed not devolved but retained, I will of course draw it to the attention of the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey), who is responsible for postal affairs, and establish whether he can take any action to ensure that deliveries get through.

[Pauline Latham (Mid Derbyshire) (Con)]

The Leader of the House may be aware that hauliers are to be penalised by the European Union, which is considering introducing a 4-metre height limit on new trailers. I have been lobbied by several hauliers in my constituency, not least Mr Robin Allen, who fears that that is much lower than the current limit and that hauliers will not be able to carry the same amount of goods, which means that there will be more lorries. The bridges do not need to be made any higher, because the trailers are already being driven under them. Will the Leader of the House refer the matter to the relevant Minister?

[Sir George Young]

I am all in favour of fewer lorries on our roads. I think that it would be best for the Secretary of State for Transport to have a dialogue with the Road Haulage Association, establish whether those anxieties are reflected more broadly throughout the industry, and then establish whether we can take action to minimise any loss of trade carried on the larger trailers.

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

Given that the Secretary of State for Communities and Local Government is on record as having said in the House that this year’s grant settlement would not hit the poorest communities hardest, and given that that is exactly what it has done, may we have an urgent debate on the matter?

[Sir George Young]

There will indeed be an urgent debate on the matter, because the settlement must be approved by the House before the local authorities get their money. As the Secretary of State said on Monday, it is a progressive settlement that reflects the requirements of the parts of the country that need the resources most.

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

Will my right hon. Friend ensure that time is found between now and the end of the consultation period for a debate on the Floor of the House about the legal aid Green Paper? We had a stimulating debate in Westminster Hall on Tuesday, when Members on both sides of the House made suggestions about what needed to be done in this vital regard, but a debate on the Floor of the House would allow more Members more time in which to amplify their concerns.

[Sir George Young]

As my hon. Friend said, there was a well-attended debate on legal aid in Westminster Hall earlier this week. Any change to legal aid will require legislation of course, and I anticipate that there will be a Bill on that this Session. Our proposals represent a radical, wide-ranging and ambitious programme of reform that reflects our commitment to ensuring that legal aid is available to those who need it most. We estimate that it will deliver savings of about £350 million by 2014-15, but the exact figure will be subject to what final package of proposals we decide to implement following the consultation to which my hon. Friend referred.

[Mr Chuka Umunna (Streatham) (Lab)]

To return to an issue I raised at a previous business questions, the Government have announced that they will change the way in which the police’s use of stop-and-search and stop-and-account powers are recorded, and I think that change will make it impossible to check properly whether their use is proportionate and non-discriminatory. In a Westminster Hall debate on 1 December, the Minister for Policing and Criminal Justice said this change would save 450,000 hours of police time, but that figure is strongly disputed by the StopWatch action group and others. May we have a debate to discuss the reality of the situation?

[Sir George Young]

It is important that we seek a consensus on what the impact of the changes will be. I cannot promise an early debate, but a meeting between the relevant Home Office Minister and the organisation to which the hon. Gentleman refers might represent the right way forward.

[Mark Pawsey (Rugby) (Con)]

Christmas is just around the corner, and many people will receive a gift of a personalised number plate for their car. That provides valuable income to the Exchequer—about £1.3 billion since 1989. However, many of these plates are illegal by virtue of their character, position and appearance and by the addition of bolts in order to create a name or word. That has serious implications for the identification of vehicles used in criminal activity, particularly where the police are using automatic number plate recognition systems. Will the Leader of the House make time for this matter to be considered?

[Sir George Young]

My hon. Friend must move in very important circles given that he says that many people will receive this gift. As a cyclist, I do not, of course, need such a number plate myself. He refers to number plate recognition, and I will draw that aspect of his remarks to the attention of Home Office Ministers.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

I am grateful for the Leader of the House’s remark that the Prime Minister is likely on Monday afternoon to make a statement on the outcome of the European Council meeting. We did not have a debate ahead of that meeting even though that would have given the House an opportunity to express its views on some treaty changes that may well have been debated at the weekend. In an earlier answer, it seemed to be suggested that the Backbench Business Committee and the Leader of the House will negotiate about extra days for debates, so will the two sides come to an agreement in order to restore, in whatever shape or form, a pre-Council debate in this House, because it is vital that we have that?

[Sir George Young]

I think the hon. Lady knows what I am about to say to her: in setting up its Backbench Business Committee, the House gave that Committee responsibility for deciding whether there is to be a fisheries debate, for instance, a European Council debate or four days of debate on defence, or whether debates should be held on other subjects. The responsibility for deciding whether there is to be a pre-Christmas European Council debate now rests with the Backbench Business Committee, so the hon. Lady should address her question to the hon. Member for North East Derbyshire (Natascha Engel), not the Leader of the House.

[Mr David Nuttall (Bury North) (Con)]

Will the Leader of the House arrange for an early debate on the performance of the Student Loans Company, so that the House can examine whether it is operating as efficiently as students and their families are entitled to expect?

[Sir George Young]

It was because we believed the SLC was not being operated efficiently that we replaced the chairman and the chief executive within one month of our taking office earlier this year. In respect of recent applications managed by the SLC, the Public Accounts Committee report published last week showed that by the end of October over half a million students had received their funding at the start of term, of which 72% were fully processed, and that 69% of new applicants were also fully processed. There must be continued improvement in the SLC’s performance however, so that students receive the level of service to which they are entitled.

[Mr Denis MacShane (Rotherham) (Lab)]

After the extraordinary revelations in The Times about the disastrous performance of Ministry of Defence procurement, may we have an early debate on the subject? The right hon. Gentleman the Member for Colombo is reported by The Times as saying that the revelations refer only to the Labour Government, but they go back to the 1990s and 1980s. Does the Leader of the House also agree that we need a complete ban on any Whitehall mandarin or armed services senior officer—or, indeed, any Minister—joining any part of the defence industry establishment on a paid basis for 10 years after they leave office, as we must shut this revolving door?

[Sir George Young]

The PAC report referred predominantly to the performance of the last Labour Government; I do not think it went back to a significant degree to 1997 and beyond. There are existing rules and restraints on what jobs former Ministers are allowed to take, and there is a period of quarantine. I am very happy to look into this matter again however, and I think it goes wider than just former Government Ministers. I think the House would have an interest in this matter.

[Robert Halfon (Harlow) (Con)]

Will the Leader of the House find time for an urgent debate on costs to small businesses? Two of my Harlow constituents— Mr Raymond Patten and his daughter—have a small business outside Harlow. Their business costs have increased severely this year, with business rates up by 50% and licensing costs trebling. Does my right hon. Friend agree that while this Government are doing many excellent things to help businesses, we must not give with one hand and take away with the other?

[Sir George Young]

I agree with my hon. Friend, and I see that there is a debate scheduled for Tuesday on support for businesses, which he may like to attend. He will have read the Government’s Green Paper, “Financing a private sector recovery”, which lists a range of measures the Government are taking to support small and medium-sized enterprises, such as a business growth fund of £1.5 billion, £200 million for the enterprise capital funds and support for the enterprise finance guarantee, as well as supporting SMEs through growth hubs. I will, of course, draw my hon. Friend’s remarks to the attention of the relevant Ministers.

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

A written ministerial statement today announced the closure of 10 of Britain’s 19 coastguard stations. There is serious concern about that proposal. Surely the announcement should have been made by way of an oral statement. Will the Leader of the House find a way for this matter to be debated on the Floor of the House?

[Sir George Young]

I understand the hon. Lady’s concern but, as she says, this is a matter on which the Government have reported to the House and, as I have said, we have to strike a balance between written and oral ministerial statements in order to protect the business of the House. The matter she raises might be a subject for a debate in Westminster Hall at the beginning of the new year.

[Grahame M. Morris (Easington) (Lab)]

Will the Leader of the House make time for an early debate in Government time on the impact of the cuts in police numbers, especially as we have already heard that 1,387 uniformed police officers are to lose their jobs in Greater Manchester?

[Sir George Young]

I understand the hon. Gentleman’s concern. There will be an opportunity to debate the police grant order early next year. It so happens that I have just received a briefing note from my chief constable in Hampshire. It cites the director of finance and resources saying of Monday’s announcement:

“These figures are very close to the force’s predictions and plans are already in place so that we can continue to operate effectively and efficiently within a reduced budget.”

The briefing note cites comments from others too, such as:

“While we do not underestimate the difficult time we will go through over the coming months, there are also real opportunities for us to do things better…we are in the process of identifying ways of improving what we do as a force.”

I hope that approach is also being adopted in the hon. Gentleman’s constituency.

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

Merry Christmas to you and your family, Mr Speaker, and to other Members of the House.

Will the Leader of the House find Government time for a debate on the impact of the following decisions, particularly on rural—and especially rural coastal—constituencies? My constituents in Felixstowe and places such as Orford and Aldeburgh are reeling from recent decisions on removing fire provision and extending the time they can expect to wait before receiving angioplasty treatment. This is unacceptable, and I hope the Government will find time for a debate on these matters.

[Sir George Young]

There will be an opportunity to debate many of these matters when we produce our proposals for reforming the health service. I understand there are still opportunities for Members who want to do so to intervene in next Tuesday’s debate on the Adjournment, and my hon. Friend may find that that will provide an opportunity to raise these concerns with the appropriate Minister.

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

Further to the comments of some of my hon. Friends, the news that Greater Manchester police is to lose a quarter of its entire work force, including over 1,000 front-line officers, is causing real concern in my constituency. We will shortly find out what the public think of this policy at the Oldham East and Saddleworth by-election, but will the Leader of the House help Members representing Greater Manchester constituencies to get a debate on this issue? He might be satisfied with the news about his local force, but Greater Manchester Members are not.

[Sir George Young]

Of course I understand the hon. Gentleman’s concern, but the former Home Secretary made it clear before the last election that if his party had been returned, it could not guarantee that there would not be a reduction in police numbers.

[Julie Hilling (Bolton West) (Lab)]

Will the Leader of the House consider holding a debate on our industrial heritage? On 21 December 1910, my community was devastated by the loss of 344 men and boys in the Pretoria pit disaster, the third largest such disaster in British history. I hope that he will join me in congratulating the communities of Westhoughton and Atherton on the efforts that they have made over a number of years to commemorate the centenary of the disaster next Tuesday and in sending sympathy to the many families who still remember their relatives and coal mining heritage with pride?

[Sir George Young]

I welcome the initiative taken by the hon. Lady and those in her community, who recognise the tragic disaster that took place at the Pretoria pit 100 years ago. It is right that we should recognise that many sacrifices were made in building the industrial strength of this country and the initiative that she has mentioned will be widely applauded in her constituency.

[Bill Esterson (Sefton Central) (Lab)]

Will the Leader of the House remind Ministers that they should tell hon. Members of decisions affecting their constituency? This week, a number of announcements affected my constituency, including the decision not to go ahead with Maghull prison and the cut of two thirds in the budget for Merseytravel. I learned of both by way of media releases forwarded to me and have still to hear from the relevant Minister on either issue. Will the Leader of the House ask Ministers to contact me at the earliest possible opportunity with the details of both those cuts, and will he remind Ministers of their responsibility?

[Sir George Young]

Ministers are quite clear that they should report matters to the House before they report them to the media. The hon. Gentleman should hear about anything that affects his constituency before the media are told about it, and I shall certainly raise that with the relevant Ministers. The transport grant announcement was issued by way of a written ministerial statement, in which case everybody should have received it at the same time.

[Mr David Anderson (Blaydon) (Lab)]

Last week, I was approached by my constituent, Sharon Martin, who informed me that she had that day sent out a fleece and winter clothing to her son, who is serving in Kabul. He had been advised by the Ministry of Defence that winter clothing would not be available in Afghanistan until February 2011. For the past week, I have tried to get the MOD to respond to this and I was told, “Will you put it in writing? We will respond within 15 working days.” That is clearly not acceptable. Will the Leader of the House therefore try to get a statement made before the Christmas recess, so that we can all have a merry Christmas, including those men and women who are abroad fighting for us?

[Sir George Young]

I applaud what the hon. Gentleman said about our fighting forces. He will get a letter from an MOD Minister before the House rises for the Christmas recess.

[Kevin Brennan (Cardiff West) (Lab)]

Now that the Prime Minister has said that he is taking personal charge of the school sports debacle, can we expect another statement from him on Monday, after he visits the Olympic site, or will an announcement be made in the usual way through the Sunday newspapers?

May I wish a merry Christmas to the Leader of the House and the Deputy Leader of the House, who is wrong about the Deputy Prime Minister? He is not St Nick, or even the messiah—he is just a very naughty boy.

[Sir George Young]

I have forgotten what the question was. On school partnerships, a further announcement will be made in due course about our proposals to replace the previous regime. I welcome what the hon. Gentleman said about wishing everybody a merry Christmas, and I hope that he included in that the Deputy Prime Minister.

[Mr Tom Watson (West Bromwich East) (Lab)]

The Leader of the House will have heard the concerns expressed by Members on both sides of the House this morning about the oil supply crisis in their constituencies. Schools and hospitals face shortages, and the old and vulnerable are suffering freezing cold. What provisions are available for an emergency debate next week should the rationing announced by the Minister for Energy this morning create panic buying over the weekend or should the emergency meetings he is having with the industry over the weekend need to be reported back to the House?

[Sir George Young]

I heard the hon. Gentleman share his concerns at Energy and Climate Change questions, when he put a similar question to one of my colleagues and it was adequately answered. At the start of the severe weather spell a number of precautions were taken to deal with salt supplies, the health service, cold weather payments and winter fuel payments. I know that he will be heartened to hear the last bit of my brief, which says that a winter resilience network has been set up and is chaired by the Cabinet Office.

[Paul Flynn (Newport West) (Lab)]

Will it not be appropriate in the new year to debate fully the content of a debate that is taking place this afternoon in order that we can pay tribute to the courage and vision of my right hon. Friend the Member for Coventry North East (Mr Ainsworth)? Although hon. Members take various views about drug problems, there is a great deal of unanimity on the fact that the policies that all parties have followed for the past 40 years have resulted in the biggest price for drug treatment in Europe, the harshest laws and the worst outcomes in terms of deaths, drug crime and drug use. There must be a better way. Can we not build on agreement between all parties to do better in future?

[Sir George Young]

The hon. Gentleman has taken a consistent stand on this issue for many years and I applaud that, although I disagree with him. I think that he is rehearsing a speech that he might give later today in Westminster Hall. He will have heard, doubtless with dismay, that the right hon. Member for Coventry North East (Mr Ainsworth) was denounced by his party leader.

[Nic Dakin (Scunthorpe) (Lab)]

Four weeks ago, I submitted four written questions on the background analysis done before the decision was taken to end the funding for the school sport partnerships. On 29 November, I received a reply to all four questions stating,

“I will reply as soon as possible.”

Apparently, that time has still not yet come, so will the Leader of the House investigate why it is taking so long to answer such simple questions?

[Sir George Young]

“As soon as possible” will be before the House rises for the Christmas recess.

[Barry Gardiner (Brent North) (Lab)]

This week, we learned that 25% of all children are recorded as being obese when they go to primary school, and the records show that the figure rises to 33% by the time they leave primary school. Given that the Government have now done away with school sport partnerships funding, will the Leader of the House make time for a debate on childhood obesity and alternative ways through exercise to tackle it?

[Sir George Young]

I think that this goes back to a question put to me earlier. The Government will be coming up with an alternative way of promoting school sports, and it will be a more effective and cost-effective way than the system that we inherited. Obesity—not just child obesity, but adult obesity—is a real issue, and my right hon. Friend the Secretary of State for Education takes it seriously.

Electricity Market Reform

Thursday 16th December 2010 Commons Chamber

12:27

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

Today, we begin consulting on the reform of the electricity market. This programme sits at the heart of my Department’s mission: to deliver secure, affordable and low-carbon energy. The case for reform is clear. We need significant investment in our energy infrastructure. As old coal and nuclear plants shut down, and demand for electricity grows, we must build the next generation of power stations. The electricity that they deliver must be both affordable and sustainable, helping us to meet our emissions reduction targets and keep the lights on.

The current energy market has served us well, but it cannot deliver long-term investment on the scale that we need, nor can it give consumers the best deal. Left untouched, it would lock carbon emissions into the system for decades to come. Investors and boardrooms around the world want to know whether the UK is a good place to do energy business, and today we are setting out our plans to make it one of the best places to do energy business.

The challenges and the opportunities are huge. Put simply, we face growing demand, shrinking supply and ambitious emissions reductions targets: demand for electricity could double by 2050 as we decarbonise the economy; 30% of our electricity must come from renewables by 2020—up from 7% today—to meet our contribution to the European Union’s renewable energy target; and in the next 10 years, a quarter of our existing power plants will need to be replaced, as nuclear and coal plants reach the end of their lives.

Without action, we will face a real and growing threat to the security of our supply. The reserve margin of spare generating capacity will fall over the next decade and the risk of interruptions to our energy supplies will rise, so we must build the next generation of power stations, and act to ensure there will be enough reserve capacity to meet our needs. Together with renewables, we will need new gas-fired power stations and new nuclear plant. We must attract more than £100 billion of investment in new power stations and grid connections by 2020—that is double the investment rate of the past decade.

We must rebalance our market framework to attract investment in the right technologies. At the moment, there is a bias towards low-cost, low-risk fossil fuel generation. Renewables, nuclear and carbon capture and storage all have relatively high up-front capital costs, but a more diverse, lower-carbon energy mix is better for our energy security, better for our economy and better for our planet.

Some measures have already delivered investment in new low-carbon generation—the renewables obligation and the EU emissions trading system—but we must go further and faster. To secure reliable, affordable low-carbon electricity, we must change the market structure. We must create the right framework to ramp up power generation and secure our supply and we must deliver cleaner, greener electricity for the 2020s and beyond.

Today, we are proposing new incentives to drive investment while protecting the rules for investments already made. The focus will shift permanently from conventional fossil fuel-fired electricity to low-carbon technologies—renewables, nuclear and cleaner fossil fuels. Our preferred package of reforms is designed to strike a balance between the best possible deal for consumers and giving existing players and new entrants in the energy sector the certainty they need to raise investment.

Reform will be gradual. We want to reassure industry that the rules for existing investments will be protected. By consulting on a process and principles for the transition to new market arrangements we aim to minimise uncertainty. The competitive market will remain at the centre of our energy policy, but the four elements of the reform package announced today will change incentives in the market and ensure both the security and decarbonisation of our power supply system while minimising costs to consumers.

First, there will be greater long-term certainty about the additional cost of running polluting plant, to make lower carbon investment more attractive. Proposals set out in the Treasury consultation to support the carbon price directly tackle the core problem, putting a better price on emissions, increasing the cost of fossil fuel-based generation and strengthening the carbon price for UK electricity generators.

Secondly, greater revenue certainty for low-carbon generation will make clean energy investment more attractive still. Through the proposed contract for difference feed-in tariff, the Government will guarantee greater revenue certainty for low carbon in the form of a top-up payment if the wholesale price of electricity is below the feed-in tariff and a potential clawback for consumers if wholesale prices go above the contracted tariff.

Thirdly, there will be additional payments to encourage the construction of reserve plants or demand reduction measures to ensure the lights stay on. Capacity payments will create an adequate safety cushion of capacity as the amount of intermittent and inflexible low-carbon generation increases.

Fourthly, there will be a back-stop to limit how much carbon any new coal-fired power stations emit. An emissions performance standard will reinforce the existing requirement that no new coal is built without carbon capture and storage.

Together, those four reforms make good on our commitments in the coalition’s programme for government. They will make the UK a prime location for low-carbon energy investment. They will ensure our energy supply is cleaner and more secure. They will protect the consumer—whereas prices will rise in the medium term, the additional impact of the reform packages will be small, and by 2030 consumer bills will be lower than they would have been if we had not reformed the market. They will lay the foundations for the sustainable economy of the future, bringing jobs up and down the supply chain.

The consultation that opens today invites everyone to tell us whether they think the preferred package of reforms is the right one and to provide the evidence to support their views. Final recommendations will be published in a White Paper in late spring 2011, and the reforms will be introduced before the end of this Parliament. We are also reviewing the role of Ofgem and the energy regulatory framework and today we are publishing the Government’s response to the call for evidence on the terms of the review.

We have a once-in-a-generation chance to rebuild our electricity market, rebuild investor confidence and rebuild our power stations. Like privatisation before it, this will be a seismic shift, securing investment in cleaner, greener power and delivering secure, affordable and low-carbon energy for decades to come.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I thank the right hon. Gentleman for early sight of his statement and for early notice that it would be made—ahead, even, of Government Back Benchers, for which I am grateful.

Let me be clear at the outset that the Opposition believe that the programme is absolutely necessary to secure energy for the future, and we will support fair and sensible mechanisms for reform. We agree with the Secretary of State that this is a once-in-a-generation opportunity to get it right and we hope that we can work with the Government and that, for their part, they will take on board the Opposition’s comments as they consult.

The issues that the Government must tackle are fourfold: security of supply, meeting renewable energy targets, finding the crucial investment for energy infrastructure—some £200 billion—and, as we heard in Question Time, keeping energy prices reasonable. It is crucial that the Government put in place the mechanisms to make new low-carbon investment attractive and they must bridge the looming energy gap without a rush for unabated fossil fuel generation. I am heartened by some of what the Secretary of State has said, but the Government must also provide energy security across a balanced and diverse energy portfolio and they must provide fairness and affordability for consumers.

We face this big challenge together, but we must not allow the consumer to bear the whole burden. The Secretary of State has dangled cheaper prices from 2030 in front of us today—jam tomorrow—but will he provide his modelling so we can be sure that the Government are doing everything they can to ensure that energy prices today are being tackled, too? We cannot allow increased energy costs to be an excuse for increased profit at a cost to our constituents.

The Government must seize this opportunity and act now to give investors the certainty they need and to meet the necessary time scales. Today, the Government have confirmed that the green investment bank is still under review. The Secretary of State has assured us that the Government are committed to low-carbon growth, but the question is: can he do it on time?

This is not the time for delay or dithering. Now is the time for action, and I hope that the Secretary of State will deem 2011 to be the year of decision. He rightly pointed out in his statement that if we do not take prompt action, “The reserve margin of spare generating capacity will fall over the next decade and the risk of interruptions to our energy supplies will rise.” Questions remain about whether new nuclear can be built on time and at the pace required and whether carbon capture and storage can be proven on an industrial scale and commercially applied to all fossil fuels on time. We also need to know the details about the funding of projects 2, 3 and 4. We also need to know whether agreements on energy storage with Norway or others will be on time, again, and sufficient in scale.

There are other questions, too. Although I recognise that many of them cannot be given definitive answers, I know that the Secretary of State’s officials will have modelled different scenarios. I ask, in the spirit of transparency and open debate, that the Secretary of State share as much as possible of his modelling and risk analysis for plugging the energy gap in the next few years with the House and with the Select Committee on Energy and Climate Change so that we can have a fully informed debate.

The Secretary of State today stresses a UK commitment to 30% of electricity from renewables by 2020. His commitment is clear and we support him. However, has he assessed the mood of the coalition’s colleagues in the European Parliament, who often seem to be at sixes and sevens and are certainly not four-square behind his stance? He is, we know, as we heard earlier this week, working closely with European partners. On Monday, he assured the House, with some feeling, that the Government are united on their position in Europe, but what is the true picture?

The statement is on electricity market reform, but given that we enter this winter with the worse gas storage for many years, does the Secretary of State also intend to make proposals on gas infrastructure and storage; and, if so, when?

Finally, will the Secretary of State give certainty to industry and to people who are already paying inflated energy bills that this programme will be enough to encourage energy companies to invest in the UK, to create the jobs that this country needs and, importantly, to protect customers from unaffordable energy bills?

[Chris Huhne]

I thank the hon. Lady for her comments and particularly for the helpful way in which she couched them. Of course we will be open to Opposition comments on the details of this matter through the consultation period and further on into the legislation. We shall need £110 billion of investment in electricity infrastructure and a total of £200 billion in energy, and one of the most valuable things we can tell investors is that there is, although I do not want to overstate it, substantial cross-party consensus between the coalition parties and the Opposition. That is very valuable in attracting big foreign investors in particular because it means that in the period over which there can be a payback of investments, which might be 20 years, foreign investors can be assured that there will be real stability of policy. I very much value that consensus and very much want to work with the hon. Lady to make sure it is there.

Let me deal with the hon. Lady’s concerns about consumers, which are absolutely appropriate. We have to make sure that business consumers and households in Britain get the best possible deal in supplies of energy—in this case, electricity. A fundamental part of the policy proposal that I hope she will welcome is that by providing investors with the certainty of a feed-in tariff, with a contract for difference, we will attract investment from the big six electricity companies and attract into the market other players—new entrants—to make it more competitive. We will also unlock the pools of capital that various Members have been concerned will not be available without this framework. It is very much part of our thinking that in trying to deal with the underlying problem of a more competitive market we should get more players into the market, because that will ultimately give the best assurance to consumers that we will get the best possible deal.

The hon. Lady asked about the shorter-term view. I made it clear in my statement that this package will deliver lower-cost electricity for consumers than would otherwise be the case on a 2030 view. We will redo the estimates for overall energy policy in the annual energy statement. As far as I can see, on the current basis there is no reason to expect that to change. In the summer, we said that with the overall package of policies we had set out, if one takes into account the energy efficiency packages and the likely reduction in bills as a result, consumers would pay about 1% more in 2020 than would otherwise be the case. That figure involves a fundamental assumption that the oil price will be $80 a barrel at that time, with a corresponding gas price, but oil prices might be substantially higher; obviously, spot oil prices are substantially higher today. The break-even point for consumers is $100 a barrel, and if the price goes north of that the policy framework we are setting out will leave British consumers paying less than if they were reliant, over the relevant period, on the volatility of the world oil and gas markets. That is fundamental. We are dealing with conditions of considerable uncertainty about the future, particularly in the oil and gas markets. We have heard today that the US Attorney General is taking a case against BP as a result of what happened in the gulf of Mexico. We know that there are rising risks and costs in extracting fossil fuels and we have to take that into account when we set a policy that can protect British consumers from the vagaries that might come.

The green investment bank is going to be a clear part of our thinking in dealing with the enormous investment challenge, and Ministers are reviewing the exact market failures that we are attempting to address with the bank. It is a long-term project and the most important thing, when we talk about decarbonising the UK economy, is not to get up and running for 1 January next year a green investment bank that might be half-baked, but to get it right. This institution has to be with us for the long term, right through to 2050, providing lending to help decarbonise the economy over the long haul, so I would much rather get it right than do it early and get it wrong.

I take on board the hon. Lady’s point about the need to deliver. I shall not rub salt in the Opposition’s wounds about the 13 years they were in power, but I remind her that we have inherited the position of being 25th out of 27 EU member states on renewable energy. [Interruption.] The hon. Member for West Ham (Lyn Brown) might chunter about that, but these are the facts. I am not making any comments about them, but am merely saying that we are 25th out of 27 EU countries and we need to improve that position.

The hon. Member for Hackney South and Shoreditch (Meg Hillier) also asked us to make available our modelling basis and I am very happy to do that. Indeed, the models that we used for the 2050 pathways study are already available on the Department’s website. Any Member of the House will find that function very user-friendly; it is Professor David Mackay’s favourite executive toy. Users can decide they want more renewables, a little less nuclear, a little more nuclear or a little more clean coal, put the change in and find out what the consequences would be. We aim to be extremely open and transparent in our whole process.

On the European Parliament, the reality is that we will determine these matters in this Parliament, not the European Parliament. I note that we have an overwhelming majority, judging by the recent vote on the regulatory justification for nuclear, for the sort of package that we have set out.

[Paul Flynn (Newport West) (Lab)]

On a point of order, Madam Deputy Speaker. Is it appropriate, given what the Speaker has said about short statements, that the Secretary of State’s answer to a single question has been longer than the original statement?

[Madam Deputy Speaker (Dawn Primarolo)]

Strictly speaking, that is not a point of order, but while I am on my feet let me say what I was going to say when the Secretary of State sat down. I am sure that the House is very grateful for his long and full answer, but I sincerely hope that we will revert to short questions and short answers so that everyone can get in.

[Chris Huhne]

Thank you, Madam Deputy Speaker. Gas storage is dealt with in the current Bill. On that point I shall end.

[Dan Byles (North Warwickshire) (Con)]

Does the Secretary of State agree that when the new measures are in place, we will require long-term regulatory stability if we are to encourage an attractive investment environment in order to decarbonise our energy market and keep the lights on at an affordable price?

[Chris Huhne]

I absolutely agree that we require long-term regulatory stability. That is one reason why we have been at pains to say that we will not change the terms on which investors relied when they made past investments. We want them to believe that when we put this framework in place they will be able to rely on a similar assurance of stability.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I strongly welcome the content of the statement on the future construction of energy markets and how they will underpin the move towards a low-carbon energy economy. The Secretary of State has said that there is currently a bias towards low-cost, low-risk fossil fuel generation, but it is more than a bias. The present build and planning permissions suggest that there is more gas in the pipeline than would cover the gap for reserve generation over the next period. The third of the four pillars he has mentioned involves capacity payments: how does he intend to fund those payments, and will he be able to direct them to ensure that reserve capacity is not overwhelmingly gas, as appears to be the case currently?

[Chris Huhne]

Clearly we want to have low carbon sources of supply, but I have made it clear that we are intending one of the three remaining demonstration projects on carbon capture and storage to be a gas project. Given the development of unconventional gas, there is a possibility that gas will provide a much more sustainable long-term source of supply than people had thought until recently. In those circumstances—carbon capture and storage applied to gas—gas may have a very important role in the long term, not just in the short term. Otherwise, I entirely agree. Capacity payments will be made on the basis of encouraging peaking plant, to deal with the ad break in “Coronation Street” when we all turn on our kettles, and to offset the intermittency problems that occasionally arise—the nightmare of the four or five cold still days in February when the wind turbines are not going and we need back-up capacity. The capacity payments will inevitably be made by consumers from their payments, but they will provide us with the assurance of supply that we have been proud to have in this country for a long time.

[Duncan Hames (Chippenham) (LD)]

There is, unfortunately, something of an uncertainty paradox, in that measures that seek to create some certainty in the market necessitate of themselves a period of uncertainty. That being the case, will the Secretary of State tell us how long energy investors will have certainty once his reforms have been implemented?

[Chris Huhne]

I am grateful to my hon. Friend for that question. When he reads the documentation we have tabled, he will see that we are at great pains to ensure that investors have the very clear message—not least because of recent experience in some other member states of the European Union—that the incentives that have been in place will be grandfathered. They can continue to rely on that. We shall minimise the amount of uncertainty, which is important not only to honour our past obligations but also if we want investors to believe in our future obligations. We have to be prepared to stand behind what we have said in the past, and we intend that to be the case. We will minimise the amount of uncertainty in joining up the two regimes, but we are of the view that we have to reform the electricity market to bring forward the low-carbon and secure supplies that we need.

[Mr David Hamilton (Midlothian) (Lab)]

I hope the Minister can find a way of sitting down now and again.

In terms of nuclear energy, we are talking about a subsidy by another name, and that is a major change in policy. I have real concerns—as will a number of other MPs when they come back in the new year—about supporting nuclear energy in the long term, when we have always argued that it should not be subsidised. What is in this for coal? Coal has played a major part in this country’s economic security, so what part will it play in carbon capture in the future? What projects will be going ahead and when?

[Chris Huhne]

There are two parts to the hon. Gentleman’s question. The first was whether the proposals are a subsidy for nuclear. I could not be clearer: this is a subsidy for low-carbon sources of energy generation. There is no subsidy specifically to nuclear. That is fundamental. [Interruption.] No; this is about low carbon. Our vision in the long term is that we should be able to rely on the market as much as possible to determine which sources of energy are the best for the British consumer. We want companies to make proposals, and—on the second part of the hon. Gentleman’s question—I very much hope that they will be on clean coal. We have an enormous amount of coal in this country that I want us to be able to use, but we cannot use it unless we can decarbonise it. We cannot use it and meet our carbon emissions targets unless we make a success of carbon capture and storage, which is exactly why I was so pleased that, despite a very tough spending round, we managed to secure £1 billion to make sure we have the first commercial-scale coal carbon capture and storage plant in the world. I hope genuinely that it will unlock a whole new future for coal as a source of low-carbon electricity generation.

[Neil Carmichael (Stroud) (Con)]

rose—

[Hon. Members]

Come on.

[Neil Carmichael]

I was just surprised to be asked.

I very much welcome the reforms, which are an excellent start. The Secretary of State talks about a gradual process. Will he give us some idea of when the four elements will be up and running?

[Chris Huhne]

We would aim to get the White Paper out in the spring and legislation landed in this place before the end of the Session, although realistically it would probably have to be a carry-over. I hope very much that we shall have legislation in place, and therefore the market system in place, in 2012.

[Malcolm Wicks (Croydon North) (Lab)]

I welcome the broad thrust of the statement. Does the Secretary of State agree that notwithstanding the beneficial effects of energy efficiency measures on prices, there are three reasons why prices are likely to rise in the medium term? The first is the new investment we require. The second is the climate change measures, which are vital, and the third is the dramatic global demand for energy over the next 30 years, which could go up by 30% or 40%. The only weakness in the statement that I can see is the social policy dimension. It is an irony that we have global warming, yet there are cold homes in Britain. Do we not require a step change in our thinking about social policies of different kinds to protect the most vulnerable during our winters?

[Chris Huhne]

I am grateful to the right hon. Gentleman for his question. He is one of the most informed people in the House on these matters, and he is absolutely right about the long-term drivers for energy markets. The social policy dimension is absolutely crucial for the Government, which is why the green deal puts such an important stress on dealing with the root cause of the problems of fuel poverty. Every winter we have debates in this place about the problems of fuel poverty, yet we have not made enough progress in really tackling the underlying issue, which is the energy inefficiency of the homes of so many people at the bottom of the income distribution. As I said in oral questions, the bills of those who are lucky enough to live in social housing with the decent homes standard could be only a sixth of the bills of owner occupiers or people in private rentals. We have to deal with that.

In the short term, we are committed, for example, to winter fuel payments, cold weather payments and to the continuation of the voluntary discount scheme for bills, and we shall underpin that with our own Warm Homes discount scheme from the next financial year. We are very aware of the issue and very concerned about it. We intend to make real progress in tackling the underlying causes, not merely providing sticking plasters for the symptoms.

[Several hon. Members]

rose—

[Madam Deputy Speaker]

Order. I ask again for short questions and short answers. Given that oral questions preceded the statement, I think we can assume that Members remember what was said.

[Martin Horwood (Cheltenham) (LD)]

Given the fresh security concerns about nuclear power, its notorious inflexibility and intermittency and the toxic legacy it will leave future generations for 1,000 years, should my right hon. Friend not explore a levy on nuclear to balance any hidden—even if unspecific—windfall subsidy, especially to existing nuclear power stations, which may come about through the reforms he has described?

[Chris Huhne]

My hon. Friend knows very well that our policy is no subsidy to nuclear. We are not intending to impose additional levies on nuclear, but the no subsidy policy certainly encompasses the idea that if there are uncertainties they have to be met in the payments made, for example, on waste and decommissioning.

[Barry Gardiner (Brent North) (Lab)]

Capacity payments have resolved one problem the Secretary of State had, which was the falling-off of power in 2017-18, but they may have given him another problem, which is that there will now be another dash for gas. Many companies were holding off, with planning permissions in the pipeline or already approved, but they will now proceed with that investment. Can he be sure that the surge in investment for gas will not detract from investment for other renewables? In addition, will he make good an omission in his statement—that the emission performance standards will not apply simply to coal, but will also apply to gas?

[Chris Huhne]

On the first point, we are consulting on the capacity payments scheme, and obviously the details will need to be worked through, but I believe that it is potentially more radical than the hon. Gentleman may be suggesting. One of the things that can be paid for under the capacity payment scheme is demand-side measures to encourage companies to get consumers to sign up for temporary interruptions in their supply, so they can turn off their fridges and so forth. That is a way of making sure that we need less peaking capacity, which will be very important. That so-called negawatt concept would also be encouraged by capacity payments. I do not believe that a consequence would be a dash for gas.

On the emissions performance standard, we have made it absolutely clear from the beginning—the coalition agreement and beyond—that this is about stopping unabated coal, as the dirtiest of the technologies. We want coal to have a future with carbon capture and storage; we want to see gas plant, if it is built, built with the readiness to apply carbon capture and storage. In the long run there may be a role for gas with carbon capture and storage, but I do not believe that it will have the consequences that the hon. Gentleman suggests.

[Stewart Hosie (Dundee East) (SNP)]

The statement was very clear: there will be new incentives, including for nuclear. That is a subsidy by any other name, and directly contradicts what the Secretary of State said on the “Today” programme in May; it contradicts what he said in his departmental debate in July, when he said that the coalition would allow new nuclear but with no public subsidy; and it contradicts what he said to his own party conference in September. So let me ask him: who does he think will feel most betrayed by this U-turn—he, his party, the coalition or the taxpayer who will undoubtedly have to pick up the tab for the folly of the new generation of nuclear power?

[Chris Huhne]

I could not be clearer than to say that there is no subsidy here which attaches to nuclear power. The subsidy attaches to low-carbon generation, and whatever the Member’s view, the reality is that nuclear power is a low-carbon energy source and the subsidy applies to low-carbon generation. Over time I want to see the technologies as they are at the moment compete, so that we can find which are the most effective at providing our consumers with low-cost electricity from low-carbon sources—and the framework will allow us to do that.

[Ian Swales (Redcar) (LD)]

How can the Secretary of State ensure that those who want to invest the much-needed billions right now do not get delayed by the consultation period and the navel-gazing that might follow today’s statement? For example, if someone has half a billion pounds for a biomass power station today, can they spend it?

[Chris Huhne]

My hon. Friend and I have had discussions on the specifics of biomass power stations, and I hope that some of the announcements that the Department has made, for example about bringing forward the review of the incentives for that type of plant, will help. We have also been able to issue some letters of comfort to different investors to try to ensure that they do not have problems with financing projects. I want to minimise the uncertainty that inevitably exists in changing from one regime to another, and make these investments happen as quickly as possible.

[Mr Tom Watson (West Bromwich East) (Lab)]

The Secretary of State mentioned volatile oil markets. These reforms will impact on the domestic oil sector in the UK. Can he tell me what he thinks the impact will be, and in doing so, can he tell me what measures he is taking in the next 72 hours to deal with the Christmas oil crisis?

[Chris Huhne]

I take it that when the hon. Gentleman says “the domestic oil sector,” he means the offshore oil and gas sector in its entirety. The prices for that sector are clearly set in a global market, so what we do, although it will be very significant in the electricity sector within the UK, will have a marginal impact on the overall global demand for oil and gas, and therefore on the prospects for our own domestic offshore oil and gas sector.

In the last 72 hours we have been trying to ensure that drivers can work longer—that they can get heating oil to homes that need it. The Energy Minister has been in constant discussions, looking at any way in which we can ensure that those who need heating oil and are currently short of that oil get it. That is essential. In those discussions, my hon. Friend has been informed about suppliers attempting to ensure that people do not have too much, so that there is enough to go round for everyone.

[Alun Cairns (Vale of Glamorgan) (Con)]

The Secretary of State’s statement includes some ambitious targets for renewables by 2020. What consideration has he given to planning matters in view of the coalition Government’s policy intention to devolve planning to a more local level, and what reassurance can he offer many people who might be concerned that large-scale wind farms could be foisted upon them?

[Chris Huhne]

I am grateful to my hon. Friend for his question because Ministers and senior officials were discussing that subject with representatives of the industry only this week. We had an interesting and useful round-table discussion about exactly that. I do not believe that top-down solutions are the right solutions, and therefore the planning framework that gives local communities real control over what happens in their area is absolutely crucial. At the same time, one message that we heard loud and clear from the industry is that where the industry has brought in local communities, often as co-investors, and where there is a clear benefit for the local community from renewable energy projects, including onshore wind, those projects go ahead. I think that is the right way forward.

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

I welcome part of the statement, although certainly not the part on nuclear, and I suspect that the devil will lie in the detail of the rest. For example, can the Secretary of State confirm what level of emission performance standards he intends to introduce, and whether both coalition partners remain committed to their pre-election position that any standard will be set at the equivalent of the emissions of a modern gas plant—in other words, 300 to 400 grams of CO₂ per kWh?

[Chris Huhne]

We are consulting on two levels, as the hon. Lady will see in the documentation: 450 and 600 grams. There is inevitably a certain margin of error, but she will see that those are the two points in consultation.

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

Can I take up the theme of a previous questioner? The history of renewable projects has been bedevilled by planning delays and objections. There is enormous concern in the business community that the new Localism Bill will only reinforce those processes. What representations is the Minister making to his colleagues in the Department for Communities and Local Government to overcome this, in order that we have joined-up government and give necessary reassurance to the business community?

[Chris Huhne]

The hon. Gentleman is right. Some issues can be tackled at national level; one planning issue on onshore wind surrounds aviation impacts and radar, and we should obviously lead that at national level. But I refer him to the answer that I gave previously: local people should be able to determine local planning and, therefore, local impact. If they are on board, and if they are brought into the proposals, renewable projects go ahead. That is our experience throughout the UK, and that will be the right way forward in getting planning approval for renewable projects.

[Paul Flynn (Newport West) (Lab)]

On what day in May was the right hon. Gentleman bewitched by the Pied Piper of nuclear power into learning to love a nuclear stealth tax? He and his party used to know that nuclear has never delivered on time or on budget, and that the only new nuclear power station in the world is already three years late and £4 billion over budget. Is it not irrational optimism for him to believe that it will be different here?

[Chris Huhne]

The hon. Gentleman is a careful student of the economics of nuclear power and is well aware of the track record. When he looks at the consultation document, he will see that we are providing greater revenue certainty for all low-carbon sources of energy. We provide no subsidy to construction for any particular sort of energy, and no subsidy to any particular type of energy on the basis of that energy’s characteristics. That means, for example, that if someone comes forward wanting to build a new nuclear power station, all the risks of construction—all the risks of delivering on time and to budget—fall on the investor, not the UK Government. If, on that basis, investors come forward, and they assure me that they will, I believe we will have new nuclear power stations, but if there is any delay in construction, that cost will fall to the investor, not to the UK Government.

[Paul Flynn]

On a point of order, Madam Deputy Speaker. In view of the unsatisfactory nature of that reply, can I give notice that I wish to raise this issue on the Adjournment of the House?

[Madam Deputy Speaker]

The hon. Gentleman knows full well that that is not a point of order, but he has got his point on the record at least.

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

First, can I welcome the Secretary of State restating his long-held, principled and consistent commitment to nuclear power? On carbon capture and storage, specifically, can he guarantee my constituents, who eagerly await the Energy Minister’s visit in the new year, that there will be no delay at all in the decision, which we expect early in the new year, on the first carbon capture and storage project for Longannet?

[Chris Huhne]

I believe that my hon. Friend the Energy Minister is making good progress on that. We have made good progress at an official level as well, and there is no reason to anticipate any delay. I very much hope that at the end of our Department’s collective term of office, we will go down as being a happening Department that makes things happen. That is what we intend to do with CCS.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

The Secretary of State has mentioned the significant investment that will be required. Does he recognise that the wave and tidal sector seems somewhat unloved in the UK, because it sees its opportunity overseas? What does he feel he should do about that, and what will he do to ensure that that opportunity goes to people in this country who are prepared to invest?

[Chris Huhne]

I do not know how the hon. Gentleman got the impression that wave and tidal are unloved. They are certainly not unloved by me, and I want to ensure that we recognise the potential of those technologies, and that they are brought forward commercially as soon as possible. I know, for example, that the tidal stream pilot project on Strangford lough has made good progress, and there are real opportunities, because, although tidal stream power is intermittent, it has one advantage over offshore wind of being predictably intermittent. So, I very much hope that those technologies come on-stream. We have a marine energy programme designed to make that happen, and I assure the hon. Gentleman that this ministerial team wants that to succeed.

[Kevin Brennan (Cardiff West) (Lab)]

There will be no shortage of either wind or gas while the Secretary of State is in post, that is for sure. On the oil issue, which we discussed earlier, and the long-term impact of his reforms on the domestic oil market, my hon. Friend the Member for West Bromwich East (Mr Watson) mentioned an immediate crisis. We have 72 hours of inclement weather ahead of us, which means that oil supplies will be even more disrupted. What steps will the right hon. Gentleman take immediately to call together oil suppliers to ensure that he sets out clearly the rationing that he thinks appropriate, something to which the Energy Minister previously referred?

[Chris Huhne]

We are already in very close contact with the suppliers, and we anticipate that deliveries will be adequate to ensure that there are supplies wherever they are needed before Christmas.

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

Manufacturers in and around my constituency and elsewhere are doing what they can on a small scale to reduce electricity consumption by taking energy efficiency measures, but what plans do the Government have to encourage that on a large scale as a way of dealing with increased demand in the years ahead?

[Chris Huhne]

I refer my hon. Friend to our extensive answers on the green deal scheme in Energy and Climate Change oral questions earlier. It will be an ambitious, comprehensive and enormous scheme to ensure that we completely refit our housing stock.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Secretary of State will be well aware that the housing with the poorest insulation is in the private rented sector. Will he put pressure on his fellow Ministers in that field to reconsider their decision not to go ahead with landlord registration or other measures, such as using the buying power of housing benefit to force landlords to insulate homes for those vulnerable tenants?

[Chris Huhne]

I think the hon. Lady will welcome our provisions in the Energy Bill, which is being debated in the other place and will come to us in the new year, because they ensure that, if the private rented sector does not take up the green deal adequately over the period to 2015, first, a tenant will be able to request a green deal installation and not be unreasonably refused, and secondly, there will be regulatory powers to improve the energy efficiency of the private rented sector for F and G-rated homes.

Points of Order

Thursday 16th December 2010 Commons Chamber

13:14

[Mr Tom Watson (West Bromwich East) (Lab)]

On a point of order, Madam Deputy Speaker. Before the Front Benchers leave the Chamber, I must say that I have not been convinced by the answers that the Secretary of State gave me about dealing with the winter oil crisis. What provisions are there for him to return to the House later this afternoon to make an urgent statement on the detail of how he is dealing with that crisis?

[Madam Deputy Speaker (Dawn Primarolo)]

Frankly, it is a matter for the Secretary of State when he chooses to come before this House and the information that he makes available to it; it is not a matter for the Chair. So, the hon. Gentleman has got his point on the record, but at this point in time it is not actually a point of order.

[Kevin Brennan (Cardiff West) (Lab)]

Further to that point of order, Madam Deputy Speaker.

[Madam Deputy Speaker]

As long as it does not pursue the same point, Mr Brennan, because I have made it quite clear that the information on when the Secretary of State comes before the House is a matter for him.

[Kevin Brennan]

Taking on board your comments, Madam Deputy Speaker, I wonder whether you can advise us on the mechanism for a recall of the House if the crisis should become serious or much worse over the Christmas recess?

[Madam Deputy Speaker]

I think the Secretary of State and the Government will keep a very close eye on that. The hon. Gentleman is a very experienced Member and knows that any Member can approach the Speaker if he or she believes it necessary for the House to be recalled.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

On a point of order, Madam Deputy Speaker. This morning we were given a written statement on the proposed closure of coastguard offices throughout the UK. Stornoway in my constituency faces losing perhaps 27 jobs relating to a massive sea area. Is there any way in which we can get the Minister to the House, so that Members can cross-examine him and raise their concerns, particularly on the announcement before Christmas of a 14-week consultation period? We need at least an extension of that, and we need the Minister here to answer those points.

[Madam Deputy Speaker]

I have had no request from a member of the Government with regard to making a statement on that issue. Again, the hon. Gentleman is a very experienced Member, and I have a feeling that he will probably find other ways to make sure that he can raise his point and question a Minister.

[Stephen Lloyd (Eastbourne) (LD)]

On a point of order, Madam Deputy Speaker. Can the Secretary of State give me an update on the longer-term commitment for the feed-in—

[Madam Deputy Speaker]

Order. Points of order are supposed to be directed at the Chair. They are not an additional way of putting questions directly to the Secretary of State. Given that we have had a very full statement and Question Time today, the hon. Gentleman has had plenty of opportunities to do that.

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

On a point of order, Madam Deputy Speaker. Members have been spotted in recent days wearing such items as denim in the House and catching the Speaker’s eye. Could you or the Speaker issue guidance to new Members such as myself on an appropriate dress code for the mother of Parliaments?

[Madam Deputy Speaker]

There are many things on which the Chair is asked to pass comment; the sartorial elegance of Members is not one of them, and that is not a point of order. As all Members are aware, there is a common dress code for the Chamber, which is to be smart.

[Thomas Docherty]

rose—

[Madam Deputy Speaker]

Mr Docherty, I cannot believe that you have anything further to that point of order.

[Thomas Docherty]

Further to that point of order, Madam Deputy Speaker. Could the Speaker circulate that dress code to all Members, on both sides of the House, so that we do not have a dress-down Thursday in future?

[Madam Deputy Speaker]

If you have an issue specifically with Members’ dress, you could always speak directly to that Member and advise them. I am sure that they would welcome it, given your own sartorial elegance. But, using the time of the Chair or Mr Speaker to nudge Members in that direction is inappropriate, and I sincerely hope that we can now move on to the rest of today’s business.

Royal Assent

[Madam Deputy Speaker]

I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Finance (No.3) Act 2010

Equitable Life (Payments) Act 2010

Local Government Act 2010

Savings Accounts and Health in Pregnancy Grant Act 2010

Superannuation Act 2010

Terrorist Asset-Freezing etc. Act 2010.

Backbench Business

Thursday 16th December 2010 Commons Chamber

[14th Allotted Day]

Park Homes

Thursday 16th December 2010 Commons Chamber

13:20

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I beg to move,

That this House notes that there are approximately 1,800 park home sites in England and Wales; further notes that current legislation permits a minority of park home site owners to cause great distress, damage to property and danger to health of park home residents; welcomes the Government’s intention to lay before the House secondary legislation to transfer jurisdiction for park homes to the Residential Property Tribunal Service; but calls on the Government to review the case for establishing a fit and proper person criterion for park home site owners and to bring forward relevant legislation at the earliest opportunity to prevent in particular park home site owners interfering with the sale of a park home without good reason.

I thank the Backbench Business Committee for selecting the motion before us for debate today. I am particularly pleased that Back Benchers from across the country have the opportunity to put the case for more protection for a group of very vulnerable people. I also thank the noble Lord Graham for his unstinting support for park home owners over many years.

I particularly thank my constituent, Sonia McColl, from the Silent Woman park home in my constituency for organising and motivating park home owners from all over the country to speak out about their bad experiences. During this year, she organised a massive petition that was presented to 10 Downing street, after which there was a meeting here in the House. More recently, as part of her “justice for park home owners” campaign, well over 100 predominantly older people demonstrated in Old Palace yard with banners, photographs of park homes being torn down and some very good chanting. There was a mass lobby of individual MPs and the day culminated in an extremely well attended meeting in the House, when we sadly heard similar stories from people from all over the country. I thank the Minister for coming and listening on that occasion. I also acknowledge the help and support given by the park home owner associations and welcome the fact that so many MPs are here today to support their constituents. Many other hon. Members have expressed regret that they are unable to attend today. However, they wholeheartedly endorse the call for the Government to take more action.

If we look back over the years, the plight of some park home owners has been raised on many occasions and amendments have been made to legislation. However, some of the worst problems have not been addressed. I was interested to read the Adjournment debate initiated by the former Member for Suffolk Coastal in March 2009. He said:

“I have rarely been as angry about a matter as I am about this case…most of us came into Parliament to oppose bullying. Deep down, what we dislike most is those who are strong bullying the weak.”—[Official Report, 2 March 2009; Vol. 488, c. 701-704.]

The issue raised was the buying and selling of park homes, to which I shall return later. The former Member for Teignbridge secured an Adjournment debate in March 2008, which also covered the buying and selling issues and the need for a fit and proper person rule. I hope that today will be a landmark moment and that the Government will commit to do everything in their power to address these long-standing and well documented issues.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

At the Lakeside park in Bridgwater, we are dealing with blackmail, threats and individuals who are determined to get these people out of their houses. Surely the hon. Lady agrees that the matter has become a national scandal? Right across the country, the lives and livelihoods of these people—in some cases the most vulnerable and needy in society—are being threatened because of this anomaly.

[Annette Brooke]

I certainly agree that the matter is a national scandal. If we consider the spread of constituencies represented by hon. Members here today, we can see that it truly is a national issue.

There are approximately 85,000 park homes on 2,000 sites in England, and 5,000 homes on 100 sites in Wales. Park home living can provide an idyllic lifestyle. Park homes are often located on the edge of open countryside and they provide a useful addition to the housing supply, particularly for many thousands of mainly retired people. In addition, they provide smaller homes with lower maintenance costs and lower council tax payments; they are on one level, and they occupy small plots within a larger site. There is the opportunity for a really good community to develop in a positive way in the vast majority of sites.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

I commend the hon. Lady for championing this cause and securing the debate. Although the tribunal will deal with many of the unscrupulous things that those who live on these sites have to put up with, is not the real issue that of being able to dispose of, or sell, a park home? In such cases, is almost too late for the individual concerned by the time the matter goes to tribunal. Sonia and everyone involved must be commended for raising that over and above what the Government are doing on the tribunals.

[Annette Brooke]

I thank my hon. Friend for that intervention. I shall return to that in more detail, but today we are discussing the crunch of the matter.

Park homes can provide an idyllic community, but community strength can develop in a different way on the minority of sites where there is an unscrupulous operator, who may well bully, intimidate, harass and even defraud vulnerable people. People in adversity will often stick together. However, in some cases, that sense of community cannot develop because park home owners can become too frightened to be seen even talking to their neighbours. I must emphasise that the points that I shall make are directed at a minority of park home site owners. There are excellent, well managed park home sites in my constituency, and I do not wish to suggest that all site owners engage in bad practices.

[Dr Julian Lewis (New Forest East) (Con)]

I add my voice of commendation to those who have praised the hon. Lady’s excellent work. Even some of the bigger firms that run park home estates, such as the one I have in my constituency, are not above a bit of sharp practice. I shall give two examples that she might like to consider. There is a great reluctance to recognise residents’ associations—for example, there have been demands for lists of all the people who are going to sign up rather than merely requesting sight of a list and people not then being able to take it away, which I believe is the legal position. In one case, there was even a claim that a letter sent to the park home owner complaining about certain conditions libelled the park home owner. Of course, one cannot libel someone by sending a letter to that person if one does not publish it to anyone else. However, ordinary people might not be able to cope with such tactics without the assistance of their MPs.

[Annette Brooke]

I agree absolutely with my hon. Friend’s points. I endorse the point that residents’ associations can in principle be formed, but that they are in practice often obstructed. That relates to my point about people being frightened to be seen talking to others on the park home site.

There are good site owners. However, a minority of site owners make legislation difficult and I hope that the outcome of this debate will be a stiffened resolve to tackle the issues, rather than just saying that they are too difficult. I am extremely pleased that the Government have committed to bringing in secondary legislation to transfer jurisdiction for park homes to the Residential Property Tribunal Service. That will undoubtedly help solve some of the problems that park home owners have been faced with and will remove the need for an expensive court process in many cases.

A recent case I am trying to deal with could potentially be solved through that route. Let me mention it briefly. A park home was purchased in May this year. The new owner wanted to make improvements and applied for an insulation grant for her mobile home from the local authority, and the local authority granted it. There is a clause in the site agreement with the site owner of this particular site that any works to the exterior of a mobile home require the express permission of the site owner. Somewhere along the line, the site owner has requested that the park home owner agrees to her home being re-sited. She has refused to do that and the site owner will not give permission for the insulation to take place. The local authority has confirmed to me that there is no technical reason why the work on the home cannot be carried out in its current position. The tribunal offers the opportunity for both sides to put their case and for all aspects to be considered. Unfortunately for my constituency, this route is not yet open, which is yet another reason why we cannot delay.

Last winter, the electricity supply on a site was faulty on the coldest night of the year. It was not restored in a reasonable time, and an 84-year-old was taken to hospital with hypothermia the next day. Purbeck district council, bravely for a small council, took the site owner to court. The site owner was found guilty and fined £1,000 with £6,000 costs. We could say that we won the battle, but not the war. My worry is that more bullying may follow.

[Nicky Morgan (Loughborough) (Con)]

I congratulate the hon. Lady on securing this debate. The fact that so many Members are here on a day when Christmas is not far away shows the strength of feeling about this issue among constituents and their MPs. I entirely understand what she says about bullying following comments made by residents of Palma park, a park home site in my constituency. The hon. Lady talked about cold nights; in my constituency, the local site owner allowed the gas to run out, which meant that on one of the coldest nights of the year the residents did not have any fuel. The hon. Lady also mentioned the spirit of community in adversity. At the moment, the residents are having to get together to clear the cesspit because the owner will not do so. I entirely agree that this situation cannot be allowed to continue for the many thousands of park home owners across the country.

[Annette Brooke]

I thank my hon. Friend for that intervention. I am sure that we will be continually reinforcing the same points.

I sincerely believe that we need a fit-and-proper-person law, which local authorities will welcome.

[Mr Steve Brine (Winchester) (Con)]

I add my congratulations to the hon. Lady on securing the debate. She and I work well in many other areas, and I pay tribute to her work on this. We need not only justice for park home owners in their campaign but confidence for people who may think about living in park homes in future but might be terrified of doing so. In my constituency, we often hear about the idea of affordable housing, whatever that means in practice, but these are, in many cases, truly affordable homes. Many people who could have the idyllic lifestyle that park homes can afford may be terrified about moving into that environment because of some of the things that are being mentioned. I hope that that will be one of the things that comes out of this debate.

[Annette Brooke]

I thank my hon. Friend for that intervention. It is indeed the case that this should provide an idyllic lifestyle and a useful addition to the housing supply.

Somebody said to me that we could make a comparison with the employment of a warden at an elderly persons’ dwelling site, because such a warden would be required to have certain characteristics. I am not suggesting that a site owner equates to a warden in any way, but the fit and proper person rule should be taken into account.

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

I welcome this debate; I congratulate the hon. Lady on securing it and on her tireless work on the matter. Does she recognise that there are concerns about fit and proper person criteria given, for example, the utter failure of the Football Association to make them mean anything? Does she agree that the Government must spell out exactly what those criteria are?

[Annette Brooke]

I thank the hon. Gentleman for his intervention. I am not pretending that this is easy to achieve, but I am trying to get a clear timetable to make progress on it. There is already work in progress. The previous Government had a statutory instrument ready to run, so some consultation has already taken place. We have the tribunal coming on board. That will provide evidence when people bring their cases about fit and proper persons and enable us to work together on all the issues that are arising.

I want to concentrate on malpractice in the buying and selling of park homes. In 2009, I presented a ten-minute rule Bill on this issue that aimed to prevent unjustified interference by a site owner when residents sell their park home. A park home site owner might reasonably wish to meet a prospective buyer, or at least to have a reference supplied, but an interview without the seller or an independent witness present can provide opportunities for rogue site owners to make misleading or untrue statements. Examples of such statements from across the country include: “The home is in poor condition”; “The home is not worth the price you’re paying”; “The home will have to be moved to another pitch next year”; “I have a right to ask the court to let me take the home off in five years”; and “The park is being developed and the home will have to be moved.”

Alternatively, the prospective buyer might be intimidated by real or implied threats and not want to be involved with the site owner in any way. The prospective buyer might understandably decide that he or she does not want to live on a park run in such a way, and/or by such an unpleasant person, and the sale will fall through. After that has been repeated a few times, the seller eventually sells the home to the site owner for a token sum. In each case, there are no witnesses and the prospective buyer is usually unwilling to give a witness statement, as he or she simply wants to get away from the park as quickly as possible. The seller does not usually go to court because there is no witness statement and the buyer is lost anyway.

The incentive for the site owner is to buy the home for a small sum, remove it from the park, site a new and possibly bigger home on the pitch, and sell it, thereby making a clear profit of perhaps £100,000. Rogue site owners currently have the ability to sabotage sales and can rely on the fact that many people who move to park homes are frail, vulnerable, elderly and easily intimidated. It seems reasonable for a site owner to be able to check out a prospective buyer, but how can we stop the abuse and possible fraud currently taking place? My Bill suggested that there should be an independent witness present at such meetings. However, that would not tackle phone conversations, so I can see that this is quite complicated.

In one case, constituents of mine were offered £81,000 by a prospective purchaser on the open market. The site owner had made an earlier offer of £15,000. A meeting took place between the prospective buyer and the site owner, who wrote to my constituent on 4 October 2007 to say:

“Thank you for your letter...introducing the above young lady to me and seeking my approval for her to buy the above home. Since taking over the park in 1999 we have always promoted the location as a retirement one for people over the age of 55. With that in mind I am unable to agree to”

the lady

“purchasing your home”.

On 5 October, the next day, a letter was issued to all residents on the park that said:

“Since taking over the Park in 1999 we have always promoted the location as a retirement one for people over the age of 55. My legal advisors have informed that this should be formalised within the Park Rules and I now write to advise you of the addition of the following rule…The Park is for retired/semi retired persons over the age of 55.”

So the rule was introduced after the refusal. The letter continued:

“In the event of anyone disagreeing with this rule please let me have your written objection within 28 days of the date of this letter.”

Representatives of the residents association on the site tell me that the prospective purchaser was originally prepared to make a statement about conversations with the site owner.

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

While I entirely agree with the need to find a better solution for the buying and selling of park homes, we also need something to help with dispute resolution. In my constituency, I came across a situation regarding residents wishing to insulate their park homes, which was being resisted by the site owner on grounds of the aesthetics of the park. I looked at that and saw that there were arguments in both directions. I then discovered that there was a conflict of interest because the owner was supplying gas to the residents at a premium price. This raises enormous questions. We need a dispute resolution system to deal with such ongoing problems that will give confidence to park home owners and certainty to operators about how they can act with regard to the residents.

[Annette Brooke]

I thank my hon. Friend for that helpful intervention. As he says, certainty and a clear understanding of the rules, and a requirement not to change them overnight, would be a big step forward. The residential property tribunal will enable both sides to put their case. I do not believe that it will solve the problem with buying and selling, but it is definitely a first step, and this debate will ensure that the next steps go ahead subsequently.

[Chris Bryant (Rhondda) (Lab)]

I, too, congratulate the hon. Lady. There were debates on this matter in the Parliament before she was elected, which were secured by the former Member for Bridgend, Win Griffiths, who had Trecco bay in his constituency. She follows a fine tradition. The big problem is the conflict of interests. The main interest of many site owners is selling new properties. That drives every other decision and informs the way they deal with people. That is why they invent new rules every six or 12 months that make it possible for them to sell another property for £80,000, £90,000, £100,000 or £120,000.

[Annette Brooke]

I thank the hon. Gentleman for his intervention. It is probably time for me to be balanced. We must accept that the site owner needs a return on their capital to invest in the park and make it a good place to live. We need to get the right balance in the legislation that allows for investment, while ensuring that no extortionate demands are made of people. I think that the House has the will to make that happen.

[Christopher Pincher (Tamworth) (Con)]

May I add to the bouquets under which my hon. Friend is being buried for securing this debate? I also acknowledge the Backbench Business Committee for sponsoring the debate. We are bringing Parliament closer to the people by debating the issues that concern them. Does she agree that reasonable, respectable park owners have nothing to worry about in the extension of the rights of park home residents, because residents want to have sensible rules about their ground rent and maintenance requirements to ensure that their communities are strong and safe?

[Annette Brooke]

Good site owners want the business to be cleaned up, because the stories that we hear reflect on them and their ability to run their parks. We must take that on board.

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

My hon. Friend not only has huge support today—all of us who attended the lobby pledged to help her take these matters beyond this debate—but if the motion is passed, there is a general will that the Communities and Local Government Committee should be asked to consider this matter. If it takes evidence, there is a willingness to help her and the Government to legislate on all the issues together, not just on the narrow matter that is in the pipeline. I want her to know that we want the law changed to cover all the abuses to which she has alluded.

[Annette Brooke]

I thank my hon. Friend, because we have to pursue this issue and not just let it go quiet for a year. We have to push at every opportunity.

[Alun Cairns (Vale of Glamorgan) (Con)]

I congratulate my hon. Friend and underline the comments that have been made by all hon. Members about her work. The shift from the county court to the tribunal is important, but many people will face difficulty in using the tribunal process, given that legal aid is not generally available for tribunal services. Does she agree that strong guidance is needed to provide understanding for those who want to use the tribunal process?

[Annette Brooke]

There was an enlightening presentation on the future tribunal service at the mobile homes all-party group. We were reassured that the process should not cost a great deal of money for the ordinary person and that the cases and outcomes would be published. It would be extremely useful if those were published on the internet, because that would provide evidence for the next stage of legislation. My main concern is that the right to go to a tribunal will not solve the fundamental problems, because potential purchasers will just disappear when the difficulties are raised.

[Mel Stride (Central Devon) (Con)]

I thank the hon. Lady for her great generosity in giving way to so many hon. Members in such a short space of time. The current court process can be prohibitively expensive and many unscrupulous site owners delay in the courts to thwart those who are pursuing them. Does she agree that it is fundamental and vital that the tribunal processes cases swiftly and mediates without delay in all cases?

[Annette Brooke]

The all-party group made that point clearly and we will monitor the issue. We do not need to wait for the Select Committee to do so.

I shall return to the example that I was giving. We went to the police, because it is a case of fraud. There were enormous difficulties in getting the police to accept that it was not just a civil matter. We now have a clear understanding with Dorset police and matters have moved forward. The case was eventually taken up, although not wholeheartedly. It was not pursued by the Crown Prosecution Service. Even though there are clear examples of fraud, it is difficult to deal with them as such.

I have been putting the case for long enough. I commend the motion to the House so that we can achieve justice for park home owners.

13:46

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

I, too, congratulate the hon. Member for Mid Dorset and North Poole (Annette Brooke) on bringing this matter to the House. I welcome and support her acknowledgment of the role of Lord Ted Graham, who has done magnificent work over many years on this difficult subject.

There are a number of park home sites in my constituency. I lost one and gained one as a result of the boundary changes at the last election. The one that I lost was in extremely good order, whereas the one that I gained is frankly a disgrace. The owner has persistently refused to maintain standards at a level that I regard as necessary for human safety. The electricity supply cabinets are his property, not that of the park home owners. He charges through the nose for the use of the meters, and yet they are unsafe. There has been a circular argument between the site owner, the householders, the local authority and various regulators about who is responsible. I have no doubt that the park owner is responsible. He provides the services at a rip-off price to residents, so he is responsible for ensuring that those services are provided in the manner that would be expected under any other leasehold arrangement. Many hon. Members live in properties that have leasehold arrangements and we should draw many parallels from the standards that we expect. That ought to be the point of guidance on which the law is based. I appreciate that there are differences, partly because the longevity of such structures is typically much shorter than that of brick and mortar properties, but the principle holds.

I like the notion of the fit and proper person, and think that we should work on it. There are some very responsible park owners, some of whom the all-party group has met over the years in their lordships House. We have met people who have had very good ideas about how to improve the relationship between tenant and landlord. We need to identify and build on best practice, and we should support and work with park owners who exercise it. At the same time, we must come down like a ton of bricks on the cowboys in the industry, who are not prepared to ensure that there is safe lighting so that people can get to their homes safely, and who enforce practices such as the hon. Lady described.

Selling scams, in particular, need to be examined carefully. If I own a piece of property and choose to sell it, the relationship should be purely between myself and the person who purchases it, although I appreciate that it happens to be parked on somebody else’s land.

I am pleased to see that my neighbour, the hon. Member for Eddisbury (Mr O'Brien), has just arrived. Following the boundary changes, he inherited a good park home site, although he has an interesting relationship with one of the tenants. I shall say no more about that. [Interruption.] It is one of his more challenging constituents, I think it is fair to say. Am I right? He is nodding.

If a property conforms to the existing rules of the park, the landlord should have absolutely no right to interfere in the question of who the seller can seek to pass the property on to. If it breaches the rules of the site, that is a different matter. That is the same in conventional leasehold arrangements, because if a property has not been maintained to the required standard—for example, in its external decoration—the landlord can put pressure on the individual living there. A few estate agent or lawyerly-looking people on the Conservative Benches are nodding in agreement with that. Those principles are well established in landlord and tenant relationships, so why do we seek to make the matter complicated?

I say to the Minister that in considering what revisions are necessary—I think all parties agree that revisions are needed—we should start by considering how conventional leaseholders in bricks and mortar properties are treated and ask ourselves what changes would bring about a set of rules that will work for park homes. At the same time, we need to protect the interests of decent park owners and address the challenges that the hon. Lady described.

On the site to which I referred, the owner calculates the electricity bill in quite an interesting way. One resident has written to me stating that the cost of electricity is generally between £2 and £3 a unit, which is pretty pricey. I know that the Government have driven up the price of fuel, but not by that much. It seems extraordinary that utilities can be charged at a price that is frankly exorbitant. If investments have to be made across the landlord’s property, it is perfectly reasonable that tenants should make a contribution in the same way that anyone else in that situation would have to. However, for them to be charged for utilities at not just a premium price but a rip-off price seems absolutely wrong. That is another matter that I ask the Minister to consider.

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

I was under the impression that electricity and mains gas were covered by regulations to be enforced by Ofgem. There is much more of a problem with oil and liquefied petroleum gas, on which there is no protection at all for consumers in park homes. I have been struggling to get an answer from Government Departments on that point. The matter that the hon. Gentleman raises is a real problem, and I hope that the Minister and his colleagues will consider it.

[Andrew Miller]

I am not sure about gas, because no gas is provided in the homes in question apart from bottled gas. In that particular case, the landlord has a central meter and one can see how much electricity is being used on the whole site, but each property has a sub-meter. That worries me intensely, because he appears—I do not know whether this is correct—to be able to charge whatever he chooses for the renting of the meter, which is a nice way of marking up the price. That may be how he gets away with the price, and perhaps we need to reflect on that detail.

Such little scams, added together, mean that people who are trying to live frugally in properties that are not worth a huge sum are being presented with bills that creep up and up. The House should be in the business of seeking to protect those people, because they are among the most vulnerable. The lady who wrote to me has put her head above the parapet and been prepared to take on the park owner, and I commend her for that. She gets every possible support that I can give her, including working with the local authority, trading standards and so on. However, people in such situations are predominantly those who do not have the capacity to take on landlords who make legal threats such as those that the hon. Member for Mid Dorset and North Poole mentioned. She talked about a rule being changed the day after a purchase was refused, and in such cases people do not have either the money or the experience to take on the case, so they need the House’s support.

I urge the Minister, and my hon. Friend the Member for Derby North (Chris Williamson) in working with the Minister, to try to find a set of rules that commands the support of the whole House. I urge him to start his search by examining how the rest of the leasehold world operates and considering whether we can learn from the experience of changes in that sector over the past 20 or 30 years. We need to improve the lot of the particularly vulnerable constituents whom we are all seeking to represent this afternoon.

13:57

[Peter Aldous (Waveney) (Con)]

I congratulate the hon. Member for Mid Dorset and North Poole (Annette Brooke) on securing the debate. I wish to speak in support of the motion, which provides us with an opportunity to raise the concerns of a group of residents whose needs are often overlooked.

Park homes provide an affordable alternative to mainstream housing. Quite often, park home owners are retired and have a limited income. Living on a park has the attractions of both security and affordability and provides the opportunity to build up a community spirit. That said, although it would be wrong to paint all park owners with the same brush as being unscrupulous and unsympathetic, there are concerns that home owners do not have a proper channel for voicing their concerns. They need to ensure that their contractual rights are honoured and that park owners provide them with a good service in return for the money that they pay.

One husband and wife in my constituency have contrasted the service that they received in the 1960s with what they get now. Back then—in different times and with different standards, I admit—in return for £2 a week there were clean and well-kept lavatories, proper baths and a wash house with steaming hot water for the weekly wash. Now, in return for a site rent higher than the monthly council tax bill, the only service provided is street lighting and the occasional filling in of potholes.

I welcome the Government’s intention to transfer jurisdiction for park homes to the Residential Property Tribunal Service. That will provide home owners with a more level playing field for resolving disputes with park owners and give them an affordable opportunity to have a say on the management of their site, to ensure that maintenance work is carried out as and when it is necessary and that they get the service for which they have paid.

We need to improve the process for selling homes. Currently, that can take too long and can be drawn out over a long period, and site owners have an opportunity to interfere with sales for no good reason. We should bear it in mind that many home owners are elderly, and when it comes to a sale, they may need to move quickly to fund, for instance, residential care. The ability of site owners unreasonably to drag out the process must be addressed.

Home owners have also complained to me about the high rates of commission charged on sales—10% is a high figure when one takes into account that the homeowner and not the site owner finds the buyer. Quite often, the sale price on which the commission is based reflects the value of improvements such as porches, insulation and brick skirts, for which home owners pay. It strikes me that there is little justification for such high charges if they are in excess of the actual costs incurred by the site owner. It is said that reducing the commission will lead to higher site fees. My reply is that it is better to move to a transparent system in which fair charges are made for providing legitimate services rather one that relies on outdated practices.

In conclusion, I thank the hon. Member for Mid Dorset and North Poole for securing this debate, and I look forward to hearing from the Minister about the Government’s timetable for introducing the tribunal service, and their views on how to improve the sales process to make it fairer to home owners.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I call Stephen Gilbert.

[Stephen Gilbert (St Austell and Newquay) (LD)]

rose—

[Stephen Lloyd (Eastbourne) (LD)]

Thank you very much, Madam Deputy Speaker. Like everyone, I congratulate my hon. Friend—

[Madam Deputy Speaker]

Order. Clearly, I should speak a little louder. Sometimes I get names wrong, but you are definitely not Stephen Gilbert.

14:01

[Stephen Gilbert (St Austell and Newquay) (LD)]

Thank you, Madam Deputy Speaker. I apologise to my hon. Friend the Member for Eastbourne (Stephen Lloyd). Although we share a first name, there are clearly some differences in our surnames. I am sure he will get a chance to speak later in the debate.

I add my plaudits to those of other hon. Members to my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) for securing today’s crucial debate, and to the Backbench Business Committee, which chose it. The Committee is revolutionising the way in which the House works and allows us to respond to our constituents’ concerns in a timely way.

There are more than 700 park homes in my constituency. Thousands of people across the country are affected by this issue, so its importance cannot be denied or ignored any longer. It is beholden on the Government to move swiftly on some of the measures that hon. Members have outlined.

As the chair of the all-party group on housing, I am a passionate believer that every person deserves somewhere safe and secure to live, and that no one should experience extortion, intimidation or harassment in their own home, but that is the reality that faces many vulnerable people in park home sites. In my view, there is a serious gap in the legislation and a worrying lack of regulation, and perhaps most importantly, as has been mentioned, there is no fit and proper person test for site owners, who in effect act as landlords to communities of vulnerable people.

Of course, the majority of park home sites are well run by well meaning people. However, the House cannot refuse to take action just because the majority do well. One reason we are here is to look after, and intervene for, minorities who face difficulty.

Earlier this year, in the run-up to the general election, I conducted a survey of every park home in my constituency. Many of the responses were more concerning than those that hon. Members receive from average street surveys—they were distressing to read. One issue that came up time and again is the extortionate rates at which some site owners increase their pitch fees year on year. One constituent told me of an annual increase of 20%, which is clearly out of order—it was well above the rate of inflation for that or any year. However, that person was elderly and vulnerable, and had no one to act as their advocate. They were entirely reliant on the information that the site owner provided them on their rights.

A 2002 study by Shelter, the housing charity, suggested that

“in practice above-inflation increases or one-off charges may be levied to cover particular items.”

However, the problem is much more endemic. Clearly, above-inflation increases are the norm in sites across the country, and there is no added value for residents. I hope the Minister addresses that in his comments.

Another issue arises when we go back to basics. Under Land Registry rules, there is no requirement to register pitches, so although sites might be registered, individual pitches are not. That enables site owners to move the chalets around and provides no security of tenure for the people who have notionally purchased at least an interest in the pitch.

[Christopher Pincher]

My hon. Friend uses the word “chalets” to describe park homes. Are there too many ways of describing such homes? They are variously called park homes, chalet sites, static homes and mobile homes, but they are not mobile homes or chalets. They are plumbed into the mains water system and have mains electricity and often gas. If I can put this sensitively, the people in them are very often the opposite of mobile. That should be recognised in the law and in how we describe such places. Such homes are not chalets or mobile homes; they are residential properties.

[Stephen Gilbert]

I absolutely agree with my hon. Friend—I was going to make exactly that point. In a written parliamentary answer to me, the Housing and Local Government Minister used the word “chattel”. My broader point was that people who live in these homes are trying to find a better way of life for themselves, but they purchase no interest in the land on which their homes are sited. They should have such an interest. The House needs to define what that interest is and to make it clear that the pitch comes as part of the package.

When we add to those problems utility provision and charging, and the above-inflation annual increases in the pitch fee, we can see how difficult it can be for park home owners to budget and plan their finances from year to year. Again, in my survey of my constituency, I heard horror stories similar to those told by the hon. Member for Ellesmere Port and Neston (Andrew Miller). There are increases in charges for water, sewage, electricity and all the basics. Tenants and freeholders take it for granted that they get a fair deal from their suppliers, but park home owners do not have that certainty. Even if they know that they are not getting a fair deal, the vulnerable people we are talking about simply do not understand how to exercise their rights.

Indeed, the draft Mobile Homes Act 1983 (Amendment of Schedule 1) (England) Order 2006 clearly states that if requested by an occupier, the site owner shall provide documentary evidence in support and explanation of any charges for gas, electricity, water, sewerage or other services payable by the occupier, but that never happens. My hon. Friend the Member for Mid Dorset and North Poole spoke of the difficulties that park home residents find in forming residents’ associations and making them into effective vehicles for making those points.

Many elderly and vulnerable people are caught in a very difficult position; as other hon. Members said, selling park homes can be a difficult process. Site owners can prevent sales by blocking a homeowner’s right to sell through a notice to terminate agreements on the basis that the home is having a detrimental effect on the site. However, site owners use that so that they can simply jump in with a bid at a knock-down price.

Even if a site owner does not block a sale, selling might not stack up financially for residents because of the site owner’s entitlement to take a commission of up to 10% of the sale price. Many residents who have tried to buy into a dream have ended up living something less than that, but they could be worse off if they try to exit because of the 10% rule. It is no surprise that the rule is resented by homeowners. Many of them have put up with increasing annual pitch fees, and many have added value to their homes because they are proud people who want to live in nice surroundings.

Finally, I have serious concerns about the harassment, bullying and general intimidation to which homeowners on park home sites are all too often subjected. Bullying tactics, threatening behaviour and even assault are not the norm, but they are not rare either. That is why this subject has brought so many Members to this debate, and it is why it is so important that the Government hear the House’s concerns.

[Andrew Bridgen]

I appreciate my hon. Friend’s measured language and his acknowledgment that most park home operators are responsible people doing the best they can for their residents. However, does he agree that, in the wrong hands, the system we have now for the operation of park homes is the nearest thing to feudalism that remains in our country? The introduction of sensitive, fair and well-thought-out legislation could enhance the situation by providing protection for both park home owners and operators, which could only be good for the industry, and, with markets being what they are, it would enhance the value of those properties for everybody.

[Stephen Gilbert]

My hon. Friend puts the point far more eloquently than I have been able to do: we are dealing with the remnants of a feudal system. I hope that the Minister has heard that point.

I want to be balanced, however, because I want to welcome the steps that the Government have already taken—in particular, the transfer of responsibility for on-site disputes to the Residential Property Tribunal Service. That is a helpful step forward, but it cannot be seen as the end game for the Government in their approach to effective regulation of park homes. I do not just want to help my residents to resolve disputes; I want to prevent them from having them in the first place. However, that will require a much stronger and transparent regulatory regime. I look forward, therefore, to hearing from the Minister about the work he has done with interested parties and the recommendations they have made to him.

I end with a call to arms: this issue bubbled away under the last Labour Government—and indeed the previous Conservative Government—but it is time that we gripped it, because we are talking about many thousands of our most vulnerable citizens.

14:11

[Heather Wheeler (South Derbyshire) (Con)]

Like my hon. Friends, I congratulate the hon. Member for Mid Dorset and North Poole (Annette Brooke) on securing this debate.

I have been dealing with the issue of park homes for more than three years, and a number of years ago we wrote to the Minister then in charge of the problem about the fit and proper person test. We have to get to grips with this, because it is a scandal. My hon. Friend the Member for St Austell and Newquay (Stephen Gilbert) said that this has been a problem not just over the past 13 years but before that. If anything can happen in this new Parliament, please can this change be made? We have some superb sites in South Derbyshire, and some very bad ones too. I will not name names, notwithstanding parliamentary privilege, because there are court cases going on and I do not want to say anything that could prejudice them. But for goodness’ sake, this is a wonderful opportunity to show what a progressive Government this is. I wish I could say that we have the support of both sides of the Chamber. However, it is important that the pleas being made today by hon. Members from across the nation are heard and that the matter is taken forward.

14:13

[Mr Andrew Turner (Isle of Wight) (Con)]

I thank you, Madam Deputy Speaker, for giving me the opportunity to speak in this debate, and I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on securing it.

I have been approached by a large number of my constituents who have highlighted to me their problems with residential mobile home parks. However, I first want to address the misconception that many people have when talking about mobile homes. As residents, these people are not on a weekend or summer holiday, but permanently living in one place—their mobile homes. These are substantial structures that are not, as their name may suggest, actually mobile. In the UK, we have always stood for the principle that a man’s home is his castle. Today we are talking about people’s homes. Although they may not be the conventional bricks and mortar, they represent the same ideas and sanctuary of the individual. With that in mind, I hope that we can encourage a debate that will lead to mobile homes being granted some, if not all, of the same rights that conventional home owners have.

The residents of Medina Park residents association in my constituency have contacted me with numerous complaints about the owners of their park, Leisure Park Real Estate, which runs several parks across the country. Their main complaint is the unfair level of power that the owners of mobile home parks have over the residents, especially when dealing with the buying and selling of mobile homes. An owner of a park is currently permitted to vet potential buyers of a mobile home. This seems reasonable enough, because it is important that they know whom they are letting into their park. However, this becomes a problem when the owner starts abusing this right—for example, by introducing extra clauses. That might include telling the resident where he can buy his supplies, what company can provide services for him or what homes he is allowed to buy.

I was told of one case in which a potential buyer was told that she could bring her pet dog on to the site only if she bought one of the more expensive homes. That is clearly an abuse of the original intention of this power. I have also been told that an unscrupulous park owner uses this power to interfere in existing owners’ attempts to sell their property. The constant interference by some park owners in the sale of mobile homes—be it through estate agents or private viewings—puts many people off purchasing mobile homes, ruining the opportunity of many residents to sell up and leave.

At the moment, the only solution is a tribunal, which does not give value for money, is not effective and puts people off finding a solution, leaving them at the mercy of park owners. I have been told of one instance where a family have been paying ground rent for more than four years while they try to sell their deceased relatives’ mobile home, but are constantly blocked by the park owner. We have also seen, in cases like these, park owners deliberately trying to force down the prices of existing homes, so that they can buy out all or some of the existing homes and replace them with more expensive, profitable homes and make more money. We have also seen that park owners are unwilling to co-operate with residents’ associations, often refusing contact with those who participate in such groups.

A large number of residents in mobile home parks are elderly, with many parks seen as an ideal venue for retirement. However, the activities of unscrupulous park owners may disrupt this. Furthermore, many residents face continued intimidation from park owners. The elderly are in the worst position, because they are unable to stand up to such owners—many do not have the required energy to do so. These issues are not just restricted to my constituency—that is evident from today’s debate. I know that many mobile home parks suffer from the same problems, often from the same people, who may own numerous parks.

I also know that the solutions that residents’ associations want are very similar. We need to change the law so that the principle of vetting a buyer to ensure that they are a fit and proper person also applies to park owners. That is the only way to sort them out. Those owners about whom no one has any complaints will have nothing to lose and everything to gain by being a respectable park owner. We would then need to increase powers to councils to remove licences for park owners who abuse their power. It is most important that we recognise that mobile homes are homes and no different from any other house in the country, and that they should be afforded the same rights as we give to home owners.

14:20

[Stephen Lloyd (Eastbourne) (LD)]

A few Members in the Chamber may know that I am rather hard of hearing, but I have discovered since being elected that in politics there are some advantages to being hard of hearing. However, I will leave that to those in the Chamber to determine.

Like everyone else, I would like to congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on bringing this debate to the Chamber. Christmas has come 35 times this afternoon, with so many compliments being paid, but I really mean it, because we are talking about a real issue. It is a fascinating thing, but I did not know that it was an issue until I got involved in politics and met a number of people living in mobile homes either within my constituency or just outside it. It was only then that I discovered what a complete lack of any kind of level playing field there is. It is quite shocking. We are talking about basic things, such as park owners buying mobile homes off the original owners at anything up to a 25% discount and then selling them on. Like other hon. Members, I have even had constituents tell me—I cannot prove this—that their utility bills were ramped up considerably. It is absolutely incredible. Others have talked about trying to form residents’ committees. Similarly, people have been leant on and have not even been able to put together a tenants’ committee through which they could put their points of view. It is quite extraordinary.

In preparing for this debate I did some more research, and, having spoken to my hon. Friend and listened to other hon. Friends today, I know that there has been a problem for quite a while. Indeed, there are people in the House who have been fighting on the issue for quite a while. I pay tribute to them. I am confident about the complete universality of where we are coming from today. I am confident too that the Minister, who is a good hon. Friend of mine, will take that on board and no doubt do all the miraculous things for which he was well known well before he reached the coalition Front Bench—no pressure there, but I look forward to that. We all know what needs doing; we all know that something needs to be done. I look forward to joining my hon. Friend the Member for Mid Dorset and North Poole in what I hope will be a victory on this issue in the new year.

The really interesting thing about this debate is the huge variety. There is one park home—or however we want to define it—in my constituency called King’s Park that is absolutely outstanding. The sense of community in King’s Park is absolutely fantastic, and that applies across the piece, from people who have been there a short time to those who have been there a long time. To be perfectly honest, if I had lost at the last election and gone broke, I would probably have moved there myself. It looked so good and there was such a sense of community. That shows the variety that exists, and that is a good thing. However, if all park home owners were similar to those at King’s Park, we would not be having this debate. The sense of quality, community and responsibility there is so strong that we might all want to move there—with the agreement of the Independent Parliamentary Standards Authority, obviously.

The challenge is that the lack of regulation means that unscrupulous people have been abusing vulnerable individuals and families for far too long. It is the old story, but I was having a discussion with one of my Conservative colleagues yesterday on the very issue of regulation—the regulation of banking, as it happens, or, to be precise, the regulation of independent financial advisers. The conundrum is that we need x amount of regulation to prevent disreputable people from taking advantage of vulnerable individuals, but the same thing always happens, which is that the regulation gets so strong and heavy that it puts off businesses from getting involved. We end up in a chicken-and-egg situation, and this issue is a classic case in point. In one sense, the regulation is pretty light-touch, because 90% of park home owners—or whatever the proportion is—are, I am quite sure, reputable individuals who do not need heavy regulation. They get on with things, they earn an honest buck and they look after the people who live in their mobile homes. There is not a problem with them. However, because the regulation is slightly weak, the remaining 10%—or whatever the proportion is—are completely unscrupulous people who have driven a coach and horses through that regulation, abusing numerous families and couples, who are often elderly, in a most disgraceful way.

I know what is going to happen, and I agree with it, unfortunately. We are going to need to toughen up the regulations, in exactly the way that my hon. Friend the Member for Mid Dorset and North Poole proposed in her speech. I will support that 100%, but I find it so frustrating sometimes. The 10% tail is wagging the 90% dog. It is absolutely infuriating. I can think of some ways in which we might deal with that 10% of society, but they might be a bit illiberal and The Guardian will not like me—which it does not anyway since the election, so I will move on. I would urge the Minister to listen to everything that we are saying, and to come through with some support and some suggestions in the new year that are a little more robust than what we are talking about at the minute, because it is quite clear that this issue has gone on a long time. It has obviously become perfectly acceptable for a pretty large number of mobile home owners to behave in a shocking and disreputable way, and it has to be stopped.

[Andrew Bridgen]

Because the fact that the regulation is light-touch is now in the public domain, will my hon. Friend concede that if we do nothing, that will make it more attractive for disreputable people to go into that line of business?

[Stephen Lloyd]

My hon. Friend hits the nail on the head, not least because—this is the conclusion that I have come to—a fair number of disreputable home owners know each other. The practice has been going on for years and, bluntly, it is a scam. Therefore, I am afraid that, as a light-touch, business-wing Liberal, I am going to ask the Minister for more regulation, and I would urge him to come forward with it sooner rather than later, so that we are not having the same debate in a year’s time. We are talking about people who deserve better, and I am absolutely confident that the coalition Government, with cross-party support, will deliver on that. Finally, I again congratulate my hon. Friend the Member for Mid Dorset and North Poole on securing this debate.

14:27

[Richard Graham (Gloucester) (Con)]

Hon. Members will be interested to know that there is a blog on which one can follow some interesting debates concerning the residents of park homes. Let me quote from one which asks,

“are the government going to sit up and take notice of us the residents, or are we to remain”

the forgotten lost? That is the challenge for us today, and the forgotten lost are not few in number. As the hon. Member for Mid Dorset and North Poole (Annette Brooke) pointed out, there are 80,000 such homes in England, and I would guesstimate that these contain slightly under 150,000 people. That is a large army—indeed, several times the army that Wat Tyler took to London bridge in the peasants’ revolt of 1381. There is a sense in which the residents of park homes today are the equivalent of modern serfs, under arbitrary landlords; or, as the Housing Minister put it more gently, there is an issue about exercising their rights.

I would like to join the many other hon. Members who have paid tribute to the hon. Lady for securing this debate today, in which many people on this side of the House, and one hon. Gentleman on the other side, have spoken for this large community of some 150,000 people. My hon. Friend the Member for Tamworth (Christopher Pincher) commented that the hon. Lady had been buried under a sea of bouquets. I hope that she has all her bouquets, but that she is not buried, because we need her very much above the ground and kicking in order to take the motion forward. I should also like to pay tribute to Lord Graham of Edmonton. He is no relation, and I think that he holds different political views from mine, but I know that he has done some very good work on this subject.

We welcome the Government’s commitment to the transfer of responsibility from the county courts to the residential property tribunals in February, although we recognise that that will not in itself solve everything. I would like to develop a few themes on certain issues and potential solutions that the Minister might like to consider. The first is the recognition of legal residents associations, to which one or two other Members have alluded. There are two park home sites in my constituency, one of which is Woodlands Park in Quedgeley. It has a residents association, which has been admirably chaired by Mike Morgan for many years, but the association is not fully recognised by the owner of Woodlands Park. It is high time that it was, and the same is true for all park homes.

In the motion, the hon. Member for Mid Dorset and North Poole rightly calls on the Government

“to review the case for establishing a fit and proper person criterion for park home site owners”.

I believe that the best way to take this forward would be for the Government to approve the licensing of park home sites by local authorities. This would have the additional advantage of the licensing authority being able to overview the documentation—sales documents, in particular—to ensure that any buyers of park homes were fully aware of the system of remuneration for owners, which is based on the sale price, the commission and the pitch rent. Those details need to be clarified and spelt out extremely clearly, so that anyone who buys a park home can be aware of what they are doing.

The motion also proposes that owners should cease to interfere with the sale process. I agree with that, but we also need to consider how the loopholes in section 207 of the Housing Act 2004 could be tightened up. In relation to the sale commission, in particular, there is a case for licensing authorities to look at whether a sliding scale could be established, which would vary according to the length of residency by the people who buy park homes.

I should like to highlight some further points that have arisen in relation to Woodlands Park and that could also be reviewed by licensing authorities. The first relates to utilities, and I should like to quote from a recent e-mail on this subject:

“Any resident changing to natural gas from bottled gas has to pay £6.50 a week extra for the privilege. Note this figure is added to the monthly pitch fee and continues for life!”

That cannot be justifiable, and charges for utilities should be brought under the licensing authorities’ review.

The second issue relates to pitch fees, and I quote again:

“One of our residents who moved to the site was paying £106.72 per month pitch fees. This was confirmed in writing…in March 2007…and a letter followed in December 2007 stating that he had underpaid therefore the pitch fee was increased to £140.38 per month. This equates to a 31.5% increase.”

That was entirely arbitrary; it was done after the sale, and there is no way for the resident to challenge it except through the very expensive process of going to the county court. That, too, needs to be reviewed.

[Justin Tomlinson (North Swindon) (Con)]

On the point about seeking legal recourse, my own experience of dealing with the challenges faced by the residents of Blunsdon Abbey Park is that they often have neither the financial nor the health capability to engage in a long legal battle.

[Richard Graham]

My hon. Friend is absolutely correct. The financial costs of such proceedings are prohibitive, even when residents are physically and mentally able to take the process forward.

In the review of the process sales cost, sales commission and pitch fee in its 2001 study, Berkeley Hanover said that there was no evidence of excessive profits as a whole, but that the process could not be described as

“perfectly fair, flexible and transparent”.

I think that that is putting it mildly, and that the issue needs to be tackled.

Today there has been a call for action—for what the hon. Member for Mid Dorset and North Poole called a stiffening of resolve. I think that all of us who have spoken so far today feel the same. I ask the Minister and the Government to consider making local government licensing authorities responsible for approving, monitoring and licensing park homes, for clarifying the sales process and in particular the commission, for ensuring that the correct documents are issued before the sale of homes, for reviewing the charges for utilities, and for the collection of rubbish and environmental health—a subsidiary issue which, although sometimes overlooked, needs attention in many park homes at a time when we are all keen to drive up recycling rates.

Today the Government have a chance to help 150,000 British citizens without having any impact on the ghastly budget deficit. I hope that they will seize the moment, and will give our constituents a very happy new year in 2011.

14:36

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

So far Members have concentrated on park home owners who have all-year-round occupation, but we should not forget those who have restricted occupation rights and who also have different problems. I want to address some of those problems.

Like my hon. Friend the Member for South Derbyshire (Heather Wheeler), I need to be careful about what I say, because there is a court case pending involving a particular site owner. The basic facts are these. One of the residents of the park alleges that the owner sold a mobile home for £80,000 under a leasehold agreement. I have seen a copy of the agreement, and it clearly states that the resident is entitled to all-year-round occupation. However, the resident has now been told to leave the site because it is allowed to open for only eight months of the year.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I realise that the hon. Gentleman wants to make his point, but I remind him that he needs to be very careful about what he says in order not to venture into current court proceedings. I am sure that he was going to do that, but I thought that I would remind him just in case it had slipped his mind.

[Gordon Henderson]

Thank you for your advice, Madam Deputy Speaker. I appreciate that the matter is sub judice, and I will be extremely careful. If you listen to my words, Madam Deputy Speaker, you will understand why I am using some of them.

Naturally, the resident has refused to leave the site, and has commenced legal action against the site owner—who, it is alleged, has responded with a campaign of harassment and intimidation. If that is true, such action is simply—

[Madam Deputy Speaker]

Order. I am very sorry to interrupt the hon. Gentleman again, but I am afraid that he cannot make that allegation in the context of a current court case. I am really trying to guide him, and I am being advised on this. I ask him to be very careful.

[Gordon Henderson]

You will be delighted to know, Madam Deputy Speaker, that I was about to end that section of my speech, but I thank you again for your advice. You will have noted that I have mentioned no names at all. However, I will take your advice and move on to another aspect of park home sites that I think should be included in any future legislation, namely periods of occupation.

On Sheppey we have nearly 7,000 park homes, 4,000 of which are mobile homes and 3,000 of which are chalets or bungalows. Those homes provide sufficient accommodation for 28,000 holidaymakers, but it has been calculated that, given the change in holiday patterns, accommodation for a number closer to 10,000 is probably required. Some of those sites have permission for 10-month occupancy, while others have permission for only eight months. Many park homes are freehold properties, and some of them are of the very highest standard and built to full building regulations. They are no longer holiday homes, but are occupied by their owners for 10 months of the year, yet their owners are made homeless for two months of the year by the current planning laws.

One such site is Parklands village in Minster, where the residents of 76 dwellings have this week received a letter from the local authority reminding them that staying in their home between 3 January and the end of February will be a criminal offence. Somewhat bizarrely, these potential criminals were advised to contact the housing services department if they have any difficulty in finding alternative or temporary accommodation.

To add to this ludicrous situation, the reason given by planning officers for refusing a planning application for all-year-round occupation of Parkland village is that it is at risk from flooding. Setting aside the fact that a full risk assessment of the site has shown that the risk from flooding is minimal, and also setting aside the convoluted logic that refuses to allow occupation of the homes during January and February when the risk of flooding is at its lowest but allows occupation in March and April when the spring tides are at their highest, it is madness to force people out of perfectly good dwellings because of a supposed risk of flooding when those dwellings are located slap-bang next to a single-storey hotel that has permission for all-year-round occupancy. These residents are being forced, under threat of prosecution, to leave perfectly good-quality bungalows that have full building regulations and energy standards approved by the local authority’s building control section, and are being encouraged to move into hotel accommodation, such as that offered by the hotel situated on the same site as the bungalows they own. Such a policy is beyond parody, but I do not blame my local authority; I blame a planning system that has allowed such illogical action. It is time that that system is changed.

Like the constituencies of many other Members, the area I represent has a lengthy housing waiting list, yet we have over 3,000 surplus park homes on Sheppey. In 2006, Baroness Andrews was an Under-Secretary of State in the late unlamented Office of the Deputy Prime Minister, and she made a speech in which she said:

“We all know that this country has a real challenge to meet the need for homes from a rapidly growing household population, as people live longer and more people choose to live alone. Park homes have a real part to play in expanding the choice and diversity in the housing stock and in providing affordable energy efficient homes.”

Let me categorically state that park homes are a part of the solution; they can help us meet the need for homes. They provide choice, quality and market-price affordability, and they can add environmentally friendly homes to the housing market. They provide a setting for stable, mixed, sustainable communities of all ages and household types.

[Mr Andrew Turner]

I am listening with interest to my hon. Friend’s comments. He says some of these homes are up to standard, but what would he say about those that are not up to standard and where people are prevented from staying for more than 10 months a year?

[Gordon Henderson]

I might address that point in my final comments.

I agree wholeheartedly with Baroness Andrews, and I am only sorry that the Government in which she served did not follow up her fine words with action. I hope that the current coalition Government do a lot better in tackling the housing shortage. One way in which they can start to do that is by taking note of the motion and introducing legislation to prevent park site owners from interfering in the sale of park homes without good reason, and using the opportunity actively to encourage local authorities to look much more sympathetically at planning applications that seek to convert holiday park home sites into permanent residential dwellings, conditional on those dwellings meeting full building regulations standards. That would be a way of providing extra homes to the people who need them in my constituency.

14:45

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

I am grateful for the opportunity to take part in this debate, and I, too, congratulate the hon. Member for Mid Dorset and North Poole (Annette Brooke), with whom I campaign assiduously as a member of the all-party group on mobile homes. As the House has heard, the group has received a number of delegations and deputations, not just in recent months, but in the period prior to my election as a Member of this House. My interest and concern in this area dates back to my days as a parliamentary candidate, when I met and discussed issues relating to park homes with the residents of the Brook Meadow park, which is in the village of Wroughton, where I live in my constituency. A number of residents, some of whom are elderly—they will forgive me for saying that—are not frightened to write to and lobby their Member of Parliament, or to come to the precincts of this House to make impassioned speeches on behalf of not only their own interests, but those of all their friends and neighbours.

An old principle in property law is the right of quiet enjoyment. That principle is well known to English law. It applies to people who live in bricks and mortar, so why does it not apply to people who live in park homes? The reason is simply that there has been only a gradual acceptance among law makers and opinion formers that park homes are not just goods or chattels, but places where people live. That acceptance means that the rights of property—the rights that we automatically assume apply for not only people who own homes, but those who rent bricks and mortar—should now apply for people in park homes.

Interestingly, amendments to the Mobile Homes Act 1983—I am grateful to my hon. Friend the Member for Tamworth (Christopher Pincher) for his proper intervention pointing out that that term can lead to a lot of misunderstanding—were made by the Housing Act 2004. Perhaps that was an implicit acceptance by the then Government that we were no longer talking about mere chattels, but about places in which people live. Whether that was a Freudian slip or a deliberate intention, I welcome it. I suggest that our new Government should adopt that philosophy when dealing with park homes, treating them as houses and places where people live. The Government should allow those people equivalent rights to those that property owners or tenants enjoy under the protection of not only the 2004 Act, but the range of housing legislation that has evolved in this place since the latter part of the 19th century.

The issues and problems raised with me by my local residents are similar to those echoed by other hon. Members, and I do not seek to repeat them. They boil down to a few key areas. There are serious issues relating to the sale of park homes, there is a lack of resolution relating to agreements about the pitch fees to be charged every month and there are problems with utilities. I wish to deal with those in reverse order.

My hon. Friend the Member for Suffolk Coastal (Dr Coffey) rightly reminded us in an intervention that gas and electricity utilities enjoy the protection of Ofgem, and water utilities enjoy the protection of Ofwat, and that various guidelines and directives have been issued. The problem arises when electricity and water supplies are administered via the site owner; in other words, they come through a wholesale agreement via the site owner, rather than to individual pitches. Therein lies a great problem. It does not allow domestic users in each park home to benefit from domestic tariffs, for example. A wholesale business-related tariff is charged to the park that is not as advantageous to residents as it might be.

Another problem is that the lack of direct contact between the utility company and the resident can lead to all sorts of complications. One local example occurred in Brook Meadow a few years ago where there was the awful case of residents being written to by the electricity company and told that their electricity was about to be cut off because the company was in dispute with the site owner. The site owner had allowed matters to develop to the door of the court before he finally relented and paid the bill that was overdue. That is not a satisfactory position for residents to be put in. They were thoroughly innocent third parties who were literally terrified at the thought of not having electricity supplied to their homes. That is an inconsistency that needs to be resolved, and it should be resolved via a system of licensing and regulation.

The same can be said about the water supply. Site home owners experience a lot of problems with water pressure. It is far better, in my view, for the site owners to withdraw from the supply issue and let residents deal directly with water companies. That would be far more transparent and easier to administer.

I have mentioned the difficulty with pitch fees. In the case that I am dealing with, the dispute about pitch fees remains unresolved. That has an unpleasant knock-on effect because, in direct breach of the regulations, the site owner has been in the habit of, in effect, threatening prospective sellers of pitches with the fact that the pitch fee has been unpaid, saying that he wants resolution of the unpaid debt before he will permit the sale. He is putting an entirely discrete issue in the way of the sale of a home. That is wholly wrong and in breach of the current regulations, but it is happening.

I use that example to make the more general point that it is now time for local authorities, which exercise a range of powers in other licensing areas, to take on the responsibility of licensing the owners of park home sites. The phrase “fit and proper person” has quite rightly been put under the microscope. It needs very careful definition, but perhaps one can draw a comparison with taxi licences and licences for public houses and clubs. In such cases, local authorities look carefully at each application, gather information about previous convictions and other such relevant information, and make a judgment based on all the evidence.

I am not a person who likes to call automatically for more regulation, but such is the gravity of the situation that faces so many park home residents that there is sadly no alternative.

[Christopher Pincher]

My hon. Friend said at the beginning of his speech that many park home residents are not frightened to come forward, but we all know that many park home residents are frightened to come forward. I am sure that he would agree that many of these people do not have assets. In fact, the only assets they have are their park homes and possibly their cars. They do not have the wherewithal to seek justice, so the law must be extended to protect them.

[Mr Buckland]

I am grateful to my hon. Friend, who allows me seamlessly to move on to my final point, bearing in mind the need for other colleagues to have their say.

My hon. Friend the Member for Gloucester (Richard Graham) made some cogent points about the provisions of section 207 of the Housing Act 2004, which amended the schedule that applies to the procedure to be adopted on the sale of park homes. That schedule has been subject to several amendments and it is sometimes difficult to follow the path that allows one to work out precisely what is in force and what is not. I understand that from the moment a request is made by the occupier—the owner of the park home—the owner of the site has to respond within 28 days to

“approve the person, unless it is reasonable for him not to do so, and…serve on the occupier notice of his decision whether or not to approve the person.”

I am afraid that is far too honoured in the breach, than in the observance. When it is honoured it is being used as a mechanism to delay sale for reasons that my hon. Friend the Member for Isle of Wight (Mr Turner) has set out very carefully.

[Justin Tomlinson]

I also see examples in which site owners are trying to get long-term residents out of the site and new tenants in on temporary contracts so that they can ultimately try to put the site up for sale for potential residential development at huge profit.

[Mr Buckland]

I am grateful to my hon. Friend for making that point, which has not been made before. We know that unscrupulous site owners will drive down the value of a park home, buy it at that low value and, sometimes, re-sell the same home to make a fast profit. That is an unacceptable abuse of the current situation.

A concrete proposal that the Minister could consider is whether we should adopt a system of deemed acceptance by an owner after a certain period. My experience locally and more generally is that there is often a disastrous combination of indifference and incompetence mixed with cynicism and a wish to make an illicit profit, but why should we allow sites where there is that cocktail to benefit from the current regulations? We should punish incompetence and indifference by adopting principles such as deemed acceptance. Currently, the onus is on the park home owner to seek from the court—I welcome the fact that it will soon be a tribunal—a declaration that the person to whom they wish to sell their property has been approved. Many hon. Members have asked whether that is the right balance. Are we asking too much of people, many of whom are vulnerable, or of the dependants of people who have died and left their park home as part of their bequest? Should we not redress the balance and put the ball back in the court of the park home owner when it comes to sales? I urge the Minister seriously to consider the principle of deemed acceptance and whether it can be worked into a revised schedule. That would be a better way of dealing with the legislation than tweaking it as we have in the past few years.

[Andrew Miller]

Let me put to the hon. Gentleman a point that I tried to make in my speech. If the park home owner has maintained the property within the site’s rules, why should the site owner have any say about whom the sale should be made to? I have not heard a rational reason why there should be any blockage at that point.

[Mr Buckland]

I remind the hon. Gentleman that there is a balance to strike. The site owner owns the land and the property, and we have to accept that there are many good, decent and proper site owners. That is why I am talking, as he did, about striking a delicate balance. We have to be careful of the age-old problem of using a sledgehammer to crack the proverbial nut. None of us wants to punish good site owners, but hon. Members the length and breadth of the land keep coming up against the rotten apples that are damaging the reputation of park homes, undermining their viability for the future and, potentially, starving the country of a useful source of housing supply. I regret that I see no other alternative than for park homes to fall under the ambit of proper regulation by a local authority.

Involving local authorities at the beginning, when the site owner wants to purchase the land, is a good way of engaging them throughout the process. Many colleagues will be aware that one of the problems is that local authorities are involved only reactively, when they are faced with a particular challenge or problem, or a prosecution, as the hon. Member for Mid Dorset and North Poole said, so they are psychologically on the back foot. There is a good case to be made for local authorities taking a proactive role, which is why I commend the approach that Members want the Government to take.

The time for tinkering has passed; it is time for a wholesale root-and-branch look at the regulations. If there is no time for new legislation, I urge the Government at the very least to look at the entire ambit of the schedule to the amended and re-amended Mobile Homes Act. Let us get things right for future generations and give current park home residents peace of mind. Let us allow them the principle of quiet enjoyment.

15:01

[Mel Stride (Central Devon) (Con)]

I support the motion and, like many other Members, I congratulate the hon. Member for Mid Dorset and North Poole (Annette Brooke) on moving it.

As my hon. Friend the Member for Gloucester (Richard Graham) pointed out, there are many park home sites up and down the country and many park home owners. In England alone, there are 85,000 park home owners, spread across 2,000 sites. In the main, as the hon. Member for Eastbourne (Stephen Lloyd) eloquently stressed, the sites are run well; they are good places to live. Park homes are comfortable and relatively easy to maintain. They are relatively low cost and affordable. Most of them—certainly those in my constituency—are in pleasant locations. They are nice places to live. Whether park home sites are well or poorly run, they have a strong sense of community.

On a minority of sites, residents face many great problems. In my constituency, the spectrum of problems ranges from sites that are somewhat poorly managed to those where there are blatant breaches of health and safety regulations, many along the lines highlighted by the hon. Member for Ellesmere Port and Neston (Andrew Miller). In my constituency, at the uglier end of the spectrum, there are examples of intimidation, particularly of vulnerable and elderly people. Intimidation often affects the mental health of elderly residents and can, on occasion, result in great financial loss, as we have heard from many Members this afternoon. I echo the comments made by many Members, and congratulate Sonia McColl on her justice campaign, on pressing so firmly on this important issue and on the work and energy that went into arranging the lobby of Parliament on 3 November.

There are a number of challenging issues, many of which have been raised this afternoon, relating to the operation of park home sites. We have heard much about the importance of the approval of the buyer stage, when an unscrupulous park site owner can put people off and use the rules to make sure that the park home owner does not achieve fair value for their property. In 1990-91, a Department of the Environment survey showed that 25% of park home owners expected problems with the sales process in the future. Of that 25%, some 51% felt that the site owner or the owning company would be the cause of the problems.

Mrs McColl is particularly keen that the approval of the buyer stage should take place in the presence of a solicitor or at a solicitor’s office. I think we should be slightly cautious here, because I am not convinced that that requirement, in and of itself, will solve the problem, and it will add to the cost of the transactions. But where a wrong has been done there should be quick redress at low cost, and substantial damages should be available to those pursuing unscrupulous site owners.

The second area of sale that I wish to address is that of what I would term the forced sale, in which the unscrupulous site owner intimidates and pressurises a resident off the site. The reason for that is clear; as many hon. Members have said, once that home is gone, perhaps a larger home can be placed on that site and profits will follow. My understanding is that some of the problems relate to the Mobile Homes Act 1983, whereby site owners can sometimes claim that an existing home has a detrimental effect on the amenity of the site. That point was raised by Shelter, whose mobile home unit looked into the issue. I therefore urge the Minister to pay careful attention to that aspect of the Act.

Several hon. Members, including my hon. Friends the Members for Waveney (Peter Aldous) and for St Austell and Newquay (Stephen Gilbert), have raised the issue of sales commission on park homes that are sold. I know that many park home owners feel it is inherently unfair to have to pay 10% of the value of their property on sale. They will argue that the site owner may have contributed nothing to the sale, and in many circumstances the owners of those homes have enhanced them at their own expense, adding to their value.

We should proceed with caution, however, because in order to make a profit a park home operator will look at all the revenue streams that go into the business, of which commission on sales is but one. It is quite conceivable that if that were reduced or removed, pitch fees would be higher, as the consultants Berkeley Hanover suggested in its 2001 report. It suggested that pitch fees might go up by 20% to 32% if commission was removed altogether. It is the case that where commissions have been reduced in the past from 15% to 10% due to legislation, there has been evidence that pitch fees have increased.

The second danger of removing commissions is that it might inflate the price of what at the moment are relatively—I stress, relatively—affordable homes, and that would be a detrimental move. It is very important that we keep the up-front affordability of these homes for individuals who may wish to buy them in the future. Indeed, the Shelter report did not recommend any reduction in the commission rate.

Several hon. Members have spoken about site conditions and licensing. Licensing was introduced under the Caravan Sites and Control of Development Act 1960, which gave local authorities the ability to impose conditions on site licences, and also the power to enforce those conditions. But it did not confer on local authorities any duty to enforce conditions on recalcitrant site owners. Those conditions, on which enforcement action can be taken, would include requirements not only on the spacing of the homes across the site, for example, but on the provision of—sometimes vital—amenities on the site. So it is very important that the Minister looks closely, as I am sure he and his colleagues are doing, at licensing and whether we should make it a duty of local authorities to intervene where there are significant breaches of those licences.

We should also look closely at local authorities’ right to refuse or revoke the site owner’s licence if there is good cause, as my hon. Friend the Member for Isle of Wight (Mr Turner) said. In those circumstances, if there were a revocation, we would need to ensure that the local authority had a clear strategy for providing the services and ensuring that the site continued to run in a safe, decent and reasonable manner.

I urge the Minister to look at giving local authorities the ability to take emergency remedial action when things do not happen appropriately on a site, and to charge the site owner for any remedial action that is taken. Local authorities could be given the authority to charge for licences to cover some of the costs of them, and, when there are appeals in the system on such matters, they might be handled by the residential property tribunal.

Much has been rightly said in this debate about the fit and proper person qualification, which was a strong recommendation of the park homes working group. There is no doubt that the park homes business is distinctly different from many others. It is not like running a shop or a pub, whereby, if one is rude to customers or runs the business badly, one can expect to see profits diminish and to go out of business. Site owners effectively have captive consumers and people whose lives they can and, as we have heard in many instances this afternoon, do make a misery.

Given how the economics of the business work, we should not be surprised by such abuse. There is a premium to be gained by bullying people and by pushing somebody out of their home inappropriately, because there are profits to be made as a consequence. The whole market has built into it the dynamics for abuse of one form or another.

I know that the Housing Minister is thinking about the issue very carefully, but I urge the Minister before us to consider seriously a fit and proper person qualification. One objection to the approach is that it might be complicated and difficult, but we already apply it to people who own houses in multiple occupation, so some local authorities already have experience in exactly that area.

Some Members, including my hon. Friend the Member for New Forest East (Dr Lewis), have said that residents associations have been quite effective in dealing with difficult situations on park home sites, and I welcome the Mobile Homes Act 1983 (Amendment of Schedule 1) (England) Order 2006, which permits such associations to be set up and, indeed, requires site owners to recognise them, subject to certain conditions, including one whereby more than 50% of residents on a site must become members. The Government would do well to encourage at every turn, with whatever legislative changes they bring in, such residents associations and to give them authority wherever they possibly can.

[Annette Brooke]

I should like to report on some further good practice by Purbeck district council, which has set up a forum for park home owners, so that they can go and share their issues. That is a very good way of backing up residents associations.

[Mel Stride]

I thank the hon. Lady for that helpful and informative intervention. I am grateful and pay tribute to Buckingham Orchards Residents Community Association in my constituency, which has done a great deal and fought hard to improve conditions on its site. I shall certainly take the hon. Lady’s suggestion of a forum and such activity to that association to see whether it might benefit from that.

Finally, dispute resolution at the moment typically means going through the county courts, and doing so not just at great expense, but often in the face of numerous delays, because unscrupulous site owners are adept at stringing things out and making things difficult at every turn. We have all heard the stories in which site owners fail to turn up, give a reason and there has to be a re-hearing. They just wear people out, which is why I particularly welcome the Government’s commitment to a residential property tribunal. However, it is absolutely essential that such a tribunal is quick to deal with grievances, that there is a minimum of delay involved and that it is not expensive to use. On 14 July, in referring to residential property tribunals, the Minister for Housing stated:

“This will mean that park home residents will be able to take action to resolve disputes with site owners, without being restricted by the prospect of facing large legal costs.”—[Official Report, 14 July 2010; Vol. 513, c. 28WS.]

That is absolutely critical. We are dealing with people who are among the least advantaged in our society and cost must be driven down to give them a route to justice.

We should also toughen up on fines and give the tribunal real teeth. At the moment, a breach of a site licence carries a maximum fine of £2,500. In many cases, that is simply not enough to deter the kind of activity that we have been debating this afternoon. I urge the Minister to consider whether there should be an escalation of fines for repeat offences, because we are aware that some site owners do the same things over and over again. Those people should be penalised more heavily each time around.

Many of the things I have raised and that other hon. Members have touched upon may not be achieved simply through secondary legislation. We may need primary legislation. I hope that the Government and the Minister have the political will to ensure that the time required to push forward these changes is made available. We need to act to remove the last refuge of Rachmanism in this country, because that is what we are dealing with; we need to act to stand up for the vulnerable and the elderly who suffer in the circumstances that I and many others have described; and we need to act for the many self-reliant, proud and decent park home residents, who ask nothing more than that they are treated with fairness, dignity and respect.

[Several hon. Members]

rose—

[Madam Deputy Speaker]

Order. Before I call the remaining speakers, by way of information, I point out that the wind-ups are due to start at around twenty-five to 4. The remaining contributors might want to reflect on how they can ensure that their colleagues get in as well.

15:17

[Martin Horwood (Cheltenham) (LD)]

I will not detain the House long. As many other hon. Members did, I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on tabling the motion. I will happily support it on behalf of my constituents who live at a number of sites in Cheltenham—Sunnyfield lane in Up Hatherley, The Reddings and Harthurstfield park in west Cheltenham. Having named those locations, I emphasise what other hon. Members have said: it is a minority of site owners who are involved in many of these abuses. However, as other hon. Members have also pointed out, the power relationship that exists under the current system between site owner and home owner is so uneven that it almost invites some of these abuses.

Park home living can be a wonderful lifestyle, as it is for many thousands of people. Generally, it involves smaller homes with low maintenance costs that are on the lowest council tax band, on one level and on small plots in parks that engender a strong sense of community. Knocking on doors in the places I have mentioned is certainly a cheerful experience—not least because of some of the wonderfully quirky ornamentation and individual decoration that is often on show

A leading insurer tells me that the incidence of crime on parks is very low. Such homes have low insurance costs and represent a very safe lifestyle. Affordability and safety are key because, as has been pointed out, many residents are elderly and very few are well off. It is unfortunate that the industry is plagued by a small number of unscrupulous operators who, frankly, make their residents’ lives a misery. I shall not repeat the issues of fees, charges and services that many hon. Member have mentioned. Instead, I will highlight again the issue of buying and selling, particularly the approval-of-the-buyer stage, where the park owner meets privately with the prospective buyer. That represents such an obvious conflict of interest that I cannot imagine even the most angelic of site owners not being tempted at times to talk down the value of a park home in order perhaps to make a killing at some stage in the future. It is clear that in many cases the owner, out of desperation, ends up selling back to the site owner, often for a derisory sum, and the site owner then has a vacant plot to develop at a huge profit. At that point they have, in effect, stolen the homeowner’s equity, which sometimes represents the homeowner’s life savings, so it is a very serious issue.

I very much welcome the Government’s intention to transfer jurisdiction to residential property tribunals—a positive step that should address many of the broader issues of fees, charges and so on that crop up from time to time. However, I am not absolutely sure that it will solve the central problem of sales, because often by the time a residential property tribunal process has been completed—evidence has been presented, the tribunal has ruled, and a decision has been communicated—the buyer will be long gone. As one expert professional constituent of mine said:

“I cannot think of a more appropriate sector for there to be some sort of fit and proper person test, some of these owners are merciless.”

A fit and proper person test would be a strong supplement to the residential property tribunal policy that the Government are proposing. That is one of the reasons I strongly support the motion.

I should like briefly to mention the parallel issue of owners of mobile holiday homes. The hon. Member for Sittingbourne and Sheppey (Gordon Henderson) has already referred to this, but I have a slightly different concern that has been raised by several constituents of mine who are permanent residents of Cheltenham but own static caravans or mobile homes in Swanage bay in Dorset, which I suspect is near to the constituency of my hon. Friend the Member for Mid Dorset and North Poole. Once again, these owners are not wealthy and are at the mercy of site owners who stand accused of reducing the market price of mobile homes artificially and then buying them themselves with the potential for a tidy profit. Again, we have the issue of fees, with the site owner apparently seeking an increase of nearly 50% in one year, in contravention of existing licences and Office of Fair Trading guidelines.

[Margot James (Stourbridge) (Con)]

I, too, have a constituent who has a pitch in the Swanage Bay View holiday park, which may or may not be the same as the park that the hon. Gentleman is talking about, where pitch fees have been increased by 22.5% over the past 12 months. There is a huge amount of pressure on older residents to sell up, with a lot of very commercial tactics being used to abuse their position.

[Martin Horwood]

I thank the hon. Lady for that intervention. We are certainly talking about the identical issue, if not the identical park, and once again we are talking about people’s life savings being at risk, often vulnerable elderly people. This is an almost entirely unregulated sector, and unless it is included in Ministers’ plans for residential property tribunals, it will remain so. Does the Minister have plans to include mobile holiday homes in any of the moves that he is making to establish residential property tribunals? If he cannot answer me now, perhaps he will write to me with his intentions or the Government’s view on that issue.

I am proud to support this motion. Since a minority of site owners apparently cannot be trusted to be fair to often vulnerable and elderly homeowners, it is vitally important for Parliament to step in.

15:24

[Dr Sarah Wollaston (Totnes) (Con)]

This afternoon we have heard from Members tales of fraud, neglect, intimidation and vandalism. For me, this is not a complicated issue. As a doctor, if I committed any of those crimes I would very quickly be declared not a fit and proper doctor and struck off. I call on the Minister to consider seriously the ability to designate people not fit and proper site owners.

It is obvious from attending the all-party group that the same names keep cropping up. It is evident that we are talking about probably fewer than 10 owners who commit these crimes across the country. Many of my constituents have relayed shocking tales of crime and fraud, but are genuinely too intimidated to go to the police.

We have heard excellent suggestions—I will not repeat them—from my hon. Friend the Member for South Swindon (Mr Buckland) and I join in the congratulations for the hon. Member for Mid Dorset and North Poole (Annette Brooke) on initiating this excellent opportunity for debate. I call on the Minister to take action, because we have waited long enough. I hope that he has listened to what all hon. Members have said.

15:25

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

Thank you, Madam Deputy Speaker, for trying so hard to decipher my signature so that I could catch your eye. I think that I am the last Back Bencher to speak in this debate, so I add some final congratulations to the hon. Member for Mid Dorset and North Poole (Annette Brooke) on raising this issue, which is so important for many hon. Members.

Like many hon. Members, this issue was first brought to my attention while I was a candidate. It was important to meet the Heathcote Park residents association and its chairman, Mary Hulett. Many park home residents feel unfairly treated and ignored, and are frustrated at the slow pace of reform and regulation. I am sure that Members from all parts of the House will welcome the transfer to the residential property tribunal, which will reduce the cost of resolving disputes and empower residents. I am sure that it will be a positive factor for the sector.

I agree with the notion of fit and proper person criteria for park home site owners, and that there should be regulations that can be used against site owners who interfere with the sale of individual park homes without good reason. However, the problems are far wider than that and much more needs to be done if we are to have a fair and well regulated park homes sector. I believe that the primary way in which the Government can assist is through the creation of a strong licensing regime. I believe that “Park homes site licensing reform: The way forward and next steps” laid out the pathway for that.

We must also tackle the disreputable practices of some site owners. That could be done through capping increases in pitch fees to the retail prices index, or by preventing consecutive increases above RPI. That would prevent site owners from suddenly springing large pitch fee increases on owners, which is particularly important in these difficult economic times.

We could also empower park home owners by allowing them to petition their site owners to agree to a framework for developing a sinking fund for repairs and maintenance. For example, if 75% of park home residents petitioned the site owner, the owner would have 12 months to develop a framework that was acceptable to the majority of residents. If site owners did not comply, an ad hoc tribunal could be set up to force a settlement that was reasonable and fair to all sides. Although some hon. Members may feel that that would be too harsh on site owners, I believe that for too long the law has been weighted on the side of the site owner, rather than that of the resident.

If residents put forward reasonable proposals and there is a degree of consensus, I do not see why a site owner should be able to refuse their requests. Well maintained park homes are in everyone’s interests. I appreciate that interventions should take place only when absolutely necessary, but we must not allow site owners carte blanche to do whatever they want. There must be a relationship of trust and co-operation to create sustainable communities. In my constituency, all residents want is a bit of fairness.

More must be done to myth-bust the idea that park home owners should not form residents’ associations. It is important that park home residents have a forum in which to air their grievances and to discuss them with their neighbours. Although the vast majority of site owners are happy for that to occur, some are keen to break up such important associations. It is vital that we give residents proper protection, and through the use of petitions and residents’ associations I believe we can go some way towards doing that.

I have one final point to make before I conclude. Park home site owners have to do more to name and shame owners who are not operating in a fair manner. The British Holiday and Home Parks Association should, where there is evidence, be willing to publish lists of site operators who are not responsible in their dealings with park home residents, and so warn individuals who are considering purchasing park homes. Ultimately, if incidents involving disreputable site owners continue, it will only further damage the sector. It is in everyone’s interest to do what they can.

All hon. Members who have had to deal with constituents’ problems with park homes know how distressing they can be. We have to remember that we are talking about something extremely personal—people’s homes. Our homes are central to our way of life and our quality of life, and people care a great deal about them, as we can see from the 10,000 signatures that were delivered to Downing street. We have to work towards finding more innovative ways to settle the problem for the benefit of park home residents, and to ensure a sustainable future for the park homes sector in general. I look forward to the Minister’s contribution and to seeing how we can move forward accordingly.

15:31

[Chris Williamson (Derby North) (Lab)]

I pay tribute to the hon. Member for Mid Dorset and North Poole (Annette Brooke), who has been an indefatigable champion of park home residents for a number of years. I pay tribute also to Members from both sides of the Chamber who have contributed to a very good and powerful debate. They have highlighted some appalling abuses of the situation in which many park home residents currently find themselves.

I do not presume to match the hon. Lady’s expertise on the subject, but I am aware from representations that I have received from park home residents that they feel the current legislation is inadequate. They have told me that it does not go far enough in safeguarding their rights and offers insufficient protection against the small number of unscrupulous site owners who can and do exploit loopholes in the law, as we have heard today.

One of the main complaints of residents is the ballooning pitch fees demanded by site owners, because they say they are powerless to resist unreasonable increases. We have heard from the hon. Member for St Austell and Newquay (Stephen Gilbert) and others about distressing examples of such abuse that they have come across in their constituencies. It seems that the standard agreement drawn up by the National Federation of Site Operators, which is now the British Holiday and Home Parks Association, leaves a lot to be desired.

I am aware that about 20 years ago a survey was commissioned for the then Department of the Environment. Residents were asked whether they were consulted by owners on any increase in pitch fees, as they were supposed to be. Only 3% said that they had been. It seems that, 20 years on, there is still a lot to do. I think that there have been some improvements, but the situation has not improved enough.

Mobile home owners have told me that they have sometimes run into problems when they have wanted to sell their homes. Members have referred to those problems during the debate. Site owners often find ways to block sales from going through. Shelter’s mobile homes unit found that some owners served notices to terminate agreements, claiming that the homes involved were

“having a detrimental effect on the amenity of the site.”

The hon. Member for Central Devon (Mel Stride) referred to that. Although that move is legitimate in some cases, in others it is not. It has been claimed that it is often used to bully park home residents into selling up at knock-down prices, as the hon. Member for Isle of Wight (Mr Turner), who is no longer in his place, pointed out. The hon. Member for Mid Dorset and North Poole has described that as a massive scandal, and it is certainly a cause for considerable concern for many people. As my hon. Friend the Member for Rhondda (Chris Bryant) and the hon. Member for Waveney (Peter Aldous) pointed out, it is a real problem throughout the length and breadth of the country.

In 2006, the previous Government removed the ability of site owners to attach conditions to their approval of prospective purchasers. Since then, the only factor that they can take into account is the suitability of an incoming resident. However, the Park Home Residents Action Alliance says that site owners can still abuse that test.

There was a proposal to transfer the jurisdiction on appeals and applications from the county courts to the residential property tribunals earlier this year, but Parliament was dissolved for the general election before the necessary approval was given. The Opposition therefore welcome the new Housing and Local Government Minister’s intention to introduce the secondary legislation that will transfer jurisdiction to residential property tribunals and urge him to press ahead as soon as possible.

However, it is clear that despite the improvements introduced by the previous Labour Government, more needs to be done to protect the rights of caravan and park home residents. Let me assure the hon. Members for South Derbyshire (Heather Wheeler) and for Gloucester (Richard Graham)—the former is no longer in the Chamber—that there is cross-party support for stronger measures. All official Opposition Members want them, and Opposition Front Benchers are united. We want to work with the Government to ensure that appropriate protection for such vulnerable people is introduced.

Much of the groundwork on identifying what legislative improvements need to be made has already been undertaken. The Department for Communities and Local Government consultation paper, “A new approach for resolving disputes and to proceedings relating to Park Homes under the Mobile Homes Act 1983 (as amended)” was published in May 2008. In May 2009, the previous Government published a further consultation document, “Park Home Site licensing—Improving the Management of Park Home Sites”. A further paper, “Park homes site licensing reform: The way forward and next steps” was published on 30 March this year.

As I pointed out, the Opposition want to work constructively with Ministers, as my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) requested. We want to build on the good foundation that we left to secure a thriving and well-run park homes sector that provides sites where people want to live and, indeed, invest. We believe that a licensing system that raises and maintains standards on sites, and one that ensures that sites are safe, well planned and well managed, with appropriate facilities and services, will help to achieve those objectives.

Such a scheme must operate fairly, and it must be proportionate, cost effective and enforceable. An effective scheme must deliver improvements in the management of park home sites where improvements are necessary while continuing to secure a vibrant and healthy sector.

15:37

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

It is a pleasure to respond to this Back-Bench debate and to my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke)—I always have to get my norths, souths, easts and wests carefully organised when I refer to her constituency. The debate, which featured 14 contributions from Back Benchers, has been well informed, wide ranging and sometimes passionate—hon. Members have given a real sense of the injustice that some park home residents are forced to suffer—and it has come at a good moment, because as my right hon. Friend the Minister for Housing and Local Government already told the House, he will make a statement on this matter in the new year. I will ensure that all the contributions and the many and varied suggestions and ideas come to his attention as he works on that.

Rightly, many Members acknowledged the broader context. The sector provides homes for 85,000 families and perhaps as many as 150,000 residents, as my hon. Friend the Member for Gloucester (Richard Graham) said. The very large majority of those residents enjoy peace and quiet, and are happy and satisfied where they are. Many sites are properly managed and maintained by decent, honest and professional site owners who have regard to the welfare and rights of the communities in their parks. It is a pity that their good work is often overshadowed by the unacceptable conduct of a minority, about whom we have heard some telling stories this afternoon. That minority can cause misery to a community in many ways; for example, by not maintaining sites properly, by bullying residents and by interfering unreasonably, or even unlawfully, when residents try to exercise their lawful rights. The House has also heard significant allegations of criminal behaviour and even blackmail. However, I do not want to dwell on the specific allegations, except to say in plain terms that the Government believe that the park homes sector should have no place for these people. I want good site owners to thrive and bad site owners to be taken out of the sector.

It is important to note some of the themes that have come out of today’s debate. We have heard the stories and anecdotes, which I do not dismiss, but Members on both sides of the House have also recognised that there has to be a balance between the powers and responsibilities of site owners on one hand, and of home owners on the other. We need to reflect on the fact that every home owner, in becoming a home owner, will have had the opportunity to look at the terms and conditions of the sale and purchase. I hope that we might also reflect on how we can make those terms and conditions more transparent to prospective purchasers, and ensure that once signed they are adhered to by both sides.

We have heard contributions about the degree to which regulation should be light or tough. My hon. Friend the Member for Eastbourne (Stephen Lloyd), who declared himself to be a deregulatory Liberal, has come to the conclusion that we need to toughen up regulation, and that was the message, I think, from hon. Members throughout the House. I will ensure, therefore, that that view is conveyed clearly to my right hon. Friend the Minister for Housing and Local Government.

The Government are committed to targeted reform that does not place unnecessary burdens on site owners, who ought to be allowed to thrive. We will not solve the problem if we drive well-run sites out of business because of an overburden of regulation or control. Our first priority, therefore, is to make it quicker and easier for residents to challenge unreasonable behaviour by site owners who disregard residents’ rights. My right hon. Friend announced in July that, under the Mobile Homes Act 1983, jurisdiction in the settlement of most disputes will be transferred to the Residential Property Tribunal Service.

I can assure the House that subject to parliamentary approval we intend those tribunals to become operational from next spring. That has been a priority for park home residents for many years, and I am committed to implementing it as quickly as possible. It will enable residents to resolve disputes much more quickly and easily, and act as a deterrent to unreasonable behaviour. I can also assure hon. Friends that access to the tribunal is normally free, although in some cases there may be a fee of £150. However, legal representation is not necessary, so the cost is much less than for court proceedings. That is a major step forward. It will give residents quicker and easier access to justice, provide an opportunity for rapidly resolving disputes and deter unreasonable behaviour.

[Andrew Miller]

That is a sensible proposition, but I ask the Minister to reflect on the history of other tribunals that started in a well-meaning way but gradually became more and more bureaucratic and legalistic. As time passes, there will be the risk—starting perhaps with the site owners—that more lawyers will enter the process, so we will need to reconsider the situation after a year or so of running the tribunals to ensure that we have got the balance right.

[Andrew Stunell]

The hon. Gentleman makes an important and interesting point, but if I may say so, perhaps we should focus on introducing tribunals before we start to evaluate them.

The aim is to improve site management and deter bad practices. That will benefit not only residents, but the industry as a whole. It does the sector no good at all to develop a reputation for bad behaviour. As they pursue their work, the tribunals will provide evidence in an open and transparent way—through a body of cases, involving case law and decision making—which will benchmark good behaviour and identify unacceptable behaviour, thereby playing a standard-setting role.

The motion calls on the Government to review the case for establishing a “fit and proper” licensing system. There is certainly no role in the sector for unscrupulous and criminal operators, but they are a minority. That brings us back to the balance between regulation and the burden of implementation. The Government’s general approach is to reduce top-down regulation and minimise the involvement of central Government in local decision making. However, we are committed to protecting the most vulnerable, and I know that some park home residents are among the most vulnerable members of society, as has been well pointed out in this debate. We are not convinced that the protection of park home residents from the minority of unscrupulous site owners requires a complex and costly national licensing system, which would apply across the sector and place burdens on all site owners, good and bad, with that cost ultimately being passed on to residents too. We have to strike a careful balance—one that protects the vulnerable, targets the worst and minimises the regulatory burdens on the law-abiding majority.

On the blocking of sales, I have every sympathy with residents who are unreasonably thwarted when trying to exercise their lawful right to sell their homes. I know that those concerns are shared by my right hon. Friend the Minister of State. The park home justice campaign is to be commended for bringing this important matter to the forefront. Ministers are now well alert—if we were not before—to what the issues are. However, we need to look at what the remedy is. The premise is that unscrupulous site owners might be less likely to make false representations or deter potential buyers if an interview with a prospective purchaser took place in front of a solicitor. However, it is a little hard to see exactly how that would work or who would appoint the solicitor, let alone who would pay for him or her. There is no reason to believe that an unscrupulous owner is likely to be any less dishonest because there is a witness present.

There is also a wider question about whether interviews are required at all, because there is certainly no statutory or legislative reason for them. The Mobile Homes Act 1983 permits the site owner to approve the purchaser, but that could be done in a number of ways, not necessarily through an interview process; for example, by providing relevant documents. If there is no legal requirement for an interview, it would be burdensome to introduce a formal regulatory process for conducting one. However, that is not to say that we believe it acceptable simply to let unreasonable behaviour be tolerated. We see improving access to justice through the residential property tribunal as the first step towards ending abuses in such cases. My right hon. Friend the Minister of State is only too aware of the problems, and he intends to announce in the new year a package of measures that will curb the excesses of the minority of unscrupulous owners, while not placing undue burdens on the majority who manage their sites effectively and in the best interests of the community.

[Martin Horwood]

In my remarks I talked not only about sites for permanent homes, but about holiday sites, where often there is also a lot of evidence of abuse. Will my hon. Friend’s measures and his right hon. Friend’s considerations include those sites as well?

[Andrew Stunell]

I will certainly take that request away, and we will certainly consider it. It is worth reminding the House that where mobile homes are used for full-time residential purposes, they have a number of tax and regulatory advantages, as compared with what we might call “normal” homes. That is because of their status as residential homes of a particular type. Holiday homes are in a different category, and have all sorts of other regulatory frameworks relating to them. However, I will ensure that that point is taken into consideration.

This has been an important and timely debate. It has certainly highlighted important areas of concern to Members, and it is a tribute to the new Back-Bench debating system that it has come before the House today. It has been helpful to me and my ministerial colleagues and I hope that, when the announcement is made in the spring, hon. Members will feel that their contribution to the debate today has had an influence on the way in which the Government are approaching the problem.

15:50

[Annette Brooke]

I shall make a brief concluding statement. I should like to thank all the Members who helped to secure the debate, because we had to convince people that we would have enough speakers today. I have been having sleepless nights about it, and I thank everyone for turning up today, especially at this time on this Thursday afternoon. I welcome the cross-party support for the motion; it is absolutely vital and it makes me feel positive that we can move forward. I hope that it will also make the campaigners feel positive. We have talked about our proud and dignified home owners, and about the fact that park homes are homes, not just chattels. That is incredibly important. Those people deserve better; the words “the forgotten lost” summed up what we have been debating this afternoon.

I am all too aware that we need a sustainable, flourishing industry, but it cannot flourish or achieve its full potential for providing this much-needed housing unless we have a way of addressing the many issues that we have been talking about today. Speed and transparency have been referred to, and they are both important, because time is running out. I welcome the first step of establishing the residential property tribunals, but I want to see concurrent planning for the next stage, because it is clear that we need more.

I wavered as I listened to the Minister’s response. First, I thought, “Oh, that’s good”, then I thought, “Oh, that’s not so good.” It is a pity that we could not have delivered a Christmas present to our park home campaigners today, and that they will have to wait until the new year for the Minister’s statement. I trust that they will not have to wait until the spring, and that the statement will be made early in the new year, because we need a response to these long-term problems that have now been raised so many times in the House. I accept that we need to strike the right balance, but that is no excuse for doing nothing. We must have action!

Question put and agreed to.

Resolved,

That this House notes that there are approximately 1,800 park home sites in England and Wales; further notes that current legislation permits a minority of park home site owners to cause great distress, damage to property and danger to health of park home residents; welcomes the Government’s intention to lay before the House secondary legislation to transfer jurisdiction for park homes to the Residential Property Tribunal Service; but calls on the Government to review the case for establishing a fit and proper person criterion for park home site owners and to bring forward relevant legislation at the earliest opportunity to prevent in particular park home site owners interfering with the sale of a park home without good reason.

Public Accounts Committee

Thursday 16th December 2010 Commons Chamber

[Relevant documents: The 40th, 44th, 46th, 49th and 51st to 53rd Reports from the Committee of Public Accounts, Session 2008-09, the 1st to 33rd Reports from the Committee, Session 2009-10, and the 1st to 10th Reports from the Committee, Session 2010-11. ]

15:53

[Margaret Hodge (Barking) (Lab)]

I beg to move,

That this House calls on the Government to ensure that all recommendations contained in Reports of the Committee of Public Accounts and accepted by Government Departments are implemented and that the relevant Minister makes a statement to the House on any recommendations accepted but not implemented within a year of their acceptance.

Over the past nine years, this debate has been ably led by my predecessor, the hon. Member for Gainsborough (Mr Leigh), to whom I would like to pay tribute. His tireless contribution to improving public services and delivering value for money has been acknowledged and recognised by hon. Members across the House.

The very first Public Accounts Committee debate was held on 19 December 1960. The then Chair, one Harold Wilson, began his speech by saying

“in my view, the confrontation in this debate is not between Government and Opposition but between the House of Commons, with its traditional responsibility for controlling the public purse on the one hand and the Government on the other.”—[Official Report, 19 December 1960; Vol. 632, c. 894.]

Those are words that should continue to guide us today. The PAC has never been, and should never be, a creature of either the Government or the Opposition Front Bench. We are a creature of Parliament, working together for the benefit of the citizen, holding the Executive to account and constantly seeking improvements in the value that the Executive give for the money that they spend.

As well as reflecting that long and proud tradition, today’s debate reflects important changes that we have collectively made to strengthen the role of Parliament. For one thing, I am the first Committee Chair to be elected to the post, as well as being the first woman in the job. It is also the first time that my fellow Committee members have been elected to their positions. I think we would all agree that that additional democratic legitimacy increases both the responsibility and the authority with which we carry out our duties.

The PAC has made changes to our standing orders. As well as allowing us to meet even when the House is not sitting—on Christmas day if need be, as we are often reminded by the hon. Member for South Norfolk (Mr Bacon)—it will make it easier for us to gain access to specialist advice from sources other than the National Audit Office should we need to do so. Furthermore, this is the first occasion on which we have had to bid for our slot from the Backbench Business Committee. That, too, strengthens our accountability to our colleagues.

The motion before us today is different from those of the last 50 years. Rather than simply calling on the House to note our reports, it specifies the changes that we want to see in the way in which the Government respond to our recommendations. That is definitely progress.

The final reason why today’s debate is particularly important is the context in which it is taking place. The new Government, for good or ill, have embarked on major changes. The spending review marks the first wholesale fiscal retrenchment for 20 years, and by some measures the greatest such retrenchment for several generations. Other reforms, in the national health service and the benefits system, are similarly ambitious. The Government want to achieve more for less. They want to achieve value for money, and the people of the country want the same. They want real value for money, real efficiency and real cost-effectiveness, so that the financial cuts have as little detrimental effect as possible on front-line services.

We are still in the very early stages of implementation of the spending review, and the question of whether or not the changes will prove to be value for money is still up for grabs, but there is no doubt that the work of the PAC is hugely important at this time. I firmly believe that if our recommendations are heeded, value for money will improve and the delivery of services will get better. Therefore, I strongly urge the Treasury to give diligent consideration to our reports, and then, after not too much consideration, to ensure that concrete action is taken. I can assure the Treasury that we will monitor implementation much more closely than may have been the case in the past.

I thank all those who help to make the work of our Committee effective. It is no mean feat to question senior civil servants from two different Departments every week—three this week—especially given that our hearings range over every conceivable aspect of public service. As might be expected, that does not happen by itself. I pay tribute to all my hard-working fellow Committee members, who turn up to hearing after hearing impeccably well informed and full of incisive questions. I thank the people who ensure that each hearing runs smoothly: the Clerk and his team of hard-working assistants, and the Comptroller and Auditor General and his staff at the National Audit Office. We are able to perform our role only because of the high quality of work carried out by the Comptroller and Auditor General and his staff.

I want to make three observations about the motion. First, Departments have achieved some notable successes, which we applaud. However—this is my second point—value for money is still too patchy. The same issues arise time and time again. Thirdly, in the past, Governments have too often been too slow to act on some of our recommendations. We will be much less tolerant of that inaction in the future.

The PAC has a reputation for tearing senior civil servants to shreds. Its members have been seen as “glass half empty” rather than “glass half full” people. We have been depicted as the hunters, and the poor accounting officers as beleaguered victims. Actually, the Committee has always tried to give credit where it is due, but the fact is that the amount of waste and poor value for money that it must consider has often been overwhelming. We are redoubling our efforts in this regard, however. It is important that success is celebrated, not just because that is fair, but because it is rare that success in one Department does not produce lessons from which the rest of Government can learn.

Two reports that we have considered in the last six months stand out, both from the Department for Education, which is therefore accorded star pupil status, at least on a provisional basis. The first was the welcome success in raising standards in the academy schools programme launched by the previous Government for struggling schools working in challenging circumstances in deprived areas. The second was the success of the programme to increase the take-up of science subjects right the way through the education and training systems.

Regrettably however, more often than not we have to consider failures rather than successes. Despite all the years of recommendations from us, the National Audit Office and others, and despite much good will and many good intentions on the part of Ministers and civil servants, we still find lots to concern us. Everyone pays lip service to the need for value for money, but genuine and detailed consideration of value for money across Government is still far too patchy.

One of the first evidence sessions we held was on the last Government’s attempts to realise value-for-money savings targets set as part of the last spending review in 2007. I was a member of that Government, and let me say that I believe those attempts were serious and sincere. Nevertheless, I must admit that I was shocked by the results. Halfway through the programme, Departments had reported only just over a third—30%—of the savings required, and only a third of them were genuine, sustainable savings.

Faced with the much more challenging task set by this spending review, what needs to change? I want to highlight two issues. First is the Government’s inability to deliver projects to time and within budget. For example, let us consider two of the hearings we have had this week. The Ministry of Defence is renowned for always delivering late and invariably overspending, but yesterday’s session, with the evidence we had before us, was truly shocking. Committing to the aircraft carrier project only to delay it eight months later at an extra cost to the taxpayer of at least £1.56 billion is truly shocking. While that did happen on Labour’s watch, I am strongly of the view that the permanent secretary at the time should not have allowed the signing of the contract, which so quickly led to such a terrible waste of money. On the Typhoons, taking £1 billion out of the budget when the MOD knew we had a contractual commitment to a third phase of the contract, leading to us having to put in £2.7 billion now to pay for a further 16 aircraft that we do not need, is completely scandalous.

Today’s evidence session on the project to widen the M25 left us all flabbergasted. Never mind the nine years it took from concept to contract or the £650 million extra because the contract was signed during the credit crunch, and never mind the £80 million spent on consultants, one of whom went on to employ the senior responsible official; the real point is that we probably should never have undertaken to widen the road in the first place. We should instead have used the hard shoulder, which would have been cheaper and almost as effective.

The second issue I want to highlight is that, time and again, we identified the lack of good and appropriate data, which leads to poor value-for-money decisions and bad choices. Whether through the evaluation of the pathways to work scheme, which measured effectiveness by including all those who asked to go on to incapacity benefit rather than those who were eligible for it, or through the failure of the Department of Health to give primary care trusts the data telling them what works in helping people to stop smoking so that they stopped wasting money on ineffective programmes, the lack of appropriate data too often results in money being wasted.

I cannot leave this subject without mentioning the Government’s recent publication of large amounts of new data on public spending. It is inconceivable that somebody in my position would do anything other than welcome this move towards greater transparency, but I must also sound a word of caution. I must be frank and say that it seems that the problem has never been the amount of data, because an almost infinite amount has always been available; the problem has been how useful the data are, where the gaps are and how well the data have been analysed. To be useful to decision makers in government, as well as to parliamentarians, the National Audit Office and the ordinary citizen, the data must be presented in a way that allows them to be understood and used. I hope that the Minister can give us some comfort that the publication of hundreds of thousands of receipts through the Combined Online Information System—COINS—database is not being done at the expense of the analytical capabilities of Departments.

To date, the Committee has focused on the actions of the previous Administration, which is entirely to be expected because the nature of audit and accountability is to be backward-facing. In time, we will consider the actions of the coalition Government and, as a cross-party Committee that jealously guards its reputation for objectivity, we shall do so impartially. I say clearly to the House that the problems we have identified will not go away simply because of a change of Administration. On the contrary, dealing with them will require concerted action, a willingness to confront age-old ways of doing things and a commitment to improve the skills of civil servants and to get better evidence with which to take decisions.

There seems to be an inbuilt resistance to change in the huge tanker that constitutes the Government machine. Why are projects so often late? Why are we invariably looking at cost overruns, rather than savings? Why can the civil service not build in-house capability to provide effective management and delivery, as well as sound advice? Why is there no culture of proper personal accountability in government at senior levels? Why can Departments not co-operate better and compete less? Why can government not learn from its mistakes?

This is not about political will; it is about institutional inertia and institutional resistance to change. All politicians want better value, enhanced efficiency and improved effectiveness. All politicians, of all allegiances, get blamed when they fail in that regard, yet the ability to succeed in securing those things seems all too often to elude us. That is partly because of the conservative aversion to risk among public sector workers and partly because nobody stays in their job long enough to see things through and be truly accountable. It is also partly because we do not recruit the right people with the right skills and partly because political expediency too often overrides economic efficiency—that is true of all parties.

That brings me to my final observation, which is the one that forms the backbone of today’s motion: the degree to which the Government act on the Committee’s recommendations. It is inevitable I would say this, but it is my sincere belief that the process of improving value for money in the public sector would be made easier if the Government made more effort to implement our recommendations. All too often, too little effort has been made. Indeed, all too often our recommendations have just been quietly ignored.

Let us consider the example of the Government use of consultants. The PAC examined that issue in 2002 and 2006, recommending on both occasions that the then Government do more to grow the skills that they need within the civil service, rather than paying out money to costly consultants. What did we find when we looked at the issue again just a few weeks ago? We found that the proportion of spend on IT and project management grew from 50 to 60% between 2006 and 2010. One of the most staggering revelations was that the Department for Transport’s spend on consultants came to the equivalent of 70% of its expenditure on in-house staff.

There are plenty of other such examples, which is why we are going to get tougher on following up recommendations. When they are not accepted by Departments, we will want to know why. When they are accepted, we will expect them to be implemented. Hence our call that the Minister responsible should make a statement to the House about any recommendation he or she has accepted but failed to implement within a year.

Today marks the publication of the first two Treasury minutes on hearings that we have had in this Session, another reason why the timing of the debate is so good. We obviously need time to study the detailed content of the documents, but they represent a relatively good start. In the response to our report on the future strategic tanker aircraft, I particularly welcome the commitment to fit these planes with a defensive aid package so that at least they can deliver troops to the war zones, as was originally intended. I also welcome the wider commitment from the MOD to work with the Treasury on renewing its guidance about where and when to use the private finance initiative. I must say, however, that is it dismaying to see how the Department is still determined to justify the decision to use PFI on that project. In my view, that is nothing less than an attempt to defend the indefensible.

On pathways to work, the response we have seen is similarly mixed. It is good to see that the Department is seeking to put proper incentives into the new Work programme so that contractors will not get paid unless they deliver. I welcome the commitment to allocate cases to private companies on a random basis in the future so that they cannot cherry-pick the easiest ones. Moreover, the results of Professor Harrington’s review of the new work capability assessment shows that it is more than just our Committee that has concerns about it, and I look forward to the Department’s response. I dislike the assumption that outsourcing these duties to the private sector is definitely the value-for-money thing to do. After all, our report found that Jobcentre Plus, almost without exception, did better than private contractors, even though they were given a smaller caseload in easier parts of the country.

I want to draw the House’s attention to one important aspect of our work over the coming months. Our work will be dominated by the implementation of the spending review. We have already held sessions with experts outside Government, and we have taken evidence from senior civil servants to understand the new framework of accountability and the role and purpose of the business plans and we will develop our own framework for ensuring proper value for money in the cuts and changes Departments make. We will rigorously hold the Government to account, but in doing so we want to assure the House that our purpose is one we share across the Benches. We want to help eke out best value for every penny spent on behalf of the citizens of the country and we want to contribute to the improvement of public services in coming years. All we ask is for serious engagement from Ministers, accounting officers and their staff across government and for the Treasury’s assistance in making that happen.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Eight people are trying to catch my eye and I shall be calling the Front-Bench speakers at about half-past 5, if people can bear that in mind.

16:12

[Mr Richard Bacon (South Norfolk) (Con)]

It is a great pleasure to follow the right hon. Member for Barking (Margaret Hodge), the new elected Chair of our Committee. I congratulate her on the way in which she has fulfilled and is fulfilling her office. It is a great pleasure to serve under her leadership. Her predecessor was something of a stern headmaster, and although her style is slightly less stentorian—I looked up Stentor, and he was a Greek herald with a booming voice and it is hard to think of anyone in this House with a more booming voice than my hon. Friend the Member for Gainsborough (Mr Leigh)—she has already shown that she is no soft touch. She has shown her teeth on a number of occasions and she chairs the Committee with great aplomb. You might expect me to say that, Mr Deputy Speaker, but ask yourself which Conservative is likely to be able to resist serving under a strong woman whose first name is Margaret.

I want to say how much of a pleasure it is to have so much new blood on the Committee. It was a bit of a shock for me and the hon. Member for Great Grimsby (Austin Mitchell) to realise that we were the only members of the Committee who had served in the last Parliament and there is a great cast of new active keen members who are working very hard and contributing their new and varied experience.

Let me start by endorsing something that the Chair of the Committee just said. The problems will not go away because there has been a change in Administration. I have been looking at the problems that Government face through the lens of the Public Accounts Committee for the past nine years—I have been wrestling with these problems— and it staggers me that the problems are so generic and are repeated so much. In my relatively brief speech, I want to focus on a number of different reports and then on one issue in detail.

I shall look first at some reports that show structural improvements in the way that we are working with the National Audit Office and secondly at some that show welcome improvement in a particular area—financial management. I shall look thirdly at some reports that show the areas where there are still serious issues, one of which would be almost hilariously bad if it were not so serious because it involves public money, and fourthly at a couple of reports that are particularly important to how we might work in future. Finally, I shall look at one report in detail.

The first three reports I want to discuss signal something quite important. They are the 52nd report of 2008-09 on reducing health care associated infection and the 26th and 19th reports of 2009-10 on improving stroke care and improving dementia services respectively. The 52nd report was the third time since 2000 that the Committee looked at hospital-acquired infections and there has clearly been significant change in that time. The Committee considered it first in 2000 and again in 2004, when there had quite shockingly been a dramatic decline. The NAO published its report in 2004 and we took evidence on it later, and that catapulted hospital-acquired infection up the agenda. Everyone will remember what a strong issue it became during the 2005 general election and it has been an important one ever since. It continues to be important for hospitals, but it will remain so only if they know that they are under scrutiny. That is why I was so pleased that we took evidence on it again in 2009. The report shows that there has been significant progress, particularly regarding the two infections that are the subject of national targets—MRSA and clostridium difficile—but that there have not been those measurable reductions in other avoidable infections that were not targeted. Clearly, progress is made in areas we scrutinise, but more needs to be done.

By returning briefly to an issue, as we did in our 26th report on stroke, we were able to demonstrate that there had been considerable improvement. Our report stated:

“We welcome the demonstrable improvements in stroke care which the Department of Health…has achieved since our first report”,

but noted that there are still further steps to take. I firmly believe that the Committee should, as a matter of routine, return to issues much more regularly. We also did that with our interim report on dementia, which showed that although the then Government said that dementia would be a national priority, they did not walk their talk in the way that they did with cancer and coronary heart disease.

The financial management reports that caught my eye are the 46th report of 2008-09 on financial management in the Home Office and the third report of 2009-10 on financial management in the Foreign and Commonwealth Office. Let us remember that almost the first act of Sir David Normington on becoming the permanent secretary at the Home Office a few years ago was to sign an unaudited and unauditable set of accounts merely so that they could be presented to Parliament. As we said at the time, that was a very unenviable position to be in and it certainly was not his fault. Our report shows that there has been considerable improvement in financial management at the Home Office and that it needs to sustain that momentum by incorporating strong financial management as standard across its business. We have identified areas in which further progress is needed, but we should stop to note the considerable improvement since the chaos of a few years ago.

Similarly, with the FCO, it was a delight to see the permanent secretary turn up with two chartered accountants and to be able to say in our report:

“The Committee is pleased to note that the Department has acted upon previous recommendations”.

That is relevant to what the Chair of the Committee said a moment ago, and I wish that more Departments would do the same. In contrast, however, our 25th report of 2009-10 on the FCO’s estate management showed that it has a lot further to go in that area. We commented that its

“new Estates Director currently does not have the information he needs to do his job.”

The lack of correct information in Government Departments is a theme that we constantly come across and the NAO has rightly focused a suite of its work specifically on estate management because the Government are such a big property owner. There is still a great deal more to do in that area to improve the quality of management within Government. It is not common to find qualified chartered surveyors and qualified chartered quantity surveyors in charge of a Department’s estates in the way that we would expect, and are now getting, with financial managers in relation to financial management in Departments. That is something that the Government should focus on.

I turn to less successful areas, notably the private finance initiative project to deliver the multi-role tanker—the future strategic tanker aircraft—which should never have been set up in that form. Paragraph 1 of our report states:

“The use of PFI to deliver a vital military capability like FSTA was inappropriate.”

It is rather depressing that after years of identifying projects where the use of PFI was inappropriate, and saying that certain types of project should never be subject to PFI—for example, the Libra project to supply computer systems for magistrates courts—it is still being used in situations in which it is wholly unsuitable. I was looking at the questions put by our Edinburgh colleague, the right hon. Member for Stirling (Mrs McGuire). At question 187, she asked the permanent secretary whether, notwithstanding the pressure he was under, there was any justification for the fact that when the Ministry of Defence

“went into a project, that they did not know what it looked like, would sound like, would turn out like, had no indication of the costs of the subcontractors.”

The permanent secretary replied:

“I am certainly not arguing in favour of the approach that was taken…All I am trying to do is to offer a little bit of mitigation for that failure by reference to the operating conditions at the time.”

I think what Sir Bill probably meant by

“operating conditions at the time”

was the previous Prime Minister, who when he was Chancellor of the Exchequer said that we would do it under PFI, or it would not happen. We need to be slightly more honest with ourselves about what is and is not appropriate, and to have more open debate about it. The project was scandalously managed and cost much more than it should. It has taken much longer than it should, and it was inappropriate in the first place.

The Chair referred to the aircraft carrier project, which is similar. We looked at that only this week with the new permanent secretary at the Ministry of Defence, as we did at the beginning of the year in our 2009 major projects report. What staggers me is that only seven months after signing the contract, the MOD took a decision that would increase the costs, not because of project management failure or management ineptitude—it was purely a decision to delay. Decisions were taken that increased the cost by £908 million—or so they thought when we reported on the matter in our 23rd report, in the 2009-10 Session, HC 338. It turns out that the figure was not £908 million; it was £650 million more than that. It was £1.5 billion extra, on top of the original cost, purely because of the decision to delay. I agree completely with our Chair. The permanent secretary at the time should have said, “Affordability is such an important component that if you want me to do it, you should require me to do it by issuing a direction.” I am sorry that was not done.

Our report on the National Offender Management Service highlighted a significant issue relating to the management of the civil service and the way that civil servants are placed on projects. Our recommendation 5 notes that

“the Senior Responsible Owner did not have the right experience for the role.”

Who put that person in that job, when she did not have the right project management experience? If we set people up to fail, we cannot be surprised if that is exactly what happens.

I should like to refer to several other reports, but I shall concentrate on the report on the Rural Payments Agency, which illustrates some deep issues in the relationship between Ministers and civil servants that are as important for the future as they were in the past. I shall remind the House of the facts in the RPA debacle. It involved the single payment system. Various methods were available, but the Government chose to implement the most complicated system on offer with the shortest available timetable. That process was certain to increase both the total number of claimants and the total land area claimed, while the agency had not properly completed the essential digital mapping exercise—refusing to recognise that it was flawed—and was using a computer system that had not been fully tested, and which was anyway not up to the job. It used an approach that split the work into separate tasks performed in different parts of the country, which made it impossible to track the progress of individual claims. It cancelled the parts of the system that would have provided management with information about what was going on and scrapped the contingency plan that would have at least enabled the agency to make part-payments. Furthermore, the RPA sacked its most experienced staff and replaced them with unskilled temporary agency workers who were required to work unsocial hours on the minimum wage. One is tempted to ask, what could possibly have gone wrong? But the fact is that, as we all know, it did go wrong.

To say that the single payment scheme was convoluted was an understatement. Indeed, Dr James Jones of the Royal Agricultural College in Cirencester told our sister Committee, the Environment, Food and Rural Affairs Committee:

“This has been highly confusing conceptually even at the highest levels of those responsible for creating the scheme rules at EU, Member State and regional level: most of the difficulties experienced in implementing the Single Payment Scheme stem back to internal contradictions that arise because

(a) entitlement is based on past occupation of specific parcels of agricultural land but is then not linked to that land;

(b) payment is related to occupation of ‘agricultural land’ but does not require agricultural production; and

(c) most of the cross-compliance and other conditions relate to production but the Single Payment was not a production-based subsidy.”

And that was just for starters. One still had to decide which of the three possible years one would start the scheme in, whether to incorporate funding for the dairy sector into the scheme, and the crucial question of the method that would be used to calculate payments. That offered possibilities of quite byzantine complexity.

The main choice was whether to use as a reference point the payments that individual farmers had received in the past under the old common agricultural policy schemes—known as the historic approach—or whether to average out all payments among farmers in a state or region, which was known as the flat-rate approach. Member states could also apply a mixed model under which they were allowed to apply different calculations in different parts of their territory. It was this that enabled the Administrations in Scotland, Wales and Northern Ireland to use a different system from that used in England.

But there was a further twist within the mixed model. Even within one region of its territory, such as England, a member state could calculate single payments using a part-historic and part-flat rate approach. Under such a “hybrid” system, payments would be calculated partially by taking the available money within a region and splitting it among farmers on the basis of a flat-rate entitlement, and partially by taking account of the old subsidy that a farmer had received historically under the common agricultural policy schemes.

That was not all. Member states could choose a hybrid scheme and leave it at that, which was known as a static hybrid, but if they wished, member states could choose a hybrid scheme and then vary it as time went on, so that over the years the proportion based on the historic subsidy payment declined and the proportion based on the flat rate increased. This was known as a dynamic hybrid.

The permanent secretary of the Department for Environment, Food and Rural Affairs, Dame Helen Ghosh, made it very clear that this was not the Schleswig-Holstein question. Members may recall that that was the question of which Lord Palmerston, a former Prime Minister, said that there were only three people who ever understood it: one of them died, one of them went mad and one of them forgot what the question was. But it was undoubtedly byzantine in its complexity. It prompts the question, what did DEFRA and the Rural Payments Agency actually think about all this? Well, funnily enough, it was very clear what they thought about it.

According to evidence from George Dunn, the chief executive of the Tenant Farmers Association, which he gave to the EFRA Committee, Bill Duncan, who was head of the central scheme management unit at the Rural Payments Agency, said that if the RPA were to choose something other than a simple historic or a simple regional average system it would be a “nightmare” to administer. That is what the senior Rural Payments Agency official thought. David Hunter, who was the director of European Union and international policy in DEFRA, said it would be “madness.” That is what the senior DEFRA official thought.

Yet Dame Helen Ghosh, the permanent secretary of DEFRA, giving evidence to our Committee, in answer to a question from David Curry, then a Member of the House and a member of the PAC, and of course a former Agriculture Minister, told our Committee:

“Ministers were being told it was possible when it was not in fact possible.”

The full quote is as follows, and I think it is quite illuminating:

“The capacity of the organisation to advise ministers—and I think we put them right—and indeed the connection between the policy and operations in the Department”—

I think she actually meant the lack of a proper connection between the policy and the operations—

“meant that ministers were being told it was possible when it was not in fact possible.”

The quote continues:

“The point I am making is that had ministers at the time been told it was effectively impossible—and I think it is very difficult to discuss counter-factuals—they may have made a different decision, had they known the difficulty”.

In other words, the senior official in the RPA with specific responsibility for the management of the scheme, Bill Duncan, thought the route that they were choosing would be a “nightmare” to administer; the senior DEFRA official with direct management responsibility for the oversight of the scheme, David Hunter, thought the route that they were choosing would be madness; but Ministers were being told that it was quite deliverable. As Dame Helen said,

“ministers were being told that it was possible when it was not in fact possible.”

Why? It is the job of the neutral civil service to ensure that Ministers are in full possession of all relevant facts before making a decision, so we could blame the civil service for that debacle.

On the other hand, and in actuality, the Minister at the time was absolutely determined to go down a dynamic hybrid route come what may, so we could blame the Minister, and perhaps we should. The Minister should have been told, however, “It cannot be done.” He should also have been told, “If you want me to do this, Minister, you are going to have to issue a direction to me to do it, because it cannot be done in a way that is economic, effective and efficient.” Why did they do it? In the end, they did it because Ministers told them to, and they were not prepared to stand up to Ministers in the interest of taxpayers, as they should have.

What is the lesson? It is quite rightly true that civil servants respond to what they believe to be a Minister’s priorities, but it is also essential for Ministers to be aware of the consequences of their decisions, and for civil servants to stand up to them and to make sure that they are aware of those consequences. I should like to think that the best civil servants do that, but I fear that it does not happen now as much as it did a generation ago. I am not making a party political point, however, because that was a criticism in the 1980s under the Thatcher Governments and subsequently; it has been a criticism of the previous Administration; and, for all I know, it will become a criticism of the current Administration. It is absolutely essential, however, for Ministers and their advisers to understand the consequences of what they do and the impact of those decisions on large-scale—often world-scale—organisations.

The right hon. Member for Greenwich and Woolwich (Mr Raynsford), in evidence to the Public Administration Committee, made the point very clearly, stating that

“there has to be an understanding on the part of the politician about the impact of political decisions on the ability to manage organisations. I am critical of a failing of some of the leaders of this Government and previous governments who have believed that essentially political decisions could be taken without a proper appraisal of the impact on the running of a department.”

16:32

[Mrs Anne McGuire (Stirling) (Lab)]

I, too, pay tribute to my right hon. Friend the Member for Barking (Margaret Hodge). She is the first woman—indeed, the first elected—Chair of the Public Accounts Committee, and that is a unique combination. She is also one of the bravest politicians in the House, and anybody who has seen the magnificent election battle that she undertook in her constituency against the British National party may well understand why permanent secretaries might be worried about appearing before her at the Committee.

It is also a pleasure to follow the hon. Member for South Norfolk (Mr Bacon), but he needs to remind me to give him a lecture on Scottish geography. He always tells me that he knows a bit about Scotland, but I must tell him that, although Edinburgh and Stirling have castles, Stirling has by far the best, and it, as opposed to Edinburgh, has me as its MP. I forgive him, however, because I admire the skill and tenacity that he brings to the Committee, and he is a role model for us all.

I am not a new Member, but as someone who has been here since 1957—[Interruption.] It sometimes feels like that. As someone who has been here since 1997, I am asked by some colleagues, “Why do you want to go on to the PAC?” The Committee has an image deficit, and, although in various analyses of our work we are called the “queen of Committees”, we are still a bit of a mystery to the majority of our colleagues. Indeed, today’s attendance shows that we will remain a mystery for another few months at least.

On the PAC, one walks in the footsteps of history. I learned more about William Ewart Gladstone in my first few weeks on the Committee than I ever did taking an honours degree in history at Glasgow university, and all sorts of historical anecdotes add to, if not the glamour, then the attraction of being a member. My right hon. Friend the Member for Barking mentioned Harold Wilson. One of the anecdotes that delights me most was the fact that, when he was shadow Chancellor, he decided that he also wanted to be Chair—he would have been a Chairman in those days, of course—of the Public Accounts Committee. In some ways, that was breaking new ground. Such a decision tuned in with Harold Wilson’s desire to consolidate his portfolio, so that he could ensure he was in control of all the strategic decisions that had to be made within the Labour party at that time. Ben Pimlott, his biographer, states that such a decision also had a practical benefit because, at a time when accommodation at the Palace of Westminster was not available for senior Opposition Front Benchers, the PAC Chairman was provided with his own room—a citadel of great importance in Westminster’s psychological battleground. My right hon. Friend has maintained the image of that citadel in the Upper Committee corridor.

Of course, the Committee does not consider the formulation or the merits of policy; it focuses very much on value-for-money criteria that are based on economy, efficiency and effectiveness, as the hon. Member for South Norfolk mentioned. Those are the three by-words that should determine how we judge the reports that come before us. In many respects, such an approach is almost counter-intuitive for politicians because we spend most of our time discussing and developing policy. However, as at least one previous Labour Prime Minister has commented, it is no use throwing money at something unless it guarantees the delivery of the objectives. I fully understood that cry of frustration in relation to one report we considered in the Committee. I shall come on to that in a moment.

We have gelled reasonably well as a Committee. There is a mixture of people who have longevity in the House, people who have longevity in membership of the Committee and people who have more recently joined this place. We bring to the Committee a range of external work experience, which allows us to question things in a way rooted in some sort of credibility in managing finances. As a Committee, we have a breadth of experience that allows us to challenge even the most eloquent of the accounting officers who appear before us. Although the subject is sometimes considered to be rather dry, we have developed a passion for our discussions with witnesses. Certainly, anyone present at our sittings this week would have noted that both energy and passion are in abundance in Room 15—anyone who follows our deliberations will have that confirmed.

In my brief contribution, I want to highlight three things that I have drawn from my short experience as a Committee member. The first relates to the lessons that we can learn from discussions on the reports and the Committee’s conclusions. Some of these issues have been the subject of previous debates—indeed, I think the hon. Member for South Norfolk has probably raised them—but they do need repeating. There is still a concern, which I hope is shared by most of my colleagues on the Committee, that the recruitment and training of civil servants has not kept pace with some of the issues, particularly that of financial responsibility. There has been an increase in training and personal development, which is welcome, but it astonished me to find out that, for example, it was only a couple of years ago when a financially qualified senior civil servant was recruited by the Ministry of Defence.

Sir Gus O’Donnell stated at a recent hearing that the British civil service has always prided itself on recruiting,

“the brightest and the best”

and on making people skilled generalists. I am not suggesting in any way that we stop recruiting those exceptionally bright people, but we also need to recognise that, in delivering projects efficiently, effectively and economically, they need to be managed properly. Will the Minister address that issue in his comments at the end of the debate and tell us what Departments are doing to enhance the training opportunities for those who undertake project management? It is not fair to the taxpayer or, indeed, to the individual civil servant for us to assume that people can manage complex and expensive projects without having the appropriate skills from the very day on which they assume responsibility for that work. With complex financial projects, learning on the job is simply not good enough.

Another point that has emerged from our discussions is how lessons are disseminated—or not, whichever is the case—across Government Departments. How does this happen currently? I get the feeling that permanent secretaries talk about it when they meet, and I understand that they meet on a regular basis. But is it a structured discussion? Is it then cascaded down to other colleagues in their Departments? Is it a learning experience only for them and their senior officials, or is it used as a corporate opportunity to change the way in which the service as a whole develops? I would like to get a feel for how we spread the word of good practice across all Departments.

Before I leave this part of my speech, I want to comment on one Department where people have tended to get it right—not always, but probably in the majority of cases—and that is the Department for Work and Pensions. Like my right hon. Friend the Member for Barking, I have a special interest in that Department having been a Minister there for more than three years. I was delighted to hear from the retiring permanent secretary about the implementation of the new employment and support allowance IT platforms. I remember this particularly because as a Minister, when we had discussions on that project in undertaking the development work that led to the Welfare Reform Act 2007, we were told that, yes, it was “stretching”, but those officials immediately started to look at ways in which they could deliver it.

I know that there are good officials in all Whitehall Departments, but the one distinguishing feature of the DWP and its senior management team is that they tend to “grow” their own people. Officials at the DWP have come through the ranks. They understand the business, and they have had to deal with real people and solve real problems throughout their civil service career. I was pleased to note that the permanent secretary who was retiring indicated that the new perm sec, Terry Moran, follows in that tradition as someone who joined the Department as a 16-year-old in Blackpool, as I remember. That is an indication of how Departments can get it right. The DWP is not perfect, by any manner of means, but on average it tends to be a bit better in delivering some of its projects.

I want briefly to mention two specific reports and Committee sessions: first, on the academies programme, which my right hon. Friend the Member for Barking also mentioned; and, secondly, on tackling health inequalities. On the first, it was a joy to be present at that discussion. Unlike the current proposals, about which I have grave misgivings on a political level, this programme was intended to improve the performance of so-called failing schools still within the state system and directly managed by the Department of Education. The NAO report clearly indicates that most academies are achieving increased academic success and that Ofsted reports are, in the main, good. There are, of course, imperfections—the report did not say that things were perfect—but in delivering effectively, economically and efficiently, the Department is doing reasonably well.

It was no surprise to discover that one of the reasons that happened was that one person, in the shape of Lord Adonis, was there at the inception of the idea and through to the delivery of the project. Consistent and persistent political overview obviously helped. In the same vein, we need to look to consistent and persistent senior responsible officials to deliver some of these complicated reports.

[Dr John Pugh (Southport) (LD)]

The right hon. Lady may be aware that a previous NAO report seen by the previous PAC established that Excellence in Cities, which was a predecessor programme, achieved equally good results at far less cost.

[Mrs McGuire]

I am speaking purely of the report that was in front of us, but I accept that there may have been other approaches. I was using the point as an illustration, not a comparison.

[Mr Bacon]

I fully accept the right hon. Lady’s point, whether it was meant as an illustration or a comparison. Another interesting facet of the academies programme, which Lord Adonis pointed out to the Committee in a seminar, was that after a relatively short period it was he, as the Minister, who held the collective memory in the Department. All the civil servants who advised him on the programme had been there for less time than him. What does that tell us about how the civil service manages its people?

[Mrs McGuire]

The hon. Gentleman highlights a recurring concern among Committee members, which is that the tendency to move civil servants around the system so often means that the collective memory is not built up. That was illustrated beautifully in yesterday’s discussions with the people from the MOD. Even in a programme of intermediate length, there had been God knows how many senior responsible officers. That leaves no opportunity to build up the collective memory.

I will take your comments to heart, Mr Deputy Speaker, and will not speak for too much time. However, I wish to highlight one other report that I found outrageous, which was on health inequalities and life expectancy. As the Committee said, the issue of health inequalities is not new. A J Cronin wrote about it in his stories about Dr Finlay and Dr Cameron. We all know about these issues. Although it was officially identified in 1997, our progress in dealing with this problem, which has been staring us in the face, is depressing. There are issues with the approach of general practitioners to those who suffer health disadvantages.

I hope that the new Government will look at the report carefully, because as they reform and change the NHS, they must consider whether they can deal with the inequalities in health across the country, or whether they will reinforce them. For the record, that is one report on which I received positive feedback from people outside this House who are in public health. A colleague in the Scottish Parliament said that it was one of the best reports he had read on the issue.

I will conclude by looking briefly to the future. Parliamentary scrutiny of the taxpayer’s pound will be more challenging. As more services are devolved to commissioning GP practices and thousands of schools, the scale of the audit trail will be breathtaking and value-for-money analyses will be even more complex. I hope that the Minister gives us an understanding of who will be responsible for the spend. Can we expect it to still be the departmental accounting officer, when he or she will have no control once the money leaves the Department? Will we invite school governors and managers, partners in general practices, and chief executives of voluntary organisations to appear before us? This is a question for us all: who carries the can when public money is involved and who pays the price if it all goes wrong? It is bad enough at the moment, when few heads appear to roll even when things go spectacularly wrong. What will it be like when thousands of people are ostensibly responsible for signing taxpayers’ cheques? A taxpayer’s pound is a taxpayer’s pound, whoever spends it. The PAC, along with the NAO and the Government, will have to consider quickly how we will manage our work to ensure that there is still public accountability and that value for money is still identified.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. Quite a few Members are trying to catch my eye and I hope to call them all. If it looks like I will not be able to do so, I will have to put a time limit on speeches, but I do not want to do that.

16:49

[Dr John Pugh (Southport) (LD)]

I am a former member of the PAC, and I found it an extraordinarily useful part of my parliamentary life and actually quite a lot of fun. I noted the remark from its Chair that its members are invariably impeccably well prepared, and I must admit that the Committee has therefore improved somewhat. I can remember times when the odd member might have simply glanced hurriedly at an NAO report just as they walked through the door. I am sure that does not happen today and that things are significantly better.

The PAC specialises primarily in post hoc analysis. The hon. Member for Gainsborough (Mr Leigh), who is in his place, and I wrote to the Treasury about that shortly after the end of the last Parliament, suggesting that it had not learned enough from the PAC and had not taken on board some of the messages that the Committee sent it. We said that there was scope for improving parliamentary scrutiny. Lo and behold, the Treasury has recently asked us to work on improving scrutiny by the House. Some people have greatness thrust upon them, and that is certainly the case for us in our modest role in the order of things.

What the PAC offers is a post hoc diagnosis, a forensic analysis of how policy is implemented by civil servants according to what their political masters dictate. They are invited in for a Socratic discussion about how things have gone, and the idea is that the Treasury then responds by trying to learn lessons and ultimately spread good practice. That is the subject of the motion.

To be fair, the hon. Member for Gainsborough has claimed in the past that the Treasury, or somebody at any rate, has implemented most of the lessons that the PAC has endeavoured to teach it. However, the PAC should have bigger ambitions. Its role in the House could be more than just to provide a commentary, and it could be a more functional part of the legislature, as is its parallel body in the USA, and as the hon. Gentleman and myself desire.

At the moment, after whatever botch-up we happen to be talking about in the Ministry of Defence or wherever, hon. Members, usually the hon. Member for South Norfolk (Mr Bacon), ask rigorously what tests were applied at the time. Indeed, that was the burden of the hon. Gentleman’s speech today. He asks what health checks were made, what the gateway review process was and whether the costings were robust enough.

The hon. Gentleman was honest enough to say today that we might be asking all those questions all over again at the end of this Parliament, because a whole series of other programmes are being rolled out, such as academies, which have been mentioned, welfare reform, NHS reorganisation, which is a heck of a big programme, and court closures. PAC members will be aware that, in the past, it discussed the effect of court availability on such matters as cracked trials, people failing to show up and court costs. There is also the green energy programme announced today. They are all huge Government programmes.

Each of those programmes should, and in fact does, involve some type of internal gateway review and Treasury assessment. There are jolly clever people in the Treasury who make it their business to examine them and see where they are heading. Unlike in local government, however, in which such processes are overt and public papers are circulated, the information never emerges in public. It is not released until long after the event, when the PAC might get its hands on it. It is held within the Government’s walls. In one sense that is bizarre, because Parliament is asked to authorise all the schemes, and in a way we vote for them blind, without adequate financial assurance.

What Parliament does in that regard is not sufficient for the task. We vote on money resolutions, but we do not talk about them. We have the farce of estimates day, and on the occasions when supplementary estimates go before Select Committees, those Committees by and large talk about something else. Occasionally a Committee will probe the finances of a particular project, and the Health Committee has done some trailblazing work in examining the finances of current Government policy. Occasionally there is a political knockabout either in Westminster Hall or on the Floor of the House, but we do not have in place adequate stress testing of policy. The PAC could contribute to that, but that testing is weak in this legislature.

The PAC is ideally set up for such a role, because it is not a policy Committee. It can ensure that costings stand up to critique. The proactive role that I hope for would keep the Government on their mettle—fewer foolish schemes would make progress—and keep the PAC on its mettle. The Committee has the advantage at the moment of always acting in hindsight in that it never gives its judgment up front so that people can see whether it turns out to be correct.

Going down the road I suggest would encourage transparency, avoid Parliament voting in ignorance and bring us into line with other countries. What is more, it would be a significant enhancement both of the PAC’s role and of parliamentary scrutiny, and a significant improvement in government. The NHS IT programme would never have run if the PAC had such a simple and clear-cut role. It would empower Parliament, improve its efficiency, and make the Government more efficient and competent. I believe that people not only in the Treasury, but in the Cabinet Office, have efficiency and competency as a determined ambition now. The country hankers for boring, effective, evidence-led government. We have had enough of being flash, we are fed up with revolutions in this service and that, and we do not really require a great deal of liberation. It would also be significant improvement if Ministers could stop using the word “step change” every time they do anything.

Good, efficient, boring government would be a significant development, and the PAC has a significant role to play if the Government allow it to do so.

16:56

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

I am delighted to contribute to this debate as a new Member of the House and a new member of the PAC. We have seen the breadth of experience within the Committee and some formidable Members have addressed the House already. It is incredibly daunting to join them. I pay tribute to the Chair and her work in making newer members of the Committee feel very welcome, although we must do our homework.

I stood for election to this important Committee because Parliament has three key roles. First, our role is representation—we speak on behalf of the people who voted us in. I am conscious that when I speak, I do so not as myself but as the representative for Walthamstow. Secondly, we are here to make laws as the legislature. We all came into politics not just to change governance, but to change lives, which we do through passing laws. Finally and crucially, our third role is oversight and scrutiny. As my right hon. Friend the Member for Stirling (Mrs McGuire) alluded to, sometimes that is not seen as glamorous as the other two roles I mentioned, but I disagree, because oversight and scrutiny is crucial. The best oversight and scrutiny is about whether politicians can achieve the things that they say they want, and why they cannot do so if that is the case, and considering other ways of doing things. Oversight and scrutiny speak to a recognition that Governments should not just start projects or policies—the public expect them to be able to finish them too. Essentially, implementation is as important as ideology in politics.

Clearly, good governance requires all three of those functions to be enacted effectively, and each depends on the others for success. Without an effective system of scrutiny and oversight, wise words and good intentions will falter on the wheel of day-to-day delivery and the messy complexity of how change occurs.

I therefore ask hon. Members to support the motion, because it relates to the PAC’s performance of those functions within the House. The PAC is very different from Select Committees that look at the desirability of policy because it looks at policy effectiveness and implementation. That is why I take great pleasure in being a member of the Select Committee that Baron Hennessy of Nympsfield described as

“the queen of select committees”.

I take pleasure in quoting him not least because I represent him, which is a nice way of referring back to the first function of Parliament that I mentioned. The Westminster model is seen across the world as the gold standard of accountability on questions of effectiveness and value for money—other countries have subsequently followed that proud historical tradition.

I stood for election to the Committee not least because of my experience in local government and the value of scrutiny in the delivery of policy. I have been on the Committee only since November, but I have thoroughly enjoyed the experience so far, because we take seriously our job of safeguarding public money. I understand now why Baron Hennessey argues that the PAC exerts a cleansing effect on all Departments, because each week we thoroughly challenge witnesses—some more than others, perhaps—on the basis of the evidence before us. We take seriously the lesson that John F. Kennedy once taught: from his experience in government, when things are non-controversial and beautifully co-ordinated, there is not much going on.

The wide range of topics I have covered in my short time on the Committee bears that out—from our work on the community care grant to the major Ministry of Defence projects and the employment of consultants. I have learned more about hard shoulders on motorways and the nature of the M25 than I ever thought I wanted to know. However, all our work reflects the Committee’s crucial role in holding Governments to account over how they deliver on their promises to the public. The hon. Member for South Norfolk (Mr Bacon) expressed that honourably in his detailed examination of farming policy. That, too, reflects the breadth of our work.

Our Committee is an exercise not in teaching new or seasoned MPs about the topics of the day, but in understanding the concept of delivery and how to make it work. It is also about the crucial and honourable role that civil servants play in government. My right hon. Friend the Member for Stirling admirably set out some of the challenges in how the civil service and the Government work together. However, the work does not stop with meetings, and that is what the motion reflects and why I want to pay tribute to the Clerks and the National Audit Office for the work they do to support our Committee. I have found their reports incredibly useful. Our role is about the process of change and how it is followed through. That is the cleansing work in action.

The Committee’s meetings and follow-up work form a circle of scrutiny that is critical to how Governments act, which is why it is vital that our work does not disappear into a dusty report or an uncomfortable meeting in Committee Room 15—however cold or hot it may be. The motion is about ensuring that the cycle of scrutiny and oversight matches our legislative and representative functions in Parliament. Ministers need to be held accountable, if there are problems with their Departments in following up on the Committee’s recommendations, and it is right that we have a motion about the power to bring them to the House if necessary, so that all Members can be involved in the discussion and understand what is happening on the ground with those policies.

There are examples of where these problems of accountability lie. According to recent research, about 60% of the Committee’s recommendations have been accepted and about 30% partially accepted. That is comparable with other systems. However, there is an issue for us to consider, because it is not any one Department that has been challenging in terms of following up those recommendations. We need to reconsider our ability to follow up those issues and tell Departments and Ministers what is happening. The Committee Chair set out admirably some of the challenges we face over the patchy delivery of value for money and the pace of change in implementing recommendations.

When recommendations are followed up, there can be great benefits for the Government and ultimately the public in the delivery of policy. In particular, I am impressed by the work done on obesity. The Committee played a role in bringing together a holistic view of how the Government were looking at the cost to the taxpayer of not addressing obesity. That work is key. Also, the Committee’s rigorous and persistent scrutiny in relation to the Criminal Injuries Compensation Authority has finally enabled change to happen.

The hon. Member for South Norfolk also alluded to the work on health and stroke care. That is another example of where the process of overview and scrutiny has made a real difference to the quality of service that people in this country receive. We also had a debate this week about the major MOD projects. Clearly, that is a controversial subject, and yesterday, we took some very difficult testimony. Notwithstanding the examples that we looked at yesterday, this rigorous scrutiny of how those projects are delivered, and the fact that the NAO, together with our Committee, has continued to apply pressure, is testament to the work that we do. Some 13 out of the 15 projects we are looking at are now being delivered better. That is a result of our work with the Government. That is why I think that our Committee reflects what is best called constructive criticism made real. However, we need more powers to ensure that that happens.

From my few months on the Committee, I can vouch for the fact that we have been equally helpful to both the last and the current Government. That is why the Government should not fear the motion, but welcome it, especially given some of the major changes to delivery that they are talking about making, particularly in terms of localism. My right hon. Friend the Member for Stirling admirably set out some of the challenges involved in having new actors delivering things through the public purse and perhaps even being responsible for commissioning services. It is all the more important that Parliament should have a clear role in asking, on behalf of the public, whether we are getting value for money, and whether we are able to deliver the things that we talk about in this House and that we as representatives, making laws, want to see happen.

It is also important to note what studies of other public accounts committees have looked at. The hon. Member for Southport (Dr Pugh) gave some examples of that. For instance, 75% of public accounts committees that were surveyed by the World Bank agreed that it was crucial to their effectiveness to have the power to follow up reports and to check the implementation of their recommendations. The World Bank also calls for powers for public accounts committees across the world to be strengthened. It is therefore important for us to recognise—as perhaps representing, as it were, the gold standard of public accounts committees—that we could lead the way on that, through today’s motion and the proposals that have been put forward. That is why the House should support the proposals, because this debate is not just about the positive impact of overview and scrutiny of public policy; it is also about ensuring that the work that we do benefits the people of this country. Indeed, I am also incredibly mindful of that representative aspect to this debate. We have a responsibility to the House and to the people whom we represent.

I do not intend to speak for too long, as I know that many other new Members also want to contribute. I hope that I can persuade the Government to accept the motion. In the words of Thomas Jefferson:

“Whenever the people are well informed, they can be trusted with their own government; that whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights.”

I hope that the House will see the Public Accounts Committee as part of that process of setting things to rights, and that the power that we are seeking today becomes part of ensuring that policy is delivered in the way that we want it to be delivered. If that alone is not encouragement enough, I would also ask the Minister to reflect on the words of an anonymous source who said:

“Admit your errors before someone else exaggerates them.”

I hope that the Minister will see the reports that we produce as a fair reflection of the work of Government and the challenges ahead, and that, in the spirit of constructive criticism, he will support the motion today.

17:07

[Stephen Barclay (North East Cambridgeshire) (Con)]

I am conscious that time is short and a number of colleagues wish to speak, so I shall abridge my remarks accordingly. However, I would like first to endorse the comments of my hon. Friend the Member for South Norfolk (Mr Bacon) and other members of the Committee, in paying tribute to the stewardship of the right hon. Member for Barking (Margaret Hodge). I would like also to thank the National Audit Office, which serves members of the Committee tremendously well.

It sometimes feels as though, as members of the Public Accounts Committee, we are getting a glimpse into the cosseted world of the television studio interviewer. We can climb on a pedestal and enjoy the clear view of hindsight. We have the safety harness of asking questions rather than giving answers. We can look at issues in isolation, rather than being distracted, as decision makers are, by many competing challenges. Yet in the short period in which I have been a member of the Committee, the same issues have kept appearing, with the ticking frequency of a metronome—a lack of accountability; poor data quality; insufficient testing of pilots; inadequate project change controls; and a mismatch of management skill sets. What binds many reports is unnecessary complexity, which invariably adds cost and masks inefficiency.

However, in this, the annual debate on the Public Accounts Committee, it is right to step down from the comfort of our perch and set out some solutions to the challenges that we face. In particular, I want to touch on five areas, subject to the time available. We need to clarify the letters of direction signed by accounting officers on their appointment and make such letters Department-specific. We need to improve the transparency of the information given to Parliament by ensuring that the NAO has unfettered access to National Rail, the BBC and the Bank of England. We need to redefine the role of senior responsible owners, to ensure that the current gap between skills and requirements is addressed. We need to introduce greater standardisation of the data presented by Departments to Committees, to facilitate better benchmarking across Government. We also need to embrace different mechanisms—some of that is already happening—so that we not only hold those making decisions to account, but look at different forums and opportunities to learn lessons.

I do not put forward those suggestions in the belief that they are in any way revolutionary. Nor do I believe, given that not even the brightest of our Sir Humphreys have managed to solve them—indeed, the Public Accounts Committee has been in existence since 1836—that my proposals are a panacea. They are simply some areas in which the Committee can start to change the direction of travel in a practical way.

I want to give the House an example to illustrate the first of those points, and perhaps the Treasury can take this away as an action for today. It relates to the letters sent to permanent secretaries. The letter dated 13 October 2010 appointing Martin Donnelly as permanent secretary of the Department for Business, Innovation and Skills makes reference to “RfRl, 2, and 3”, without defining what these are, and to section 5(6) of the Government Resources and Accounts Act 2000, to section 5(7) of that Act, and to chapter 3 of the “Managing Public Money” document. It also requires him to look at the Treasury handbook on “Regularity, Propriety and Value for Money”. I suggest to the Treasury that a new permanent secretary taking over the reins of a Department has better things to do than read those documents.

We saw in the evidence from Sir Bill Jeffrey that there had been a discussion about why he had not sought a letter of direction, when signing the contracts for the aircraft carriers, on the ground of affordability. There was a lack of clarity there, and that was in conflict with the letter that the Committee had received from Sir Nicholas Macpherson. So it is clear that there are issues there.

[Mr Bacon]

Will my hon. Friend give way?

[Stephen Barclay]

I will not, because other colleagues need to speak. In fact, I have time to discuss only this one issue, and I will not talk about the other four. I hope that the Treasury will conduct a review of the letters that go to permanent secretaries, so that they can at least be made Department-specific and self-contained as stand-alone documents. At the moment, they are unclear, and that gives rise to the kind of confusion that we saw in relation to Sir Bill Jeffrey and others.

17:11

[Jackie Doyle-Price (Thurrock) (Con)]

I, too, have the pleasure of being a member of the Public Accounts Committee, serving under the probing chairmanship of the right hon. Member for Barking (Margaret Hodge). I want to follow up some of the points made by my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay). Sometimes serving on the Committee does feel a bit like being in “Groundhog Day”, as we see the same issues arising again and again in relation to delays in executing contracts, poor management and so on. I want to concentrate on one theme leading from that, which is leadership.

Leadership is crucial to the delivery of any programme. It involves the ability to take ownership, and to ensure that projects are delivered to deadline and on budget, and that they are fit for purpose and deliver the objectives that they are meant to achieve. Too often, we have found such leadership lacking. My message to my colleagues on the Front Bench is that, given the public spending constraints that we now face, value for money is of central importance, and the Treasury needs to play a much stronger role in ensuring that Departments deliver their obligations. For that reason, I heartily endorse the sentiments in the motion, which will put ministerial accountability at the heart of delivering value for money. Hitherto, the Committee has not called Ministers to give evidence, but I am fast coming round to the view that there is a case for doing that, so that Treasury and Cabinet Office Ministers can tell us what they are doing to ensure that their colleagues across government are delivering against their obligations.

The right hon. Member for Barking referred to the Committee’s report on the 2007 comprehensive spending review. Ministers should read that report, to see where things might go wrong in the current spending environment. There was a massive discrepancy between Departments in the degree to which they were able to deliver against the cuts that were required of them. In particular, the Department for Communities and Local Government had achieved only 5% of its required savings halfway through the inquiry. That brings me back to the importance of leadership and the importance of government as a machine ensuring that the principle of value for money really is pushed all the way through the system.

Other colleagues want to speak in the debate so I shall close by drawing the House’s attention to the private finance initiative, which has been the subject of a great deal of work by the Committee. In the recent past, the machinery of government has been rather too attached to PFI as a funding stream, with delivery being focused on completing a deal rather than on whether the PFI contract really represented value for money for the taxpayer and whether it would deliver what was required. The Committee examined the role of the PFI after the credit crunch. We found that the banks had increased the cost of financing PFI projects by up to a third, and that the risks had been transferred back to the public sector at an additional cost of £1 billion to the taxpayer.

It is not surprising that financing costs rose following the credit crunch, but it is very disappointing that the Treasury did not use that occasion to challenge the view that the PFI was still an appropriate funding vehicle for many projects. The contract for the widening of the M25 has already been mentioned. The cost of that was increased by 23%, or £660 million. In the past few weeks, the Secretary of State for Transport has had to announce significant cuts in his expenditure. It is clear that the delivery of other projects has been jeopardised. We are locked into some PFI contracts for 30 years, which means that those that are of poor value will clearly be of ongoing poor value to the taxpayer.

Moreover, a contract of that length is not suitable for some services. Facilities need to be able to react to the constantly changing needs of hospitals, for example. If we nail everything down in a PFI contract, we embed inflexibility in the system. NHS South West Essex primary care trust in my constituency is in a very poor financial state, and is implementing a severe programme of cuts to deal with an overspend. Sitting in the middle is Brentwood community hospital, an underused facility funded by an expensive PFI contract.

My message to the Government is very simple. The Treasury and Ministers throughout Government must be vigilant and fleet of foot in ensuring that their Departments deliver value for money, and a central part of that will consist of responding to the findings in our reports. I look to the Treasury in particular to ensure that appropriate leadership is given, and that we deliver better value for the taxpayer.

17:16

[James Wharton (Stockton South) (Con)]

Thank you for giving me an opportunity to contribute, Mr. Deputy Speaker. I also thank other Members who have curtailed their speeches in order to ensure that everyone has a chance to speak in this important debate. I emphasise the importance of the debate, and also that of the role of the Public Accounts Committee. I am a relatively new Member of Parliament and a new member of the Committee. I hope that the right hon. Member for Stirling (Mrs McGuire) will forgive me if I say that I am indeed learning on the job, and it is a very steep learning curve, but I think that many new members are getting to grips with their role very well. I am pleased to count myself among friends on the Committee, even if we are not all hon. Friends on the Floor of the House.

I must make a brief apology to a rather wonderful lady called Julia Whitehill. She is my constituency caseworker, and she worked diligently to arrange the constituency office drinks party this evening, which I have forgone in order to speak in the debate. If that is not a measure of the importance that I attach to the PAC’s work and to the debate, I do not know what is.

I shall touch briefly on just one of the many reports that the Committee has undertaken in the current parliamentary year, because I think that it is of significance to my constituents. Tackling health inequalities has already been mentioned in the debate, and the report to which I refer is entitled “Tackling inequalities in life expectancy in areas with the worst health and deprivation”.

My constituency in the north-east of England is at the centre of much of that challenge. We have real deprivation in my region, and we face real challenges in health care and life expectancy, which need to be addressed. The Committee identified some of the failings in policy that had hampered earlier efforts to tackle the problem, and suggested a number of measures that future Governments might wish to take. It found that the health gap between deprived areas and the general population had widened despite the efforts that had clearly been made—I do not deny the legitimate efforts made by the last Government to tackle the problem, and I do not suggest that it is not high on the agenda for many Members in all parts of the House—and that the Department of Health had not set about its important task with sufficient urgency or focus.

The Committee also found that a failure adequately to address GP shortages in areas of deprivation had led to the widening of the gap, or at least had been a significant contributory factor, and that that was still a problem. It suggested that there were opportunities for the Department to identify new measures to drive up GP numbers in areas of deprivation, including the possible use of the GP contract to give GPs an incentive to go to the places where they were most needed.

The NHS spends about 4% of its overall budget on prevention, but the Committee found—this is a recurring theme—that individual commissioner spending was not readily identifiable; as we find when we look at many Government Departments and operations, the lines of accountability were blurred. Time and again we find that accountability suffers when Governments of whatever political hue push forward with measures that do not properly take into account the lessons the Committee tries to help them understand.

Along with funding shortfalls and other problems which, sadly, I do not have time to go into in detail, we found that there is much work to do and that previous efforts had not succeeded. Across so many Departments, the lines of accountability—the ability to measure what is supposed to be achieved and to set milestones on where we are meant to be going—are lacking in the plans put forward, whether by civil servants, Ministers or political parties. A huge amount of work needs to be done to change the way government functions so that Governments can deliver their objectives, whatever they might be. Whatever our political outlook, we all have an interest in ensuring that Governments work efficiently so that when Ministers pull the levers of power, things happen in the way that is intended. A key aspect of the PAC’s role is identifying where Governments do not deliver in the way they are supposed to, irrespective of policy determination or the lead coming from the Ministers at the top.

I am conscious of the time constraints but I merely wanted to have the opportunity to make this contribution and to put on record my admiration for the work that our wonderful Chairman, the right hon. Member for Barking (Margaret Hodge), is doing in leading us through a challenging set of reports and issues. Our work load is, I think, greater than that of the other Select Committees of this great House at this time, as is the pace at which we tackle it. I am extremely pleased to be a member of the Committee and to have had this opportunity to contribute to the debate. I will end my remarks now in the hope that other Members will also be able to contribute.

17:21

[Joseph Johnson (Orpington) (Con)]

I thank those hon. Members who have curtailed their speeches, and due to the severe time constraints, I will also limit myself to addressing just one theme. It is the theme we discussed in the recent hearing on the Department for International Development: supporting primary education around the world. That is a subject in which I take a particular interest.

That hearing contrasted with many of the other hearings the Committee has had, because DFID is not a repeat offender in the sense that it is not having to be forced to implement past PAC reports. It is a Department that is being reformed from top to bottom, very much in the spirit of the long line of PAC reports that have been critical of value for money within the Department.

The hearing provided us with a very good insight into the work of a Department that is of major importance to the coalition and will become of increasing importance as we meet our commitment to lift the share of aid spending to 0.7% of national income by 2013. Let there be no doubt as to my support for this commitment, which demonstrates the coalition’s determination to stand behind the poorest people around the world. However, at a time of severe retrenchment across unprotected Government Departments, it is all the more crucial that DFID continues the work that has been ongoing—since May, I would say—to do more to secure maximum value for money for the UK taxpayer and the greatest possible impact for those whom the Department is trying to help. The PAC hearing raised a number of concerns in this respect.

First, the primary education programme supported by DFID illustrates the way the Department has, until recently, made astonishingly little attempt to measure value for money in even its biggest programmes. DFID’s rationale for investing in education is that it brings wider benefits which support poverty reduction, but the National Audit Office report and then the PAC hearing clearly found that too much emphasis has been placed on measuring simply the numbers entering education and that DFID has been too quick to claim credit for increases in enrolment rates that are hard to link directly to its programmes. It is also clear that the Department has paid too little attention to how many children are actually attending and completing primary school education, along with the standard of literacy and numeracy they attain. Those are key areas where limited progress has been made. I am glad that, since May, value for money has been vigorously addressed by the new Secretary of State and his team. There is the clear objective of reorienting the entire aid programme to focus on results, not inputs.

That is all the more important in the context of a comprehensive spending review where DFID’s budget is being increased quite substantially, from £6.3 billion this year to £9.4 billion by 2014-15. That is the single biggest increase across all Departments and is an increase of 37% in real terms. By 2014-15, DFID will be bigger even than the Home Office and the Ministry of Justice. That is why I particularly appreciate the work that it is doing to set up the Independent Commission for Aid Impact, which will further emphasise the new value for money priority of the Department. A chief commissioner is in place and is starting work as we speak.

It is also worth pointing out that even though DFID’s budget is expanding, the Department is not losing its focus on administrative efficiency and value for money. That is another area where we can commend the way in which the Department is pre-emptively addressing the concerns that we were raising in the PAC hearing. Although DFID’s overall budget is increasing, administrative costs within the Department are to be reduced by 33% over the course of the comprehensive spending review period. There is certainly evidence to suggest that there is still fat to be cut. I find it surprising that, in an aid Department, there are civil servants earning £175,000, and I am not sure that that sets a great example to the pro bono sector in general.

Lastly, I return to where I started. Measuring outcomes accurately and demonstrating value for money will help to build public support and buy-in for the substantial expansion of the DFID budget that we are programming over the coming years. The PAC’s work in that respect will make a valuable contribution to the process.

17:26

[Ian Swales (Redcar) (LD)]

I shall be brief. I am also new to the House and the Public Accounts Committee, and I thoroughly enjoy working for the right hon. Member for Barking (Margaret Hodge) and respect the massive expertise of my fellow Committee members.

I wish to discuss the recurring themes of our work, which is an issue that has been mentioned today. Even at this early stage, I recognise the same messages coming out again and again. The hon. Members for South Norfolk (Mr Bacon) and for Great Grimsby (Austin Mitchell), who are the corporate memory of our Committee, often remind us of that. I was recently contacted by a former senior civil servant in the Home Office, who discovered that I was serving on the PAC and wrote me a long e-mail outlining the issues as he remembered them, how the Committee’s recommendations were dealt with and the crucial issue of accountability. Although he retired seven years ago, his e-mail could have been written about what was happening yesterday.

I am conscious that the Committee tends to review problem areas, rather than successes, and so one perhaps gets a slightly jaundiced view. However, one is struck by the eye-watering sums we often talk about and one can get desensitised. One begins to think that £100 million of waste does not seem too much. Last week, we held a review of errors in the benefits system and it was suggested that £1 billion might be some kind of irreducible minimum. It is inconceivable that that discussion would take place in the private sector with that conclusion being reached.

I support the comments that have been made about leadership. I describe the people who the Committee sees as the good, the bad and the slippery. We get some very good ones, but we certainly get some of the other types too. I was going to talk in detail about the consultancy area, of which I have direct experience, but time does not permit me to do so. I shall therefore pick up just one point on that, which was that consultants tend to be engaged on a time basis, rather than on the basis of fixed outcomes, fixed prices.

So many of our reviews have huge time scales; it is common to be talking about issues that have taken longer than the second world war to sort out. That raises questions about the way the Government contract, engage consultants and so on and whether they really get things done in a timely fashion.

I recognise that there are challenges ahead. Although I welcome some of the Government’s movements on accountability and business plans, there are challenges involving the comprehensive spending review as well as two issues that have not been mentioned yet. The first is the abolition of the Audit Commission, and I still think we need to decide what the post-life is on that. Secondly, crucially, much Government money is now going to outside bodies that are beyond the reach of the National Audit Office. For example, in the consultancy world, £700 million is estimated to go to outside bodies versus £1 billion in departmental spending.

I welcome the motion, which seems a step in the right direction. It is right that we should not engage in political discussion or decision making, but many of our conclusions are not just about the Treasury—they require ministerial action. I commend the motion to the House.

17:30

[Mr David Hanson (Delyn) (Lab)]

I have sat through the debate and found it extremely positive in its approach to the issues. There is a great deal of cross-party support for making how we manage issues in government a key focus.

May I begin by paying tribute to my right hon. Friend the Member for Barking (Margaret Hodge)? It is already clear that she has not only a grasp of the role of the Public Accounts Committee but the respect and support of Members on both sides of the House. It is crucial to consider the PAC’s role by leaving aside party politics and examining where systemic failures in Government expenditure occur.

May I also echo my right hon. Friend’s thanks and support for the hon. Member for Gainsborough (Mr Leigh)? He served the House of Commons well during his period in office, when he produced more than 400 reports on a range of issues. I can honestly say that during the last Parliament I appeared to wake up most mornings to the hon. Gentleman on the radio, kicking somebody. As a Minister in the last Government, I was often grateful that it was not me.

I welcome the approach taken in the motion. I will support it as I recognise that it contains elements that will help to strengthen the accountability of Ministers for acting upon the reports that they have accepted as recommendations from the PAC. Anything that puts in place a mechanism that will make Ministers and their civil servants know that they have to report back to the House on progress on measures that they have accepted and agreed to do is extremely important.

I am grateful for the speeches made by right hon. and hon. Members on both sides of the House. Several key themes have come out of the debate. First, we have seen the importance of the scrutiny role that the PAC will perform and has performed. The hon. Member for Orpington (Joseph Johnson) pointed out the recent report on the activities undertaken by DFID.

The hon. Member for South Norfolk (Mr Bacon) referred to not just scrutiny but to the positive actions taken on hospital-acquired infection as a result of reports undertaken by the PAC. Indeed, he mentioned the improvements that are taking place in the Home Office. I can speak from personal experience as for a short period I was subject to a report as a Minister in the Ministry of Justice. It was on the National Offender Management Service’s C-NOMIS programme, which is an interesting point to which I shall return later. I became a Minister three and a half years after the programme commenced, froze the project three months after my inauguration in the Department and was subject to a PAC report that considered a range of issues. Civil servants had come, gone and left before I came and, after I left, civil servants were still managing that project. There are important lessons that we need to consider.

The scrutiny role of the PAC is important, but key issues to do with good governance have arisen in today’s debate and they are equally important. The hon. Member for North East Cambridgeshire (Stephen Barclay) listed clearly what is required of good governance in any project management. It is the sort of project management that anybody in the private sector or the voluntary sector who has responsibility for resources will undertake. Even in our private lives, most of us will undertake such good governance to ensure that we meet collective objectives. The hon. Gentleman’s point was also reflected in the comments of the hon. Member for Thurrock (Jackie Doyle-Price) on the leadership that is required for the role of good governance. The hon. Member for Southport (Dr Pugh) also touched on that.

Good governance relates to some key issues that were reflected in what the hon. Member for Redcar (Ian Swales) said about self-evident truths that recur. They should be the key issues that the Committee focuses on as part of its future role, and they involve simple issues such as having a proper business plan, clarity of objectives and clarity and responsibility for budgeting. It is also about having a reporting mechanism so that people know what is being spent when, how and for what purpose, and it involves the good governance of civil servants, which the hon. Member for South Norfolk mentioned, and good ministerial governance. That was reflected in the comments of my hon. Friend the Member for Walthamstow (Dr Creasy) about her constituent. Now that he has been elevated to the Lords, I am afraid that however he voted at the last general election, he will not be able to vote in the next one.

The issue is how to put in place and systemically manage the overall issues. It comes down to key issues of personal accountability for civil servants and Ministers. There is a role for the Committee, which is echoed in the motion, and it relates to the accountability of individuals—Ministers and at civil servant level—for the decisions they take and for how they manage the good governance issues I have outlined.

Delivery is key. The hon. Member for Stockton South (James Wharton), who showed real commitment to the Committee by missing his constituency party, focused on the issue in his area about how the political aspirations of whichever party is in government are delivered on the ground. What Ministers decide, how civil servants protect the taxpayer against reckless ministerial decisions and how they implement positive ministerial decisions is key. The points that the hon. Gentleman made were very important in relation to the health aspirations he discussed, but this is ultimately about value for money and making sure that whatever objectives Ministers have set are delivered in a timely, sensible and forward-looking fashion.

My right hon. Friend the Member for Stirling (Mrs McGuire) highlighted some of the challenges we will face in the future. I do not want to politicise this debate, but the current Government’s focus on greater localism, devolution of power and distribution of responsibility will mean that the food chain of accountability that she mentioned will be equally important in future.

As a background to all this, we are in a time of increasingly reducing resources. The Government’s Budget proposals mean reductions of £32 billion a year and additional net tax increases of £8 billion a year by 2014-15. Departmental losses include figures such as a 49% reduction in the capital budget in the Home Office and reductions in revenue budgets of 23% and 24% at the Ministry of Justice and the Home Office. Whatever our views on those matters, and we all have our own views, it is even more important at this time of diminishing resources that they are spent with a clear focus on value for money, that they deliver what they are meant to deliver and that they are managed by Ministers through the civil service. As we have seen recently, the Committee’s reports on the Ministry of Defence’s major projects review, which my right hon. Friend the Member for Barking has ably led on this week, and on the private finance initiative contracts with the Highways Agency to widen the M25 show that, retrospectively, there are real issues that will be common themes that we need to address for the future.

Before I conclude, let me make a simple point about how stability relates to political accountability. I was a Minister for 12 of the 13 years of the previous Government and not once did I hold a job for more than a couple of years. I was the longest-serving Minister with responsibility for prisons and probation in the history of the Labour Government—I served for two years and one month. I had to pick up, learn about, develop and manage projects that had started before I was in the post and carried on after I left to go to the Home Office. As well as accountability for civil servants, it is important that we have accountability for Ministers. The motion would ensure that Ministers who make agreements and accept recommendations report back to the House on what they have done. I hope they will have longer in office so that they can see projects through from start to finish. They would thus remain personally accountable and, on behalf of the House, they could hold civil servants to account, too.

I commend the motion to the House, and I look forward to hearing the Minister. I thank Members on both sides of the House for their contributions.

17:40

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

I am standing in for my hon. Friend the Economic Secretary, who has been called away due to family illness. She would have wanted the opportunity to take part in an interesting and wide-ranging debate.

I, too, congratulate the right hon. Member for Barking (Margaret Hodge) on her election as the PAC Chair. As we have heard, and as the right hon. Member for Delyn (Mr Hanson) pointed out, she clearly has the support of her Committee. She demonstrates the long tradition of the PAC in ensuring value for money and I am sure she will be determined in pursuing that aim. As she rightly says, when we face challenges in the public finances, the issue is more important than ever. As a Treasury Minister, I fully support the right hon. Lady in her determination to seek value for money.

I pay tribute to my hon. Friend the Member for Gainsborough (Mr Leigh) who chaired the Committee with such distinction over two consecutive Sessions. The Committee grew under his chairmanship, and he brought in a number of innovations that will stand the test of time.

I recognise the contributions of new members of the PAC, both to the debate today and to the work of the Committee more generally. We heard from the right hon. Member for Stirling (Mrs McGuire), the hon. Member for Walthamstow (Dr Creasy) and my hon. Friends the Members for North East Cambridgeshire (Stephen Barclay), for Thurrock (Jackie Doyle-Price), for Stockton South (James Wharton), for Orpington (Joseph Johnson) and for Redcar (Ian Swales). They have all demonstrated their commitment to the PAC—some by missing the office party, which surely goes beyond the call of duty.

Everyone has been impressed by how quickly the Committee has moved. The new Committee set about its work with hearings just a few days after it was reconstituted. That is a clear demonstration of the importance of the Committee’s work, and shows that value for money is a key consideration for all parts of Parliament.

We heard from the right hon. Member for Barking that she is the first woman to chair the PAC. She is also its first elected Chair. I believe I am the first Treasury Minister of a coalition Government to respond to a PAC debate. Perhaps that demonstrates that in the PAC, as in the Government, Members from different parties can work together to ensure that we serve our country well.

Data collection was one of the issues raised by the right hon. Lady. She highlighted the fact that far more information is made publicly available and she was concerned that it might be at the expense of the analysis that is needed, whether at governmental or parliamentary level. The intention is that the information should complement ongoing work. We want information disseminated to as many people as possible, allowing citizens to hold the Executive to account. Many people will have an interest in detailed or local data that the House may not have the time or energy to scrutinise in depth. That is not a criticism of the PAC, which clearly has enormous energy. None the less, it is right that people outside the House can explore the issues and make sure that their voices are heard and taken into account by decision makers. I hope that will complement the excellent work undertaken by the PAC.

I fully recognise the Committee’s concerns, set out in the motion, that Departments should implement agreed Committee recommendations. As I understand it, some 90% of Committee recommendations are accepted by Governments of whatever colour. That shows the value added by the work of the PAC and its ability to identify where improvements need to be made. The Committee knows that Departments already have to give accounts in their annual reports on whether they accept or reject Committee recommendations, and the Treasury enforces that requirement quite strictly because we take the Committee’s recommendations very seriously and we are pleased to accept them in the majority of cases. However, I understand the point made in the motion that the Committee feels that more could be done to ensure that Departments implement in a timely way those recommendations that they have accepted.

The Treasury and Departments already view the implementation of Committee recommendations seriously; moreover, the National Audit Office already carries out follow-up studies, in part to check progress in implementing Committee recommendations, and those reports are placed before the Committee. In those circumstances, accounting officers have to account directly to the Committee on why agreed recommendations have not been implemented. It is also important to remember that there will be some circumstances in which it simply is not possible to implement all agreed recommendations within a year of acceptance.

However, I think it is a sensible principle that Ministers should make written statements to the House on any recommendations that have been accepted and not implemented within a year of acceptance, and the Government are pleased to support the motion because that is a useful addition to our accountability. There will of course be a need to look carefully at exactly how we can implement that; there is some discussion as to quite how many written ministerial statements will be necessary as a consequence, but I think it is a helpful principle and we would support the motion.

Very many issues have been raised in the debate and I shall not attempt to address them all, but I noticed that two themes emerged in many speeches. The first was the issue of capability—the ability of Government Departments to deliver big projects, and to cope with many of the issues that they face. Hon. Members will be aware that the Government have established the Efficiency and Reform Group, in which the Cabinet Office and the Treasury work very closely together. The intention of that group is to strengthen capability—to strengthen the expertise that is available in these key projects, to ensure that the right skilled staff are there. We hope that will address many concerns. As many hon. Members said, it is particularly important to strengthen the financial capability of Departments. We as a Government believe that the role of the financial director of any Department should be respected and should be a very significant role in any Department.

The second theme that emerged repeatedly was accountability. We heard examples of difficulties that arose because senior reporting officers moved on too quickly. That is a very fair point. It is absolutely right that we ensure that there is proper accountability for spending when spending is devolved to local communities and organisations, and we must be alive to the issues there. In the context of the Ministry of Defence and aircraft carriers, an issue was raised about the role of the accounting officer. I agree with those hon. Members who say that it is part of each accounting officer’s duty to respect the financial limits within which his or her Department operates, and we should expect that to happen.

Many detailed issues have been raised in the debate and there is not time for me to address them all, but I thank Members for conducting such a wide-ranging and interesting debate. We have covered plenty of topics and I look forward to seeing how the Public Accounts Committee develops under the chairmanship of the right hon. Member for Barking. I wish her and her Committee well for the future, and I look forward to working with hon. Members to deliver value for money throughout Government expenditure.

17:49

[Margaret Hodge]

I had the opportunity at the start of this debate to say a lot, so I shall say very little now.

First, I am very grateful to the Government for agreeing to the terms of the motion before us. I simply draw to their attention the fact that there should be no need for any written ministerial statements if every Department responds properly to the recommendations to which they have agreed and implements them. We hope that the device will empower action rather than lead to further ministerial statements.

Secondly, I warmly and genuinely thank all the members of my Committee. The hard work of all my colleagues has led to the rather good reports—I think—that we now put out. We are a team, not an individual, and the quality of our reports reflects the brilliance of that team—all of us who are Committee members. My thanks also go to the National Audit Office, because its work is of an extremely good quality.

In respect of civil servants, on the whole we do not want to criticise what the Government do; we want to celebrate success wherever we can. We just wish that we were able to do so more often. I know from my time in government, as do other former Ministers, that there are a lot of dedicated and very able civil servants, and the question is just one of whether we can get the work going beyond that.

Finally, our Committee’s work is important. Last night, after our evidence session with the Ministry of Defence, I went out for dinner and just happened to talk about what we found. Totting up the amount of money wasted, I noted that £3.7 billion was binned because we cancelled Nimrod; £1 billion was mostly binned because we cancelled Sentinel; £1.56 billion was wasted because we delayed the aircraft carrier; and £2.3 billion was wasted because we ordered Typhoon aircraft that we do not want.

That shows the importance of the vigilance that we intend to continue to have over how the Government spend their money. We cannot afford to waste it, because we need it too much, particularly in the current circumstances, so we look forward to working with the Government to ensure value.

I wish everybody a happy Christmas.

Question put and agreed to.

Resolved,

That this House calls on the Government to ensure that all recommendations contained in Reports of the Committee of Public Accounts and accepted by Government Departments are implemented and that the relevant Minister makes a statement to the House on any recommendations accepted but not implemented within a year of their acceptance.

Business without Debate

Thursday 16th December 2010 Commons Chamber

Sittings of the House

Thursday 16th December 2010 Commons Chamber

Ordered,

That, on Tuesday 21 December 2010, the House shall meet at 11.30 am and references to specific times in the Standing Orders of this House shall apply as if that day were a Wednesday.—(Miss Chloe Smith.)

Football Governance

Thursday 16th December 2010 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Miss Chloe Smith.)

17:52

[John Mann (Bassetlaw) (Lab)]

I rise to speak in an Adjournment debate that the Speaker has kindly granted me on football governance and what the Government can and should do about it.

If one were to ask about the crisis in English football, one would anticipate that, at the top of football’s establishment, facts and figures would pour forth to demonstrate that English football, under the premier league, is one our prime exports, that receipts and revenues have exponentially expanded over the years and that things are growing healthier and going better than ever.

Last Tuesday, a unique—but, I fear, not for long unique—football match took place near my constituency. It would have been in my constituency if one of the teams in a rearranged FA trophy match, Worksop Town, had a stadium or, even, a pitch, but it does not, because the fourth oldest football club in the world has been locked out of its stadium by the owner for some years and exiled to rented stadiums elsewhere throughout England.

Unusually, however, the match was also a major derby, because not for many decades have Worksop Town played near rivals Mansfield Town. Many leagues have separated the two but, by luck, the FA trophy brought them together. There were snowy conditions, but the match could not be switched to Mansfield, because Mansfield Town has also been locked out of its stadium by its previous owner and landlord. The match therefore took place in Ilkeston, which is the same Ilkeston where the football club has recently been liquidated. So, two teams played a match in the grounds of a club that has been liquidated and that some people are trying to reform. I shall not waste the House’s time by giving the result. In that match, there were, uniquely, two teams that were both without a ground, with 250 years of history between them. That demonstrates the true crisis underlying English football.

I will just make one comment on the recent FA bid for the World cup—I will not attempt to draw the Minister into such a small distraction. Suffice it to say that there is a 23-member committee and if one country has a member on that committee and it ends up with just two votes when there are two decisions, there is something very wrong indeed. Politicians know the dynamics of committees and decision making, so hon. Members will appreciate and understand the negotiating hand available to anyone with a vote within such a system.

Now is the time to start changing English football. The impetus and imperative is not the much-publicised World cup bid and its failure, but the less well publicised uniqueness of Worksop Town versus Mansfield Town and where that match was played and could have been played last Tuesday. Both teams’ owners could have put out any football team they had bought on to those two grounds because no one has deemed them not to be fit and proper persons for the governance of English football.

A second issue that has not been explored is how we are seen across the world, particularly in Europe. Some 60% of European football debt is in English football. I have heard such a theme before, although not quite in relation to those figures. We call it the financial crisis—the big banks. Before Lehman Brothers collapsed, no one had said that banks in this country could collapse. However, the Royal Bank of Scotland, Lloyds, HBOS and other smaller entities were on the verge of collapse and there had to be major Government intervention that involved huge amounts of taxpayers’ money. Those banks were ever onward and upwards. They were taking risks, leveraging and presuming that growth would be for ever. No one really questioned in advance whether such a situation was sustainable.

In English football, there has been a similar boom to that experienced by the banks. It is contemporaneous—perhaps not coincidentally contemporaneous—that there is a risk that the English football boom will turn to bust, and that we will see major forced restructuring when something significant happens. The banks have a term for what happened: toxic debt. Much of the money lent to English football is exactly that—toxic debt. In other words, it is money that the banks cannot rationally hope they will get back.

The contrast to English football is the German Bundesliga. With its good governance law, the Bundesliga is in profit. Indeed, if a Bundesliga club is not in profit, according to the rules, it will automatically be relegated. The Swedish league is in profit. There are many models of football bodies that have reorganised their governance, but in terms of the competitive advantage that our clubs perceive that we have on the European stage, the German one, in particular, will come back to haunt us.

18:00

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.—(Miss Chloe Smith.)

[John Mann]

Perhaps we should be looking at the German model of football refinancing itself. I suggest to the Minister that we should consider how people were persuaded to change the rules of football governance through the German football association.

[Mr David Lammy (Tottenham) (Lab)]

Is my hon. Friend as concerned as I am about the rumours on the internet that a Qatari consortium is planning to buy Tottenham Hotspur football club? This is apparently to do with a decision to leave the poorest ward in London and move across London to Stratford. Is he concerned that Manchester United or Liverpool FC might fancy moving down to London to increase their shareholder profits? Does he think that community and history should stand alongside the big business that is taking over football?

[John Mann]

In 1923, Tottenham Hotspur famously bribed Worksop Town to replay a match two days after its initial historic 0-0 draw, allegedly providing copious amounts of beer to disable the team, which unfortunately then had a rather heavy defeat.

My right hon. Friend makes a very important point from which two issues emanate. First, who owns English football clubs? Are they merely chattels to be bought and sold, as we have seen, but, more dangerously, to be moved across London or across the country, as we saw with AFC Wimbledon, or indeed to be moved across the world, be it for the 39th match or the entire club? That is a scenario that I foresee in 10 years’ time. Who knows what will happen? Football clubs are free to make their decisions. However, community responsibility is involved. Good governance should instruct that the FA, at the top of the pyramid, ensures, in terms of its rules and their use, that good community relations, community development and community inspiration are key.

Secondly, it is rather outrageous that the football world has not stood as one behind the athletics world regarding a football club using the Olympic stadium as part of the legacy. It would be very good for a high-level football club to use that superb stadium. But when we have the best athletic stadium in the world, it would be outrageous for the football world to think it acceptable that it will be just for football, not athletics, so that we would not be able to host and win the 2015 world athletics championships because we do not have a stadium. The Minister can have some influence on that.

[Mr Lammy]

Does my hon. Friend remember the video with which we won the Olympics, with the faces of young Londoners, many of them black, and the dream of athletics that is now apparently to be ditched in favour of big business? Will he, like me, continue to remind the House and the Government of that responsibility?

[John Mann]

Worksop Town and Retford United, the two semi-professional clubs in my area, do not compete quite on the levels of Tottenham Hotspur, but their communities’ views are the same. We want our clubs in our communities. At our rather modest level, we expect those governing English football to give us every assistance in having rules that they implement to ensure that we are not simply chattels to be moved around. It can be as big as the Tottenham Hotspurs, or as small as the Worksop Towns or smaller still, but we have a right to expect that the history, the tradition and the communities who have funded these organisations should not be cast aside because someone has some developmental idea of making more profits out of that institution by shifting it, be it elsewhere in London, into the Olympic stadium, to the far east, or wherever else. That will be an increasing risk in English football. Similarly, the bubble of television rights might burst. I shall say a little on that in a minute.

I return to my analogy of the banks, because it is a relevant one. Football debt is toxic debt. The risk taking of the banks was predicated on a model of permanent growth. They offset and hedged tomorrow’s income and used it for today’s expenditure. Football has got into precisely the same mindset. The premier league is rightly proud of its success, its export potential and the tax revenue that it brings into this country, but so were the banks. The premier league thinks that there will be permanent growth. A simple change to the European Commission’s rules on the bundling of football rights could prick the bubble and send some clubs out of business, because the money would be pulled back by the banks, as their shareholders would expect. Those are the risks that football is taking.

The Deloitte report is rather expensive, but luckily it is available free to Members through the Library. Because of the risk of great personal expense, the copy that I borrowed is being returned at this very moment. According to the 2008-09 figures in that report, of the 44 premier league and championship clubs, only eight had a pre-tax profit, a majority did not have net positive assets and only two had no debt. That is extraordinary considering the growth and success in revenues. However, that has been increasingly squeezed out by players’ wages and agents’ fees. Teams compete to buy big-name players and more expensive players because of supporter demand. That is not a sustainable business model. Even building a club’s brand as an investment is not sustainable with that amount of leveraged debt. The bubble will burst and it is about time we started to say so. Will it be next year, in five years or in 10 years? Who knows? However, just as with the banks, the bubble will burst and the over-exposure to debt will ripple throughout football.

We used to hear about administrations, but now we hear about liquidations. It is a new language. Clubs vanish and have to be reformed. King’s Lynn football club, which was in the same league as Worksop Town, disappeared last season—bang! Gone! That meant one less club to be relegated, much to Worksop’s relief. It had a regular crowd of 1,500, which I think was the highest in the Unibond North—disappeared, gone, vanished! Another example is Ilkeston Town. Chester City was once a great and famous club that sometimes beat the very top clubs. It had been a member of the Football League throughout most of the league’s history, but then bang! Gone! It now has to be recreated right at the bottom by the supporters. Scarborough Athletic has had to move to Bridlington, which is rather ironic, to exist in any form. Of course, such clubs can come back with their supporters behind them. We would keep Retford United or Worksop Town going however low they went.

Is any of this fair and just? Fairness and justice have gone out the window as far as the FA is concerned—not in its rules, but in the application of its rules. Why should Exeter City, a club that was saved by its supporters and that has sensible balance sheets, have to compete with clubs that are borrowing money that they will not be able to pay back and that know that they may well go into administration if they do not succeed in getting promotion? More than half the football clubs in the Football League have gone into administration in the past 15 years. That has been the boom time for English football, during which we have said that we are leading the football world.

Who are the losers? No one has yet fully quantified the losses for Portsmouth, for example, but it would not surprise me if the losses—not to the football world, nor even to the Exchequer, but to local businesses in Portsmouth—were in the order of £4 million. One remembers that horrendous time when a club that I first saw at the age of four and have seen thousands of times since, Leeds United, went into administration and St John Ambulance was not paid, even though it was the boom time for English football. Governance in English football is in crisis, and has been for a long time.

When there are big music concerts—the Glastonburys and the rest—the organisers pay for the policing and stewarding required. They hire stewards in large numbers. There are not thousands of police thronging around every time there is a music festival in London or anywhere else, but when there is a football match the police are there, and who pays for them? The taxpayer pays a lot of the money. We need to use leverage—if football will not put its house in order, some of us will start demanding that it pays full policing costs. Why should my police force lose out, and why should I have football clubs in my area that are not able to play in their own stadiums because of the weakness of the application of football’s own rules? That is not sustainable in the political world, and it is not sustainable for my constituents.

[Mr Lammy]

Will my hon. Friend give way?

[John Mann]

Sorry, I should make some progress.

There is an inquiry into the matter by the Select Committee on Culture, Media and Sport, and I hope that the Committee will consider a few matters. It ought to consider the chocolate question: Cadbury and Rowntree’s, once great British institutions—gone. Should that be allowed to happen in English football, as it did in the car industry, as you know very well, Mr Deputy Speaker? It should consider whether the UEFA fair play league, an excellent initiative, should be part of the root-and-branch reform of English football.

I should also like the Committee to examine in detail the question of Leeds United, not to pick on Mr Ken Bates specifically—I do not particularly care about his arrangements and motives for having the club owned offshore—but to see what the football authorities have done and who owns Leeds United. That is a legitimate question for the Committee to take detailed evidence on, not to attack Mr Bates or the club but to explore the processes behind it. We need to know why the FA and the Football League have been unable to answer questions about the matter.

We need to know whether Mr Ali al-Faraj, once owner of Portsmouth, actually exists. That would be a good question for the Culture, Media and Sport Committee to ask. If he does, by what process was that man, who some claim does not even exist, deemed a fit and proper person to own a premier league football club, and who is he? The process by which football leaders asked and answered that question should be part of the inquiry, and I am sure it will be. I am sure the Committee will also examine why there are not currently three non-executive directors appointed to the FA, and how long it will take for that to happen.

It may sound as though I am attacking the big names, the brands. I am not. Frankly, it is a free market and they can do what they want, as they have done and will continue to do. I am attacking the governance of English football. If the big brands disappear abroad to a European super league, or go to play a 39th game or locate themselves in China or wherever else in the far east, that will be their choice and their loss. I want to ensure that the structure of English football means that the teams in my constituency can play at their own grounds and not be thrown off them. I want the Worksops, the Mansfields, the Ilkestons and the Chesters, as well as clubs higher up, to exist in the future.

I think that the FA is somewhat terrified of the figures in the premier league. The Minister ought to strengthen the FA’s resolve by asking it the difficult questions and forcing its hand. Where are the black managers in English football? Where are the Muslim and Jewish players? Where are the women at the heart of the FA? No other sport would tolerate unfit, improper persons in the ownership of clubs. Football, uniquely, wearisomely and supinely, does so. Why are the rules not applied? In Spain, there is a law on transparency, and in France the law gives people the ability to open the books. I have mentioned the situation in Germany already.

As well as leverage over the European Commission and thus Sky’s packaging and bundling of football, the Government have leverage over the FA. They give the FA an awful lot of money. A new chairman is about to be independently appointed. I say to him or her—that would be a turn-up for the books—that they have to use the powers they have already and reject the pressures from the premier league when the premier league conflicts with the FA, because we cannot justify taxpayer support for football if football cannot sort out the absurdities of last Wednesday, when Mansfield and Worksop were locked out of their grounds by the club owners.

I trust and hope that the Minister will use his leverage—his influence—to ensure that our national game survives at every level, and that we force good governance on the FA. Every change in English football has been forced on the FA, and the Minister must use his leverage to ensure that it gets its act together and runs English football properly, as it should be run.

18:16

[The Minister for Sport and the Olympics (Hugh Robertson)]

I congratulate the hon. Member for Bassetlaw (John Mann) on securing this debate and on how he presented the case for reform in football, which is a powerful case. He asked a number of questions, which I shall attempt to answer in a minute. Before I do so, it is worth placing on the record exactly why football is important to the Government, and thus why reform is so necessary.

Football is our national game. More people play and follow it than any other sport. Events such as the World cup and European championships and the key domestic football fixtures command the attention of many millions of people up and down the country. Every single constituency has a football club in it, and many, including the hon. Gentleman’s, have a large number of clubs.

The hon. Gentleman alluded to the fact that the Government directly contribute to the financial running of the game through the whole sport plans, which we managed to protect through the comprehensive spending review, and through the Football Foundation. Indeed, funding to the grass roots was preserved as part of the CSR. Finally, as he touched on towards the end of his speech, Governments of all persuasions have supported initiatives such as Supporters Direct and the Kick It Out campaign, which goes to the heart of the black and minority ethnic issues that he mentioned. If I can give him any comfort on those, I spoke at a Kick It Out reception earlier this week. I am absolutely determined that the lamentable record of English football in that regard will be addressed—no ifs or buts. Football will continue to be important to the Government and the House.

Let me try to answer some of the questions he posed in his speech. He rightly said that there was something very wrong indeed when England could get only two votes apart from the one it commanded out of the 22 on offer for our World cup bid. Indeed, it remains a sad and sorry fact of that whole bid that our technical evaluation was the best of any of the bid teams. By common consent, we produced the best presentation on the day, but we then got the lowest number of votes. That tells us a number of things, principal among which might be that we simply aimed at the wrong target. We presented to FIFA a strong and compelling case for hosting its World cup, but it was in fact looking for a new frontier for football and a global political statement. All sorts of rumours are swirling around the bid, but that essential truth lies at our failure to land it.

The hon. Gentleman’s second question was on financial mismanagement. He rightly paid tribute to the German leagues, which are in profit. It is absolutely right that we look at the example of the German leagues. I gather that the Culture, Media and Sport Committee, as part of its investigation, is going to Germany to examine precisely that. Having said that, we have to acknowledge that the German league started from a slightly different position to the one we are in. We know that the current system needs reforming, but the question is about how we get from where we are now to where we want to be.

The hon. Gentleman’s third point was about the Olympic stadium. I have probably had a lucky escape, because the right hon. Member for Tottenham (Mr Lammy) has now left the Chamber. The hon. Member for Bassetlaw asked why the football family has not fallen in behind the athletics use of the stadium. I suspect that the honest answer is that two competing clubs that are part of its family are playing off against each other for the use of the stadium. Even though I am safe—speaking at the Dispatch Box—from being sued, I should simply say that a process is in place that will come to a conclusion in early January, when I hope that a preferred bidder will be announced. We have all been advised by the lawyers not to get involved in that process, so if he will forgive me, I will leave that one alone, although we should have an answer by the beginning of January. I can reassure him that the commitment to leave an athletics legacy after London 2012 was one we made to the International Olympic Committee, and I suspect that it was a crucial part in delivering to us London 2012. From my point of view at least, it is a commitment that will be met.

The hon. Gentleman asked about why the level of debt is so high. Debt, in itself, is not always—although it often is—a bad thing. The key thing is the relationship between debt and revenue. The premier league has made some welcome introductions and tightened up its rules this year, as too has the Football League. However, I agree entirely that there is a great deal more to be done, and I will come now to how we might tackle that.

The hon. Gentleman’s next question was about the Select Committee report and the investigation it is about to undertake in the new year. He asked whether the fit and proper person test would be examined as part of that investigation. I hope it will be. It was originally the Government’s intention to take up the cudgels over football governance and reform as soon as the World cup bid was over. We were advised not to do that before, because of the interrelation between Government interference and how the international regulators look at the world of football. We were set to do that, however, and the Select Committee then announced that it wished to conduct an investigation into it. Out of respect to the House and its Select Committees, it is much better that we allow it to do that, rather than set out another investigation alongside it. Of course, that will have the advantage of allowing hon. Members from both sides of the House to contribute to the Select Committee investigation, which will allow, on a cross-party basis, many of these issues to be examined.

The hon. Gentleman asked about the relationship between the FA and the premier league and why the governance of the FA is so poor. I want to make it clear that we have said to the FA all along that we support the Burns proposals and that ideally it should have a fully independent chairman. If, in order to get the very best person to provide the sense of leadership and direction that the governing body of our national game needs, it feels that it cannot meet the one-year independence rule, as far as I am concerned, that is fair enough. I want it to have the best possible person, and I do not want it to be hamstrung. However, if it chooses somebody who is not independent by that definition, it will remain our intention to ensure, as the hon. Gentleman said, that it has a considerable number of non-executives on its board. We have said two. If it was to go further than that, I would be delighted. As he said, the relationship between the FA and the premier league—one the representative of the premier league, which is this country’s most successful sporting export, and the other our national game’s national governing body—is crucial, and if one is weakened irretrievably, it damages the relationship beyond repair.

The hon. Gentleman’s final question was about the use of Government money. He will have guessed from what I am saying that we are keen to advance this agenda. For the moment, however, I am happy to let the Select Committee have its say. I undertake to him and the House to take extremely seriously the Committee’s report, and if necessary we will use all the tools at our disposal, which would include the use of Government money. The only caveat I would make is that, given that the public money goes to the whole sport plan and the Football Foundation, the danger, if we activate that lever, is that we simply hurt the grass roots of the game, rather than targeting our action where we believe it is needed.

With that, I shall finish where I started and thank the hon. Gentleman for his contribution and congratulate him on securing this debate. This will be my last appearance at the Dispatch Box this year, so I wish everybody a very happy Christmas and new year.

Question put and agreed to.

18:25

House adjourned.

Westminster Hall

Thursday 16th December 2010 Westminster Hall

Thursday 16 December 2010

[Mr Charles Walker in the Chair]

Backbench business

Thursday 16th December 2010 Westminster Hall

Drugs Policy

Thursday 16th December 2010 Westminster Hall

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

14:30

[Mr Bob Ainsworth (Coventry North East) (Lab)]

Thank you for presiding over our debate this afternoon, Mr Walker.

I thank the Backbench Business Committee for allowing the debate. I asked for a full day in the Chamber, in prime time, and the Committee gave me three hours in Westminster Hall, on a one-line Whip, on a Thursday—the last sitting Thursday before Christmas—but I am grateful none the less.

We are not so well attended that we will run out of time, so that will not be an issue, but I hope, Mr Walker, that you will use your offices to ensure that everyone gets an opportunity to speak, irrespective of their views. We need what I am, effectively, calling for—a full and comprehensive debate on drugs policy.

As people know, I was in charge of drugs policy for about two years in the early part of the past decade, as a Parliamentary Under-Secretary of State for the Home Department under my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett). My right hon. Friend managed to get agreement from the then Prime Minister and Cabinet giving us a little headroom to make some progress on drugs. Before then, we had the regime of the drugs tsar—a lot of debate but not enough progress—but my right hon. Friend managed to gain some leeway. We ran that whole debate as comprehensively as we could, because we were looking to refresh our drugs strategy. We involved as many people as we could, such as practitioners in treatment, police officers and the Select Committee on Home Affairs, which was enormously helpful in thinking things through.

I am not unproud of some of the things that we did, but we did far too little. We took the policy in the right direction. Yes, the classification of cannabis got all the headlines at the time—we took cannabis from class B to class C, in line with the scientific information—and that appeared to be the only thing in which the press were interested, but we did a lot else besides.

We brought in guidance for clubs, encouraging them to have water fountains, so that young people did not die of dehydration if they had taken ecstasy. We opened the door to heroin prescription in my response to the Home Affairs Committee. That was difficult—some people in the Government were enormously worried—although, if we read the response, we can see that the door was open only a small fraction. However, open it was, and that was one of the most important things. I thought that we could follow that up over time, and use heroin prescription as one of the tools to reduce harm.

We put harm minimisation at the forefront of our policy and we massively expanded treatment. When Members look at the reasons for the fall in crime—acquisitive crime, in particular—in recent years, yes, of course they can look at the increased police numbers paid for by the previous Government or the initiatives on antisocial behaviour, which made positive contributions, but they do not look nearly enough at the huge increase in drug treatment that we brought in. People do not fully appreciate the extent of the link between heroin addiction, in particular, and acquisitive crime and prostitution. Overwhelmingly, prostitutes in our country do what they do because they are addicted to drugs. A huge proportion of acquisitive crime is committed in order to pay for a habit. We also introduced an education policy, Talk to Frank, which is still going. I am glad that the new Government are to continue it, because giving people good advice on the consequences of drugs is so important.

Many people ask, as they did in the media this morning, why on earth I did not do or say the things that I am advocating now when I was in government. I had a choice to make. As people saw this morning, the Minister is straight out, saying, “This is wrong and I can’t approve it.” My own party disagrees with what I am saying, so my choice, had I wanted to go further than what I was allowed to do, within the limitations of collective responsibility, would have been to resign. That was my choice—to resign and make a small splash, which might have dampened my shoes but would not have moved drugs policy far at all, or to stick with it and make some small improvements. I chose to stick with it, and we made some small improvements, which were worthy.

I am saying to the House today—to the Government, to my own party and to anyone else—that we did far too little. We have not dented the huge apparatus that supplies drugs, not only to our country but across the world.

[Andrew Griffiths (Burton) (Con)]

I am the secretary of the all-party parliamentary drug misuse group.

The right hon. Gentleman mentioned the downgrading of cannabis and the U-turn or about-turn when the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) became Prime Minister, but the figures speak for themselves. NHS treatment for cannabis use doubled in the three years after the downgrading, drugs deaths surged by 15% the following year and the number of drugs dealers prosecuted for dealing cannabis in the three years afterwards fell by 29%. Does he not understand that he was sending completely the wrong messages to young people about drug use?

[Mr Ainsworth]

No, I do not agree, and those figures will not bear scrutiny. That is what we ought to do—scrutinise what the hon. Gentleman has just said. We ought to bring some reason to bear, rather than make simple allegations and claims.

Everyone said that, when we reclassified, cannabis use would go through the roof. There is utterly and absolutely no evidence for that—quite the reverse. Cannabis use, according to all the evidence that I have seen and heard—others are far bigger experts than I am—went down in that period. The reclassification had no impact. When we reclassified cannabis back to class B, it had no impact again. All the scaremongering about the reclassification of cannabis was uncalled for and proved to be incorrect.

Cocaine use, however, has gone up, because that has been the fashionable drug in recent years—it is a darn sight more dangerous than cannabis. Cocaine use has gone up, but we never reclassified cocaine. If the hon. Gentleman is positing an argument for reclassification making an ounce of difference to the levels of use, he is in real trouble.

[Paul Flynn (Newport West) (Lab)]

I congratulate my right hon. Friend on his courage and vision, and it is a pleasure to be here today. Does he not agree, having heard the nonsensical intervention from the hon. Member for Burton (Andrew Griffiths), that the classifications have almost nothing to do with use of the drug concerned? A huge amount of energy has been spent talking about and legislating on the classifications, but the real tragedy is that in every year of the past 39 years, the waste of lives in Britain has increased, from 1,000 addicts in 1971 to 320,000 now. We have the worst outcomes and the harshest penalties of any country in Europe. Does he not agree that there must be a better way?

[Mr Ainsworth]

I will move on to some of those issues later in my speech. The only point on which I disagree with my hon. Friend is his use of the term “nonsensical”, because we really must get away from flinging insults when discussing the matter. In the days ahead, many insults will be flung at me by sections of the right-wing press, which I knew would happen when I raised the subject, but it will be a great shame if we cannot have a more serious debate on that most serious issue.

I have had some busy jobs in the past few years and so might not be as current as I was a short time ago, but I have always argued that the regulatory framework adopted in different countries makes little difference to their levels of drug use. Sweden has a hard attitude to drugs and relatively low drug use. Italy has a softer attitude and relatively low drug use. We have a very hard attitude and relatively high drug use. Holland has a relatively liberal regime and a high incidence of drug use. That tells us that the regulatory framework has little effect on the levels of drug use in those countries.

[Mike Weatherley (Hove) (Con)]

I congratulate the right hon. Gentleman on his courage in holding the debate today. It is a welcome contribution to the general debate that we should be having on the subject. As he will know, Brighton and Hove has a high rate of deaths related to heroin. Does he agree that drug users are not necessarily criminals and should be rehabilitated and assisted, and that part of that involves the recognition that criminalisation is perhaps inappropriate, particularly for marijuana? Does he also agree that the previous Government’s decision to declassify marijuana to class C perhaps sent the wrong message because it was neither one way, nor the other, and people buying the drugs are still buying them from criminal gangs? Either it should have been legalised, or the message that should have been sent out was that it was a harmful drug. We really need a full, independent review of the whole situation, without the emotion that seems to come from all sides.

[Mr Ainsworth]

I intend to move on to what I am proposing shortly and knock down some of the things that have been said that are not true.

During the changes that we made in 2002, a young and newly-elected Conservative Member was a member of the Home Affairs Committee—he is now the Prime Minister. He went along not only with all the changes that we made, but with the Committee’s report, which asked the Government to go further in two particular areas: to reclassify ecstasy from class A to class B, which the Government would not do; and, more important, to have a full debate on the alternatives to prohibition. He supported and advocated that, and he was right to do so. We did not go along with that, nor have the current Government. They have condemned it and ruled it out in the new drugs strategy issued last week. When the right hon. Gentleman became leader of the Conservative party, he felt, for reasons best known to himself, that he needed to recant and said that he had been wrong to support that policy. That shines a light on exactly what the problem is.

This morning, the leader of my party said that what I was saying was not Labour party policy and that he did not agree with me. I am not surprised in the slightest and I expected nothing other that that. The Minister will stand later and say that the proposal is irresponsible, that it is not Government policy and that they will set their faces against it. When the Prime Minister was being commendably brave as an ambitious young Member, however, he believed in it, and I believe that he still does but knows that it would be enormously difficult to take that position. He would not hold the right wing of his party, with which, heaven knows, he has enough trouble, in place. That is why he will not support what he knows to be common sense, and that is the tragedy of drug policy in this country.

The new drugs strategy contains many of the phrases that were used in my refresh of policy in 2002: “overarching strategies”; “joining up the bits”; “let’s get cleverer”; let’s get smarter”; “let’s work with others”, and “let’s work with others abroad.” All those phrases are in the new strategy, yet the Government are trying to claim that it is a huge, new drugs policy, which will have an impact. It is not. Overwhelmingly, it is a continuation of what went before. There is one significant difference: the Government are retreating from the notion of harm minimisation, the only thing that made the difference. They claim that harm minimisation is fine, but that we have to go further and put the need to cure people of their addictions at the forefront of all our thinking. Who would not want to do that? Who on earth thinks that curing people’s addictions is not a good idea? I think that it is a fantastic idea. However, we should not be naive. It will work in some instances, but not in others. It will work at some points in people’s lives, but not at others. The opportunities, where they exist, to move people through drug addiction to becoming drug free ought to be seized and properly funded.

When we talk about an emphasis on cure, we should be mindful that rehabilitation is massively expensive. The Government are not about to start funding mass rehabilitation and are in fact cutting drug treatment programmes. There will be reductions in drug treatment budgets in every constituency the length and breadth of the country. The budget for drug treatment in Coventry and Warwickshire is currently £11 million, but the new budget will be £8 million, which is a huge cut. If we start taking money for rehabilitation out of that £8 million, the funding for many other treatments will be hugely reduced. I have a real fear about that, because we are about to enter a period when unemployment will rise, police numbers will decrease and drug treatment will be slashed, which will result in a massive increase in acquisitive crime. I fear that that is what our country is about to face.

[Andrew Griffiths]

The right hon. Gentleman makes a strong case for harm minimisation, as if it were the solution to the problem, but does he not accept that the figures show that 95,000 people in the UK have been on a methadone script for more than a year? Of those 95,000, 25% were still on methadone four years later. I do not know about him, but I am ambitious for people and do not want to see so many living in state-induced dependency. Does he accept that that maintenance is not providing the kind of solution that we are looking for?

[Mr Ainsworth]

I, too, am ambitious for people, and if anyone can be cured of an addiction, I want them to be cured of it. I do not want us to leave one person whom we can get off opiates dependent on them, but, equally, I am not naive. I do not believe that any Government, never mind a Conservative-led coalition Government, will fund the levels of drug treatment that provide the rehabilitation episodes that are needed to get the number of people that the hon. Gentleman talks about off their habit.

Therefore, the choice that we face is to keep those people safe until such time as they can make progress, or to hand them back to the criminal market, put them back into the hands of the dealers, let the guy on the street corner supply them with diamorphine, encourage them to go back to prostitution or to start robbing their mates and neighbours. That is the stark choice . My Government chose to expand drug treatment hugely. We did it not for the benefit of the drug users themselves but for the benefit of the entire community.

[Mike Weatherley]

Were the drug rehabilitation programmes based on methadone or abstinence? I have been to various drug rehabilitation centres, and by far and away the most effective drug rehabilitation was through abstinence rather than methadone. I wonder whether there would be some cost savings in the long run from full abstinence.

[Mr Ainsworth]

We should listen to the experts. I went to see the person who runs the drug treatment facilities for Coventry and Warwickshire in Coventry city centre a few weeks ago, in preparation for this debate. He said that, to some degree—and if they do not go too far—we ought to look at the Government’s policy, because perhaps in some instances we have been complacent about moving people through. We were so pleased with ourselves for stabilising people, getting them safe and keeping them out of crime, but perhaps we should have been more assiduous in trying to cure them of their addiction. I am not opposed to trying everything to cure people of their addiction.

Let me say what I am and what I am not advocating. I am simply saying this, and no more: it is about time we had a debate in this country, and provoked one internationally, about whether the war on drugs can succeed, or whether we ought to be prepared, in a rational way, to examine the alternatives. We ought to look at continuing the current prohibitions, we ought to look at the alternatives, we ought to examine the issue properly, rationally and sensibly. We ought to be prepared to have that debate.

We ought to look at whether we should reintroduce heroin prescriptions as one of the potential treatments for heroin addicts in this country. We used to do that in the 1960s, but we stopped doing it. People, including famous and gifted people, lived with their heroin addiction and continued to make a contribution to our society, but we stopped that under international pressure. We are now part of the international pressure that stops others from moving.

Ten years ago, Portugal decriminalised small amounts of drugs. People do not go to Portugal to get zonked; there is not a huge problem. I understand that there is a huge financial problem in Portugal, but there is not a huge drug problem. People go to Portugal to play golf and to enjoy the sun. Portugal is still there. It is fine, it has saved a fortune, its HIV rates have crashed through the floor, the sky has not fallen in. We have been part of the international pressure to stop that country from doing what it has done.

Portugal has been successful to such a degree that the sitting Prime Minister at the last general election held up his drug liberalisation programme as a reason for his re-election. Would it not be amazing if the Prime Minister of this country could stand in front of the British public and say, “Vote for me because I have liberalised drug policy and it has made a huge difference,” instead of shrinking from what were his clearly held beliefs as he climbed the ladder and became leader of the Conservative party? The war on drugs is not working.

I want the Minister to answer only one question. I know that he will disagree with me today—he has to; he would not be allowed to be the Minister if he were to agree with me—but I want to ask him this one question. I flagged it up on the media this morning, so he should not be surprised by it. He has a new drugs strategy, which he says is different. He says that it will work, that it will make a difference. How many years will he give his new strategy to make a significant difference?

If in two years’ time we have not made any progress, will he agree to the kind of debate and policy shift that I am advocating? Do we have to wait five years, or 50 years? We have been at this, unsuccessfully, for 50 years. We have built international criminal organisations that dwarf the mafia that arose out of prohibition in America. In America, good people with good intentions banned alcohol for 13 years. They created Al Capone and Lucky Luciano and, in the end, they caused the St Valentine’s day massacre. After 13 years, they did not give in—they came to their senses and removed prohibition.

If we do not start looking at alternatives to prohibition, we will continue to have the Pablo Escobars and General Noriegas of this world. Sher Mohammed Akhundzada in Helmand province, the Taliban, the corruption of the Afghan Government and the funding of the Afghan insurgency will continue. If we move production from Afghanistan, it will simply go elsewhere, as it moved from the golden triangle to Afghanistan some years ago. If we spray the entire forest in Colombia and destroy the foliage so that coca cannot be grown, production will move to Bolivia, Peru and, potentially, to Africa. When? That is my only question to the Minister.

I am not advocating a big bang. I do not believe that any political party would dare to propose some huge, instant change in this regard. People are too frightened, and rightly so, by the size of the problem. I am proposing debate, incremental change, pilots and rational thought. I am proposing that the Government do not do what is in their Police Reform and Social Responsibility Bill, which I believe includes a measure to remove the requirement to have scientists on the Advisory Council on the Misuse of Drugs. How stupid is that? In a modern society, we are about to say that we do not need scientists on the advisory council. Perhaps we should legislate to have witch doctors on it. That is about as silly a thing as I have heard for some long time.

[Andrew Griffiths]

The right hon. Gentleman mentioned science, and I saw Professor Nutt on television today, coming to his aid and supporting his proposition. I have listened to his reasoned speech, in which he has set out why he thinks this is important, but he has not mentioned anybody involved in drug treatment who supports his suggestion. Which groups advocate the legalisation of heroin and cocaine?

[Mr Ainsworth]

The hon. Gentleman needs to listen to what I am saying. I am not advocating kiosks on street corners where young people can buy heroin, for heaven’s sake. I am a parent and a grandparent, and I want to make my children and my grandchildren safer. I do not want them to experiment with dangerous drugs. [Interruption.] I have said that it is about time that we had a reasonable debate, but the hon. Gentleman cannot help this yah-boo nonsense. He has asked a question and I will give him an answer—and after today we will give him a load more as well, because there are lots of them.

I am advocating the replacement of the dealer, who has a ready market with addicts putting money in his pocket and who is, in his totally and utterly irresponsible way, prepared to sell heroin to children and anybody else to extend his market, to the extent that we can do so—perfection does not exist—with a doctor. I want to get people into clinics and give them prescriptions and remove the dealer’s market, thereby removing at least some dealers.

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

I want to cite a couple of people who support the right hon. Gentleman’s position. Sir Ian Gilmore, the former president of the Royal College of Physicians, argues that decriminalising illicit use could

“drastically reduce crime and improve health.”

The chairman of the Bar Council, Nicholas Green, QC, says:

“A growing body of comparative evidence suggests that decriminalising personal use can have positive consequences. It can free up huge amounts of police resources, reduce crime and recidivism and improve public health. All of this can be achieved without any overall increase in drug usage.”

We are not short of any allies on this side of the Chamber.

[Mr Ainsworth]

I have been helped in preparing this speech, and in my thinking on this matter, by an organisation called Transform, which is often accused of being a libertarian organisation, although it is not; it proposes good, solid, readily available, well-funded treatment, while saving a fortune and many lives in the process.

[Mrs Helen Grant (Maidstone and The Weald) (Con)]

I thank the right hon. Gentleman for having the bravery to initiate this important debate. Drugs destroy lives and wreck families. I suspect, sadly, that few families in Britain today have not been touched by the scourge of drugs—the thieving, lying, deceit, violence and unreasonable behaviour that come from drug abusers. Yet families do not talk about that with friends, for fear, in many respects, of criminalisation and because of the instinctive need to protect loved ones. The situation is difficult. There is no one to talk to and no one who can help, in many cases, and it can be lonely for families dealing with such matters. Nevertheless, it is a killer and we have real problem. I am not in favour of the right hon. Gentleman’s proposals for legalisation, but there are some excellent abstinence-based systems in residential programmes, one example of which is the Kenward Trust, in my constituency, which provides respite for the family and treatment for the abuser.

[Mr Charles Walker (in the Chair)]

Order. I think we need to let Mr Ainsworth respond to the intervention. May I say to all colleagues that interventions are getting a little bit long? I am not picking on one colleague. This is a useful juncture at which to remind hon. Members to keep interventions short.

[Mr Ainsworth]

I thank the hon. Lady for her heartfelt comments. She disagrees with me. Turning the clock back to when I was a relatively new Member of Parliament, I would have said exactly the same as her. When my Government came out with a new drug policy, particularly if I had had the opportunity to have input into it, I would have hoped and thought that a lot of good people were working on it and that it would make a difference. In the period ahead, the hon. Lady should watch what happens. If this new drug policy does not make any difference—I believe it will not—she should keep an open mind and come to another conclusion. I do not know how many years she or the Minister will give it, but she should keep an eye on the policy and stay engaged with this issue. I think that she will, like me, come to different conclusions over time, but that remains to be seen. All I can say is that I hope that she keeps an open mind.

I want to raise one more issue that is not to do with drugs, but I am determined to say this. As I said, I am neither the slightest bit surprised about, nor do I have a problem with, what my party leader said this morning. He distanced the Labour party from what I am saying. I expected that; he was never going to do anything else. However, I am annoyed that an anonymous Labour party spokesperson said that what I am saying is irresponsible. I do not mind that the leader of the party, the shadow Minister or the Labour party spokesperson think that; if they do, they should say it. I will not be the slightest bit upset if anybody disagrees in any terms with what I am saying. But I am upset by anonymous briefings by my party against its members. I used to get angry about that in government. It used to happen to me in government and I am sure that it happens to Conservative and Liberal Democrat Members, too. I will not allow people anonymously to say these things without my making an issue of it, because doing so is the only way that hon. Members can fight back.

The road of anonymous briefings leads to Damian McBride. My party learnt from that problem once; it does not need to learn the lesson again. Whoever this individual is, they should stop, because if they do not stop and if they say these things about me, I will say things like this, publicly, in television studios and in the Chamber of the House of Commons. We will, between us, damage our party. Stop. If they want to say anything about me and my views, they should give us their name and say it on the record. I will not be offended. Anonymous briefing has been a plague of modern politics. I am determined that people will not do it to me without some retaliation.

[Several hon. Members]

rose—

[Mr Charles Walker (in the Chair)]

Order. Six Back Benchers are here and we have quite a bit of time. Just two Back Benchers were planning to intervene, but given the nature of this debate I would not mind, and I am sure that colleagues would not mind either, if they made short speeches, because this is an important subject.

15:08

[Neil Carmichael (Stroud) (Con)]

My name is Neil Carmichael, in case there is any doubt about my being anonymous.

I welcome this important debate. I congratulate the right hon. Member for Coventry North East (Mr Ainsworth) not only on securing it, but on having the courage to say something different from what he has said before. I do not agree with him, but it is right and proper to have such a debate from time to time, because in respect of the current drugs strategy we are looking back to the Misuse of Drugs Act 1971. Time has marched on. This is a good opportunity to review the situation.

Decriminalising drugs and drug use will not be helpful. Instead, what do we do about people who are on drugs? That is the more important and immediate issue.

Colleagues have mentioned the use of methadone, which is one of the big issues that we have to confront. Methadone is not a satisfactory solution to the problem, and we simply have to state that. Let me give hon. Members an interesting statistic. When the Labour Government’s programme kicked off back in 2000 or 2001, it was spending £60 million on methadone. By the time it had finished, the figure was more than £400 million, which is an astonishing amount to spend on something that really is not solving the problem. The first key point, therefore, is to recognise that the methadone strategy is the wrong one and that we need to look much more carefully at getting people off drugs altogether.

Another startling statistic is that fewer than 5% of people are in a form of drugs treatment whose task it is to get them off drugs altogether. We are therefore not only pursuing a methadone strategy with wild abandon, but being very reckless, given that we know that there are glittering examples of good practice, where people are treated for drug addiction and leave the system—usually very speedily—with a satisfactory outcome.

We have one of those glittering examples in Gloucestershire. The Nelson Trust was visited by my right hon. Friend the Secretary of State for Work and Pensions and its work has won an award from the Centre for Social Justice. That is quite right, too, because a huge number of people go to the trust with a drug addiction and a large proportion come out completely free of drugs. That is the direction of travel that we should be encouraging, and the Government have actually signalled that that is the direction of travel. We need to be sure that we get resources to organisations such as the Nelson Trust so that they can deal with the problem.

As a result of a question to the Secretary of State for Health, the right hon. Gentleman discovered that most of the money that we spend on treatment is being spent on methadone. We need to transfer resources away from methadone and towards taking people off drugs altogether. It is important that we flag up to the Minister right now the fact that organisations such as the Nelson Trust really need to be seen, examined and then supported, because there is clear evidence that they work—and that they work well.

My right hon. and learned Friend the Lord Chancellor and Secretary of State for Justice is also signalling an interest in dealing with drugs. He has noted that too many people are on drugs in prison; indeed, it is probably easier to get drugs in prison than it is on the outside, which is an astonishing fact. Of course, if we are talking about comparisons, we should remember that it costs about £675 a week to treat somebody and take them off drugs, but, as we know, it costs more than £800 to keep somebody in prison. We need to act on that, and the Secretary of State for Justice is doing just that in the prison reforms in his recent Green Paper.

It is really important that we start supporting organisations such as the Nelson Trust with finance and Government policy, because it is essential that we tackle this question rigorously. The National Institute for Health and Clinical Excellence has pointed out that nearly half of all crime is related in some way or other to drug use and abuse. That is a staggering fact, which signals not only the scale of the problem, but the gains that we could make if we simply tackled addiction in the way that the Nelson Trust does and other organisations can. We really need to focus on a strategy that moves us away from methadone and towards getting people 100% off drugs.

The Nelson Trust recognises, as we all should, that this is about more than just the immediate issue of getting someone off drugs. We need to provide family support and opportunities for people to transfer into work. We also need to sort out what can sometimes be pretty difficult housing circumstances. When somebody is on drugs, of course, all those things and more become very problematic. To get somebody off drugs, therefore, we also need to tackle some of those surrounding issues. The Nelson Trust has pioneered some really good work on that, and that is the direction of travel that we should take. I finish with a strong appeal that we think less about methadone and more about getting people off drugs for ever.

15:15

[Paul Flynn (Newport West) (Lab)]

It is a joy among reasonable people to hear one prohibitionist talking good sense. That can be a turning point in the national conversation on this subject. My right hon. Friend the Member for Coventry North East (Mr Ainsworth) is not the first former drugs Minister to say that he disagrees with his policy in office. I collaborated with the late Mo Mowlam on a book about her views in and out of office, although, sadly, her illness overtook her. My part of that book has been published, and I can commend it unreservedly to hon. Members who are looking for an intelligent Christmas present for the discerning reader—it is all there. However, I will not burden hon. Members with that this afternoon, because I have had ample opportunities to give my views on that subject in the past.

My qualification for speaking today is that I have been in favour of the policy my right hon. Friend has described for more than 25 years. I have strongly advocated decriminalisation and legalisation throughout my parliamentary career. I agree with what he said about politics. It has been a great advantage to me to advocate such a policy. The results in Newport West at the last election show that if I had experienced the same swing against Labour as all my colleagues in neighbouring constituencies, I would not be standing here now.

I admire the present Prime Minister of Portugal, because he is a man of courage and principle. When he introduced his policy as a Minister, it was highly unpopular; indeed, it was not popular in his own party, and it certainly was not popular with the press or the public. However, he went ahead, and his policy is now supported by all parties in the Portuguese Parliament.

Yesterday, Joao Castel-Branco Goulao, Portugal’s drugs tsar, visited the House and gave an account of what happened when the country de-penalised all drugs. The law came into effect in 2001. By 2005, it had halved the number of drug deaths—imagine that! The procedure is complicated, and I will not go into it entirely, but the Cato Institute did an assessment of it, which was published in Time magazine last year.

Every outcome of de-penalisation in Portugal has been positive. Seizures of big quantities of drugs have increased greatly because the authorities are not bothering with tiny quantities of drugs for personal use. The prison population has decreased, which has saved a fortune in prison and court costs, and the use of every category of drug has been reduced. The policy has been a huge success.

The point that I want to make is that we are on the verge of a breakthrough and a positive measure. I do not want to repeat the old argument—I have wasted many hours on it—between the prohibitionists and the pragmatists, who have a go at one another before retreating to their own silos, with no progress having been made. There has been success, and I say that as the current chairman of the Council of Europe’s sub-committee on health and the Council’s rapporteur on drugs for more than a decade.

I have visited more than 20 countries to look at their drug policy, and put forward numerous papers. The one that will be a success is a new convention on drugs, which I introduced in 2005 and which has gone through the great whale of a bureaucracy in the Council of Europe and European politics. I believe that next year it will become a convention that all the 47 countries of the Council of Europe will be asked to ratify.

The convention has already been approved—unanimously voted on by 47 countries in the Council of Europe. It has had the approval of the Red Cross and 150 countries in the world have supported it. It has gone through the Pompidou Group, which has the reputation of being very conservative. Having had the approval of the Council of Europe, it is being assessed by two international think-tanks.

It is based on this: I despair of ever getting the Nordic view in line with the southern Mediterranean view, of Portugal, Italy and Spain—or of the Netherlands and Switzerland. That will not happen; but if the different views are regarded as circles, there is a point where they intersect. That point is where the convention will be built—on that common knowledge.

Everyone will disagree on many factors, at the extreme of each side. We shall not get people to agree on decriminalisation, I am afraid, in the foreseeable future; but we can get people to agree on stopping the waste of believing that the criminal justice system is a good-value, effective way of dealing with addicts. Every country in Europe knows it does not work, yet we pursue it and spend billions on it.

[Mike Weatherley]

The hon. Gentleman was talking about the Nordic view and Portugal; is he aware of the Swiss model? The four-fold approach that they have is:

“Prevention, law enforcement, treatment and harm reduction”.

Everyone in this House would, of course, agree that the last—harm reduction—is the ultimate goal.

[Paul Flynn]

I am very much aware of it. I did a scientific analysis some eight years ago of what was happening in drug production in four countries—Switzerland, Sweden, Britain and the Netherlands. It was an attempt to examine the effects and the level of drug abuse. On one point I disagree with my right hon. Friend the Member for Coventry North East: the level of drug use in Holland is lower than it is here. Sweden, from a very low base, had the biggest increase. The United Kingdom came out worst, and it remains the worst in all outcomes. Switzerland has tried a number of brave experiments, particularly in the way of prescribing heroin. That has been a great success as a way of reducing crime.

However, I want to mention our greatest failure internationally, and the one I feel despair about. I have addressed the Commonwealth of Independent States, the former communist bodies. The worst thing that has happened internationally on drugs concerns them, because when the Berlin wall fell, none of the communist countries had a drug problem; many had alcohol problems, but none had a drug problem. They came to us and said, “You in the west have had this problem for a long time. You guys know about it. What do we do? How do we deal with drugs?”

But instead of getting a formula in which we said, “Well, this has worked,” those countries got back a babble of conflicting views from all parts of Europe. They repeated our remedies and inherited our problems. Those states have 25 million addicts now. If we had adopted a model that worked 10 or 25 years ago, we could have handed it on. I believe that such a model exists in its best state in Portugal now.

I urge all hon. Members to approach the matter with an open mind. I have memories of previous debates of this kind, and in particular of David Mellor, in about 1990, announcing that we could be absolutely certain of one thing—that heroin use had peaked. We had about 90,000 addicts then. When I spoke on the subject about 18 months ago, the number was 280,000, and it is now 320,000.

I recall another debate—we used to have a three-hour debate on Friday mornings—when the Government and Opposition spokesmen had to leave the Chamber because they both needed a fix of the addictive drug to which they were enslaved; they both needed to go out and smoke. I am sure that later in the evening they would wander off to any of the 16 bars in this place, decrying young people’s use of drugs—with a cigarette in one hand, a glass of whisky in the other, and a couple of paracetamol in their top pockets for the headache that they were going to get the next morning.

We behave with hypocrisy and incompetence on drugs. I do not want to go into the wasted years that we have had, but can we just say where the United Kingdom is now, and put aside tabloid pressure? Let us forget about what people say, and the abuse that my right hon. Friend the Member for Coventry North East will get, and say we know what is right, and what works, and we know that the policies that we have pursued for 39 years have given us the worst drug problems and the worst outcomes in Europe.

We had tough policies in ’71. They did not work, so we had even tougher policies—and they did not work, so we went on again to still tougher policies. There were great plaudits for all the politicians putting them through. Each time, our problems went up and up. That has not happened in Portugal. In the Netherlands, there is some kind of control. The glamour has been taken away. The joy of forbidden fruit has been taken out of using cannabis. People can go to a cannabis café and have a cannabis cake with their grandmother. Where is the fun in that? Part of the attraction, here, is the illegality of drugs. Part of the problem, and the reason why people die here, is the illegality of drugs.

My right hon. Friend the Member for Coventry North East mentioned that people can, if they get control of their heroin and know its quality and strength, become heroin addicts and live into their nineties. Many people have. There are homes in the Netherlands for geriatrics who are heroin addicts. They can be maintained. People here who are unfortunate enough to be addicted must take their heroin from illegal sources, from those who produce products that may well be toxic or contaminated. They take them in unhygienic surroundings in a dark alley. That is why prohibition is killing people.

[Andrew Griffiths]

The hon. Gentleman paints a very rosy picture of people living a long and happy life on heroin. One of my constituents spent 30 years on methadone and has now been drug-free for two years. He has just celebrated his second drug-free birthday. He said he has wasted his life. The difference between his life on methadone and his life drug-free is like being born again. He is one of the strongest advocates of tackling the situation in which we park people on methadone for years on end, rather than, through rehabilitation, tackling the reason why they use drugs in the first place.

[Paul Flynn]

The hon. Gentleman is simplifying the problem. No one is in favour of people going on methadone for prolonged periods, but it does happen, and often it is preferable to the alternative. The point that the hon. Gentleman seems to miss is that a rich heroin addict can live almost without risk. We know of famous people—I shall not mention any names—who were heroin addicts all their lives and died in their beds at an advanced age. At the moment it is poor addicts who suffer, and who are in the position I described—exposed to street dealers and contaminated heroin.

I remember vividly, from the time of the 2002 Home Office report—I was kindly mentioned in the introduction—working with David Cameron, and attending the meetings. I remember his sharp questioning of a man called Fulton Gillespie, whose son had been killed by injecting heroin contaminated with talcum powder.

I had a hope that the generation now in government and opposition—I am sure that most members of the Cabinet and shadow Cabinet used illegal drugs in their university careers—would at least have the courage to see that the present policies are not working, and can never work. I hope that they go through the same realisation that my right hon. Friend the Member for Coventry North East has courageously undergone, and conclude that we have to have another policy. We should be able to agree on the extent of the failure.

The hon. Gentleman mentioned prisons, and one of his hon. Friends told me that he went to a prison where a prisoner explained that he had toothache and wanted an aspirin, but would have to wait until the next day to see a doctor for that aspirin. He also said that he could go out of his cell and obtain heroin, marijuana or cocaine within five minutes.

How many of our prisons are drug free? None. No prison in the country is drug free. If we cannot keep drugs out of prisons with 30-foot walls, what chance do we have of implementing a policy of prohibition to keep drugs out of schools and clubs?

[Andrew Griffiths]

We agree on that point, but the matter is much worse. The number of methadone interventions—prescriptions—to prisoners has more than doubled in just over three years. The problem is not just illegal drugs in prison; methadone is being prescribed more and more to keep prisoners quiet.

[Paul Flynn]

There seems to be a concentration on methadone as a solution. It is not. It is part of the problem. There is no way round it, except the nonsense of putting addicts in prison for their addiction. Nothing could be more counter-productive or a larger waste of money. I believe that that is in the convention that will be introduced next year. There is a universal view that we must move away from using the criminal justice system for treating addiction, and use health outcomes and treatment.

As sensible people, we must recognise the enormity of our continued failure, and get politicians of all parties together—the hon. Gentleman is secretary of the all-party group on drug misuse, and I welcome that—to recognise the courage of my right hon. Friend the Member for Coventry North East and how he has taken on interviews today. That will arouse the realisation, throughout the country and among all parties, that the only way of ensuring that we are not top of the league of drug deaths, drug crime and the other drug problems on this continent of ours is to learn from other people—including lessons from the Netherlands, and particularly the recent lessons from Portugal.

There is a better way. There is certainly no way practised by any country in the world that is worse than what parties on both sides have done for the past 40 years in the United Kingdom.

[Several hon. Members]

rose—

[Mr Charles Walker (in the Chair)]

Order. It is conventional that I now call an hon. Member on the Government Benches, but I am aware that Caroline Lucas must leave for a surgery, so I will call her now, although I will not make this a habit. I apologise to the hon. Member who has been waiting.

15:32

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

Thank you, Mr Walker. I appreciate that, and I am honoured to follow the hon. Member for Newport West (Paul Flynn) who is such an expert on this issue and speaks such good sense about it.

I congratulate the right hon. Member for Coventry North East (Mr Ainsworth) on securing the debate and on his position, which I believe is the right one and which my party has advocated for many years. My constituency is in a city that has the unenviable reputation of being home to the most drug-related deaths in the UK, so I have a keen interest in what can be done to reduce the harmful effects of drugs both on society as a whole and on individuals.

I shall start by saying a few words about what is wrong with much of the current drug policy, making a few references to the Government’s newly published strategy, and making the case for an approach that focuses on reducing the use of drugs and the harm they cause—treating addiction primarily as a health issue, rather than a criminal justice issue.

The facts about drug use are not new to anyone in the Chamber. In the UK, for example, the social and economic costs of class A drugs are estimated at more than £15.4 billion a year, and more than half of the 35,000 people in prison are thought to have serious drug problems, which put them there. Those facts should be the starting point for any strategy, which should be based on available evidence. Instead, much of our current approach is based on moral judgments against drug use and users. The Home Secretary falls into that trap in the Government’s drug strategy, which they published just last week. For example, she asserts that

“drug use in the UK remains too high”,

while failing properly to recognise that the greatest risk is not drug use per se, but the societal and individual problems caused by a prohibitionist response. Moreover, although there is, understandably and rightly, considerable fear about the impact of drugs, it cannot be allowed to dictate policy. Reducing drug-related harm is a public health concern and should be subject to the same sort of effectiveness and efficiency standards as other areas of public health.

Drug-related harm is caused partly by the nature of the drugs being used—not just their addictiveness—by the way in which they are acquired and used and by how society treats people who use drugs. Unless we develop an approach that seeks to reduce the harm associated with all those aspects of drug use, we risk perpetuating it, and that is what has been occurring since the current prohibition-based policy has been in place.

The matter is not as simple as saying that the war on drugs has failed to reduce drug-related harm; it is actually making it worse. Far from it being a neutral intervention, it often pushes people towards more harmful products and behaviour, and certainly more harmful environments. I am especially mindful that the poorest in society usually suffer most from drug misuse, but it is crucial to differentiate between the suffering caused by drugs and that caused by drugs policy. For example, the vast majority of drug-related offending is a consequence of drugs policy. The burglary, theft and so on to enable drugs to be bought at vastly inflated prices would be significantly reduced under a regulated system.

There is a growing view among the scientific community, as well as among politicians, the police and the legal profession, that we must move away from prohibition, which criminalises people, towards a health-based strategy that seeks to reduce drug use and drug harm through control and regulation. In an intervention, I quoted some of the experts who agree with that position.

All too often, alternatives to the current prohibition-based approach are depicted as a free-for-all, with drugs being readily available with no checks and balances, and with people being encouraged to become users. That is deeply irresponsible, because nothing could be further from the truth. I am certainly not advocating a free market in legalised drugs, and I do not believe that anyone else is. The legalised market exists for tobacco, for example, and it still exists to a great extent in some parts of the global south.

From a public health perspective, the free market approach is even more damaging than the unregulated criminal control of drug markets, with the aggressive promotion of consumption via marketing and advertising, all to the one end of maximising profits for legal commercial actors.

In fact, under the current system there is a free-for-all with no controls on who sells drugs, no controls on who can buy them and no controls on their make-up. Every drug supplier is, by definition, unlicensed, placing them beyond any form of state control or management. If we persist in burying our heads in the sand on this issue, we will miss the opportunity for the state to intervene to regulate and control the drugs market, properly to treat drug users, and to reduce the harm to users and society, all within an overarching framework of seeking to reduce drug misuse.

Poverty, social exclusion and inequality all have an impact on drug use and drug markets, so they must be looked at alongside policies on education, prevention, treatment and recovery. All too often, success in the so-called war on drugs is measured in terms of numbers of arrests or drug seizures, when we should be assessing whether harm experienced by individuals and communities is declining.

As the Home Secretary acknowledges in the foreword to the new drugs strategy:

“Individuals do not take drugs in isolation from what is happening in the rest of their lives”.

I welcome that recognition, and the strategy’s emphasis on the role of tackling disadvantage. In that context, it is important to note the work of the Equality Trust, which shows a clear and demonstrable correlation between drug use and inequality. There is a strong tendency for drug misuse to be more common in more unequal countries such as the UK.

[Mike Weatherley]

Does the hon. Lady agree that there is a small problem with the benefits culture, which often helps to perpetuate drug use?

[Caroline Lucas]

That is an interesting observation. Yes.

If the Government are serious about tackling drug abuse they also need to tackle inequality. Turning people with a medical problem into criminals, and burdening them with a whole new set of obstacles to overcome, seems particularly perverse and counter-productive. As well as tackling some of the social factors that contribute to drug use, we should tightly regulate the production, supply and use of drugs, as that is the most effective way to reduce drug harm.

Legal regulation of potentially risky goods is the bread and butter of Government, so it is logical and consistent to apply the same principles to drugs as those applied to alcohol and cigarettes, for example, or to imported toys and hair dyes. The Government are there to regulate potentially risky goods. Some of the most useful work on this issue that I have come across is from the Transform Drug Policy Foundation, which has published a “Blueprint for Regulation”. It starts by saying that it is helpful to know what regulation would actually look like, so that we can begin to outline different kinds of supply models. For example, it suggests prescription as one particular model, or pharmacies that have restrictions according to buyer age, the quantity of drug being bought, and the case specific concerns relating to potential misuse. One particularly appealing aspect of that approach is the scope to require pharmacists or licensed suppliers to offer advice about harm reduction, safer use and treatment services where appropriate.

I have had the privilege of visiting the RIOTT—randomised injecting opioid treatment trial—programme in my constituency. In case hon. Members have not heard of it, it is one of three trials to examine the effectiveness and cost-effectiveness of treatment with injected opioids, such as methadone and heroin, for patients who were dependent on heroin but did not respond to conventional methadone substitution treatment.

Some 150 people receiving oral methadone substitution treatment and injecting illicit heroin on a regular basis were recruited to the trial. Fifty of them were provided with optimised methadone medicine to take orally, and 50 were given supervised injected long-acting methadone treatment. The remaining 50 were given supervised injected heroin, with access to doses of oral methadone. They also received—this is absolutely crucial—one-to-one personal support and had people who worked with them, got to know them and gave them advice and support. All participants were followed-up for six months to enable researchers to compare the effectiveness and cost-effectiveness of the three treatments.

The main measure of the trial’s effectiveness was the proportion of participants who stopped using illicit heroin. In other words, they stopped trying to get dirty heroin from the streets. Laboratory urine tests allowed researchers to check if the heroin used had been prescribed or had come from the streets. Researchers also collected information about other illicit drug use, injecting behaviour, health and social functioning, criminal activity and so on. The results and the strength of the conclusion were amazing. They suggested that pharmaceutical heroin was far more effective in helping to stabilise people’s lives, get them off the illicit heroin and, crucially, to begin to reduce their overall drug use. The treatment was not just about keeping people on a particular dosage for ever, it was about enabling them to withdraw from ongoing drug use. I met participants on the trial who told me that it had saved their lives. It had given them back control of their lives, allowed them to kick crime, find their families again and, over time, reduce their drug use.

Professor Strang from King’s College London, one of the leading academics on the study, described its outcomes as follows:

“The RIOTT study shows that previously unresponsive patients can achieve major reductions in their use of street heroin and, impressively, these outcomes were seen within six weeks. Our work offers Government robust evidence to support the expansion of this treatment, so that more patients can benefit.”

I am pleased that the drugs strategy foresees a role for substitute prescribing. I call on the Home Office and the Home Secretary to ensure that the results of the RIOTT programmes are properly factored into the analysis, and that such programmes are made more available across the country. The trials are an example of the regulated use of a drug that is otherwise prohibited. They provide a useful, albeit limited, example of how regulation can enable users to become prescribed users, rather than street users, thereby illustrating some of the benefits of regularising the supply route and decriminalising drug use.

I would like to address the issue of cost, which has been mentioned several times. Some people argue that programmes such as RIOTT are extremely expensive, but I would like to look at the other side of the equation. Given the cost of following up drug-related crime to the police, or the cost to the NHS, approaches such as that of the RIOTT programmes are far more cost-effective than the continuing prohibition that we see today.

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

I apologise for not being in the Chamber at the beginning of this important debate and I welcome the opportunity to discuss this issue today. The hon. Lady sets out an alternative approach to tackling the drugs problem. Does she agree that, whatever policies are advocated, it is essential that they are properly assessed for their effectiveness in reducing crime and improving health, and that they should be based on sound science and regularly reviewed after implementation to check whether they continue to be effective?

[Caroline Lucas]

I agree with the hon. Gentleman that our position needs to be based on science and evidence, and regularly reviewed. It is precisely that kind of approach that characterises the RIOTT programmes that I mentioned. I have seen the results in my own constituency and I passionately hope that such programmes will be made more available across the country.

In conclusion, hon. Members will appreciate that to consider the legal regulation of drugs represents a huge shift in thinking. As such, any regulation should be brought in slowly and carefully, step by step, with each phase properly assessed before moving on to the next one. I mentioned earlier that, sadly, any debate on drug strategy is all too often derailed by knee-jerk reaction and an assertion that attempting to question the existing prohibition-based approach is tantamount to dishing pills out like candy to school children.

I hope that hon. Members will not take that kind of simplistic approach today. I am sure that they will not as the nature of the debate has been very constructive. I hope that we can build a cross-party approach to drug regulation that will be open to learning from the example of countries such as Portugal, which primarily treats drugs policy as a health concern. I would certainly advocate an entirely joined-up approach to drug abuse under the auspices of a single unit in the Department of Health, rather than, as at the moment, the Home Office. I hope it is clear that being in favour of drug controls is entirely consistent with the objective of reducing drug-related harm, and that continuing to support prohibition actively works in the other direction.

15:47

[Andrew Griffiths (Burton) (Con)]

Thank you for giving me the opportunity to speak in the debate, Mr Walker.

It was not my intention to speak today, predominantly because I was due to go back to my constituency this evening, where I was to present awards to 250 drug addicts and recovering drug addicts and their families at an event run by the Burton addiction centre, which I am lucky to have in my constituency. I received a call this morning from one of my constituents, a young man called Jamie, who for many years had been a prolific user of heroin and many different substances. He has been drug free for three years because we in Burton are lucky to have an abstinence-based programme at the Burton addiction centre that aims to help change people’s lives in a way similar to the scheme mentioned by the hon. Member for Brighton, Pavilion (Caroline Lucas). People’s lives have been changed.

Jamie rang me to say that he had heard on the news what is being advocated by the right hon. Member for Coventry North East (Mr Ainsworth). He told me to ask him this: on the day that drugs are legalised, will he arrange for the police van to arrive at Jamie’s house, put on the cuffs and take him to prison? If that does not happen, Jamie guarantees that he will be dead in six months. He said that not as a knee-jerk reaction, but as someone who has experienced the devastating impact of heroin abuse, and has had the ability, the support and the power to get himself clean and to get his life back.

[Mr Ainsworth]

Neither I nor anyone else proposes to force the hon. Gentleman’s constituent to start taking drugs again. As he believes in an abstinence-based policy—the new Government’s policy—I will ask him the question that I asked the Minister. How many years will he give the policy to make a difference? We are at the end of 2010 and he and I might be here in a couple of years’ time. How many years will he give the policy to make a real difference?

[Andrew Griffiths]

The policy is making a real difference in my constituency now. If the right hon. Gentleman comes to see this evening the 250 people in my constituency who, along with their families, have gone through an abstinence-based programme, he will see for himself that it works. It changes lives; it changes communities. He says flippantly that he will not force anyone to take drugs. That fundamentally shows that he does not understand addiction. The issue is not that someone would be forced to take drugs, but that they would be freely available. Every time someone went into the town centre, they would be able, if they were feeling down, to go to their chemist or doctor and get a hit of heroin or cocaine. Drugs would be much more readily available. The right hon. Gentleman does not understand that one of the major problems for addicts is removing themselves from the circle of friends, from the community, that leads to their drug use. All too often, people fall into drug use because friends, colleagues or associates are using drugs. Because of that, they get hooked; they get addicted.

Of course the right hon. Gentleman is well intentioned. I have always known him to be a thoughtful and considered person, but in advocating either licensing or prescription, presumably on the NHS, for heroin and cocaine, he fails to understand addiction and the way in which it works.

Let me read out an e-mail that I received this morning from a young lady who is a recovering addict. She says:

“Addiction is extreme. Doing everything to the extreme. Getting out of it and constantly chasing that buzz. Addicts don’t just use one drug, they use many drugs and alcohol to get out of it. One bag of heroin was never enough. Prescribe me one bag and I would want two. Give me two and I want three.”

When we hear from addicts and see the situation in which they find themselves, we can understand their concern. It is not easy to tackle an addiction. We recognise that that is one of the most difficult things that people can do. But when it comes to the idea that making drugs more accessible to people will in some way solve the problem, the addicts I talk to regularly just do not agree with the right hon. Gentleman. I urge him to come and talk to the all-party drugs misuse group. We will give him a good hearing. We regularly hear from dozens of very committed people who are involved in real drug treatment. Some advocate maintenance and some advocate abstinence programmes, but they are all actively involved in, as the hon. Member for Brighton, Pavilion says, trying to give people back their lives.

The right hon. Gentleman prays in aid the Transform organisation. That is a think-tank and a lobby group, but it does not help people overcome addiction. It does research and it talks to people, but it does not help people, on a day-to-day basis, deal with the effects of addiction. I urge the right hon. Gentleman to talk to people who are working with addicts day in, day out, to understand their very real concerns.

I am not going to hide away. I went on television today and said that I thought the right hon. Gentleman was not just wrong, but reckless and dangerous, because the message that is being sent out that drug use is acceptable in some way is simply wrong.

[Mike Weatherley]

Surely one of the reasons why we are having this debate is to have a frank and varied discussion. Does my hon. Friend agree that we need an independent review? We all agree that drugs are harmful and we would like to reduce their use in society. In my constituency, 70% of all crime is related to drug use. We need to stamp that out. I made the point earlier that the benefits culture perpetuates drug use. Many people are trapped in such a situation. Surely an independent review of the best way to make progress cannot be objected to; it must be a good thing.

[Andrew Griffiths]

My hon. Friend is well intentioned. I do not know whether he thinks that no one considers these things. I do not know whether he thinks that despite the thousands of people involved and the millions—indeed, billions—of pounds that are spent on trying to find a solution to the drug addiction problem in our country, someone has not at some stage sat down and considered whether legalisation would be a good idea, but I can assure him that they have. I do not want to send a message to young people that drug taking is an okay thing to do. The hon. Member for Brighton, Pavilion can tut, but in my constituency I have seen families who have been devastated by drug deaths. I have seen people young and old who are living with addiction. I am sure that the hon. Lady has, too.

[Caroline Lucas]

I apologise for tutting, but the reason why I was tutting is that I do not think that any hon. Member is suggesting that we want to give a message that drugs are okay. One of the things that hinder the debate is attributing to one another positions that we do not actually espouse. We all start from the point of saying that drugs are causing harm in society. The question is this: how do we best reduce that harm? It is fairer to accept that all of us are driving towards that aim.

[Andrew Griffiths]

I absolutely accept that the hon. Lady is well intentioned, but the right hon. Member for Coventry North East this morning advocated licensing or prescription of heroin and cocaine. What does a parent say when they see a senior politician saying, “We should license these drugs”? The nuances of the argument about a debate and a discussion are lost on young people, who may this very weekend be thinking about whether to try drugs for the first time.

[Caroline Lucas]

What confuses young people is mixed messages given out by Governments, people obviously being hypocritical about drug use and so on. We should not underestimate young people’s ability to understand this debate, and they will have a much better chance of understanding it if we are all straight with one another, rather than hiding behind positions that none of us is really espousing.

[Andrew Griffiths]

I could not agree with the hon. Lady more. We talk about mixed messages. The right hon. Gentleman asked about the assertions that I made about the impact of downgrading cannabis. I point him to Hansard for 1 April 2009 and the answer to a question asked by my hon. Friend the Member for Broxbourne (Mr Walker), with the reference number 267674. It shows that the number of patients treated by the NHS for cannabis use in 2004-05 was 13,408 and that three years later, that had increased to 26,287.

I think that we need to move on and talk about the impact of the approach that the right hon. Gentleman advocates. He advocates prescription for heroin or for cocaine. Of course there is already the prescription of methadone and similar heroin substitutes, and I think that we all accept that that has been a complete failure. The aims were good, and I recognise the need to minimise harm and stabilise people. That is very important, which is why it remains a key part of the drugs strategy as outlined by my hon. Friend the Minister. However, the public think that our drugs strategy should be fundamentally about getting people free from drugs—getting them off their addiction. We are misleading the public when we say that it is okay to take drugs. It is true that, as was said, some people live a long life as a heroin addict. Some people live for 20 or 30 years on methadone, as I said was the case with my constituent. However, that is not something that I would want for a member of my family or for a friend or colleague. Stabilisation—harm minimisation—should have an impact in the short-term, but we all have to be more ambitious about moving to recovery thereafter.

[Mr Ainsworth]

If a child, grandchild or relative of mine had a serious addiction and was in a place where rehab would help, I would pay for it—I do not disagree with the hon. Gentleman. He should not think that I am naive or devoid of life experience—I am not. However, the Government will not pay for rehab on the scale necessary.

[Andrew Griffiths]

I do not want to steal the Minister’s thunder, but I think he will outline how payment by results and changing the culture of how we treat drugs and drug rehabilitation can deliver the outcome and be more cost effective. I invite the right hon. Gentleman to visit the Burton addiction centre in my constituency, where the programme is not only cost-effective, but so cost-effective that GPs pay for beds because they see the impact it has on difficult patients, who were in a revolving door, going in and out of their surgery. A proper abstinence-based rehab programme, with support for both them and their families, makes a massive difference to GPs’ health budgets. The right hon. Gentleman shakes his head, but he should come and see some of these projects before he dismisses them.

[Mr Ainsworth]

I was drugs Minster for two years.

[Andrew Griffiths]

It is true that the right hon. Gentleman was drugs Minister for a number of years, and I understand that the drug problem increased in every one of them.

[Tom Brake]

Earlier, the hon. Gentleman said that all the Transform organisation did was research. Does he feel that there is already sufficient evidence on the effectiveness of abstinence programmes versus substitution programmes, or prohibition versus the licensing scheme that the right hon. Gentleman proposed?

[Andrew Griffiths]

The hon. Gentleman raises an important point. It is true that we do not yet have enough evidence on the success of abstinence-based programmes, which is why I am encouraged that the Minister is going for a pilot project in the drugs strategy. I am evangelical on the benefits that proper rehab in an abstinence-based programme can have, but we need to be able to prove that it works. I accept that. Not only am I confident, but the providers and the clients who have been through these programmes are confident that this is a radical change to the drugs strategy and the way we treat drugs. The simple fact is that I agree with the right hon. Gentleman that we cannot continue along the path on which the Labour Government set us.

Last year we spent £235 million on methadone—that is just on the drug, not the prescription or related services—to treat 154,000 methadone users. That £235 million is the equivalent of spending £500 a minute on methadone. It would pay for 11,000 NHS nurses. That puts into perspective not only the costs to society in crime and anti-social behaviour, but the costs in numbers of a purely maintenance-based programme that is simply failing. I say that it is failing because 95,000 of those 154,000 people who received a methadone script last year were still on the script a year later, and more than 25% of them would have been on methadone for four years. The idea that a maintenance programme is a short-term thing that gets people drug free is not correct. It is clearly not working, which is why we need this fundamental shift in our approach to drugs.

I agree that we have lost the war on drugs to date, but I do not think it is inevitable that we have to raise the white flag and accept that heroin and cocaine will be prescribed or sold in our communities. I say that because those dealing with these things on the ground have warmly welcomed the different approach laid out by the Minister. As I said in my all-party group, a number of very cynical and concerned charities, voluntary groups and organisations involved at the sharp end of dealing with addiction have warmly welcomed the change in approach. They recognise that we cannot continue with the current failed policy.

We win the war on drugs by improving rehab, giving people a recovery-based programme and being optimistic and bold about what we can help them deliver. It is about much more than rehab. It is about helping people deal with the chaotic lives they lead as drug users. It is about ensuring that people have the support of their family, and that their family recognise and understand the process, and that they have access to good health care, a safe home and opportunities. We must ensure that we do not simply expect people to go into the same community, where they had been shooting up for the previous 10 years, after a four-week detox programme, and think that they have their lives back together. It is about ensuing that we give them an opportunity to get back into work, have work experience or work in the community. All those things are very important.

I will draw my contribution to a close, but I wish to say that I do not believe for one moment that the solution to our drug problem is the one advocated by the right hon. Gentleman. I do not want to see prescriptions for heroin or cocaine issued in my constituency, and I know that many hon. Members feel exactly the same. We have a blueprint in the Government’s drugs strategy for fixing the mistakes made by previous Administrations, and many of us are completely behind what the Minister is trying to do.

16:07

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

It is a pleasure to serve under your chairmanship this afternoon, Mr Walker. I congratulate my right hon. Friend the Member for Coventry North East (Mr Ainsworth) on securing the debate. I note his great success in getting his views and comments widely trailed in the media. Despite the fact that it is the Thursday before Christmas and we are on a one-line Whip in the House, the debate this afternoon has had a great deal of attention.

All Members know from our work in our constituencies that drugs cause misery to people and thwart the opportunities and life chances of not only the individual, but family members. They sometimes blight whole communities. However, when looking at drugs in the UK, it is important to remember that we have had some successes. For example, the coalition Government’s strategy refers to the fall of a third in the last decade in young people’s rates of drug use. The importation of cocaine has also been disrupted.

As my right hon. Friend said, there has been a great deal of investment in treatment for people with drug problems. He is a very distinguished Member, with, as he explained, experience as a drugs Minister. It is right that we should all welcome the opportunity for a considered and mature debate on drugs policy.

My hon. Friend the Member for Newport West (Paul Flynn) spoke with great passion and knowledge about his experience in European countries. The hon. Member for Brighton, Pavilion (Caroline Lucas) talked about her interesting experience looking at the RIOTT trials, and about what we can learn from them. She also addressed the matter of tackling inequality when thinking through drugs policy.

My right hon. Friend the Member for Coventry North East has set out his approach, but it is not one with which the Opposition agree. There have been headlines and a great deal of newspaper copy today, but the topic has been reported in far too simplistic a way to deal with the complexities of the drugs problem we face. The issue is not straightforward; there are many different—and respected—views on the way forward for drugs policy in this country.

My right hon. Friend the Member for Doncaster North (Edward Miliband), the Leader of the Opposition, commented today:

“I am all in favour of fresh thinking on drugs. I don’t agree with him”—

referring to my right hon. Friend the Member for Coventry North East—

“on decriminalisation of drugs. I worry about the effects on young people, the message we would be sending out.”

That is an interesting point. We do need to have fresh thinking, and we need to keep the area under constant review.

This debate is timely due to the recent publication of the coalition’s drugs strategy for 2010. We have also had the Second Reading of the Police Reform and Social Responsibility Bill in the House of Commons this week. That includes clauses specific to drugs policy, which I will address later.

The Opposition share the coalition’s broad approach to drugs strategy, building on the pillars of preventing drug-taking, disrupting supply, strengthening enforcement and promoting treatment. There is a lot on which we can agree. However, the strategy marks a departure, from the previous focus on reducing the harm caused by drugs to a focus on recovery as the most effective route out of dependency. We want to look at that further and examine what that would mean.

It is important to note that the Home Secretary, in her foreword to the drugs strategy, states that during consultation the Government looked at the issue of liberalisation and decriminalisation, but decided that that was not the answer—that it fails to recognise the complexity of the problem and gives insufficient regard to the harms that drugs pose.

I want to explore the drugs strategy a little further and test some of its statements against the reality of the current policies being put forward by the coalition Government in areas such as health, education, benefits and criminal justice. The backdrop to the strategy was the announcement of the comprehensive spending review and the budgets that will be available to the pubic sector over the next few years. I focus particularly on the budget allocations to the police, local authorities, the NHS and the education sectors. They all have a very important role to play in drugs policy.

In line with the coalition’s general thinking, the strategy features a move away from a top-down to a local decision-making approach—the localism agenda. I hope the Minister can reassure me and other hon. Members that good practice, which does exist around the country now, will continue to be spread and that we will not see only pockets of good practice, with the rest of the country left to mediocre practices. I hope the Minister can reassure me about that, based on this new local approach.

There are three areas on which I want to comment. There is the issue of reducing demand. We know from research that people from backgrounds in which they face problems, such as homelessness, unemployment or exclusion from school, are more likely to take drugs.

There are policies in the strategy that include a great deal about early intervention and getting to those groups early on to stop them from taking up drugs. There is mention, for instance, of the 4,200 additional health visitors that the coalition Government will have in place by 2015. That is all well and good, but I am concerned about how we are to train those additional health visitors, and also about where the money is to come from for those additional professionals.

The situation is the same with Sure Start. The strategy mentions Sure Start and the coalition Government recognise the important role that Sure Start and children’s centres play. We all know that the funding of the 3,500 that were opened under the previous Labour Government will now go to local authorities and will no longer be ring-fenced. As local authorities are under huge pressures to balance their budgets, I ask the Minister to look carefully at whether the role of Sure Start and children’s centres will be as effective as the strategy sets out, with reduced resources.

There is also mention of the national programmes of support for families with multiple problems. Again, I hope that that money will be protected. Pilots of those programmes are showing very good results. Will the Minister respond by saying how he will secure the resources to ensure that that category of early-intervention project is as effective as it can be?

I want to mention education. All of us recognise how important drugs education is. My right hon. Friend the Member for Coventry North East mentioned FRANK, which he was pleased to hear was still going. That is right, and most people accept that the initiative has been a success. However, drugs education has to be more than just a website. We know the important role that schools play in getting messages across to young people. I am concerned about the changes that we are seeing in the education sector—the move to a narrower academic approach in schools, moving away from the Department of Children, Schools and Families’ approach, which was about Every Child Matters and championing the well-being agenda. That seems to have been sidelined within schools with the new approach of the Secretary of State.

Will the Minister reassure me that drugs education will remain an important subject in schools? I was deeply disappointed that at the very end of the previous Parliament, the Conservative party blocked personal social and health education from becoming a statutory, compulsory subject in schools. PSHE is a good vehicle for ensuring that drugs education is present and effective in the educational setting.

My hon. Friend the Member for Gedling (Vernon Coaker), a former drugs Minister and schools Minister, made it clear to me that if teachers are expected to provide good drugs education, they need training, resources and the use of external experts to come and talk to children and young people. That all takes resources and I am concerned that those may not be available to schools and head teachers.

I wanted to pick up one other point on education, which is in the section of the strategy dealing with reducing demand, and encouraging young people to stay in education and obtain qualifications to help them get employment. There is one section that deals with educational opportunities and talks about supporting children and young people from disadvantaged backgrounds to stay in education. I read that and thought it did not fit well with the coalition Government’s current policy to remove educational maintenance allowances. That has a direct effect on some of the disadvantaged communities, where drugs have been a problem. As a number of hon. Members have already said, the removal of the EMA is a real problem when trying to encourage young people to stay on up to 18.

I move on to restricting the supply of drugs. The strategy is building on the good work over the past few years and relies on a number of factors. One is around good neighbourhood policing, and of course we have seen additional police numbers over the past 13 years. We now face a 20% cut to police budgets. PCSOs, who often provide an effective presence on the streets, will have their numbers cut. Again, I seek reassurance from the Minister about how the strategy will deliver, given that reduction in resources. Under the Police Reform and Social Responsibility Bill, which had its Second Reading earlier this week, police and crime commissioners are to set out the strategic direction for police forces. When the Bill comes to its Committee stage, we will want to consider the possible conflict between reduced resources and the fact that police and crime commissioners will probably want to play a part, encouraging the police to join them in partnership working. It will be difficult for police commissioners to square that circle of not having the resources needed to provide effective partnership working.

Legal highs are mentioned in the Police Reform and Social Responsibility Bill. The Minister knows that there is common cause on tackling legal highs, as there have been a number of debates on the subject over the previous few months. There is common cause not only because it is the right thing to do; the previous Government began the journey, and the present Government are continuing on a similar line. What is proposed in the Bill will prevent manufacturers from tweaking compounds to stay ahead of any ban.

The chair of the Advisory Council on the Misuse of Drugs says that the Bill permits a systematic approach, which is to be welcomed. Clause 149 of the Bill allows the Secretary of State to introduce temporary class drugs orders to deal with the problem of legal highs. Overall, we support the proposal, but we shall want to examine it further in Committee. The matter was raised in a previous debate, but will the Minister give some indication of the cost of legal highs’ being banned for up to 12 months?

I turn to the question of building recovery in communities, the individual tailored approach set out in the document. Although it is recognised as important, I hope that there will be true recognition of the need for different approaches, and that they will be deemed equally valid. For some people, moving on to methadone and remaining stable and able to function as members of the community may be seen as a positive result, whereas for others being entirely drug free will be the right goal.

I do not agree with the hon. Member for Stroud (Neil Carmichael). He seemed to imply that we did not need to have a range of treatments, although he spoke passionately about the Nelson Trust and the excellent work that it does. The hon. Member for Burton (Andrew Griffiths) spoke about the Burton addiction centre, and told us about Jamie’s view of the situation. However, I believe that we need a plurality of approaches. We cannot have a one-size-fits-all approach for something as complex as dealing with drug treatment. Martin Barnes, the chief executive of DrugScope, said:

“The aspiration for treatment and recovery is to be applauded, but the challenge will be ensuring that high level ambition is delivered and sustained locally, not least at a time of policy change, uncertainty and spending cuts.”

The massive reorganisation of the NHS means that PCTs will be going and that GPs will hold 80% of the NHS budget. Along with the creation of the national public health service, and local authorities taking on the public health role, the way in which much of the public sector is to operate will be a constantly moving feast. I understand that public health money is to be ring-fenced, but it is unclear exactly how much money local authorities will have for dealing with public health matters in their areas. I believe that directors of public health will commission services locally. The services will be competitively tendered and rewarded, and there will be transparency about the performance of any drug treatments contracted for.

We heard earlier in the debate about payment by results. I hope that we will be able to explore that question further, and to discover how the pilots, which will be created by 2011, will work. We need more detail about how they are to be judged successful. Will it be if people become drug free, or if they are merely stable and able to function on methadone? We need that information.

[Andrew Griffiths]

The hon. Lady raises a point that is crucial to the success of payment by results. The danger is that certain providers will cherry-pick the easy-to-cure addicts, and that the more difficult and complex cases will be abandoned. Does she agree that we need to ensure that providers that deal with the toughest cases should be properly rewarded?

[Diana Johnson]

We will want to look carefully at the pilots and exactly how such problems might be dealt with. There must be an imaginative way of dealing with that matter, but we need more detail. The strategy sets out in broad terms what the Government want to do, but the hon. Gentleman is right.

There is also the question of prisons and the criminal justice system. Reference has been made to the proposals in the Green Paper published by the Secretary of State for Justice. It is worth pointing out again that resources and funding will be required. For the approaches that the majority of Members want to see put in place, the important question is where the money and resources will come from.

We also need to deal with the social issues set out in the strategy, such as the reintegration of former drug addicts so that they can obtain housing and employment. Such matters sit uneasily with some of the proposals made by the coalition Government on housing, housing benefit and changes, and that may cause problems for people returning to work. Those matters, too, need to be considered.

As my right hon. Friend the Member for Coventry North East said, clause 150 of the Police Reform and Social Responsibility Bill will remove the requirement for certain appointments to the Advisory Council on the Misuse of Drugs to have a scientific background. It will remove the requirement set out in the Misuse of Drugs Act 1971 to include those with wide and recent experience of medicine, dentistry, veterinary medicine, pharmacy, the pharmaceutical industry and chemistry, and those with experience of the social problems caused by drug abuse. That approach rather undermines the view of the Minister for Universities and Science, who wrote into the ministerial code the principles for respecting independent advice—including scientific advice, obviously and importantly.

The Liberal Democrats seem to be in some difficulty on this question. The hon. Member for Carshalton and Wallington (Tom Brake) raised it in an intervention, and the hon. Member for Cambridge (Dr Huppert) has tabled EDM 1148. The problem is that the Liberal Democrat 2010 manifesto says that drugs policy should always be based on independent scientific advice, including making the ACMD independent of Government. There will be some discussion in the coalition about how to deal with that, as it seems that that pledge is in danger of bring broken.

I look forward to hearing from the Minister, and particularly to his answer to the question posed by my right hon. Friend the Member for Coventry North East on evaluating the success of the drugs strategy, and at what point we can have a further debate to consider whether the strategy has worked.

16:28

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

Thank you, Mr Walker, for presiding over this Westminster Hall debate on drugs policy, and for giving me the opportunity to speak on a subject that I know is of real concern not only to right hon. and hon. Members in the House, but to communities throughout the country.

It is obviously a timely debate, given that the coalition Government launched their new drug strategy on 8 December. The development of the strategy was supported by a targeted consultation exercise in the autumn, which generated more than 1,800 responses. That shows how seriously people take the matter, and how important it is that the Government get their drug policy right. We have worked hard to achieve precisely that.

I congratulate the right hon. Member for Coventry North East (Mr Ainsworth) on securing today’s debate. It is right that we should debate these issues. Although we may disagree with the approach, it is, I think, an honest disagreement on the basis of emphasis, priority and what is likely to be most effective. In no way would I impute anything other than honourable intentions to the approach that he seeks to bring this afternoon. None the less, there is clearly a difference of opinion across the House and probably across his own party. Although he clearly brings passion and belief to the debate, I genuinely disagree with him on a number of issues that he has raised this afternoon.

On the issue of the criminal justice system, I ask the right hon. Gentleman to reflect on recent developments. The hon. Member for Kingston upon Hull North (Diana Johnson), who speaks for the Opposition, has just highlighted the issue of legal highs. One of the challenges that the Government have faced was the perception that because a drug was legal it was safe, and the way in which that was interpreted by many young people.

Putting a legal framework around some of the newly emerging psychoactive substances did have an effect. It reduced demand. It telegraphed very clearly that these were dangerous drugs and could significantly harm health. That in itself provided a significant public health message as well as a criminal justice framework around both supply and possession.

This is a changing environment. Issues and challenges are emerging to which the Government must respond. Indeed we need to look at why people become addicted and why they become involved in drugs in the first place. The problem is complex and cannot be resolved by looking at criminal justice in isolation. Other factors must be taken into account, such as intergenerational deprivation and treatment pathways, which we emphasise very clearly in our drugs strategy.

I genuinely welcome our discussion and the approaches that right hon. and hon. Members have brought to it this afternoon. As for the notion that our proposal on the Advisory Council on the Misuse of Drugs is silly—that was probably the one pejorative phrase that the right hon. Gentleman used during the course of his contribution this afternoon—let me say to both the right hon. Gentleman and the shadow spokesman that its existing framework is a matter that has merited our careful consideration. Our proposal should in no way be characterised as Government not wanting to receive scientific advice.

As hon. Members will know, there are different types of members of the ACMD: the statutory and non-statutory members. We are not convinced that drawing that distinction between the two is necessarily sensible. Equally, the need for scientific and other expert advice has changed over the years. Indeed, the science itself has changed, and it is important to have flexibility in the arrangements on the construction of the ACMD. That was the purpose that lay behind the provisions in the Police and Social Responsibility Bill.

The ACMD was supportive of the proposal. It acknowledged that it is questionable whether the statutory positions in the Act correlate with how the council now operates. It considered that the proposed change was particularly important given the introduction of the temporary bans and the need to provide advice within short timeframes.

The chief scientific adviser to the Home Office, Professor Silverman, has also consulted the wider scientific community and garnered broad support. The flexibility of bringing different expertise to the ACMD as the drugs landscape changed was welcomed. Those consulted were the Academy of Medical Sciences, the British Academy, the British Society of Criminology, the Royal Pharmaceutical Society, the British Pharmacological Society, the Royal Society and the Royal Society of Medicine. The proposals also had the support of Sir John Beddington, the Government’s chief scientific adviser.

I just want to put it on the record that this is in no way seeking to undermine or weaken the scientific approach that we wish to take over the formulation of drugs policy. We very much value the scientific input and the relationship that we have with the ACMD in the formulation of policy. That is very important and I would not wish in any way to give the impression that the Government were, in some way, not looking to scientific advice or input or not having that expert involvement in the formulation of policy. It is important that I state that this afternoon.

There were some good contributions by a number of hon. Members this afternoon, which highlighted the various different treatment providers in their constituencies. I welcome the work that is undertaken in that regard. When I come on to the main body of my speech, I will set out some of the themes that have emerged from the strategy, explaining how we wish to develop them further.

The right hon. Gentleman challenged me on the evaluation and asked how long we are seeking to pursue the policy framework that was set out in the drugs strategy. Let me say that this is the Government’s drugs strategy for this Parliament. None the less, let me draw the attention of the right hon. Gentleman to the penultimate paragraph of the drugs strategy, which makes it clear that we are committed to reviewing the strategy on an annual basis.

Such a review will allow us to respond to new and emerging evidence and to respond flexibly to the changing nature of the drugs trade and the outcomes being achieved. That is something that we have underlined along with the need to ensure that we consider the newly emerging evidence as it moves forward.

[Mr Ainsworth]

I thank the Minister for his firm support for continued scientific input on the advisory committee. In the annual report, if there is no evidence of decreased availability, of an improvement in drug problems in the country next year, is he prepared to consider other prohibition?

[James Brokenshire]

I do not intend to have an annual debate on decriminalisation. What I want to see is the emerging evidence. Some of the issues that are raised are sometimes on the basis of supposition and assertion and we will look at any clear evidence that appears. I have been considering this issue for quite some time, as I know that the right hon. Gentleman has, and the comments that I make this afternoon are made not because I am on the Front Bench or the Back Bench, but because they are honestly held views. We are simply not persuaded by the arguments on decriminalisation because we feel that it will increase supply, that it does not take account of the complexities of the drug problem—why people become addicted to drugs in the first place—and that it could make the situation worse. It is a question of looking at the outcomes of our policy.

The pilots around payment by results will be introduced during the course of this year. It would be premature to expect results over the course of 12 months. This is a five-year strategy—or a four-and-a-half-year one now. We will be considering not only the interim outcomes that will be produced by the strategy, but the evidence and the performance that sits alongside the course of the strategy as it is implemented. That is the responsible and sensible thing to do.

The right hon. Gentleman said that drugs have become a party political football, but I believe that they are becoming less of that. I certainly welcome some of the comments that were made this afternoon by the hon. Lady who speaks for the Opposition in relation to the approaches that have been set out in the new drugs strategy. I also appreciate the welcome that has been given to our proposals for dealing with legal highs and the temporary bans that are suggested in the new Police and Social Responsibility Bill. I hope that even this afternoon we are having a measured debate, even if we disagree on some of the themes and issues that are being debated. It is important that we have a sensible and measured debate, even if we may fundamentally disagree on some issues. At least it sets a measured framework around the discussion of some of these themes, which I know is sometimes difficult to achieve in debating what is a sensitive issue that often provokes a number of passions.

I would also take issue with the claim that the approach on enforcement is not capable of working, especially when one considers that the quality of cocaine on the streets is, in some cases, as low as 10% in purity at the moment. That shows some of the very effective work that is taking place, both in-country and also upstream back to places such as Latin America, where cocaine—from coca production—comes from, as I know that the right hon. Member for Coventry North East will know very well. When I visited Latin America at the end of September, I was very impressed by a number of measures that Governments in that region are undertaking, not only to tackle production but to undermine and take very clear action against the organised crime groups that do harm in this country as well as in Latin American countries. That co-operation between countries on enforcement and on sharing intelligence is a very effective way of responding to some of the organised crime groups, including seizing assets and using such powers more effectively to get at what is driving a number of those groups. I know that right hon. and hon. Members will have seen that that has been a theme that we have developed clearly in the drugs strategy itself.

The new drugs strategy is a critical articulation of our reform programme and work to tackle the key causes of societal harm, which include crime, family breakdown and poverty. It sets out a different approach to tackling drug use and dependence. The difference from previous strategies is the focus on the key aim of supporting and enabling those who are dependent on drugs and alcohol to recover fully, and the strategy places responsibility on individuals to seek help to overcome their dependency. Alongside our holistic approach to supporting people to overcome their dependency, we will also be reducing the demand for drugs, by taking an uncompromising approach to crack down on those involved in the drugs trade and shifting power and accountability to local areas to tackle the damage that drugs and alcohol dependence cause to communities.

The strategy sets out two high-level ambitions; first, to reduce illicit and other harmful drug use, and secondly to increase the numbers of individuals recovering from their dependency on drugs and alcohol. I think that we are seeing a changing pattern in what the experts would describe as polysubstance abuse; drugs are not being taken in isolation, but are being taken together. That is why it is important in the treatment framework to ensure that alcohol is part of that treatment platform. These ambitions will be achieved through activity that will encompass three themes: reducing demand; restricting supply, and building recovery.

On reducing demand, we will focus on establishing—

[Andrew Griffiths]

I think that the vast majority of those involved in drug treatment recognise that it will take a while—a period of time—to see meaningful results. We have to change the ethos in relation to recovery and we have to up-skill a work force and teach them the new skills that they will need. I think that the right hon. Member for Coventry North East (Mr Ainsworth) is the only person who is looking for a quick fix.

One of the elements that is very important is the role of those people who are in recovery in the community. In my own constituency of Burton, what has been a huge success has been the fact that addicts in recovery are going out and being advocates for not taking drugs. They are going into schools and educating young people, which is far more powerful than the Minister or somebody else standing up and saying, “You shouldn’t take drugs.”

[James Brokenshire]

I agree, and the issue of champions is developed in the strategy; I hope to discuss it shortly. Having visited the Burton addiction centre, I know that the approach of detox, rehabilitation, recovery and resettlement really takes people down that pathway. Equally, using the 12-step programme and then receiving ongoing support from other community and voluntary sector organisations can work in responding to and dealing with those challenges posed when people relapse. It is important to have the support in the community to support those people and deal with those situations.

We will focus on establishing a whole-life approach to prevention and breaking intergenerational paths to dependence. Under this theme, we will focus on early years prevention, particularly for those families with multiple needs, to improve children’s life outcomes. On that point, we are establishing the early intervention grant, to bring together funding for services for the most vulnerable children and young people. It will be worth around £2 billion by the end of the period that we are talking about, including funding for family support, Sure Start and targeted youth support. Further detail about how we expect that money to be spent will be made available shortly. I am sure that the hon. Member for Kingston upon Hull North will be looking out for that information in response to the questions that she posed in her contribution this afternoon.

Alongside early prevention, good-quality drug and alcohol education and information will be provided to young people, families and parents, through schools, as part of their pastoral responsibilities, and through colleges, universities and the “FRANK” service. We will ensure that accurate information and advice is provided on the effects and harms of drugs. We are committed to giving schools greater freedom and flexibility, and we want them to be free to innovate. The Department for Education will conduct an internal review to determine how it can support schools to improve the quality of all personal health and social education teaching, including drug and alcohol education. Intensive support will be provided to vulnerable young people, such as those who are truanting or excluded from school, to stop them becoming involved in drug or alcohol misuse. Drug and alcohol services will be encouraged and supported to make the best use of early interventions, such as parenting and family support projects, to keep families together and aid the recovery of parents who are misusing drugs.

On supply, we will reduce drug-related crime, drug trafficking and organised crime’s involvement in the drugs trade. The new National Crime Agency will lead the fight and with the UK Border Agency it will deliver on the Government’s determination to enhance the security of our borders. We will take action to stop drug traffickers profiting from the drugs trade, through cash seizures and asset forfeitures, money laundering prosecutions, and civil and criminal recovery prosecutions. We will also tackle the trade in drug precursors, which are compounds required to produce drugs, by working with producer countries, the legitimate trade in those compounds and international partners. We will strengthen international partnerships and make best use of the Government’s capabilities overseas to disrupt drug traffickers at source or in transit countries.

The introduction of police and crime commissioners will bring local democratic accountability to policing, ensuring that where drug-related crime is a problem for local people it is tackled as a priority. PCCs will be at the heart of an integrated community response to improve co-ordination between the police, community safety partnerships, communities, drug services and users, and the public. I look forward to the debate during the Committee stage of the Police and Social Responsibility Bill about PCCs, because we believe that they will be an important facet in driving change at the local level. We will also address the issue of so-called legal highs through the development of temporary banning orders, by improving the forensic analytical capability to detect new psychoactive substances and by establishing an effective forensic early warning system.

On recovery, we will focus on building a recovery-led system to enable individuals to become free from dependence on drugs or alcohol and to contribute to society. Although recovery is something that is personal to each individual, the strategy sets out three key principles for recovery: well-being, citizenship, and freedom from dependency. The individual will be placed at the heart of the system, with personalised services providing appropriate support.

We have touched on the issue of payment by results and the models that are being developed around that approach. The detailed information on those models will be provided in the early part of next year, as we are looking to develop those pilot projects. Perhaps I might give some indication of the sorts of outcomes that we are looking to achieve, because I think that it is those outcomes that will telegraph our desire, strategy and approach in this regard. They are very much focused on helping individuals to be free from clinical dependence but they will also look at offending, employment, health and well-being, and the outcomes in those areas. Taking that approach will help us to deliver and I think it will inform the pilot projects as they develop, including the treatment and recovery processes that are involved in the broader system.

The recovery system will also be locally led and owned. Public Health England will be established from April 2012 and a ring-fenced public health budget will be allocated from April 2013. The commissioning and oversight of drug treatment and other recovery services will become a core part of the work of Public Health England. We will look to directors of public health, jointly appointed by Public Health England and local authorities, and located within local authorities, to work with a range of local partners and the health and well-being boards to design and jointly commission services that most meet local needs.

Nationally, we will not prescribe the approach, but will develop and provide an evidence base of what works—the hon. Member for Kingston upon Hull North and others mentioned that theme. We will create a recovery system that focuses not on getting people into treatment and keeping them there, but getting them off drugs and alcohol for good. Substitute prescribing continues to have a role to play in the treatment of heroin addiction, in stabilising drug use and supporting detoxification. Medically assisted recovery can and does happen. However, for too many of the 150,000 people currently on a substitute prescription, what should be the first step on the journey to recovery is where their journey ends. That must change. We will ensure that all those on a substitute prescription engage in recovery activities and so build upon the 15,000 heroin and crack cocaine users who successfully leave treatment every year, having overcome their dependency.

Recovery can be contagious. People tell us that they are most motivated to start on their individual recovery journey by seeing the progress made by their peers—a point made clearly by my hon. Friend the Member for Burton (Andrew Griffiths). Those already on the recovery journey are often best placed to help. Active promotion and support of local mutual aid networks will be key. We will also support communities to build networks of recovery champions to help such individuals at the start of their recovery journey.

People’s housing needs must be met to secure their recovery. We will work with local authorities and housing providers to share best practice and to examine the development of a payment-by-results approach to housing services. The strategy will ensure that the benefits system supports engagement with recovery services. It will offer claimants with a substance dependency a choice between rigorous enforcement of the normal conditions and sanctions if they are not engaged in structured recovery activity, or appropriately tailored conditionality for those who are.

A key contributor to recovery is employment. The strategy sets out how we will equip people in recovery with the confidence and necessary skills to compete in the labour market, encouraging them into a range of employment opportunities through training, work trials and adult apprenticeships. We also plan to introduce a small number of pilots to explore how payment by results can incentivise providers to support recovery. We will work with the pilot areas to co-design the approach. The work on implementing a payment-by-results approach for drugs recovery will help set the future direction for all commissioning of drug services under Public Health England. Such work will complement that being undertaken within the criminal justice system to encourage drug and alcohol misusers into recovery-focused services, including: developing and evaluating options for providing alternative forms of treatment-based accommodation in the community; making liaison and diversion services available at police custody suites and courts by 2014; and diverting vulnerable young people away from the youth justice system where appropriate.

As I have said, evidence is of crucial importance in the field of drugs. The most recent study of the outcomes of drug treatment, the largest area of spend for the strategy, found that drug treatment was cost beneficial. For every £1 spent on treatment, £2.50 was saved, and drug treatment was found to be cost beneficial in 80% of cases. In order to allow us to evaluate the strategy, an evaluation framework is under development. It will aid assessment of the evidence currently underpinning the themes of the drug strategy and identify where new evaluation is required to provide a better assessment of effectiveness and value for money.

During the consultation process, which informed the development of the strategy, some respondents advocated liberalisation and decriminalisation as a way to deal with the problem of drugs, in many ways returning to some of themes we have been debating this afternoon. The Government do not believe that liberalisation and legalisation are the answer, for the many reasons I have highlighted. Such an approach addresses neither the risk factors that lead individuals to misuse drugs or alcohol, nor the misery, cost and lost opportunities that dependence causes individuals, their families and the wider community. By delivering on the national commitments set out in the new drug strategy and enabling local partners to take responsibility at a local level, we will ensure that individuals, families and communities will be stronger and healthier. I very much look forward to continuing the debate in the months ahead.

16:54

[Mr Ainsworth]

The hon. Member for Burton (Andrew Griffiths) said that I am the only person who is looking for a quick fix. No one understands more than I do how busy Ministers are. I know the work that the Minister will have undertaken in his consultation—writing the documentation and everything else over a period. However, can he find a little time over his Christmas break to do what I did: put our drug strategy refresh together with his drug strategy—eight years apart—and look at the phrases, issues and so-called solutions?

The Minister will find that we had overarching strategies and key principles. I cannot remember if we had three or four themes—he has three themes. He thinks that seizing assets will be part of the solution—I took the Proceeds of Crime Bill through the House in 2001, with all-party support, and it has been on the statute book since 2002. He thinks that upstream interdiction will solve the problem—look at our strategy and see how much emphasis we put on upstream interdiction eight years ago. He thinks that champions are new—look at champions in our strategy. Also, look at action against precursors in our strategy, which is another thing that he is saying will, in some ways, deliver something.

The Minister thinks we are having some success, and that adulterated drugs on the streets of London are an indication that policy is working. The hon. Member for Burton thinks that the war on drugs is not working, while the Minister thinks there is some evidence that it is, but there has been feast and famine in drugs repeatedly over the years. At the moment we have a famine—we have a shortage of heroin and a problem in Afghanistan. However, it will be got over, and we will see availability increase again, because there is too much profit for that not to happen.

The Minister will have an annual review, although he is not prepared to look at the alternatives. His mind is closed—he has his drug policy—but he will have the annual review and participate in it. Let me predict something that I say with huge sadness: when we get to the annual review, heroin will still be freely available in the towns and cities of this country, the price will not have gone up astronomically and, in all probability, the adulteration level will have gone down, because it is at a high point at the moment. We will have lost another year and gained little, and the argument for alternatives will have grown stronger.

I knew before I started that the Minister would not move. I ask him to keep an open mind. I know how hard that is and how very difficult it is for him or for my right hon. and hon. Friends to deal with, but he will find, sadly, that I will be right. We will be saying the same things in a year—if he is still in post, because he might have moved on to greater things—and, sadly, we will have lost another year. However, we will keep up the debate and, hopefully, we will get there.

Question put and agreed to.

16:58

Sitting adjourned.

Written Ministerial Statements

Thursday 16th December 2010 Written Statements

Thursday 16 December 2010

Council for Science and Technology

Thursday 16th December 2010 Written Statements

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

The Prime Minister has agreed to re-constitute the Council for Science and Technology (CST) and reappointed four of the existing members to the newly reconstituted Council, starting from 1 January 2011. The CST is the Government’s top-level advisory body on science, engineering and technology policy.

The four reappointees are:

Dr Hermann Hauser Hon CBE, FREng

Professor Alan Hughes

Professor Michael Sterling FREng

Sir Mark Walport FMedSci

Their reappointment term will commence on 1 January 2011 and end on 31 December 2013.

The Prime Minister also reappointed Professor Dame Janet Finch as CST independent co-chair until the end of December 2011, alongside the Government’s chief scientific adviser, currently Professor Sir John Beddington CMG FRS.

In addition the Prime Minister has appointed four ex officio members:

President of the Royal Society—Sir Paul Nurse

President of the Royal Academy of Engineering—Lord Browne

President of the Academy of Medical Sciences—Sir John Bell

President of the British Academy—Sir Adam Roberts

as new members of the Council, effective from 1 January 2011.

The recruitment process for around 10 new members is currently under way, in accordance with the OCPA rules.

The CST is the UK Government’s top-level advisory body on science and technology policy issues. It reports directly to the Prime Minister. CST’s remit is to advise the Prime Minister on strategic science and technology policy issues that cut across the responsibilities of individual Government Departments.

Full details of CST’s terms of reference and organisation can be found at http://www.bis.gov.uk/cst.

EU Competitiveness Council (Post-Council Statement)

Thursday 16th December 2010 Written Statements

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

My noble Friend the Under-Secretary of State for Business, Innovation and Skills (Baroness Wilcox) has today made the following statement:

“I represented the UK at the EU Competitiveness Council in Brussels on 10 December 2010, which discussed EU internal market and industry items. Andy Lebrecht, the UK’s Deputy Permanent Representative to the EU represented the UK when I was not in attendance.

One of the main items debated was the Commission proposal for a Council regulation on translation arrangements for an EU patent. Member states were unable to achieve resolution by unanimous agreement and a number of member states made a request to the presidency to take on a process of enhanced co-operation in order to make progress. (Enhanced co-operation can be used as a last resort when unanimous agreement cannot be reached and requires the involvement of a minimum of eight member states, while remaining open to any member state that wishes to participate). The UK was among those who supported this request and endorsed the importance of creating a business-friendly EU patent in order to boost competitiveness. The UK, with a number of other member states, supports the Commission’s three language proposal (English, French and German).

Council conclusions were adopted on a proposal for an EU gambling framework to harmonise regulation in Europe. Council conclusions relating to the Commission’s Single Market Act communication were also agreed after some deliberation. Conclusions on the EU industrial policy flagship initiative were also adopted. All these items were supported by the UK.

On the Commission proposal for a fully harmonised consumer rights directive, the majority of member states have reached agreement on a text. The UK is willing to be flexible in order to reach agreement on a Council position, and expects to endorse the general approach when the text is formally approved at the Environment Council on 20 December.

There were also Any Other Business items comprising an update on the latest EU consumer scoreboard, a Commission report on implementation of the services directive and the mutual evaluation process, a presidency report of a conference on the transposition of EU directives and a presentation by Hungary on their work programme for the forthcoming EU presidency. In the margins of the Council, member states confirmed Prague as the location for the European Agency for the Galileo satellite navigation system.”

European Union Finances White Paper

Thursday 16th December 2010 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I am today laying before Parliament the annual European Union finances White Paper “Statement on the 2010 EU Budget and measures to combat fraud and financial mismanagement” (Cm 7978). It is the 30th in the series.

The White Paper gives details of revenue and expenditure in the 2010 EU budget and covers recent developments in EU financial management and measures to counter fraud against the EU budget. It also includes updated details on the budget review, own resources decision, the UK consolidated statement on the use of EU funds in the UK and the European economic recovery plan and changes related to the entry into force of the Lisbon treaty.

Looking forward to future years’ budgets, and particularly in the current economic and financial climate, the Government remain determined to ensure better value for money in EU budget spending, to oppose unacceptable budget increases, and to push for improvements in EU financial management.

Carbon Price Support Consultation

Thursday 16th December 2010 Written Statements

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

The Government have today published a consultation to encourage investment in low-carbon electricity generation.

“Carbon price floor: support and certainty for low-carbon investment” is an innovative approach to achieving the UK’s energy and climate policy objectives. Giving greater support and certainty to the price of carbon in the power sector will encourage further investment in low-carbon electricity generation. This can be achieved through reform of the climate change levy (CCL) and fuel duty to enable fossil fuels used by power generators to be taxed on the basis of their carbon content.

The proposal is part of a wider package of reforms to the electricity market, covering a number of commitments set out in the coalition agreement. These wider reforms are set out in a consultation on electricity market reform, also published today by the Secretary of State for Energy and Climate Change.

The consultation invites interested parties to submit their views on a range of implementation issues by 11 February. The Government will then publish their response, by Budget 2011. The Government intend to introduce legislation for the proposals in the 2011 Finance Bill (and subsequent secondary legislation) and to bring the proposals into effect from 1 April 2013.

Copies of the document have been deposited in the Libraries of both Houses and are available in the Vote Office and on the Treasury website at

www.hm-treasury.gov.uk.

EU Agencies (National Experts)

Thursday 16th December 2010 Written Statements

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

Legislation will be introduced in the Finance Bill 2011 to create an exemption from income tax for subsistence payments made to national experts seconded to EU agencies located in the UK. Separate secondary legislation will be introduced to create a corresponding disregard for the purpose of national insurance contributions. The exemption will remove a disincentive for high-quality experts to be seconded to these agencies and will put the tax treatment of such payments into line with that given to experts seconded to EU agencies in many other EU member states.

The legislation will affect national experts seconded to the European Banking Authority, the European Medicines Agency and the European Police College. It will have effect from 1 January 2011.

Fire and Rescue Service

Thursday 16th December 2010 Written Statements

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

I have today published the outcomes of the first phase of a process which has the power to determine the future shape and direction of England’s fire and rescue service and the wider fire sector. This work, known as “Fire Futures”, has been led by the sector and was launched in July by the Department for Communities and Local Government.

The scope of the review was determined by the sector and structured around four sector led work streams: localism and accountability; efficiency, effectiveness and productivity; role of the fire and rescue service; and national interests. It reported to me yesterday and I have placed copies of the reports in the Library of the House.

At a time of tough spending choices, it has never been so important to be open to change, to new ideas and ways of working, so that we can prioritise resources to support our front-line services.

Now we will consider options emerging from this work to take forward, based on principles of localism, decentralisation, transparency and value for taxpayers’ money. Fire and rescue services are already trusted local partners with a vital community role and are therefore best placed to lead this change.

I am grateful to individuals and organisations from the sector for showing such commitment to this process and taking part in a constructive dialogue which I am confident will now continue as I seek reactions to the reports while I decide which options to take forward. The Government will report back by March 2011.

Building Regulations

Thursday 16th December 2010 Written Statements

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

I am setting out today the main elements of the programme of work the Department for Communities and Local Government will lead in the new year to establish the changes required to the building regulations. The work will identify the changes that need to be made to the building regulations regime between now and 2013 to ensure it remains fit for purpose and delivers its contribution to the Government’s policy goals.

At the end of July I asked our external partners to tell me their ideas about what in the building regulations needed to be improved or extended, where we might reduce the regulatory burdens and how we might deliver even better levels of compliance. I wanted this to play a key part in helping to deliver our commitment to reduce the burden of regulation while ensuring we had given proper consideration to emerging issues. I am grateful for the way industry and members of the public have responded both in writing and through their participation in workshops.

The programme I am setting out today has been arrived at after active engagement with our external partners. A key theme to emerge from this process has been that these partners believe that although the regime is generally fit for purpose, there are things we can improve. This confirms the Department’s belief that the building regulations should remain the national minimum standard that building work should comply with.

While much of the programme of work is deregulatory in nature, it will, however, include work to deliver our commitment to increase energy efficiency through part L (conservation of fuel and power). This will represent our next steps towards zero-carbon buildings and will also provide an opportunity to consider provisions for the existing stock in the light of the Government’s emerging policies on reducing carbon emissions, including the green deal. We will also explore how better to ensure high levels of compliance.

In addition, I would like to consider further the case for Government intervention in two other areas. First, whether there is a role to ensure suitable toilet and changing provisions for people with multiple and profound disabilities—often referred to as “Changing Places”. I would also like to explore further the case in relation to minimum standards for security in homes and explore whether national regulation might be a more effective approach than voluntary and local interventions.

Set against this there are a number of key areas where we want to explore the potential for deregulation and streamlining of the existing provisions. In particular, representations made to Government demonstrate concern with the costs imposed on electricians by part P (electrical safety—dwellings). We believe it is now time to evaluate the building regulations’ contribution to the safety outcomes they were intended to support and, if we are to retain regulation of this kind, how we might minimise the associated costs.

We also believe that there is scope to look at the rationalisation of parts M. K and N (access, protection from falling, collision and impact and glazing respectively) to address areas of potential conflict and overlap between them. As part of this we intend to review existing guidance that promotes the use of access statements in order to consider whether they remain necessary while maintaining the standards of accessibility we are seeking to achieve.

As part of this deregulatory element we also need to explore what changes may be needed to the building control system. I believe there is scope to enhance compliance and reduce the burdens on those who use the system. To that end, over the next few months we will be taking forward work to gather further evidence about actual levels of compliance and reasons for non-compliance. In the light of this, we will be exploring options to further improve enforcement and incentives for responsible businesses. We will also be considering how we can improve the interface with planning and other standards regimes.

In developing this programme we have been mindful, and will remain so, of the need to manage down the regulatory costs to business as part of this process. We will also be specifically considering the impacts on house builders, with the aim of contributing to the achievement of our spending review commitment to reduce regulatory costs over this Parliament.

The Department for Communities and Local Government is also today publishing on its website a supporting document to this statement that provides further information about the exercise we have undertaken and more detail on the programme of work to be taken forward. I am placing copies of this document in the Libraries of both Houses.

Call-Out Order (Iraq/Afghanistan)

Thursday 16th December 2010 Written Statements

[The Minister for the Armed Forces (Nick Harvey)]

With the expiry of the call-out order made on 5 January 2010, a new order has been made under section 56(1)(a) of the Reserve Forces Act 1996 to enable reservists to continue to be called out into service in support of operations in the region of Iraq and the Gulf

The new order is effective until 4 January 2012, small numbers of reservists continue to be required to support operations in the region and some 44 are currently called out and serving, of whom 20 are in the region.

Continuity of Education Allowance

Thursday 16th December 2010 Written Statements

[The Minister for the Armed Forces (Nick Harvey)]

As announced following the strategic defence and security review, the Ministry of Defence is reviewing the broad range of allowances paid to service personnel. Work is ongoing to define fully the package of changes, but we are now able to announce some changes to the continuity of education allowance (CEA).

The Government place a very high priority on the welfare of service personnel and their families. Due to the requirements of service, some personnel relocate frequently, and it is important to ensure that their children are not disadvantaged by this requirement and have continuity of education. This continuity is not achievable through the day school sector for service personnel whose children accompany them on necessary relocations both at home and overseas. The importance of the allowance in supporting accompanied service and in enabling the armed forces to deploy to meet service needs is well understood. Nevertheless, it represents a significant investment, around £180 million per annum, to support some 5,500 personnel, fewer than 3% of the total number of service personnel. In the current fiscal climate, we must be sure that this expenditure is fully justified. I am therefore leading a review of CEA.

The review will consider the fundamental rationale for the allowance, look at alternatives, including a lesser reliance on independent schools, and at the justification for the current set of entitlements. Longer-term work on the development of a new employment model for service personnel is also likely to impact on the requirement for this allowance, and the review will consider what this might imply. The review will involve consultation with the service community, families federations and those outside who have an interest. I want to keep the period of uncertainty about the future of CEA to a minimum and intend to announce the conclusions of the review in the spring. Any changes will be promulgated well before they are implemented.

In parallel with this review we have put in place some immediate changes to the detailed rules on eligibility and payment structures for CEA and the governance of claims for the allowance. These changes should reduce our expenditure on the allowance by over £20 million per annum. The changes reflect the fundamental justification for the allowance—a commitment on the part of the individual to accompanied service. The most significant of these changes therefore involves withdrawing eligibility for CEA from personnel who serve unaccompanied by their families in some locations (principally but not exclusively MOD London) and in sea-going assignments. Appropriate transitional arrangements have been put in place to ensure individuals who are currently drawing CEA under these 'involuntary separation’ rules will not be unfairly disadvantaged.

Armed Forces Pensions

Thursday 16th December 2010 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

I am pleased to announce that I will be amending the compensation and pension payments for individuals who die as a result of service while holding acting rank. Pension arrangements under armed forces pension scheme 05 already ensure that any acting rank held at the time of death is taken into account in the pension received by surviving dependants. However, under the armed forces pension scheme 75, in most cases, the acting rank needs to be held for at least a year for it to be recognised in the pension received by surviving dependants. This rule will now be amended to ensure that, in future, those who die as a result of service while holding acting rank will have this higher rank recognised in the pension paid to their dependants, regardless of the length of time the acting rank has been held.

For previous such cases since April 2005, a lump sum payment of £20,000 will be made through the armed forces compensation scheme to ensure the acting rank is recognised in the payments dependants have received.

Agriculture and Fisheries Council (13-14 December)

Thursday 16th December 2010 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

My hon. Friend the Parliamentary Under-Secretary of State Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon) represented the United Kingdom at the Agriculture and Fisheries Council in Brussels on 13 and 14 December. Richard Lochhead and Michelle Gildernew attended for Scotland and Northern Ireland respectively.

There were two substantive agenda items on fisheries; the setting of fishing opportunities for EU vessels in the Atlantic, and in the Black Sea respectively. There were four items on agriculture (the three dairy items being taken together) and one agriculture AOB.

On fishing opportunities for 2011, the Council and Commission reached unanimous agreement on a package of measures which set quotas for the main commercial fish stocks in the Atlantic, including for cod, haddock, plaice and sole. Over two days of intensive negotiations, the UK battled hard to reach an agreement that ensures the long term sustainability of fish stocks, while providing short term catching opportunities for our fishing industry. The package my hon. Friend secured, helps all sectors of the industry, large and small, and delivers benefits for all parts of the UK—north, south, east and west. It also means the UK can drive forward with its innovative approach to fisheries management—catch quotas—which enable fishermen to land more while catching less, thereby helping to tackle the scourge of discards. The final agreement included a number of notable gains for the UK, including on Irish Sea Nephrops, Western Channel sole. West of Scotland megrim and monkfish in the West of Scotland and the Celtic Sea.

The UK team also fought off effort restrictions for fisheries in the Celtic Sea, with a commitment to consider a more sensible management regime to apply from 2012. Moreover, they won a firm commitment from the Commission to a comprehensive review of the EU’s cod recovery plan next year. The UK also resisted a revision to the management arrangements for plaice in the English Channel, that would have meant UK fishermen losing out badly.

Separately, the Council and Commission also agreed quota levels for sprat and turbot in the Black Sea.

The discussion on CAP reform concentrated on the achievement of food security. While all believed competitiveness to be significant, only Denmark, the Netherlands and the UK supported a greater focus on training, innovation, sustainability and improved business practices as a means of boosting competiveness. The majority of member states cited price volatility as a justification for the continuation of direct payments and wanted to retain a less favoured area scheme in the second pillar of the CAP. Proposals would issue in the next few months.

The Commission presented the dairy proposal and the quarterly market and quota phase-out reports. Both reports showed a positive market situation for the dairy sector. Most member states were on track for the expiry of the quota regime in 2015. The majority of member states welcomed new proposals to increase the power of producers in the food chain. The incoming Hungarian presidency hopes to reach political agreement on the dairy proposal by June.

The Commission presented its legislative proposals on Agricultural Quality Policy plus guidelines: on the use of private quality assurance schemes and on the use of GIs in processed products.

Agriculture and Fisheries Council (29-30 November)

Thursday 16th December 2010 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

My hon. Friends the Minister of State and the Under-Secretary, my hon. Friend the Member for Newbury (Richard Benyon), represented the United Kingdom at the Agriculture and Fisheries Council in Luxembourg on 29 and 30 November. Elin Jones and Michelle Gildernew also attended for Wales and Northern Ireland respectively.

There were two agenda items on fisheries plus a working lunch on the reform of the common fisheries policy. There were four agenda items on agriculture with seven, mostly agriculture, AOB items.

On deep sea fishing opportunities in 2011-12, the Council and Commission reached agreement on fishing limits, notably deep water sharks, the black scabbardfish, roundnose grenadier, Alfonsinos and forkbeards. Given that these are vulnerable long-life cycle species, of which little is known, the UK and Sweden led calls for a precautionary approach that differentiated these from other fisheries. Some other member states (MSs) pressed for and gained significant concessions. The final agreement included declarations on defining a differentiated category for deep sea species to identify specific treatment in the Commission’s policy framework.

On the first round of discussions with Norway on the shared fishing opportunities for 2011 the UK underlined the importance of moving towards a catch quota management system which would reduce discards and incentivise responsible fishing and emphasised the importance of maximising arctic cod opportunities. Some MSs warned against using their stocks to pay for this. The UK noted the withdrawal of Iceland from talks on managing mackerel stocks which impacted on the EU-Norway talks; this attitude was unhelpful and the Commission should be firm.

On the Agriculture items: the Commission will act to ban 1, 3—dichloropropene as there was no qualified majority either for or against the proposal. The Commission’s recent report on the potential for the European Food Safety Authority to charge fees was discussed very briefly, with some MSs supporting its conclusion that a full impact assessment is required to inform any subsequent proposals. The Commission presented its paper on the Farm Advisory Service (FAS), highlighting a need to improve the targeting of advice, especially in reaching small and medium-sized farms. The subjects covered by FAS needed to go beyond cross compliance to cover competitiveness and innovation. Recommendations would be taken forward in due course.

The first discussion on the Commission Communication on CAP restricted Ministers’ interventions to three minutes each. Most MSs broadly welcomed the communication as a useful starting point. There was general endorsement for the continuation of the current two pillar structure of the CAP. A number of important themes emerged during the debate, which focused largely on what the communication was missing:

There was support for continuing direct payments (DPs) to farmers, with new MSs calling for their equalisation. Some MSs rejected a transitional period at the beginning of the next financial perspective (FP). The abolition of historical references periods was welcomed. France, Germany and Greece, however, cautioned that new objective criteria should not result in a flat rate payment; DPs needed to be allocated fairly, taking account of regional costs and farm structures. A few MSs resisted the intention to cap payments to large farms. The UK called for substantial cuts to the EU budget, which should include material cuts to the CAP budget and with progress on reducing reliance on direct subsidies leading eventually to their abolition. Others, however, called for a strong or adequate CAP budget commensurate with its challenging policy objectives.

All MSs called for a significant effort to simplify CAP rules. The UK noted that some of the Commission’s ideas looked too complex. The Commission will establish an expert group to work alongside those drafting legislation to ensure that new measures did not increase administrative burdens for farmers or national authorities.

Many MSs were sceptical of the Commission’s proposal to green pillar 1, as this could work counter to the simplification objective. However, a number welcomed the principle of securing better environmental benefits. The Commission insisted that new measures on environmental compliance would not increase burdens and would generally take the form of guidance on the application of cross compliance provisions.

MSs queried the confused treatment of less favoured areas (LFAs) in the Communication. Some wanted LFA payments to remain in the second pillar, whereas others favoured an additional LFA uplift in pillar one. Some MSs supported the Commission’s intentions to provide a small farmer payment and to restrict payments to active farmers, although clarity was sought on definitions of “small” and “active”.

MSs welcomed the retention of a specific pillar devoted to rural development. The UK called for a greater share of a reduced CAP budget to go to this. Some new MSs called for pillar two resources to be concentrated on MSs with the greatest modernisation needs. MSs were broadly supportive of the continued focus on competiveness and agri-environment. Territorial cohesion was frequently stressed.

The presidency said that the issue would be discussed on 13 December. The incoming Hungarian presidency stated that it intended to seek a conclusion at the March Council.

Under Any Other Business:

There was a short Commission paper on the current inter-institutional blockage on long-term fisheries management plans. In its view a large majority of MSs (not the UK) were not being realistic; the European Parliament had a legitimate interest in setting these under the Lisbon treaty and the Council could not cling to this power. It wanted to begin a dialogue to resolve the matter quickly.

The presidency presented its information notes on the review of the European plant health regime and the international conference on animal welfare education.

On the 2011 Budget the Commission took the opportunity to sensitise MSs to difficulties with the reimbursement of DPs, if the new draft budget was not adopted. National budgets would take the strain of some 75% of direct payments being made by national authorities in the first few months of 2011, while operating under a system of twelfths. However, problems were unlikely to arise for market management or rural development expenditure, which had flatter spending profiles. There was no discussion.

The Netherlands presented its note on the conference on agriculture, food security and climate change.

France presented its note on the aims of the French presidency of the G20 in the field of agriculture highlighting four themes: increasing transparency about global stock reserves, enhancing the moral behaviour of market operators, co-ordinating international crisis management and addressing price volatility.

Finally, the Italian Minister tabled a point related to the food labelling proposal due to be discussed at the EPSCO Council formation on 7 December. The Italians want to see the manufacturer of products identified on the label. The UK responded that this would not be acceptable given that this information is not meaningful to consumers, adds burdens to businesses and has the potential for negative impact on competition.

Single Payment Scheme

Thursday 16th December 2010 Written Statements

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

In my statement of 1 December 2010, Official Report, column 77WS, I promised to keep the House informed of the progress of the Rural Payments Agency (RPA) towards its 2010 single payment scheme (SPS) payment targets.

As at Wednesday 15 December, RPA has made payments totalling some £1.16 billion to 85,060 farmers (80.6%). The agency continues to strive to meet its target to pay 85% of eligible claimants by the end of December. RPA has also now issued letters to all those farmers who are unlikely to be paid this month.

Progress toward the December target will be reviewed again today by the RPA oversight board, with a view to ensuring the money reaches farmers as early as possible while also protecting taxpayers’ interests. Joined by new permanent RPA chief executive (Mark Grimshaw) from 17 January, the board will focus the agency’s attention in the new year on the still more challenging target of making 95% of the value of SPS payments by the end of March 2011. I will continue to keep the House informed.

Victims of Terrorist Incidents Overseas

Thursday 16th December 2010 Written Statements

[The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)]

Since 2004 the Foreign and Commonwealth Office has offered specific assistance for British victims of terrorist incidents overseas and their families. Originally known as the aftercare plan, but renamed exceptional assistance measures (EAM) in 2008, it was introduced in recognition of the fact that many travel insurance policies explicitly exclude acts of terrorism from their cover. EAM allows Ministers to activate special assistance to victims of terrorist attacks above the standard consular package. This can include medical evacuation, payment of immediate medical expenses and repatriation. It is only ever activated in extremis.

When the policy was first introduced in 2004, EAM could be awarded to any British victim of a terrorist incident abroad, regardless of whether or not the person had travel insurance. However, in June 2008 the Government at the time decided to impose restrictions on EAM eligibility, excluding those victims who did not have travel insurance.

I have decided to overturn this decision and restore EAM for all British nationals affected by a terrorist attack overseas, regardless of whether or not they have travel insurance. Acts of terrorism are singularly heinous crimes, usually targeting innocent people at random. It is right that all British victims of terrorist attacks overseas can receive the same level of support from the Government.

EAM only covers incidents overseas that are deemed to be acts of terrorism by Her Majesty’s Government. They do not replace travel insurance. British nationals travelling overseas are strongly advised to take out comprehensive travel insurance. Those that do not and are involved in accidents or incidents often deeply regret it when faced with huge bills.

Key elements of the exceptional assistance measures are:

i. The measures will only be activated as a last resort, where financial assistance is not made available through other means, i.e. from the Government of the country where the incident took place, insurance providers or other agencies and organisations, and in a situation we deem to be terrorist in nature;

ii. Assistance, under these measures, will not be made available to those who have travelled to a country or region for which the FCO had advised against all travel;

iii. The measures do not cover medical care in the UK or long-term care in relation to conditions relating to the effects of the terrorist incident;

iv. These measures will be activated on a case-by-case basis by ministerial decision.

Value-Based Pricing (Consultation)

Thursday 16th December 2010 Written Statements

[The Secretary of State for Health (Mr Andrew Lansley)]

I am launching today a consultation entitled: “A new value-based approach to the pricing of branded medicines”.

The consultation document sets out this Government’s proposals for introducing a system of value-based pricing for medicines, as stated in the coalition agreement. Such a system would enable patients to access the medicines and treatments their doctor advises they need by establishing a closer link between the price of a new branded medicine and the value which it offers in terms of benefits to patients, reflecting unmet need, therapeutic innovation, and where appropriate, benefit to society.

While the current system of pricing medicines has tried to achieve a balance between reasonable prices for the NHS and fair return for the industry to develop new medicines, it does not promote innovation or patient access in the way that we are looking for. We have committed to honouring the terms of the Pharmaceutical Price Regulation Scheme 2009 until its expiry, but there is a need to reform the way in which we pay for medicines from 2014 onwards. As we have made clear through the establishment of the cancer drugs fund prior to 2014, we are enabling NHS clinicians to have better access to the medicines required for their patients.

This consultation is an important opportunity to engage with different groups in order to gain their views on how we should best reflect the value of medicines in order to deliver the best health outcomes for patients. This consultation sets out the Government’s initial thoughts and invites engagement from interested parties in order that we can begin to develop a future model of medicines’ pricing.

Copies of the consultation document have been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

New Dental Contracts (Pilot Schemes)

Thursday 16th December 2010 Written Statements

[The Minister of State, Department of Health (Mr Simon Burns)]

We said in the coalition agreement that we would introduce a new dental contract based on registration capitation and quality to increase access and improve oral health, particularly of children. We are today announcing the publication of our proposals for piloting that new contract, and inviting expressions of interest in taking part in the pilots.

The current dental contract, which was introduced by the previous Administration in 2006, has been a bone of contention for dentists since its inception. The House of Commons Health Select Committee report published in July 2008 found that the contract had failed to solve problems of access, that the UDA-based system (that is units of dental activity) of remuneration was extremely unpopular with dentists, and that commissioning of dentistry by primary care trusts was often of poor quality. It called for registration to be reintroduced.

Under our planned new contract dentists will be rewarded for the quality of care they deliver for patients rather than the number of treatments and, through registration, patients will have the security of continuing care. Our reforms will give dentists the encouragement they need to provide a service that meets the needs of today’s population. The Select Committee noted that there was widespread criticism that the UDA system introduced in the 2006 contract was not piloted. We have decided that we will carry out pilots as part of the development of our reforms.

To help us develop our proposals, we have taken advice from a national expert steering group, containing representatives of the dental profession, and patients, and NHS commissioners. Professor Jimmy Steele, author of the independent review of dentistry published last year, was also a member of the group.

The three different models set out in the publication will be piloted in 50 to 60 areas around the country from next April. The three pilot models will be slightly different in order to provide information and evidence on different aspects of the proposals, which will then help inform the development of a new national contract.

The proposals we are announcing today mark a first step towards delivering this new and better system of dentistry. In the light of the pilots we will bring forward proposals for a new national contract, with the intention of bringing forward legislation.

Drug-Related Crime and Rehabilitation

Thursday 16th December 2010 Written Statements

[The Minister of State, Department of Health (Paul Burstow)]

Professor Lord Patel of Bradford OBE was asked by the Department of Health and the Ministry of Justice to lead a review of drug treatment and interventions in prisons and for people on release from prisons in England and provide a report, with recommendations.

The report aims to raise the ambition about what can be achieved in regard to drug treatment and interventions in prisons and to consider efficiencies and cost effectiveness.

Lord Patel’s report has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

I would like to thank Lord Patel and his review group for the thoroughness of their work.

As outlined in the coalition programme for government, we are aiming to overhaul the system of rehabilitation to reduce offending, and to ensure that sentencing for drug use helps offenders to come off drugs. We want to promote innovation in service provision and commissioning. Payment by results will be an important tool in achieving progress.

In the comprehensive spending review, the need for continued, substantial investment in drug treatment was reaffirmed. As part of our commitment to ensuring that there is local pooling of resources it has been agreed that some budgets previously held by the Home Office and the Ministry of Justice will transfer to the Department of Health from April 2011. This will allow us to look in a more joined-up way across the total spend on drug treatment to improve the treatment journey and avoid wasting resources.

We welcome Lord Patel’s contribution to the important drugs treatment debate and will be looking carefully at the recommendations and evidence his group has collected. This Government believe that given the substantial investment in drugs and the strong association between the use of drugs and reoffending, we should be ambitious in our aims to improve efficiency and effectiveness, focusing on recovery outcomes, encouraging offenders to come off drugs.

Control Order Powers

Thursday 16th December 2010 Written Statements

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

Section 14(1) of the Prevention of Terrorism Act 2005 (the 2005 Act), requires the Secretary of State to report to Parliament as soon as reasonably practicable after the end of every relevant three-month period on the exercise of the control order powers during that period.

The level of information provided will always be subject to slight variations based on operational advice.

As set out in previous statements the Government are reviewing control orders as part of a wider review of counter-terrorist and security powers and measures. The Government will report on the outcome of this review shortly.

As explained in previous quarterly statements on control orders, control order obligations are tailored to the individual concerned and are based on the terrorism-related risk that individual poses. Each control order is kept under regular review to ensure that the obligations remain necessary and proportionate. The Home Office continues to hold control order review groups (CORGs) every quarter, with representation from law enforcement and intelligence agencies, to keep the obligations in every control order under regular and formal review and to facilitate a review of appropriate exit strategies. During this reporting period, four CORGs were held in relation to the orders in force at the time. In addition, further meetings were held on an ad-hoc basis as specific issues arose.

During the period 11 September 2010 to 10 December 2010, one non-derogating control order has been made, with the permission of the court, and served. One control order has been renewed in accordance with section 2(6) of the 2005 Act in this reporting period. Two control orders expired during this reporting period as it was not considered necessary to renew the orders for a further 12 months. One control order, made in a previous quarter but never served, expired during this reporting period.

In total, as of 10 December 2010, there were eight control orders in force, all of which were in respect of British citizens. All of these control orders were non-derogating. Three individuals subject to a control order lived in the Metropolitan Police Service area; the remaining individuals lived in other police force areas.

No criminal proceedings for breach of a control order were concluded during this reporting period. However, one set of criminal proceedings against one individual who was formerly subject to a control order and three other individuals for conspiracy to breach a control order was concluded in the reporting period 11 June 2010 to 10 September 2010. This followed a CPS decision that prosecution was no longer in the public interest. It was not possible to include this information in the previous statement laid on 16 September 2010.

During this reporting period, 34 modifications of control order obligations were made. Twelve requests to modify control order obligations were refused.

Section 10(1) of the 2005 Act provides a right of appeal against a decision by the Secretary of State to renew a non-derogating control order or to modify an obligation imposed by a non-derogating control order without consent. No appeals have been lodged with the High Court during this reporting period under section 10(1) of the 2005 Act. A right of appeal is also provided by section 10(3) of the 2005 Act against a decision by the Secretary of State to refuse a request by a controlled person to revoke their order or to modify any obligation under their order. During this reporting period one appeal has been lodged with the High Court under section 10(3) of the 2005 Act.

On 15 September 2010 one individual subject to a control order was granted permission to appeal to the Court of Appeal against the High Court judgment in the substantive judicial review proceedings under section 3(10) of the 2005 Act relating to his control order.

No court judgments in relation to control orders have been handed down during this reporting period.

Immigration (Detention of Children)

Thursday 16th December 2010 Written Statements

[The Minister for Immigration (Damian Green)]

The UK has a long tradition of welcoming people from across the globe and we can be especially proud of our record in granting refuge to those who have been persecuted. When those people include families with children, we have a particular responsibility to ensure that we approach the task with compassion and humanity.

That is why one of this Government’s first acts was to commit to ending the detention of children for immigration purposes. This Government believe that children should not be detained in our immigration system, but we must ensure that those with no right to be here leave the UK. This is a difficult issue—we need to balance the welfare of children and families with the need to maintain a robust and workable immigration system.

In June I set up a review of how we work with families in the immigration system. The Home Office launched a consultation which received over 340 responses from different organisations and members of the public. We also sought the views of interested parties through a working group co-chaired with the Diana, Princess of Wales Memorial Fund, received recommendations from a further expert group convened by Citizens UK and examined how other countries manage family removals. We have also worked closely with the Department for Education as the lead Department for children and safeguarding in England and will continue to do so on implementation.

We have already begun to take action where we can. Since the beginning of June, fewer than 50 families have been held in immigration detention—compared to over 300 over the same period last year—and the average stay in detention has been reduced from 15 days to 4 days.

But we need to go further. With immediate effect no children will be detained at the Yarl’s Wood immigration removal centre.

We are now implementing a fundamentally new approach to the whole end-to-end process of working with families in the immigration system. This new system will strengthen families’ trust and confidence in the immigration system, maintain public confidence in the Government’s ability to control the UK’s borders and ensure that families with children are treated humanely and in a way that meets our international obligations and our statutory duties in relation to children’s safety and welfare.

Working in partnership with the Office of the United Nations High Commissioner for Refugees, we will continue to improve the quality of our asylum decision making through our asylum improvement project. We will develop best practice for working with families and will increase the specialist skills of our staff. Working with partners from local authorities, the voluntary sector and local communities, we will continue to test new arrangements for providing early access to legal advice and practical support and guidance to families.

In those cases where an application has been refused and all appeals have been exhausted, we will assist families in departing voluntarily, including with financial assistance where necessary. UK Border Agency staff will hold a dedicated family return conference with each family to help them understand the options available tor their return and prepare for it.

We will, of course, still require families to depart who have no right to stay here and who do not depart voluntarily. But rather than being detained, they will instead be given a minimum of two-weeks’ notice of their departure date while they remain in the community. This extended notification period—up from 72 hours at present—will ensure that the family can prepare properly for their return. Families will then be given the opportunity to check themselves in at the port of departure.

At this point families will have had every opportunity to comply and exercise some control over the timing and manner of their departure. They will have had the opportunity to challenge the decision that they must return in court, supported by legal aid and voluntary sector partners; they will have had the opportunity to discuss their options at family return conferences; and they will have had the possibility to leave voluntarily, with a financially supported return.

Where families still fail to co-operate, their case will be referred to a new independent family returns panel, which will ensure that the welfare of the children involved is fully considered in a tailored returns plan. The panel will be independently chaired and include experts on health and child safeguarding. Once the new process is implemented, the panel will be able to recommend using any existing mechanism or policy available to the department to manage returns, but specifically excluding detention in an immigration removal centre.

As a very last resort for those rare cases when families fail to co-operate with all other options, the panel will have the option to refer the family to a new type of accommodation for only the last 72 hours before departure.

This accommodation will not be an immigration removal centre. It will have a family-friendly environment, with an entirely different look and feel. The site will be secure but will respect family privacy and independence. We will be seeking third sector involvement in the running of the accommodation.

This accommodation, which will only be used for very short periods of time, will be for those families who have consistently refused to comply with the process and whom the independent panel advise need that level of oversight. Once there, families will be allowed to leave the premises with permission on a risk-assessed basis. We will allow children to have the opportunity to leave the premises subject to a clear and transparent risk and safeguarding assessment and suitable supervision arrangements. We will also ensure that there are suitable adults on site in Tinsley House from January to allow children to have the opportunity to leave the centre following a risk and safeguarding assessment by UK Border Agency. The panel will encourage accountability and transparency in the process by producing an annual report, which will include all cases referred to the new accommodation.

In addition to ensuring the removal of families with no right to stay here, we must maintain our ability to protect the border. Other countries have kept the ability to detain those arriving at the border for a short period and we will need this capability as well. We will retain Tinsley House at Gatwick for this purpose when necessary. Families detained trying to enter Britain illegally are usually returned on the next available flight and within 24 hours.

The process I have outlined balances the welfare of children and families with the need to maintain a robust immigration system which can remove people with no right to remain here.

As we put the new process into practice we will continue to learn and improve. We will work with communities, the voluntary sector, local authorities, the Department for Education, and families themselves to make the new process work. At the heart of our new approach will be the fundamental need to safeguard the welfare of children.

Further information on the review can be found on the UK Border Agency website and a copy will be placed in the House Library.

Gang-Related Violence

Thursday 16th December 2010 Written Statements

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

Gangs cause significant and lasting harm to our communities by fuelling violence, creating an atmosphere of fear and drawing young people into criminality. The Government are committed to tackling gang-related violence by giving local partners the legal powers they need to prevent gang-related violence and encourage gang members to exit their gang lifestyles.

As part of this approach, from 31 January 2011 police and local authorities will be able to apply to a county court for an injunction to prevent an individual from engaging in, or encouraging or assisting, gang-related violence, or to protect an individual from such violence. This new civil tool will enable courts to place a range of prohibitions and requirements on the behaviour and activities of an individual; providing strong support to help those who want to leave violent gangs and placing tough restrictions on those who don’t.

Statutory guidance on injunctions to prevent gang-related violence has been produced to help ensure their appropriate and effective use. Copies of the statutory guidance have been laid before the House and will be available from the Vote Office.

Development Ministers' Foreign Affairs Council

Thursday 16th December 2010 Written Statements

[The Secretary of State for International Development (Mr Andrew Mitchell)]

The Foreign Affairs Council (Development) took place in Brussels on 9 December. Due to priority parliamentary business that day, my ministerial colleagues and I were unable to attend. The UK was represented by the Permanent Representative to the EU (Kim Darroch) and the Director of International Relations for the Department for International Development (Anthony Smith). Both officials attended with clear direction from Ministers on relevant policy priorities. The High Representative of the Union for Foreign Affairs and Security Policy, Baroness Ashton, chaired the meeting.

Future of EU Development Policy

EU Development Commissioner (Andris Piebalgs) introduced his “Green Paper on EU Development Policy in Support of Inclusive Growth and Sustainable Development”. He confirmed that once the public consultation had concluded in January 2011, the Commission would begin drafting a communication on the results. This will include toolkits about how different work-streams can be taken forward.

Ministers broadly welcomed the paper and the opportunities it brings to think afresh about the future of EU development policy. The wide-ranging discussion covered issues including growth, human rights, gender, agriculture and sustainable development. The UK intervention welcomed the focus on growth and called for the prioritisation of actions that can deliver impact and results and demonstrate value for money.

Ministers were invited to provide written comments on the issues raised by the Green Paper in early 2011.

Afghanistan

Commissioner Piebalgs and the EU Special Representative in Afghanistan (Vygaudas Ušackas) briefed Ministers about the latest situation in Afghanistan. They stressed their long-term commitment to development and to the transition of responsibilities to the Afghan Government, based on the approach agreed at the 2010 Kabul conference. Ministers confirmed their strong support for this approach. It was also stressed that the EU action plan, agreed by EU Foreign Ministers in October 2009, offered the best way forward in terms of better co-ordinating European efforts in Afghanistan.

Innovative Finance

In a discussion led by the French Development Minister, the Council debated innovative financing mechanisms. The UK joined other member states in welcoming the exploration of a range of innovative financing opportunities, while emphasising that these should complement, and not deflect from, existing official development assistance targets. The Commission was invited to continue working on the technical feasibility of innovative financing mechanisms and exploring their potential impact.

Haiti

Ministers discussed the severe situation in Haiti, and agreed on the continuing importance of co-ordinating relief efforts. Commissioner Piebalgs noted that €325 million of the €522 million pledged for reconstruction in Haiti was now programmed, and that, to date, €61 million had been disbursed. The Commission is preparing a communication on reconstruction efforts, with the aim of effectively communicating the results of EU support in advance of the 12 January anniversary of the earthquake.

Mutual Accountability and Transparency

The Swedish Development Minister led a brief exchange of views on the importance of mutual accountability and transparency between European donors and partner countries. This is crucial in order to demonstrate the legitimacy of development assistance, and to help partner countries make better informed investment decisions. The UK strongly supported this approach—a key priority of the coalition Government—and suggested an aid transparency guarantee, similar to the one launched in the UK, be adopted at pan-European level.

The Council also adopted conclusions on mutual accountability and transparency as an “A” point without discussion. These can be viewed here: http://register. consilium.europa.eu/pdf/en/10/st17/st17477.en10.pdf.

International Development Conferences in 2011

Over dinner, there was an exchange of views about the least developed countries (LDC) summit that will take place in Istanbul in May 2011. The Council noted the importance of ensuring a focused EU position in advance of the summit. The Commission will prepare a draft EU position paper in January 2011. The UK’s suggestion of a focus on growth and vulnerability was welcomed.

The dinner concluded with a short discussion about the fourth high-level forum on aid effectiveness that will take place in Busan, Korea, in November 2011. The UK joined other member states in stressing the need for a high-level political debate at the forum, rather than purely technical discussions. The Council aims to agree a common position ahead of the forum in May 2011.

International Development Association of the World Bank

Thursday 16th December 2010 Written Statements

[The Secretary of State for International Development (Mr Andrew Mitchell)]

The International Development Association (IDA) is the part of the World Bank that provides assistance to the poorest countries. The international negotiations to agree its work and funding for the next three years concluded on Wednesday 15 December, and I wish to inform the House of the outcomes.

Thanks to UK pressure, for the first time, IDA has set out some of the results it will deliver with this replenishment. These are

Improving the Lives of Poor People: IDA has set itself the target of:

Providing 80 million people with access to improved water sources

Providing 2 million people with access to improved sanitation facilities

Immunising 200 million children

Providing 30 million more people with health services, including 2 million pregnant women

Recruiting and training 2 million teachers

Helping countries create wealth and jobs: IDA provides a range of support including funding key infrastructure, such as power, irrigation and roads. This is essential for boosting trade, encouraging private investment, and enabling people to access markets, schools and health centres. IDA has set itself the target of constructing and rehabilitating 80,000 km of roads.

Help poor countries cope with shocks: The financial crisis, the spike in food prices, and natural disasters have all put poor people under enormous strain recently. A new facility is being established in IDA that will enable the bank to offer countries additional support, for example to Haiti for reconstruction after the earthquake.

Throughout the negotiations, the Government have pressed the bank to step up its efforts to improve the lives of poor women and girls and those who live in fragile states, and the bank has made some clear commitments. These include more support to countries like Afghanistan.

IDA is an important and effective channel for international efforts to achieve the millennium development goals (MDGs). As the emerging findings of the Government’s comprehensive multilateral aid review demonstrate, its high-quality analysis and the deep expertise of its staff are drawn on by Governments in IDA countries to develop robust national poverty reduction strategies and make good public spending choices. In its own programmes, IDA delivers flexible assistance in support of countries’ priorities. As well as investing in areas such as health, education and agriculture it also helps countries develop the institutions, the policies and practices that underpin sustained poverty reduction and economic growth, for example helping to strengthen accountability and tackle corruption. The bank has a strong track record of robust evaluation and lesson learning, and its new transparency policy puts it at the forefront of multilateral agencies in this regard.

In light of IDA’S strengths, its central role in helping the international community achieve the MDGs, and the results and reforms it has committed to deliver, the UK will provide an average of £888 million a year for the next three years. The result of the negotiations, following all the donor pledges and action from bank management, is that IDA will have $49.3 billion (£32.4 billion) to invest in tackling poverty in the three years starting in July 2011, of which the UK’s burden share is 12%.

Northern Ireland Human Rights Commission (11th Annual Report)

Thursday 16th December 2010 Written Statements

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

I have today laid before this House a copy of the “Northern Ireland Human Rights Commission’s Annual Report and Accounts for 2009-10”, in accordance with schedule 7 paragraphs 5(2) and 7(3)(b) of the Northern Ireland Act 1998.

This is the 11th annual report published by the Commission.

“A Bill of Rights for Northern Ireland: Next Steps” (Responses)

Thursday 16th December 2010 Written Statements

[The Minister of State, Northern Ireland Office (Mr Hugo Swire)]

I have today published responses to the previous Government’s consultation on “A Bill of Rights for Northern Ireland: Next Steps”. The responses are available on the NIO website: www.nio.gov.uk.

A total of approximately 36,492 responses were received. There were 232 substantive responses and approximately 36,260 email and mail/freepost mailshots that were sent as part of campaigns by various groups. Individual mailshot responses have not been published on the NIO website due to the high volume received; however, sample versions have been made available.

There was considerable support from human rights and community groups for a wide-ranging Bill of Rights along the lines of that recommended by the Northern Ireland Human Rights Commission. They expressed concern that the proposals in the consultation document fell well short of this.

The consultation also demonstrated opposition to a wide-ranging Bill of Rights and support instead for a more limited set of rights that reflected the particular circumstances of Northern Ireland. This divergence of views was also reflected in the submissions made by political parties in Northern Ireland.

The Government will continue to consider how best to address this issue, but continue to urge all sides to work together to help build consensus on the best way to proceed.

Robert Hamill and Rosemary Nelson Inquiries

Thursday 16th December 2010 Written Statements

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

It is with regret that I must inform the House of a delay to the publication of the reports of the Robert Hamill and Rosemary Nelson inquiries.

The Robert Hamill inquiry has recently informed me that it expects to deliver its report to me by the end of February 2011. The Rosemary Nelson inquiry informs me that it currently expects to deliver its report by the end of April 2011. I have written to both inquiries to ask them to expedite their work and to continue to bear down on costs in these remaining months.

As with the Bloody Sunday and the Billy Wright inquiries, it is my intention to publish these reports as soon as practicable after I receive them, and I will inform and update the House accordingly.

Justice and Security (Northern Ireland) Act 2007

Thursday 16th December 2010 Written Statements

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

I have laid before Parliament the Third Report of Robert Whalley CB, independent reviewer of the Justice and Security (Northern Ireland) Act 2007 (the “2007 Act”).



This Third Report provides an assessment of the operation of sections 21 to 32 of the 2007 Act and the procedures adopted by the Brigade Commander 38 (Irish) Brigade for receiving, investigating and responding to complaints. The report covers the period 1 August 2009 to 31 July 2010.

The report highlights the security situation in the past year and the activities of residual terrorist groups who have been dangerous and disruptive and remain heavily involved in organised crime. The reviewer states that the police have had to deal with more threats and attacks this year, and this has led to a substantial increase (22%) in the use of stop and question and stop and search across the range of police powers. He also makes note of the heavy demand for the services of ammunition technical officers (ATOs).

The reviewer acknowledges that the police have responded to his recommendation to further develop recording systems and notes some improvement from his limited sampling of the records; however, there is still some way to go in pursuit of best practice. He welcomes the development of electronic recording which the police are pursuing and the thematic review which is being conducted by the human rights adviser to the Policing Board into the comparative use of police powers and development of best practice. He comments that it will significantly complement and enhance work in this area.

Mr Whalley highlights the marked decrease in military complaints and notes that the departure of the Pumas of 230 Squadron RAF has significantly altered the pattern of military flying in Northern Ireland. He states that the complaints system is efficient and responsive and must continue to function as effectively as it does now. He also emphasises the importance of engaging complainants, and suggests that it should be standard practice to offer a visit to Aldergrove (if not a flight in a helicopter) when a repeat complaint is made. He recommends the flying station at Aldergrove should take it as a high-priority task to keep the website on planned flying times up to date.

The Chief Constable and the Brigade Commander 38 (Irish) Brigade have both welcomed the independent reviewer’s report and the recommendations made. I too would like to thank Robert Whalley for his work and for the recommendations contained in his third report. I will consider them carefully.

Advisory Committee on Business Appointments (11th Report)

Thursday 16th December 2010 Written Statements

[The Prime Minister (Mr David Cameron)]

I have today published the 11th report of the independent Advisory Committee on Business Appointments.

The report provides an account of the Committee’s work in giving advice about appointments that senior Crown servants and former Ministers wish to take up after leaving Crown service. The report covers the period 1 April 2009 to 31 March 2010.

Copies of the report have been placed in the Libraries of both Houses.

Coastguard Services (Modernisation)

Thursday 16th December 2010 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

The United Kingdom is fortunate to have strong and effective front-line search and rescue capabilities, many of which are provided by volunteers, including some 3,500 volunteer coastguards carrying out coastal rescues, the lifeboats operated by the Royal National Lifeboat Institution and the volunteer mountain rescue teams. I would like to pay tribute to the dedication and commitment of these volunteers who provide a long-standing example of the contribution that individuals can make to the society in which they live.

Our front-line search and rescue services could not, however, function effectively and save the lives that they do without effective arrangements to identify and manage incidents, including directing the best placed and most suitable rescue assets to the scene. These arrangements are provided through our regular coastguard officers who also monitor ship movements around our coasts, provide information and services to seafarers and recreational water users, operate vessel traffic monitoring schemes in some locations, including the English channel, contribute to counter-pollution activities in our waters and support our volunteer coastguard force. They are currently located in 18 maritime rescue co-ordination centres around the UK.

The coastguard has a long and distinguished history. But in common with all public services it cannot stand still. Our seas are becoming busier with larger ships and increasing numbers of offshore renewable energy platforms, making key areas of our seas more congested. There are also increasing numbers of people using our beaches, coastlines and seas for leisure activities.

The current organisation of the coastguard—which dates back some 40 years—is not well placed to respond to these challenges. The lack of national co-ordination between the centres can result in limited resilience and an uneven distribution of the workload, especially during busy periods.

The latest technologies offer opportunities to address these issues and to modernise the coastguard enabling it to deliver a more integrated and improved level of service, at lower cost, with better-rewarded staff taking on increased responsibilities and with enhanced career opportunities.

With these objectives in mind, I am today launching a 14-week consultation about the modernisation of the coastguard service. The consultation document, which is available in the Libraries of both Houses and on the Maritime and Coastguard Agency website: www.mcga.gov. uk, sets out proposals to:

Establish two nationally networked maritime operations centres, located at Aberdeen and the Southampton/Portsmouth area, capable of managing maritime incidents wherever and whenever they occur and with improved information systems, together with a 24-hour centre at Dover looking over the busy channel traffic separation scheme.

Provide for five other sub-centres, fully integrated into the national network around the coast and operating during daylight hours. On the basis of an evaluation of the existing sites and the facilities available at them, it is proposed three of these should be located at Falmouth, Humber and Swansea. We also require sub-centres at either Belfast or Liverpool and either Stornoway or Shetland. The case for selection between these locations is more marginal. We are therefore inviting comments and information about factors that should influence the choice of sites for these two sub-centres.

Provide high quality and demanding jobs for our coastguards, with the job weight and pay reflecting the increased demands placed upon them in line with civil service pay guidelines.

Strengthen the leadership and support provided to our volunteer coastguards in the coastguard rescue service.

Improve present levels of service to the public while reducing costs.

The proposals do not affect the small centre operated by the coastguard alongside the Port of London Authority on the Thames in London.

These changes will strengthen the coastguard service by dealing with potential points of weakness in current structures and adding resilience throughout the system while also maintaining strong regional links and enhancing front-line rescue services through the volunteer coastguard.

Search and Rescue Helicopters (Procurement)

Thursday 16th December 2010 Written Statements

[The Secretary of State for Transport (Mr Philip Hammond)]

Together with my right hon. Friend the Secretary of State for Defence, I had planned to announce to the House today an intention to proceed with negotiations with the preferred bidder for the planned procurement of search and rescue helicopter capability. However, the preferred bidder has informed the Ministry of Defence within the last 48 hours that it has become aware of a possible issue in connection with its bid to provide the UK search and rescue capability, which was the basis of its selection as the preferred bidder as announced in February 2010.

In the circumstances it is not appropriate for us to proceed with the planned announcement until the status of this issue has been clarified.

My right hon. Friend and I will make a further statement to the House as soon as we are able to provide further information and to set out our plans for proceeding to secure the provision of search and rescue helicopter capability in the future. We regret the further uncertainty that this entails for all those involved in providing the UK’s search and rescue service.

Remploy (Annual Report and Financial Statements 2010)

Thursday 16th December 2010 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

Remploy has today published its annual report and accounts for 2010. Copies will be placed in the Libraries of both Houses later today.

House of Lords

Thursday 16th December 2010 Lords Chamber

Thursday, 16 December 2010.

11:00

Prayers—read by the Lord Bishop of Bristol.

Royal Assent

Thursday 16th December 2010 Lords Chamber

11:07

The following Acts were given Royal Assent:

Finance (No. 3) Act,

Equitable Life (Payments) Act,

Local Government Act,

Savings Accounts and Health in Pregnancy Grant Act,

Superannuation Act,

Terrorist Asset-Freezing etc. Act.

Women: Economic Policies

Thursday 16th December 2010 Lords Chamber

Question

11:07

Asked By

[Baroness Massey of Darwen]

To ask Her Majesty’s Government what assessment they have made of the impact on women of their economic policies.

[Baroness Verma]

My Lords, all departments will assess the impact on gender, race and disability of our economic policies as required by the equality duty laid down in legislation. This is the first time that has been done. The Treasury published an overview of the impact of the spending review on equalities alongside the main spending review announcement.

[Baroness Massey of Darwen]

I thank the noble Baroness for that response. It is all well and good, but has she read the Women’s Budget Group report on the impact of the CSR on women? Will she accept that there are different kinds of fairness and that women often lose out due to their caring responsibilities, among other things? Will she also accept that this impacts on their employment opportunities, and say whether an assessment has been made of that?

[Baroness Verma]

My Lords, I have read the report. I am very keen to support the fact that this Government are making fairness a key priority. I do not accept that the report sets out exactly what the Government are doing. Therefore, it is only right that noble Lords are informed that we have taken out of income tax 880,000 of the lowest paid workers, who are predominantly women. We are also protecting the lowest paid public sector workers from the pay freeze. Added to that, we are including and increasing flexible working for all people, rather than for just mothers and carers, so that we can enable women to enter a workplace that suits their needs rather than the needs always of employers.

[Baroness Howe of Idlicote]

My Lords, earlier this year the Women and Work Commission estimated that improving women’s participation in the workforce is worth between £15 billion and £23 billion to the economy each year. With the British economy clearly in need of such extra financial input, what plans do the Government have to ensure that both the private and the public sectors maximise talent at its appropriate qualification level? I ask this not least in light of the drastic cuts being made to government services, which will mean that the major job losses are in fact for women.

[Baroness Verma]

My Lords, in responding to the noble Baroness, Lady Massey, I pointed out that the Government take seriously the fact that the impact will fall predominantly on the lowest paid workers. That is why the Government have decided it is much better to ensure that flexible working is available to far more people. It means that women who often work in jobs below their potential are able to work at times better suited to them and their families, and that fathers are able to take more responsibility for caring at home.

[Baroness Gardner of Parkes]

My Lords, will the Minister confirm that the present Government aim to have more women on the boards of major companies? Does she think it is important to have women at that level coming through? If such board representation existed, it might have a filter-down effect that helps women all the way down the scale.

[Baroness Verma]

My noble friend raises an absolutely crucial point, and it is why we have asked the noble Lord, Lord Davies of Abersoch, to look at how government and business can work together to make sure that the boardrooms of public and private bodies are better represented. It is unacceptable that measurements taken in 2009 show that only 12.5 per cent of the board members of the FTSE 100 companies were women. We need to ensure that we are able to do this by having better arrangements for flexible working and through a culture change within those organisations.

[Baroness Hollis of Heigham]

My Lords, is the Minister aware that among families with children, those headed by women face double the cuts in benefits and services of other families? Is she further aware that among pensioners, those who are single, female and elderly—mostly widows—face double the cuts of other pensioners? How can it possibly be “fair”—a word the Minister used extensively in response to my noble friend Lady Massey—that those women, who are the poorest, who earn least and who own least, face double the cuts of everyone else?

[Baroness Verma]

My Lords, the noble Baroness is slightly misinformed.

[Baroness Hollis of Heigham]

No!

[Baroness Verma]

We need to take on board that we have introduced the triple guarantee to uprate the basic state pension by the highest of earnings, prices or 2.5 per cent from 2011. This is a difficult time for most people. Unfortunately, it is the result of what we have inherited.

[Noble Lords]

Oh!

[Baroness Verma]

We are in difficult times but we will protect the most vulnerable as best we can.

[Lord Lester of Herne Hill]

Is the Minister aware that during the passage of the Equality Bill the previous Government completely failed to tackle the problem that the provisions of the laws dealing with unequal pay for work of equal value for women are tortuous and unworkable? Do the Government have any plans to look at those provisions with a view to making the law effective and persuading employers to look at their pay scales and practices to eliminate direct and indirect sex discrimination?

[Baroness Verma]

My Lords, we are ending the pay secrecy clauses and working with businesses to ensure that they voluntarily work towards ensuring that pay between men and women is far more equalised. The equality duty that we will bring in in April will ensure that organisations are more transparent in how they are engaging across the board, not only on gender issues but on minority and disability issues, to make sure that everyone will be able to access a fair day’s pay for a fair day’s work.

[Baroness Gale]

My Lords, why out of the £16 billion being brought back into the Treasury from direct tax benefits will £11 billion come from the tax benefits to which women were entitled?

[Baroness Verma]

My Lords, I go back my first response. We have taken 880,000 of the lowest paid workers out of income tax. The majority of them will be women.

Public Disorder

Thursday 16th December 2010 Lords Chamber

Question

11:15

Asked by

[Baroness Miller of Hendon]

To ask Her Majesty’s Government whether, in the light of the public disorder that took place on 10 November and 9 December, they will introduce public order legislation prohibiting the wearing of masks or disguises at otherwise lawful demonstrations, marches and protest meetings.

[Lord Wallace of Saltaire]

My Lords, the police already have powers under Section 60AA of the Criminal Justice and Public Order Act 1994 to require the removal of face coverings worn for the purpose of concealing identity. The police also have powers to seize such items.

[Baroness Miller of Hendon]

My Lords, it does not appear so when we have these disturbances. It would be very helpful for the police if potential troublemakers did not wear masks, so enabling the police peacefully to move them on to avoid trouble.

[Lord Wallace of Saltaire]

My Lords, the tradition of policing in the United Kingdom is by consent and to maintain as far as possible the trust of the public with whom the police are working. It is therefore a matter of judgment for the police whether someone who puts on a mask during a demonstration in the middle of a very large crowd should immediately be arrested. We have to trust the judgment of the police on that. I am assured that a number of the arrests that took place at the end of and since recent demonstrations were of people who put on masks during part of the demonstrations.

[Lord Condon]

Does the Minister agree that this issue requires a proportionate and balanced response, and not an overreaction? There is a long history of masks and disguises being used peacefully by protesters as part of their repertoire of raising and ridiculing issues and sometimes individuals. Paradoxically, by donning a mask out of context, protesters can draw attention to themselves as potential troublemakers who are worthy of additional attention.

[Lord Wallace of Saltaire]

I thank the noble Lord for that question; he has of course great experience in this matter. The definition of a mask worn for the purpose of concealing identity and with the intention to commit acts of violence is tightly drawn. I passed someone at Victoria station this morning whose face was covered, I think, to keep him warm. Two days ago, I passed some Japanese tourists outside here who were wearing gauze face masks which I think were intended to prevent them catching the European version of Asian flu. They would not be caught by the Act.

[Baroness McIntosh of Hudnall]

Does the noble Lord accept that while one has great sympathy with the reasons behind the Question—I appreciate what has just been said about the necessity of balance in approaching this issue—there is one other balancing issue that should be taken into account: that police should not appear on such demonstrations with their identity numbers concealed or otherwise removed?

[Lord Wallace of Saltaire]

My Lords, that point is extremely well taken. I know that the police have it very much in mind.

[Baroness O'Cathain]

My Lords, does my noble friend realise how terrifying it can be when a mass of people are protesting and people come up wearing masks? It might be fine for great strong men like him, but it is not fine for a lot of people. The arguments against banning masks just do not hold water. Surely if there was a rule which stated that masks could not be worn, someone wearing a mask would be arrested. That would be the law. Why cannot we have it?

[Lord Wallace of Saltaire]

My Lords, Section 60AA is very tightly drawn, requiring police to be authorised in the particular circumstances to require any person to remove any item which the constable reasonably believes that person is wearing wholly or mainly for the purpose of concealing their identity. We have all of us been watching the demonstrations in recent weeks. We know how difficult it has been for the police to maintain the balance for the great majority of demonstrators who wished to undertake peaceful protest. I am sure that all of us wish to maintain the right to peaceful protest in this country. How the police deal with the minority of violent protesters is a matter that we must leave to operational judgment on the day and at the time.

[Lord Hunt of Kings Heath]

My Lords, the noble Lord is surely right to say that this matter has to be left to the judgment of the police. Does he agree that it shows some of the difficulties that the police have and that they need support? Does he really think that the Government are giving the police the necessary support in the light of the drastic cuts in budgets that are going to be made to the Metropolitan Police Force?

[Lord Wallace of Saltaire]

I might well have anticipated that question, as it comes up on all possible occasions. The Government are giving the police all the support that they can. I am informed that a number of the people arrested after demonstrations are people identified as having been wearing masks, but if they have also been identified as taking part in more serious offences, they will be charged for the more serious offences first.

[Lord Trimble]

My Lords, will the Minister please think about this point again? The offence as currently on the statute book is very tightly drawn and, consequently, means that policemen engaged in a situation will be very cautious in their approach to things. We might like to take into account the experience in Northern Ireland, where, for decades, it was an offence simply to wear a mask in public, and it did not cause any of the difficulties alluded to earlier.

[Lord Wallace of Saltaire]

My Lords, one simply has to ask whether it helps when police are attempting to control a very large demonstration to ask for police snatch squads to try to go in to the middle of a demonstration to seize particular demonstrators, which is in effect what the noble Lord is asking for. We have to leave this to the judgment of the police on the day. I am assured that a number of those who were wearing masks and, for example, in the 24 November demonstration, vandalising a police van in the middle of Whitehall were identified afterwards and some of them have been arrested.

[Lord Pearson of Rannoch]

Do the powers extend to the removal of a burka that might have been donned during a demonstration?

[Lord Wallace of Saltaire]

My Lords, I have already quoted Section 60AA of the 1994 Act, which says,

“for the purpose of concealing … identity”.

I have also said that there are plenty of other reasons, not simply including religious identity, for which people may indeed wear masks. If it gets colder in the next few days, we can expect to see many more white Christian Englishmen, perhaps even including the noble Lord—I am not sure whether he is a Christian or not, but that is up to him—wearing masks that keep their faces warm.

Indonesia

Thursday 16th December 2010 Lords Chamber

Question

11:22

Asked By

[Lord Harries of Pentregarth]

To ask Her Majesty’s Government whether they will make representations to the Government of Indonesia regarding the initiation of a dialogue with the indigenous West Papuan opposition.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, the UK remains committed to the territorial integrity of Indonesia. We will do all we can in support of measures to address the widespread poverty in the area in question, and to raise our concerns about human rights abuses wherever they occur. We encourage, along with other international partners, a meaningful dialogue which would be of assistance in finding an acceptable solution.

[Lord Harries of Pentregarth]

I thank the Minister for his reply, but would he urge on the Indonesian Government the sheer seriousness of the present situation? He will not need to be reminded of the statement of the Foreign Secretary in the other place that friendly relationships with states should in no way preclude our raising human rights abuses in the strongest terms. Would he draw the attention of the Indonesian Government to the fact that 10,000 people are assembled in June to reject the so-called special autonomy measures? The West Papuan people do not believe that these are helping them, and a dialogue is needed with their leaders.

[Lord Howell of Guildford]

I appreciate the very strong feelings on this subject, not only of the noble and right reverend Lord but of many people about some of the reports from that area. I fully endorse what my right honourable friend the Foreign Secretary said in another place. Our ambassador raised with the governor authorities only a couple of weeks ago some aspects concerning human rights that clearly concern us greatly. The Deputy Prime Minister raised questions of human rights in the area and of access of journalists, to see just what is going on, when he met senior Indonesian Ministers at the Asia-Europe summit in October. So we certainly have not been silent on this matter, but we do believe that it really is the responsibility of the central, district and provincial Governments and all the parties concerned to work out exactly how a dialogue is going to go forward. There are real restraints on how much we can do from outside, except to keep raising our voice about the clear abuses of human rights that have, sadly, occurred.

[Lord Avebury]

My Lords, I declare an interest as having been involved for two and a half years in the negotiations between the Indonesian Government and the Acehnese people, which led to a successful conclusion. Has the example of that process, and in particular the use of mediators, been considered by the parties? If not, could it be suggested by the Government to the Indonesians?

[Lord Howell of Guildford]

In instances such as the one that my noble friend has mentioned, mediators and facilitators can play a part. We have not been asked to play such a role ourselves, but I would not question the proposition that in very difficult and intense situations of the kind that we are discussing, this kind of mediation can undoubtedly play a part. However, we have not been asked to play that part.

[Lord Hannay of Chiswick]

Will the Minister confirm that the Indonesian Government are maintaining their ban on foreign journalists going to Papua? If that is so, does he not agree that the ban is entirely counterproductive, because it nurtures the view that there is something going on there that has to be concealed? Will he therefore say whether the Government will follow up the intervention by the Deputy Prime Minister at the Asia-EU summit and press the point on the Indonesian Government in their own best interests?

[Lord Howell of Guildford]

Certainly what has been raised by the Deputy Prime Minister will be followed up. The noble Lord mentioned concealment. If he has visited websites, as I have, to look at reports of what is going on there, he will have seen enough to realise that horrific and dreadful things have occurred. While the case for greater access for journalists is always strong and we will pursue it, we can already see what is happening there.

[Baroness Liddell of Coatdyke]

My Lords, the noble Lord will be aware that one of the associated problems in Indonesia is that of people smuggling. In view of the tragedy overnight off Christmas Island, will the Government do everything in their power to raise again in international fora the need for concerted international action against people smuggling?

[Lord Howell of Guildford]

Yes, of course we will. One has to echo the words of the noble Baroness about the sadness and tragedy so graphically depicted in photographs in our newspapers this morning of these refugees—boat people of a kind—going to a terrible death in the storms off Christmas Island. It is very sad.

[Baroness Symons of Vernham Dean]

My Lords, the Minister was kind enough to tell us that the ambassador raised these issues, as did the Deputy Prime Minister at the summit a couple of months ago. Will he tell us what the response of the Indonesian Government was to having these matters raised?

[Lord Howell of Guildford]

Not in detail, except that they recognised we have these concerns. The ambassador was in the West Papua region and talked to the governor and to the police authorities. He made the point very clearly that the reported abuses of human rights are completely unacceptable and that we are very concerned. As far as concerns their response, we must try to look forward to the possibility of getting a dialogue going so that an acceptable solution can be found. However, from outside it is very difficult for us or for any other international partner to define what that solution should be and how it should go forward.

Extradition: Gary McKinnon

Thursday 16th December 2010 Lords Chamber

Question

11:29

Asked By

[Lord Maginnis of Drumglass]

To ask Her Majesty’s Government what is their current position regarding the request for the extradition of Gary McKinnon.

[The Minister of State, Home Office (Baroness Neville-Jones)]

My Lords, a judicial review of a decision by the previous Home Secretary to uphold an order for Mr McKinnon’s extradition stands adjourned. My right honourable friend the Home Secretary is reviewing the case against the sole legal test, which is whether, given Mr McKinnon’s medical condition, extradition would breach his human rights. My right honourable friend has sought Mr McKinnon’s consent to a psychiatric assessment by clinicians recommended by the Chief Medical Officer. A response is awaited from his solicitors.

[Lord Maginnis of Drumglass]

I declare an interest in so far as I chaired the independent review of autism services in Northern Ireland and currently chair the Northern Ireland autism regional reference group. I am grateful to the Minister for her Answer, but does she accept that inadequate recognition and the total lack of appropriate interventions for those with an autistic condition, which was first identified and defined by Kanner in 1943, have deprived someone in Gary McKinnon’s age group of his human rights and that to extradite him would exacerbate the social neglect that he has suffered? Do we not have a more compelling moral responsibility in this instance than a legal one?

[Baroness Neville-Jones]

Medical science has advanced through the ages, and we have a better understanding of some of these conditions. With regard to Mr McKinnon’s case, it is of course precisely the issue of the state of his medical condition and whether the extradition would breach his human rights that is at issue at the moment. We hope that he will be willing to undertake an examination, with agreed clinicians.

[Lord Dholakia]

My Lords, many of the judicial avenues open to Mr McKinnon have now been exhausted. The sad part about it is the particular state of disablement that he suffers. A conversation was recorded between the Prime Minister and President Obama in July this year where they said that they were looking for agreeable solutions. Has such a solution been found? Will the Minister confirm that the Extradition Act 2003 does not require contestable evidence? Does it not work to the detriment of British citizens, and should it not be reviewed?

[Baroness Neville-Jones]

On the first point, as my right honourable friend the Home Secretary has made clear, we have a legal framework within which Mr McKinnon’s case is being considered. On the second point, my right honourable friend has asked for a review of extradition provisions, including the US/UK treaty as well as the European extradition warrant. Sir Scott Baker will be considering some of the issues to which she has made reference.

[Baroness Browning]

My Lords, having been actively involved in the other place in the Gary McKinnon case, I have read his psychiatric reports that were made available to the Home Secretary before the general election. I understand that the Minister is seeking further medical reports. Does she agree that the evidence already before the Home Office shows overwhelmingly that the threat of self-harm is not an idle threat but is very real? Does she also agree, in the light of the damage that has been caused to the American Government by Wikileaks, that, rather than trying to imprison an autistic savant, the Pentagon would do well to employ Gary McKinnon to sort out the weaknesses in its computer system?

[Baroness Neville-Jones]

If I might respond to the first part of my noble friend’s question, one of the factors that influenced my right honourable friend the Home Secretary to stay the judicial review that was in progress was precisely the desire to take a second look at the question of Gary McKinnon’s medical condition. The House will understand that she has asked for a separate and impartial view to be taken of his medical state.

[Lord West of Spithead]

My Lords, did the Minister or any members of the current Government have discussions with the Americans about this case when they were Opposition, and were they given any indications about how the Americans would behave with regard to it?

[Baroness Neville-Jones]

I have not had any discussions with the Americans and I cannot, without notice, answer for other members of the Government.

[Lord Hodgson of Astley Abbotts]

My Lords, I want to ask my noble friend about the timing of the Scott Baker review. Clearly, this is an increasingly urgent matter, given this and other sad cases. The latest parliamentary Answer that the Minister has given is that it will take place in late summer, which is a fairly broad date. Could we have an update on the timing? Does the Minister not share my regret that this unbalanced treaty was slipped—not passed—through by the previous Labour Government without any parliamentary scrutiny at all?

[Baroness Neville-Jones]

My Lords, I would hope that the legislature had done its proper job. As regards the review being conducted by Sir Scott Baker, he has indeed been asked to report by next summer. The reason for that is to allow him to conduct a proper review. If I might say so, there is a general feeling that some of the provisions need looking at. If they are to be looked at, they need to be looked at thoroughly. They include such matters as the breadth of the Secretary of State’s discretion; the operation of the European arrest warrant; whether we should commence the forum bar; whether the UK-US extradition treaty is unbalanced; and the whole question of whether requesting states should be required to provide prima facie evidence. This is a long and substantial list of items. I am sure the House will agree that it is right that those conducting the review should be able to do a thorough job.

[Lord Hunt of Kings Heath]

My Lords, we will clearly look forward to the outcome of the review with a great deal of interest. I hope the noble Baroness will agree that there should then be parliamentary debate. However, will the noble Baroness confirm that the 2003 Act, which was debated in Parliament, enabled the UK to align extradition arrangements with EU member states, the US, Canada, Australia and New Zealand, and has been instrumental in bringing back to this country people who have committed crimes against UK citizens?

[Baroness Neville-Jones]

The noble Lord is correct in saying that the Act has enabled the UK to request the return of citizens to this country for trial. There are some erroneous figures out in the open about the operation of the UK-US treaty. The numbers in each direction are pretty much the same. There have been 25 cases of people returned to the UK and 29 of individuals returned to the US by the UK.

Arrangement of Business

Thursday 16th December 2010 Lords Chamber

Announcement

11:37

[Lord Shutt of Greetland]

My Lords, immediately after the conclusion of the debate in the name of the noble Lord, Lord Moynihan, my noble friend Lord Marland will repeat a Statement on electricity market reform.

Loans to Ireland Bill

Thursday 16th December 2010 Lords Chamber

Business Statement

11:38

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, with the leave of the House I will make a Business Statement about the Loans to Ireland Bill, which had its First Reading last night and was printed this morning.

On 22 November, my right honourable friend the Chancellor of the Exchequer announced that the United Kingdom, alongside the International Monetary Fund and the European Union—the eurozone and other member states—will participate in the international financial assistance package for Ireland. The United Kingdom has agreed in principle to make a bilateral loan to Ireland of approximately £3.25 billion, as it is in our national interest that the Irish economy and banking system are stable. The Government have therefore introduced a short Bill, designed to provide the necessary authority for HM Treasury to advance these funds to Ireland.

The intention is to fast-track the Bill. It is important for the Government, the IMF and the other lenders to be sure that the legislation will be passed so that they can assess the adequacy of the whole international support package. The IMF board is meeting to discuss the package today. Noble Lords will appreciate that insuring against further financial market instability is also imperative in the current environment. The Bill was introduced in another place on 9 December. In line with recommendations on fast-track legislation made by the Constitution Committee of this House, the Explanatory Notes to the Bill contain a full explanation of the case for fast-tracking and address the key questions set by the committee. In particular, the Explanatory Notes set out that the Bill contains a sunset provision, so that the authority to lend to Ireland and the power to increase the cap lapse after 8 December 2015—five years after the date of introduction in another place.

At the completion of stages in another place yesterday, the Bill was certified as a money Bill by Mr Speaker because its sole purpose is to authorise financial expenditure. The usual channels have agreed that the Second Reading of the Bill will be taken next Tuesday, 21 December, before Committee stage of the Public Bodies Bill resumes, and that remaining stages will be taken formally immediately after Second Reading, as is usual practice for money Bills. This will allow the Bill to receive Royal Assent before both Houses rise for the Christmas break. A list of speakers for Second Reading of the Bill next Tuesday is already open in the Government Whips’ Office. This approach has the agreement of the usual channels and I hope that the whole House will support it.

Business of the House

Thursday 16th December 2010 Lords Chamber

Motion on Standing Orders

11:40

Moved By

[Lord Strathclyde]

That Standing Order 46 (No two stages of a Bill to be taken on one day) be dispensed with on 21 December to allow the Consolidated Fund Bill to be taken through its remaining stages that day.

Motion agreed.

Procedure Committee: Third Report

Thursday 16th December 2010 Lords Chamber

Motion to Agree

11:41

Moved By

[The Chairman of Committees]

That the 3rd Report from the Select Committee (HL Paper 71) be agreed to.

[The Chairman of Committees (Lord Brabazon of Tara)]

My Lords, this report covers several matters, some of which are, I hope, self-explanatory. However, I hope it will be helpful if I refer briefly to three of our recommendations.

First, we have considered the proposals of the Leader of the House regarding the future timetabling of Thursday debates, both for the present, two-year Session, and for future Sessions, which will run from spring to spring. We are satisfied, on the basis of figures and projections provided by the Clerk of the Parliaments, that the Leader’s proposals will provide the same number of Back-Bench debate days as the current arrangements. We therefore recommend this proposal to the House.

Secondly, we have endorsed a suggestion by the Leader of the Opposition that the limit on the number of topical Oral Questions allowed per Member should be increased for the duration of the present, long Session. In deciding on an appropriate limit, we have had to balance the length of the Session against the growing number of Members wishing to table Questions. We therefore recommend a one-off increase in the limit from four Oral Questions per Session to five.

Finally, we have considered the conduct of Oral Statements. We recommend that in future Members wishing to ask questions on an Oral Statement should, as a courtesy to other Members, be present to hear the whole Statement read out. This is a modest change, but I hope that the House will welcome it.

Motion agreed.

Gulf of Mexico: Oil Spill

Thursday 16th December 2010 Lords Chamber

Debate

11:42

Moved By

[Lord Moynihan]

To call attention to the implications of the Deepwater Horizon oil spill in the Gulf of Mexico; and to move for papers.

[Lord Moynihan]

My Lords, I declare an interest as one of many long-term investors in BP shares as part of a pension fund and, more important for today’s debate, as a director of Rowan Companies. I have had the privilege to sit on Rowan’s board for 12 years and have chaired its health, safety and environment committee since its inception. We are a high-spec jack-up rig company with a manufacturing and land drilling business headquartered in Houston, Texas. I should add, in the context of today’s debate, that Rowan has no involvement in deep-water drilling activity.

The explosion that we are considering, and its consequences, occurred on the Transocean Deepwater Horizon at 10 pm on 20 April this year. It is known that the crew had been fighting circulation issues on the rig, where the weight of the muds and pressure of oil were not matched. The explosion was a horrific human disaster that rapidly turned into one of the worst environmental catastrophes in the history of the energy business.

In 1990, when I was appointed Minister for Energy with responsibility for implementing the Cullen report, a different approach was followed by the British Government from that energetically pursued by the Obama Administration before the mid-term elections. Back then, on 6 July 1988, the Piper Alpha rig, a North Sea oil production platform, was the subject of a tragic explosion and the resulting fire destroyed the rig and killed 167 men, with only 59 survivors. The Government of the day, with the support of the Opposition, responded calmly and worked with the industry on both sides of the Atlantic—indeed, with the US company Conoco leading—to implement a new safety regime, which currently leads the world.

Deep-water drilling is the future of the industry. Such drilling characteristically takes place in hostile conditions and is at the leading edge of drilling technology. Deep water is where the world’s hydrocarbon growth market exists and is the main area for offshore production growth, with deep-water discoveries accounting for 50 per cent of world discoveries over the past three years. The deep-water discoveries are significantly larger in size than the new onshore discoveries, with 150 million barrels of oil equivalent being the average size of a deep-water discovery compared with 25 million barrels onshore. Deep-water production has doubled over the past five years and is expected to double again over the next five years. The reality is that, given the annual discoveries required to meet world demand, in 20 years’ time we will need to discover and produce as much from deep-water drilling as we do in total world wide today. However, as we have seen, deep-water exploration and production are still in their infancy, and the focus has been on exploratory wells. A backlog of needed development drilling may indeed be building.

Against that background, we need to consider not only what is happening in the offshore oil and gas drilling business but the relevance of this morning’s announcement that the US intends to take legal action, as was expected. It would be inappropriate to comment on the legal implications of that, but equally the announcement was part of due process and those who follow the industry recognised it as such. What is relevant is that the decision has formally spread the net much wider; many counterparties have been added, and I anticipate that more will be added. The announcement underlines the fact that Deepwater Horizon was a major industrial accident, but I have to say that the approach being taken is in stark contrast to the total focus on BP by the Obama Administration before the mid-term elections.

That point about BP brings me to my remarks on governance. The British, much more than the Americans, favour the separation of powers between the chairman and the CEO. This is not just for good governance, as the role of the chair is to provide air cover for the CEO. In the case of BP, the chair should have been available to cover while his CEO focused on the operational issues, for the only person who can provide such cover is the chairman. Regrettably, Tony Hayward had no port of call, as he had no effective chairman. As a result, he had become too close to the action. When the chairman finally appeared, to the embarrassment of many his reference to “the little people” on the lawn of the White House achieved the unthinkable by yet further damaging the reputation of the company. As a result, BP presented a soft public-relations target.

Interestingly, BP is in the interesting position that there may be a silver lining for the company in this tragedy. The real problem facing the major oil companies is growth. Many are simply too big. BP has been forced to shrink substantially, to a level from where it can begin to grow again. I believe that the very size of the behemoths in the industry will lead to potential safety incidents in the future, unless these issues are addressed very seriously world wide today. Over time, the reaction will be for these very large companies to break themselves up into refining, marketing, midstream and downstream businesses. I sensed that the noble Lord, Lord Browne—an eminent former CEO of BP—came very close to this point.

A second issue, which is well known to the Minister from his previous professional life, results from insufficient capacity in the insurance market. The liabilities are now too big for few except the majors to deal with. The question that I pose is whether the insurance market can be encouraged to provide more cover and, if so, how. Most available capacity is about £2 billion yet, post the Deepwater Horizon disaster, capacity needs to be of the order of £20 billion or more.

The nature of deep-water drilling—indeed, the nature of our offshore licensing regime—requires work in partnerships. On many occasions in the North Sea, BP has benefited from working with small independents, which often have the ability to show more ingenuity, more innovation, more responsiveness and more fleetness of foot. Small independents can be more focused on the success of an individual well, which can have a major impact on an independent’s balance sheet, whereas the majors can sometimes lose sight of the detail within a wider portfolio of assets and innumerable drilling activities, which dilutes the focus of the senior management. Put simply, on many occasions independents have brought a more user-friendly approach to drilling activity. I am a believer in diversity in the industry, as you get the most out of any situation from having a range of players involved in an activity. However, the disaster in the Gulf of Mexico has pushed back deep-water exploration to the big battalions, in an unseemly battle between a major oil company and a sovereign Government.

If I were running an independent today, the first question that I would ask my management team is, “Are we engaged in operations anywhere in the world that could bring down the company?”. If so, deep-water drilling is not a risk that I would be prepared to take. However, there is little evidence that the independents can receive protection from the insurance market. I put it to the Minister that this is potentially a huge loss to an industry that is focused on the deep-water exploration that, as I outlined earlier, is so essential to the future of oil and gas production. We must avoid a scenario in which the independents are precluded from deep water.

I turn to the implications that I believe will follow. The first and most important issue for any oil and gas company—indeed, for any company—is safety. Safety is everything. Safety cases need to be in place on oil rigs, not gathering dust. Active, live safety regimes are critical to the safe performance of activities in very hostile conditions. Nothing is more important than a strong safety culture. There needs to be more on-board safety exercise, with all persons on rigs required to participate.

I propose for the consideration of the industry that, in each country world wide, a single entity should have broad safety and pollution prevention responsibility to avoid the gaps, overlap and confusion that exist in some safety and regulatory regimes. The regulator’s core responsibilities and objectives must be clearly identified. Safety management and regulatory priorities should also be identified through a comprehensive risk assessment programme.

At the heart of safety is training. Training and competency programmes must take account of new risk information. Contracting strategies need to take account of safety and risk implications.

I have always believed that government and industry should promote an improvement mentality, not a compliance mentality. Continuous communication is essential—communication among regulators, operators, contractors, workers, industry associations and public interest groups—if we are to achieve that objective of a continuous improvement in safety. Operators and contractors must manage their companies to achieve safety objectives and must continually assess the effectiveness of their management programmes. I believe that regulators world wide should seek not to resolve problems but to serve the industry by distributing information by, for example, hosting workshops so that the industry itself can solve the problems.

Wherever possible, the best standards should be identified and applied internationally. The industry should not have different standards in different countries. Accident investigations should always be conducted independently, and findings should be promptly and broadly distributed and discussed with all personnel.

Industry and government cannot rely solely on incident data to identify risks. New indicators must be explored and assessed, particularly for major hazards and safety culture. Worker input into safety culture is absolutely essential—you are as strong in safety as your weakest link. Peer-based audit programmes should be considered for both regulators and operators. I hope that the Minister will agree that all personnel should be trained to be safety leaders and should be empowered to stop work on a rig without blame. In the context of the disaster in the Gulf of Mexico, inspection of life capsules also needs to be reviewed. Why were two life capsules not deployed on the Transocean rig?

As I mentioned, training is critical. Back on land, training to plan for managing disasters offshore—from media training and helicopter co-ordinator training to incident command training—needs to be reviewed in order to understand better how to handle an incident.

A final point on the implications of those safety considerations is the importance of a clearer definition of the respective roles of the drillers and operators. While the operator is the overall supervisor and co-ordinator of the project, the processes and the people lie within the control of the driller.

Against that background, I congratulate the Government on their measured response to the incident. However grave the human and environmental disaster—and there is no denying the scale of severity of both—this was not the time for the fury of a nation to be turned on a major drilling accident. The aftermath became grossly political and over-reactive, from the press coverage to the McCarthyesque attempt at character assassination by some at the congressional hearings. Both of those damaged American national interest and were in stark contrast to our reaction to the Piper Alpha disaster, with its huge loss of life.

The Secretary of State, Chris Huhne, was right to state that the Deepwater Horizon gives us pause for thought and, given the beginning of exploration in deeper waters west of Shetland, there is every reason to increase our vigilance. DECC has increased the oversight of drilling operations by requiring additional inspectors in its Aberdeen office. Can the Minister confirm that the number of annual inspections of drilling rigs will double? If that is the case, do the Government feel that there should be further changes to the inspections, both in content and frequency?

I understand that DECC is also reviewing the indemnity and insurance requirements for operating on the UK continental shelf. Can the Government respond to my earlier observations on the cost of cover and exposure, which will be prohibitive for many of the independents on which the success of North Sea exploration and production has been built? Does my noble friend agree that this could seriously damage future activity in deep-water, high-pressure fields to the detriment of activity in UKCS waters? If so, what action do the Government intend to take in this context? Have the Government asked the insurers to work with a new group of regulators and oil companies—the oil spill prevention and response advisory group, or OSPRAG—to study this issue and come forward with solutions? If action is not taken, only the very few, strongest self-insured operators will, as I have argued, be able to participate.

Having made some observations earlier on the chairman of BP, I hope that the House will allow me to end by paying tribute to the substantial contribution that Tony Hayward made to the company throughout his lifetime of service. His knowledge base and talent were identified, recognised and nurtured by the noble Lords, Lord Simon and Lord Browne, who as his predecessors encouraged his exceptional talents. On the occasion of the explosion of the Macondo well, in terms of the safety culture that he had rigorously sought to implement since first setting foot in the CEO’s office, Tony Hayward’s instincts, initial judgments and strategy were sound in the immediate aftermath of that crisis and helped to pave the way to assist many thousands of people affected by the tragedy. The problem grew into an issue of how those judgments and strategy were put into effect and how to handle the media and inevitable US pre-election political assault. History will show that it can never be said that Tony Hayward did not recognise the incident’s heavy toll on the Gulf, its inhabitants and the workers on the rig. Nor can anyone doubt his total commitment in seeking to address the nightmare that was engulfing the industry, BP, his colleagues, his family and himself on the very subject to which he was committed—the safety of his workforce in the world’s most hostile yet necessary industry. That industry will fuel much of the world’s economy in the 21st century through deep-water offshore oil provinces, in which so much of the industry’s future will be based.

11:58

[Lord Grantchester]

While the rhetoric has subsided to a large extent on the oil spill disaster, nevertheless the reality of the event has to be recognised and recent events taken into account. For BP, the event was a near-death experience. It appeared that BP did not know what was happening as it seriously underestimated the flow-rate discharge. It appeared not to know how to stop the flow, as three attempts to stem the well failed. It appeared unappreciative of the depth of the concern regarding the effect of the spill on the environment and the impact on other businesses in the gulf.

The Macondo spill resulted at one stage in a 50 per cent fall in BP’s share price, while the stock market had concerns about whether the asset base of the company was deep enough to meet its ultimate liabilities. BP’s stock briefly rallied following the initial disaster but this morning it fell again as the US Government announced their plan to take legal action against BP for the disaster in the Gulf of Mexico. They are planning to sue BP, in addition to Anadarko of the US and Mitsui of Japan, its partners in the disastrous Macondo well; Transocean, the owner of the Deepwater Horizon drilling rig; and the QBE syndicate 1036 at Lloyd’s of London, which insured the rig. The claim is for $21 billion.

Following extensive political debate and government discussion undertaken in the full glare of publicity, BP has responded to stabilise the situation. Among the measures taken, it has set aside $20 billion in an escrow account under third-party control with no cap on its liabilities and excluding potential penalties. BP is perhaps grateful for the political pressure to withhold two quarters’ dividend payments, with the challenge to resume but not restore dividend payments in 2011. It must be borne in mind that this affected the pension funds of many people on both sides of the Atlantic. In addition, BP has cut its capital expenditure and, since the disaster, has now disposed of $43 billion value of assets to increase liquidity. The spill over the 87 days before the capping stack attempt succeeded in stemming the leak is estimated at 4.9 million barrels and resulted in a record $17 billion second-quarter loss to the company.

The company has made its internal inquiry extensively available. The internal inquiry did not identify any single action or inaction that caused the accident. Rather, a complex and interlinked series of mechanical failures, human judgments, engineering design, operational procedures and contractor interfaces allowed an escalation of errors. The report presented eight key findings related to the causal chain of events and recommendations that have been examined throughout the industry and between national regulatory regimes.

The UK already has a robust regulatory regime introduced following the Piper Alpha disaster of 1988. For deep-water drilling, operators are being required to demonstrate that the factors identified in the BP report have been satisfactorily addressed—that there is effective co-ordination between all the companies involved and between companies and relevant government agencies. In this light, it is correct that the UK Government do not see a case for any ban on deep-water drilling. The strength of the UK regulatory regime was recognised in the initial report from the US Department of the Interior, which identified that elements of our regime should be implemented there, in particular a case-by-case safety appraisal, independent verification of the design of wells and, most important, the separation of the health and safety function from the licensing function within government.

The Macondo incident has shown that co-ordination between all the companies involved and between companies and relevant agencies is an essential part of safe operations and will be a requirement to be demonstrated. The industry needs an environment where best practice is shared and lessons are learnt. The UK regulations also contain a range of additional safeguards, statutory requirements, checks and verifications. While it is impossible to say that such a blow-out as occurred in the Gulf of Mexico could never happen in UK waters, our regulations provide a reduced probability of such an event.

The US has separated health and safety from licensing in two different agencies and has implemented two new rules to improve safety. First, there is the drilling safety rule to make mandatory several requirements for the drilling process and, secondly, there is the workplace safety rule to make programmes to identify potential hazards and to introduce risk reduction protocols.

Since the capping of the well on 15 July, BP has had to revise its business to ensure that safety is placed at the heart of its operations. Finance and reputation have been further strengthened through structural and personnel changes. Under the guidance of a new chief executive, Bob Dudley, the exploration division has now been split between exploration, production and development, each with separate leaders reporting to the chief executive. In addition, BP has re-examined the low-probability, high-impact quartile of its risk register and introduced a new executive role with powers to intervene, also reporting to the chief executive. These changes help to ensure that a greater emphasis is placed on risk management.

Furthermore, BP has examined its relationships with contractors to review the balance between, on the one hand, its incentives and reward structures, with the corporate emphasis on operational objectives such as timely fulfilment, and, on the other hand, the emphasis on safe operations. It needs to introduce further measures to incentivise safety. BP has identified improvements to its response capability in operations made complex by the very nature of deep-water drilling.

I am informed that BP, with the rest of the industry, is examining best practice in communication and sharing of experiences. In hindsight, it is examining the disincentive to share near-miss experiences, such as the one that happened in the Shell Sedco 711 platform in the North Sea in December 2009, when a blow-out preventer worked and shut down operations, in contrast to what happened in the Gulf of Mexico.

I am grateful to the Minister for making his contacts in BP available to outline their changes to business practice. Not only is it necessary to focus on preventing major oil disasters and disastrous events, but examination of all leaks, spills and seepages in operations must also take place, with the necessary reporting structures to build up a culture of continuous improvement within the industry and with the emphasis on safety and the minimisation of environmental degradation.

In response to the gulf inquiry, an industry-led initiative has set up the Oil Spill Prevention and Response Advisory Group—OSPRAG—to liaise with industry and government. I would like to ask the Minister what discussions have taken place with this group. What areas of concern are being addressed? Will it continue to meet to a regular timetable?

In light of the huge amounts of dispersant that have been used in the gulf, can the Minister tell us what monitoring and research is happening and being shared with Her Majesty’s Government concerning dispersant effects on the environment? I understand that no advances in dispersant technology have occurred since the 1989 Exxon “Valdez” spill.

I am grateful to the department for making available the shareholder map of responsibilities in respect of the regulatory framework. Action 9 of the department’s annual energy statement makes a commitment,

“to undertake a full review of the oil and gas environmental regime following the outcome of the investigation into the causes in the Gulf of Mexico incident”.

Can the Minister advise the House when that review will be finalised and whether it will include a best-practice review by the Better Regulation Task Force or the Risk and Regulation Advisory Council?

Finally, I ask the Minister whether the Government are setting up any formal structures to improve dialogue internationally between Governments, especially with the United States, to monitor exploration as it takes place in ever more remote and potentially hazardous environments as the search for oil reserves continues.

The North Sea remains an extremely important resource to the UK: the UK’s oil and gas resource is estimated to be up to 24 billion barrels equivalent. The sector at present provides about 60 per cent of the country’s energy and benefits the balance of trade to the tune of some £30 billion a year. This disaster highlights the challenge to move decisively towards a low-carbon economy. Recently a report from a group of business leaders drew attention to what it called the peak oil debate and urged an added emphasis behind renewable energy that green campaigners have been longing for. Meanwhile, BP announced yesterday a significant discovery in the deep-water west Nile delta in Egypt. It cannot be a return to status quo practices. We must press on and continue in the transition to safer, more sustainable energy. I look forward not only to the Minister’s reply but to his Statement later today.

12:04

[Baroness Falkner of Margravine]

My Lords, the BP oil spill in the Gulf of Mexico was the biggest oil catastrophe in American history and possibly in peacetime history overall. Eleven people died; numerous others suffered injuries as a result of the explosion on the Deepwater Horizon platform; an estimated 5 million barrels of oil escaped into the sea; and we will never know how much oil ended up in the deeper ocean. There was considerable damage to people’s livelihoods, and to marine and wildlife, as well as to the reputation of a distinguished multinational connected to this country.

While my noble friend Lord Moynihan and the noble Lord, Lord Grantchester, have greater expertise on the technical aspects of this catastrophe and what it means for safety regulation for oil rigs in the deep seas, I shall concentrate on the unsustainable and insatiable American appetite, and that of the developed world, for fossil fuel in non-renewables. The implications for the UK are equally profound.

I merely note that the debate about the technical failures of BP and the other companies involved is of great significance because we must learn the lessons from it. As a recent report on the “Today” programme revealed, a Shell platform only narrowly avoided a similar incident in December 2007. The safety review discovered a series of misinterpretations and mistakes by the crew operating the platform, which was very similar to what happened in the BP case. Fortunately, as the noble Lord, Lord Grantchester, said, the blow-out preventer worked and a major oil catastrophe was averted in the North Sea. While the risks of deep-sea drilling are thus evident and widespread, I want to focus on some of the bigger lessons on which we need to draw for a British policy on energy and oil, and on climate change and the environment.

The BP oil spill is not an isolated case with tragic outcomes. It is in fact symptomatic of the larger risks that we are forced to take as the world reaches the point where our demand for petroleum outstrips our capacity to find and produce it. It is a simple geological truth that the world’s oil reserves are limited. What is not known is the amount of oil that is still available to us for commercial exploitation. For decades, the international oil companies and the Governments in oil-rich countries have assured us that there was no danger that we would soon come close to exhausting world oil reserves. They told us that the doomsday scenario of a so-called “peak oil” was misguided. This optimistic outlook seemed justified over the past several decades as new oilfields were discovered and technological innovation allowed us to dig for ever more remote reserves. But in recent years peak oil theory has gained traction in international energy debates and can no longer be dismissed as scaremongering or out of hand.

In 2009, the UK Energy Research Council carried out a major review of about 500 studies of future oil reserves. It concluded that,

“a peak in conventional oil production before 2030 appears likely and there is a significant risk of a peak before 2020”.

Other bodies, such as the respected International Energy Agency, have also begun to change their forecasts for oil reserves. In 2007, the US Department of Energy warned that,

“peak oil presents the world with a significant risk management problem of tremendous complexity”.

We in the UK should be particularly receptive to these warnings, for our own experience with oil production provides a classic illustration of what an oil peak looks like, albeit in a regional context. Oil production in the North Sea peaked in 1999 and is now on a declining path. Britain has been a net importer of oil since 2005—something we did not anticipate and plan for quite well enough.

As other oilfields are becoming unavailable, either because they have reached the end of their lifetime or because they are in the hands of state oil companies, we need to search for oil in ever more inaccessible parts of the world. As the BP oil spill demonstrated, the scramble for unconventional oil comes with growing safety and environmental risks. They are also likely to lead us into civil war and conflict—not least if you look at countries as far apart as Equatorial Guinea, Nigeria or Saudi—to doing business with those we may not wish to be so dependent on.

What are the answers? A tightening of safety standards and regulatory oversight of the oil industry will be an important answer to the BP issue. But if we focus solely on this aspect, then we miss the bigger threat of our continued dependence on oil, which is fuelling the search for unconventional oil reserves deeper and deeper in inhospitable waters, literally. In fact, given current trends in road and air transport in the UK, our oil dependence is set to grow even more. We may be able to replace coal and oil-based energy production with renewable energy sources and nuclear energy, but oil remains an irreplaceable fuel for the transport sector. Although households and industry have been able to reduce their dependence on oil since the 1970s oil crisis, the transport sector’s share of oil consumption has steadily risen. Cars, trucks and airplanes now consume about 50 per cent of oil in the United Kingdom.

There are compelling reasons for reducing our dependence on oil. The fight against climate change requires us to reduce greenhouse gas emissions, chiefly those from the burning of fossil fuels. A shift away from oil would also be beneficial for the UK’s foreign policy, which I have already touched on. As more and more oil reserves are controlled by Governments that are neither liberal nor democratic, we would do well to reduce our addiction to oil and our dependence on the good will and co-operation of often unpalatable and unpredictable regimes in oil-rich regions.

The BP oil catastrophe should thus be seen as a wake-up call. It brought to light extraordinary failings in safety procedures and management structures by, as I have said, a proud international oil company. It is also shone a light on how our dangerous dependence on oil is forcing us into ever riskier forms of oil exploration. We cannot address the former problem without dealing with the latter as well. It is for these sound environmental reasons that this Government have embarked on a radical overhaul, and we will hear today about the electricity market reforms. We look forward to my noble friend’s Statement in a short while and the consultation process that is to follow.

12:16

[Lord Selsdon]

My Lords, I should declare a number of interests that may confuse your Lordships as much as they do me. I am grateful to my noble friend Lord Moynihan. My first interest lies in my great aunt Jenny Mitchell-Thomson, a canny Scot from the east coast who, 50 years ago, left to the nephews and nieces, of whom I was one, £500 in British Petroleum shares with instructions that they should never be sold except in dire emergency. I did actually sell some of those shares briefly to help pay for the education of my son, Calum Mitchell-Thomson—the same name as my own—who has a degree in marine economics and is the managing director of one of the larger investment banks dealing with energy. He is my specialist adviser from time to time.

I declare another interest in that 20 years ago Earl Jellicoe, a mentor of mine as he was of the noble Lord, Lord Moynihan, appointed me at a young age to serve on one of the EU committees, together with the noble Lord, Lord Stoddart of Swindon, and other great names. We were to determine where our future would lie, including what would happen when North Sea oil ran out. We said that it would be a worrying time, but that the technology that we would have gained from those developments in the North Sea would benefit us worldwide.

I then asked myself who owns the oil under the sea, and remembered the old Scottish definition of freehold, “All from heaven above to hell beneath”, with a few extra territorial rights in that you controlled the foreshore or the sea as far as you could ride a horse and throw a javelin. Looking out at the North Sea one day, I wondered whether I could design a form of cannon or weapon that would give control of that sea. I looked up Big Bertha, the gun used during the war. I found that no one had yet worked out who owned those areas of the North Sea beyond the 200-mile limits.

I scratched my head and asked what would happen when the oil runs out. Our oil did run out, as the noble Baroness mentioned just now. We had a sudden change from a surplus to a deficit. We have a deficit in manufactured goods of £100 billion a year and in foreign trade of £45 billion, and the decline in revenues from North Sea oil is having an impact. The only conclusion is that the economy of the United Kingdom has to be worldwide. Within that, our expertise in oil and gas in the energy sector is quite significant. My son was briefing me last night and said that I should think of six things—high, high, high; low, low, low. Low—low depth, low pressure, low temperature—exploration that is not complicated. High—high depth, high pressure, high temperature—exploration that is complicated and technically difficult.

I then set out to evaluate this issue, as I tend to do from time to time, and said, “Goodness me, 71 per cent of the earth’s surface is covered by sea. Who owns and controls the sea? Who has, or should have, those rights?”. Not so long ago I suggested in your Lordships’ House that perhaps the 200-mile limit should be extended to 500 miles or something of that sort because the law of the sea is quite complex. I found in my evaluations that the United Kingdom coastline is longer than that of India. Noble Lords might say that that has no relevance, but it has some small relevance because it is full of creeks and inlets that go in and out, and these provide an opportunity for shellfish.

The pollution of our inland and coastal waterways could have a major impact upon shellfish production and £45 million a year of exports. That is only a small amount but a study of the seas of the world—the Pacific Ocean, the Arctic, the Mediterranean, the southern seas—will disclose vast coastlines. Where are these coastlines and to whom do they relate? Some 44,000 kilometres of them relate to the British Commonwealth, including overseas territories, dependent territories, bailiwicks and others. It is the same length of coastline as that of the former Soviet Union. Of course, the Americans’ is much smaller. So we have coastlines to consider within our Commonwealth relationships. Among other former empires and territories, the French and their francophone territories have 34,000 kilometres of coastline. This may or may not be relevant but we need to consider the sea and look not only at the opportunities within in it but at the pollution dangers that can befall us again from an explosion related to oil or to anything else.

We all remember the tsunami, but what few of us knew at the time the first buoy triggered an alarm in the Pacific was that if the telecommunications world had been sufficiently switched on, someone with a mobile telephone could have sent a signal to almost everyone in Indonesia and elsewhere saying, “Get off the beach”. We have to consider the question of communication, including satellite communication.

We already accept that 91,000 vessels sail upon the oceans of the earth, ignoring, of course, the vast numbers of British private yachtsman—I declare an interest as secretary and treasurer of the House of Lords Yacht Club—sailing under 147,000 different flags and ensigns, which is almost as much as anyone else in the world does; and, of course, we are sea-related.

One of the worries is how we can patrol and control the seas when we have lost much of our Navy. However, on the merchant shipping side, as I have pointed out, there are 91,000 vessels. The biggest individual fleet is that of the Japanese, but the Commonwealth has 21,000 vessels. So there again is a relationship, and, perhaps multilaterally with our Commonwealth friends, we should give some thought to the oceans of the world.

As I went down this route I asked myself what technological advantages we have that can determine when disasters, oil-related and others, are picked up. We have satellite technology—I declare an interest as having been secretary of the Parliamentary Space Committee for some years. The new satellites, most of which contain British technology, are the size of a washing machine. I was a director of an Italian washing machine company for a while so I know the size of washing machines. I have mentioned before that these satellites can scour from a relatively low earth orbit the oceans of the world and can pick up oil spills, the migration of fish and almost anything else. They are surveillance satellites, and are within our own capabilities.

The point I am trying to make is that although there may be an oil disaster—and we all worry about health and safety—we must accept that, at the end of the day, there will be many developments under the earth and under the sea. I pause for a moment to express my regrets for the two recent mining disasters. We do not know how or why the earth suddenly decides to tremble. We know well how tsunamis arrive. We also know that HMS “Scott”, our survey vessel, is the only vessel that can carry out underground surveillance of tectonic plates and, if it had been surveying before, might well have determined the causes or the potential for tsunamis.

Here in this country, with our international relations, we have certain resources and technical capabilities, although we may now lack the financial muscle. We have a lot going for us. The implications of the spill are not just for health and safety; they are for where and how we exploit the underground resources of the world or even space resources.

I feel very worried about the balance of trade and our current difficulties. I do not mind so much about the decline in the value of the pound, because I have to declare an interest in that my great uncle, Stafford Cripps, had the job of devaluing it for the first time. It is within the family. We all talk about these things over Christmas lunches or dinners. I am not optimistic, but what my noble friend has done today is open a door for wider debate. I congratulate him on his own know-how—and know-how, I was once told, is a magic word for turning common sense into cash.

12:27

[Baroness Smith of Basildon]

My Lords, I doubt that the noble Lord, Lord Moynihan, could have foreseen quite how topical his debate would become today, with the news coming through late last night that the US Government are to take legal action against BP and eight other firms following the Deepwater Horizon oil spill. The noble Lord clearly highlighted the challenges facing the industry. I found very interesting his assessment of the levels and elements of risk involved.

As we have heard, this catastrophic incident on 20 April this year created explosions and fire on the rig, causing the rig to collapse and leading to the deaths of 11 people with 17 others being injured. The oil spill continued until 15 July, when it was temporarily closed by a cap, and was then declared “effectively dead” on 19 September.

Initially, it was estimated that around 1,000 barrels of oil a day were being released from the well; that estimate was later increased to 5,000 barrels a day. In the largest ever accidental leak in the ocean, millions of barrels of oil were spilled over five months. It can be quite hard to comprehend the scale of such a disaster, the scale of the exercise undertaken to stop the oil spill and the scale of the clean-up operation, let alone the ongoing issue of whether there is adequate research and investment into spill response technology.

It is hard also to comprehend the social and environmental impact. The spill was in an area where 71 per cent of employment came from tourism and recreation. A further 200,000 jobs were in recreational fishing. It is an area on which the nation relied for commercial fishing stocks. It was hugely important also for bird and wildlife watchers.

It may take many years, particularly with the legal action that is now under way, for the financial implications fully to be understood. There is and, as we have seen, will continue to be considerable litigation. As was reported in the Financial Times, there is,

“no way to put this in historical context because we have never faced anything like this before”.

We know from the speeches that we have heard today that the ramifications are likely to be long lasting, not just for the Gulf of Mexico, which has been hit environmentally and economically, but for BP and the other companies involved. As the noble Lord, Lord Moynihan, outlined, there are implications for the future of offshore drilling across the world.

Do we know what exactly went wrong? The Minerals Management Service, which has since been renamed the Bureau of Ocean Energy Management, Regulation and Enforcement, is the regulatory and inspection body for offshore oil drilling and rigs in the USA. An investigation by the Associated Press claimed that such examination as was performed was in the most part brief, perfunctory, extremely lax and with poor record-keeping. Crucial safety and emergency procedure information, including documentation for the precise incident that later occurred, was not available. The investigation by AP claimed that after just over the first three years around 25 per cent of inspections were omitted, although that could be explained by weather and other factors, which could mean that an inspection was not possible. However, the last three inspections took two hours or less. Nevertheless, the rig was regarded as having a strong safety record and was never on the informal watch list for problem rigs.

The question is whether we in the UK should take comfort from the difference in our regulations from those in the US. There are key differences. Mr Steve Walker, the head of the Health and Safety Executive's offshore division, described it as,

“additional and different layers of regulation”,

with a system of independent verification enshrined in law, which the US does not have. In his evidence to the Select Committee in the other place, he also considered that our performance-based legislation was more sophisticated than the US checklist of inspection. When asked whether the Deepwater Horizon would have been allowed to operate in the UK, given that it had,

“a single blind sheer ram on the blowout preventer”,

he informed the members that in the UK the HSE would have seen the design 21 days before drilling began, asked questions about the design and would have assessed the answers before deciding whether to take any action. Also, in the UK we have a separation of licensing from health and safety oversight, which helps to ensure the appropriate distance between the interests of the industry and the health and safety of those involved. I welcome the fact that the HSE has made its own response to this incident and will undertake a further examination of the regulation and the record of the UK industry.

BP has undertaken its own investigation and, as we have heard from the noble Lord, Lord Grantchester, made significant and welcome changes to its own organisation to improve safety, becoming more risk-averse as a result. There are lessons to be learnt for the whole industry. The development of North Sea oil fields has been subject to considerable debate, controversy and conflicting views over many years. Numerous oil and gas companies, including BP and Chevron, which was granted a licence for deepwater drilling in the North Sea on 1 October, are looking to expand their operations and to go forward and deeper to more remote areas than previously. The debate between those who argue that such drilling is necessary for energy security and those who feel that the environmental costs are too high has been intensified by the Deepwater Horizon spill. The comments of the noble Lord, Lord Selsdon, highlighted his concerns about coastline pollution and the impact on the UK. Given his obvious love of the oceans, I am sure that he shares my concern at the news today that so many coastguard stations are to be closed around the coast of the UK.

Drilling for oil has continued; record numbers of bids for new offshore oil and gas licences were submitted in 2010 and, in October, 144 new licences were issued, including more than 20 for drilling in deep sea areas. Greenpeace has now issued a legal challenge against the Government to stop the 22 new deepwater drilling licences until the causes of the Deepwater Horizon explosion have been properly established. The arguments advanced by the lawyers are that the licences are close to environmentally sensitive areas which support legally protected species such as whales and dolphins. I am aware that the Minister can say very little about this issue because it is subject to legal action, but I seek his views on the department's confidence in the UK regulatory regime. The noble Lord, Lord Moynihan, was right in highlighting that safety has been of particular concern on this issue.

Following President Obama's review, the US Government have announced additional rules. Before drilling takes place, stronger environmental and safety standards are to be in place, working on the principle that the Administration should proceed with caution and create a more stringent regulatory regime. Does the Minister consider that the differences in the two countries’ regimes offer greater protection in the UK? What ongoing discussions is the department engaged in with the HSE? Is the Minister satisfied that all the current deep-drilling rigs in the UK fully comply with emergency policies and ongoing training on how to respond in event of an incident? How often does he consider that deepwater drilling rig inspections should take place to be confident of safety procedures, and what lessons have been learnt in the UK from this incident?

The noble Baroness, Lady Falkner, rightly highlighted her concern, shared by many, about the sustainability of the ever-increasing demand for oil and the ongoing quest for new reserves because of this demand. The Minister will be aware of the report last month from a group of business leaders, including Richard Branson, about UK dependence on oil and their concerns about this. What consideration has the department given to this report? With business, there is always the relationship between risk and money. How much will it cost when things go wrong? As we have heard, BP has footed a hugely significant bill for the beach clean-up and may, in addition, become liable to additional financial loss depending on the US Government's litigation. The Department of Energy and Climate Change has reported that licensees operating under the Petroleum Act 1998 are required to have sufficient funds available to discharge any liability for damage attributable to any oil pollution incident. The licence does not set a limit to the licensee's liability and licence applicants must demonstrate that at all times they have sufficient funds to meet expected commitments, liabilities and obligations. Further to the event in the Gulf of Mexico, I understand that the department has asked the Offshore Pollution Liability Association, or OPAL, immediately to revisit its risk modelling for worst case scenarios. Can the Minister provide any information about how this review is progressing and when we can expect to hear results? I appreciate that the news of the US legal action is very new and clearly carries the possibility of profound implications. It may be too early for the Minister to have reflected on these points but, if he is able to say anything further, particularly if there have been discussions between the Attorney-General in this country and the Attorney-General in the US, it would be helpful.

Finally, I thank the noble Lord, Lord Moynihan, for bringing this issue before us today, topical as it turned out to be. This debate should be seen in the wider context of ongoing debates that we are having and the Statement that we will shortly hear from the Minister on the ongoing Energy Bill. This is a huge issue for this country with huge implications. Our role as an Opposition is to work with him to deal with these hugely important and crucial issues. When we are able to support, help and advise, we will want to do so, playing a constructive and helpful role in securing the security for life of this nation.

12:36

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, I thank my noble friend Lord Moynihan for bringing this to the House and his invaluable insight and very measured speech on this matter. I hope that my own speech will cover a number of the issues raised by noble Lords in what I think has been an excellent and very informative debate. I think that the Opposition have set out very clearly the state of the nation as regards the oil industry. My noble friend Lady Falkner made very clear the long-term problems for the nation, and I shall deal with some of those points later. Noble Lords must forgive me if I repeat in my speech some of the things that have already been said, but they are worth repeating.

The Deepwater Horizon accident was a most serious and tragic event in recent years. We must not forget that 11 people died, which was a terrible loss of life, harrowing for the families and friends of all those involved in the industry. There were very serious consequences: the resulting oil spill and its after effects caused untold stress and heartache for local communities, with widespread disturbance of fishing, tourism and other activities in the region, which is still recovering from the horrendous Katrina hurricane. But in considering all this, let us keep it in a degree of context and recognise the vital contribution that oil and gas exploration has made to the world economy.

We have all noticed that lawsuits are back in the newspapers today. It is clear that the legal process has had some time to run. We should wait for the due process of the presidential and the Marine Board and other investigations to shed light on where responsibility lies and the action that could be taken. It would be wrong to suggest that there have been extensive cross-Atlantic discussions at this point between legal departments but, obviously, there is an ongoing process that started when the incident happened because BP, among others, is a transatlantic company. Both departments have been talking for a long time, to answer one of the questions asked by the noble Baroness.

We should not forget that BP is a great British company, creating not just wealth and jobs here in the UK but also in the US and many other parts of the world. Millions of pensioners benefit and this Government have been right to stand behind it during this time of crisis.

Ultimately, BP has suffered badly. This was manifested in its stock market value and in the eventual resignation of its CEO, Tony Hayward, to whom my noble friend Lord Moynihan paid tribute. BP is of course working hard to complete remedial actions stemming from the incident, and to learn from it. It is restructuring its safety culture and has reviewed its operations around the world. It has sold some of its assets to provide assurance that it can meet all legitimate liabilities arising from the disaster.

In the UK, while we are working hard to move towards a less carbon-intensive future, we cannot overnight remove our need for hydrocarbons. We will be dependent on oil and gas for several years to come. We have a choice of either producing oil and gas in UK waters, where we are recognised as having one of the most robust safety and environmental regulatory regimes in the world, with all the economic benefits that that will bring, or paying to import oil and gas from elsewhere.

The oil and gas industry, which has been operating here for more than four decades, is a fantastic success story. Its innovation and verve have ensured that we have been able to produce 40 billion barrels of oil and gas in the UK. We should not forget that UK oil and gas still provide around two-thirds of the UK's primary energy needs. However, the contribution is not just to our security of supply, but to our economy. The industry supports around 350,000 jobs directly and indirectly, and another 100,000 people are involved in exporting goods and services. Annually the industry spends around £12 billion in the UK and provides around £10 billion to the Treasury in taxation. The good news is that we still have the equivalent of some 20 billion barrels of oil—perhaps more—left to produce. To realise this potential, we need continued investment and new exploration, and we want to support the industry in every possible way to achieve this.

My department is working closely with the oil industry on a number of fronts to ensure that the right incentives remain to bring the required level of investment and exploration, and that the legislative framework facilitates new developments, for instance by securing third-party access to existing pipelines and facilities. I will bring new provisions in this area in the forthcoming Energy Bill. My department was pleased to offer 144 new licences recently in our 26th offshore round. This shows the continuing confidence in the future of the UK continental shelf and provides a strong basis for continuing exploration and development activity.

We have an innovative and productive industry. The UK was one of the first areas worldwide in which offshore exploration and production took off, and we now have more than four decades of experience. More than 10,000 wells have been drilled in UK waters, including more than 300 in depths of more than 300 metres. This means that the risks associated with drilling wells on the UK continental shelf are well understood. Our regulatory system has been developed to meet the evolving challenges. Following Piper Alpha, safety regulation was brought under the Health and Safety Executive umbrella to get the benefit of its expertise, not least in regulating major hazards.

The recommendations after the Piper Alpha inquiry of the noble and learned Lord, Lord Cullen, shaped the North Sea safety regime that the UK industry has been successfully operating under for the past 20 years. It was a step change, and it was recognised at the time that a more comprehensive approach to regulating safety in the industry was required, with a change of culture that put more responsibility on duty holders to manage risks across the range of their activities. The concept of goal setting was introduced, with duty holders required to identify their hazards, assess the risks they posed and put controls in place to minimise those risks. For high-risk offshore activities it was necessary to formalise the process into a permissioning regime, with the industry required to show in writing, via a safety case, that the health and safety risks were “as low as reasonably practicable”. The regulator’s role is to assess the safety case, accept it when appropriate and initiate inspections to ensure that it is being implemented. Other legislation on evacuation, escape and rescue, management and administration, design and construction, was revised in a less prescriptive style to complement the new safety case regime. I could go on. The key point is that we have a tough and effective regime in the UK that is considered a benchmark around the world, and particularly in Europe.

DECC plays a vital role in overseeing the exploration, development, production and environmental performance of the offshore industry. Following the US incident, an internal review was conducted by senior officers on the basis of the information available immediately after the accident, looking at the implications for DECC’s offshore regulatory regime. Both current and expected future drilling operations were considered. I am glad to report that the review did not uncover any gaps in the regulatory controls, or any reason to doubt their effectiveness. I pay tribute to the previous Government, too, for their activity in this regard. However, it was recognised that, with the prospect of more activity in deep waters, it is increasingly important to be assured that operators are doing what they should be doing. We have taken a number of steps to further strengthen our regime. We have increased the number of environmental inspectors and doubled the number of environmental inspections of mobile drilling rigs. The requirements for OPEPs were revised. All OPEPs submitted for exploration, appraisal and development drilling must now assess the worst-case scenario where all containment barriers have failed, resulting in a well blowout. Pre-drilling inspections are now carried out on deepwater mobile rigs before any final drilling permit can be issued. Containment devices are now available in the UK, and the industry is working on a capping device that we expect will be ready for deployment in the North Sea before the end of next year. I hope that that answers one of my noble friend’s questions.

The ceiling on the industry insurance liability scheme, Oil Pollution Liability Ltd, which the noble Lord also asked about, was increased from $120 million to $250 million, and the industry is looking at liability issues in general to see if anything more is required. I am aware that the European Commission wishes to look at the way in which deepwater drilling activities are regulated across Europe, with the aim of ensuring consistent standards. While we will continue to work on this with our European counterparts and the Commission, everyone should be clear that we will strongly defend the UK’s ability independently to regulate its oil and gas industry, because we have been shown in the past to have a strong regulatory regime. If the exercise is focused on raising standards in other member states’ territories, the UK can provide a strong contribution, given our substantial experience in this world.

Before summarising, I will answer a few specific questions that I have not yet covered, and perhaps amplify my noble friend Lord Moynihan’s question about insurance. I spoke to insurance industry leaders this morning and I do not believe that there is no market available for an increase in liability protection. However, we should recognise that BP was not a great purchaser of insurance and elected to run potential liabilities against its balance sheet. Of course, insurance should not be a substitute for a balance sheet. People should not carry out work unless their balance sheet can cope with the inevitable potential liabilities that manifest themselves.

The noble Lord, Lord Grantchester, asked whether we were in contact with OSPRAG. We are in regular contact and, as I indicated earlier, we are looking for technological advancement. Huge lessons have been learnt from this disaster. We must look at the US review when it comes out; we await it with great interest. We will consider its implications for our own regime and will implement any changes that we think should be made. However, I point out that we suggested to the US regime that they follow our regime, which separates health and safety from departmental issues. The US regime chose not to, but I understand that it is now about to do so. On the wider issue, the G20 has initiated a best practice dissemination work group for deepwater drilling as part of a global marine environmental initiative, and of course we strongly support that.

The noble Baroness, Lady Falkner of Margravine, has told us, rightly, that we cannot continue to depend on oil. I welcome her encouragement of the development of renewables, which we will doubtless be discussing in a few minutes’ time.

The noble Lord, Lord Selsdon, made a most engaging speech. Earlier, I looked up what his interests may be in this field and I was glad that he came out with about 30 or 40 of them in a very short time to demonstrate that he has a close association with the oil industry. I look forward to hearing about his discussions at the Christmas table as much as he looks forward to hearing about ours.

I am grateful to the noble Baroness, Lady Smith of Basildon, for giving me prior notice of one or two of her questions, because that meant that I could do the requisite research to respond to them in a way that I hope she feels is adequate for her needs.

One of the questions was, “Do you consider that the difference in the two countries’ regimes offers greater protection in the UK?”, which was a further amplification of things that I had discussed. The straight answer is that, as I said earlier, we have in place a number of safeguards that offer the UK greater protection. The requirement for a safety case ensures that risks are identified and suitable controls are selected. HSE reviews, well design and procedures are fundamental, while a schedule of well examination by independent and competent persons is an addition to the HSE review. A scheme for the verification of safety-critical equipment, including blow-out preventers, is in place and the HSE monitors well operations on a weekly basis. These are critical issues.

Our department has a close working relationship with the HSE and has accepted safety cases of the current deep-water drilling activities that include the emergency procedures required to ensure safety. After the HSE has accepted the safety case for an installation, it produces an inspection plan and inspects the installation at least once a year—sometimes three times a year, depending on the type of installation and activities being undertaken.

The noble Baroness rightly brought ITPOES, the UK Industry Taskforce on Peak Oil and Energy Security, to our attention and she mentioned that Sir Richard Branson was a member. Of course we welcome any outside suggestions and contributions to this debate. It is not as if we are not carrying out such work ourselves; our chief scientist is permanently in discussion with stakeholders about the threats to oil supply. We started an initiative in that regard in August and we intend to review that and work within its results.

In summary, the Deepwater Horizon accident was a most serious and tragic event, causing 11 deaths and, subsequently, environmental and unprecedented economic consequences. I am sure that the knock-on effects will be felt by local people and businesses in the region for years to come. It was also viewed as a wake-up call for the industry and regulators worldwide.

The oil industry is fundamental to Britain. We will be reviewing the US report once those investigations are complete to see whether there is anything more that we need to do on top of our own significant regulatory scheme. Deep-water drilling in the UK is not a new concept; the industry has been conducting such activities here since 1974. However, we must not be complacent. We have to remain extremely vigilant. I thank noble Lords for their excellent contributions to this debate and I look forward to further discussions as the years go by.

12:54

[Lord Moynihan]

My Lords, I am most grateful to the Minister and to noble Lords for participating in this debate. Over the past 10 years, I have learnt much about the family history of my noble friend Lord Selsdon. Once again, the House enjoyed his contribution, expertise and family insights. May he speak on any subject on which I am fortunate enough to win the ballot in future.

If American politicians were listening, they would have been impressed by the noble Lord, Lord Grantchester, because of his well researched speech and his calm, professional, all-party approach, which has also characterised the approaches of this House and another place to oil disasters, both within the UKCS and beyond our shores. It was echoed in content, delivery and expertise by the noble Baroness, Lady Smith of Basildon, as well as in her welcome focus on the changes that BP has made in the light of the disaster.

I thank my noble friend Lady Falkner for widening the debate to the challenge of macro-energy policy. As the Minister states, the truth is that, whatever steps we take—and we are about to hear about more welcome ones—the global demand for oil and gas will continue to grow over the next 30 years and we had better be prepared for the technical challenges, the political issues and the high prices that will accompany the world’s insatiable demand for hydrocarbons.

I particularly thank the Minister for his speech, for the work undertaken by his excellent officials, some of whom I recognise from over 20 years ago when I was in the department, for his answers to noble Lords’ questions and, above all, for focusing, as indeed has the House, on safety. An unremitting focus on safety is essential and is the most important implication that we should draw from the Deepwater Horizon oil tragedy. I thank noble Lords for their contributions to this debate and I beg leave to withdraw the Motion.

Motion withdrawn.

Electricity Market Reform

Thursday 16th December 2010 Lords Chamber

Statement

12:56

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, with the leave of the House, I should like to repeat a Statement made by my right honourable friend Christopher Huhne in the other place.

“Mr Speaker, today we begin consulting on the reform of the electricity market. This programme sits at the heart of my department’s mission to deliver secure, affordable and low-carbon energy.

The case for reform is clear. We need significant investment in our energy infrastructure. As old coal and nuclear plants shut down and demand for electricity grows, we must build the next generation of power stations. The electricity that they deliver must be both affordable and sustainable, helping us to meet our emissions reduction targets and to keep the lights on. The current energy market has served us well but it cannot deliver long-term investment on the scale that we need, nor can it give consumers the best deal. Left untouched, it would lock carbon emissions into the system for decades to come.

Investors and boardrooms around the world want to know whether the UK is a good place to do energy business. Today, we are setting out our plans to make it one of the best places to do energy business. The challenges, and the opportunities, are huge. Put simply, we face growing demand, shrinking supply and ambitious emissions reductions. The demand for electricity could double by 2050 as we decarbonise the economy. Thirty per cent of our electricity must come from renewables by 2020, up from 7 per cent today, to meet our contribution to the EU renewable energy target. In the next 10 years, one-quarter of our existing power plants will need to be replaced as nuclear and coal plants reach the end of their lives.

Without action, we will face a real and growing threat to the security of our supply. The reserve margin of spare generating capacity will fall over the next decade and the risk of interruptions to our energy supplies will rise, so we must build the next generation of power stations and act to ensure that there will be enough reserve capacity to meet our needs. We will need, together with renewables, new gas-fired power stations and new nuclear plant. We must attract more than £100 billion of investment in new power stations and grid connections by 2020—double the investment rate of the last decade.

We must rebalance our market framework to attract investment in the right technologies. At the moment, there is a bias towards low-cost, low-risk fossil fuel generation. Renewables, nuclear and carbon capture and storage all have relatively high upfront capital costs, but a more diverse, lower-carbon energy mix is better for our energy security, our economy and our planet.

Some measures have already delivered investment in new low-carbon generation, such as the renewables obligation and the EU Emissions Trading Scheme, but we must go further and faster. To secure reliable, affordable low-carbon electricity, we must change the market structure. We must create the right framework to ramp up our power generation and secure our supply. We must also deliver cleaner, greener electricity for the 2020s and beyond. Today, we are proposing new incentives to drive our investment while protecting the rules for investment already made. The focus will shift permanently from conventional fossil fuel-fired electricity to low-carbon technologies: renewables, nuclear and cleaner fossil fuels. Our preferred package of reforms is designed to strike a balance between the best possible deal for consumers and giving existing players and new entrants in the energy sector the certainty that they need to raise investment.

Reform will be gradual. We want to reassure industry that rules for existing investments will be protected. By consulting on a process and principles for the transition to the new market arrangement we aim to minimise uncertainty. The competitive market will remain at the centre of our energy policy, but the four elements of the reform package announced today will change incentives in the market and ensure both the security and decarbonisation of our power supply system, while minimising costs to consumers.

First, there will be greater long-term certainty about the additional costs of running polluting plant to make lower-carbon investment more attractive. Proposals set out in HM Treasury’s consultation to support the carbon price directly tackle the core problem—putting a better price on emissions, increasing the cost of fossil fuel-backed generation and strengthening the carbon price for UK electricity generators.

Secondly, greater revenue certainty for low-carbon generation will make clean energy investment still more attractive. Through the proposed ‘contract for difference’ feed-in tariffs, the Government will guarantee greater revenue certainty for low carbon in the form of top-up payments if the wholesale price is below the feed-in tariff and a potential clawback for consumers if wholesale prices are above the contracted tariff.

Thirdly, there will be additional payments to encourage the construction of reserve plants or demand-reduction measures to ensure that the lights stay on. Capacity payments will create an adequate safety cushion of capacity as the amount of intermittent and inflexible low-carbon generation increases.

Fourthly, there will be a back-stop to limit how much carbon any new coal-fired power station emits. An emissions performance standard will reinforce the existing requirement that no new coal is built without carbon capture and storage.

Together, these four reforms make good on our commitments in the coalition’s programme for government. They will make the UK a prime location for low-carbon energy investment. They will ensure that our energy supply is cleaner and more secure. They will protect the consumer as, while prices will rise in the medium term, the additional impact of the reform packages will be small. By 2030, consumer bills will be lower than if we did not reform the market now. The reforms will also lay the foundations for the sustainable economy of the future, bringing jobs up and down the supply chain.

The consultation that opens today invites everyone to tell us whether they think that the preferred package of reforms is the right one and to provide the evidence to support their views. Final recommendations will be published in a White Paper in late spring 2011 and the reforms will be introduced before the end of this Parliament. We are also reviewing the role of Ofgem and the energy regulatory framework and today we are publishing the Government’s response to the call for evidence on the terms of the review. We have a once-in-a-generation chance to rebuild our electricity market, our investor confidence and our power stations. Like privatisation before it, this will be a seismic shift securing investment in cleaner, greener power and delivering secure, affordable and low-carbon energy for decades to come”.

13:04

[Baroness Smith of Basildon]

My Lords, I thank the Minister and his departmental colleagues for giving us early sight of today’s Statement. Given the other business before the House, it was helpful to have that advance notice. We certainly welcome the Statement and the high-level recognition of the issues that we as a nation have to tackle.

I want to highlight four key issues that come across in the consultation document: first, security of supply; secondly, the ability to achieve our green targets in the longer term as well as through short-term measures; thirdly, securing the investment of around £200 billion that is needed in order to grow those businesses that will help us to achieve those targets and energy security; finally and crucially, keeping energy prices reasonable. The Minister will be aware of the press speculation today, which has already caused great concern. We face a huge challenge, but the consumer must not bear the whole or too great a burden.

I make it clear that we on this side of the House believe that the programme is absolutely necessary to support security in energy for the future and that we will support sensible, fair mechanisms for reform. Today, we welcome the publication of the paper and the consultation, because it is crucial that the Government put in place the mechanisms to make new low-carbon investment attractive. They also have to bridge the looming energy gap that we face without a rush for unabated fossil fuel generation. The Government also have to provide energy security across a balanced and diverse energy portfolio while considering, at all stages, fairness and affordability for the customer. Although increased energy bills have become a reality, we cannot ask consumers to accept ever increasing bills. We must be able to give them genuine assurances that we are doing all that we can to protect them.

I shall ask the Minister a few questions. The paper is an electricity market reform proposal but, given that we enter this winter with the worst gas storage, do the Government also intend to bring forward some proposals for gas security? Can the Minister also assure us that the Government are committed to low-carbon growth and stimulating investment? Given the welcome announcement today that the green investment bank is to go ahead, what role is the bank likely to play in that?

There are a number of challenges and the Government have to seize this opportunity, which is why we welcome today’s Statement. However, investment and certainty are paramount. The energy security of the nation means that we cannot allow any delays. We have to act, and act fast. The noble Lord knows that the industry needs certainty if it is to invest at the scale needed. Are the Government able to provide certainty to the industry and to people who are already paying inflated energy bills? Will the programme being put forward today be enough to encourage energy companies to invest in the UK, to create the jobs that this country needs—and the skills to fill them—and to protect customers from unaffordable energy bills?

A number of issues are before your Lordships’ House at present. We have had this consultation; we have the Second Reading of the Energy Bill next week; we have the announcement today of the green investment bank; and we have the Treasury consultation on carbon prices. It is all part of a bigger picture, along with the review of Ofgem. Noble Lords will be aware that the Energy Bill has been introduced and is being debated next week. We certainly welcome the Bill and the opportunity to work with the Government on it, but it presents as many questions as it answers about the Government’s intention on energy policy while, as we can see, much of the detail of the green deal is intended to be included in regulations. I look forward to the Delegated Powers and Regulatory Reform Committee’s analysis of the Bill and to debating the substance of the policies as the Bill goes through the House, so that we can play our part in working with the Government to address these issues.

Finally, we entirely agree with the Minister and the Government about the importance of this Statement and the consultation. This is the once-in-a-generation opportunity that he referred to. As always, we are prepared to work with him and his Government constructively to ensure that we achieve the triple goals of fairness for consumers, a better environment and energy security.

13:09

[Lord Marland]

I thank the noble Baroness, as I always do, for her constructive contribution and for being very clear that we are working closely on this, as we have so far with pre-briefings and such things. I do not want to get into the detail of the Energy Bill because we are going to exhaust ourselves over the next few months on that subject, so let us keep our energy pent up and ready for that.

I will deal quickly with the two substantive questions which the noble Baroness asked. We recently agreed to planning permission for a 15 per cent increase in storage for gas. Gas storage is fundamental but not critical because, from the previous Government’s activities, we now have the most flexible gas refinery and ports to import gas. We are in a pretty unrivalled position to import. We have 50 per cent of our own gas supply and a secure supply from Norway of 20 per cent. We are in quite good shape at the moment but we cannot be complacent. As the noble Baroness said, the green investment bank has been given the go-ahead, which is good news. It will be fundamental to pump-priming many of the activities that will be fundamental to the capital investment that is required.

13:11

[Lord Jenkin of Roding]

My Lords, while warmly welcoming my noble friend’s Statement, it gives rise to several questions. I have one in particular. Is it part of the purpose of the proposals to provide a longer-term level playing field across the different low-carbon generating technologies? That seemed to be inherent in the Statement last November of his right honourable friend Mr Huhne. However, my noble friend’s department has recognised that the lifetime carbon footprint of nuclear power is roughly equal to that of wind power. For how long will it be justifiable for the consumer to have to pay a substantial subsidy to generate more wind power when you could get a more reliable source of energy at a lower cost from a larger nuclear programme? I would be most grateful for the answer to that question.

[Lord Marland]

There is no greater expert than the noble Lord on these matters. I can assure him that this electricity market reform is to establish a level playing field for renewables and to get a clearer line of benefits and support for it. As to his point about nuclear power, we have cleared the decks for the start of new nuclear. His experience would concur that, unfortunately, the period for establishing a new nuclear power station is a minimum of eight years. Then there are all the other regulatory issues that we must go through in getting to there alone. My noble friend will know—because he is so knowledgeable on all these matters—that the 2050 pathway, which will incur a doubling of electricity demand, means that we will have to obtain electricity from virtually every source we can get our hands on.

[Lord Knight of Weymouth]

My Lords, it looks as though we are in for another cold weekend. As the weather gets colder, the confidence of consumers in being able to turn on the heating without worrying too much about price needs to be reinforced. To do that, we need to have confidence in our supply. Building on the last question, can the Minister give some assurance about developing nuclear to help fill the energy gap, and developing it on time, particularly given the Health and Safety Executive’s decision not to issue final certificates to new forms of nuclear technology? Similarly, can he give some assurance that the Government will invest in skills so that we can grow such skills in the eight-to-10-year window? Will we develop those skills domestically in areas such as Somerset, down the road from where I live, where we want to see the nuclear skills academy going ahead with confidence?

[Lord Marland]

The noble Lord makes an extremely good point on skills. There has been inertia in nuclear. I pay credit to the previous Government for reversing public opinion on nuclear, but not for the fact that there has been no activity. We have created much activity. Nine months ago, or when we got into power, people would have asked what was going to happen on nuclear. SIs have now created the opportunity for new nuclear. It has become a fundamental part of our programme. There is a serious task in obtaining the skills to satisfy that programme. I welcome the noble Lord’s support for that. It is fundamental because we have lost those skills in the past 20 years and it will be no small task to regain them. Therefore, we must have a programme that runs concurrently with the development to make sure that they both happen, and that we can cope with the eight or nine power stations that will, we hope, be built in the next few years.

[Lord Greaves]

My Lords, I join noble Lords who have thanked the Minister for repeating the Statement, which was made in the House of Commons by the Secretary of State, my right honourable friend Chris Huhne. It gives noble Lords in this part of the House great confidence that this important area is in the hands of Chris Huhne, our Liberal Democrat Secretary of State, and his team of Ministers in both Houses.

In view of the importance of making sure that consumers get a fair deal, does the Minister have confidence that this package will deliver more decarbonisation and low carbon for less cost? Is it true that this package shows that we can reach half the level of carbon in the electricity system at a lower cost than that which was planned by the previous Government?

[Lord Marland]

I am grateful that my noble friend champions my boss, Chris Huhne, who has been excellent to work with. I compliment my fellow Ministers on the Conservative Benches for their excellent work on this matter. The key to this reform package is to ensure that we have a pricing structure—which would otherwise be going out of control through the uncertainty of fossil fuel prices in the future—that gives us electricity security through our own supply of electricity from renewables. We have no alternative but to achieve our targets because they are set down in European law.

[Lord Lea of Crondall]

My Lords, as an aside, I hope the noble Lord, who is normally very courteous about all these matters, will not repeat the canard that the Labour Party was uniquely responsible for not getting nuclear to be more advanced than it already is. After Chernobyl in 1986, all western Governments got cold feet about nuclear; it took an awfully long time to bring the world around to the reasoning for going forward, which has several elements, as we all know. The Labour Government got us to the starting gate more or less before the election.

I come to three questions about this announcement. First, I particularly welcome the fact that the Treasury, as far as I know, has for the first time produced a consultative document that will lead to a Statement in the new year about a carbon price floor. That is the Treasury’s phrase. However, in not revealing what the carbon price floor might be in pounds, dollars or euros, the Treasury only lifts its petticoat as far its ankle. There is no further gleam as to where it might wind up. For 20 years, ever since Rio, we have known that—

[Noble Lords]

Question!

[Lord Lea of Crondall]

The second question is coming up, if noble Lords would mind not interrupting. Secondly, how does the Minister reconcile this Statement with the Energy Bill, the Second Reading of which we will debate in this House next Wednesday? This is a rather important Statement, but the government decisions announced in it were not available when the Energy Bill was published. Does he agree that it is rather surprising—if you take a half-interest in these matters—that he has not said anything about the implications of our now having to table a considerable number of amendments to the Energy Bill? Finally, on the European aspect of the carbon regime, we are now talking as if we are acting on our own. I cannot believe this is the case. Will he comment on that as well?

[Lord Marland]

Clearly the noble Lord was not listening when I gave credit to the previous Government for reversing public opinion. I thought that I gave fulsome praise in that regard. As for the carbon floor price, as the noble Lord rightly says, the Treasury has lifted its skirt and has said that it will publish the results of its consultation by 2011. It hopes to have the new carbon price support in place by 2013. The Treasury is carrying that matter forward now.

I am not sure what point the noble Lord makes about the EU. He may be suggesting that we are the only people who have signed up to our renewables target. However, this is a mandated, cross-European target, to which we are signatories.

[Baroness O'Cathain]

My Lords, I have a simple question for my noble friend on the Statement. He mentioned that energy prices could well decrease. Will he assure me that, in any format or framework that will be produced by him and my noble friends, the consumer will benefit as soon as the price goes down, rather than the usual practice at the moment whereby as soon as the price goes up the consumer is hammered and eight, nine or 10 months pass before any adjustment is made? It ought to be very easy to adjust the rate automatically by computer. I suggest that he deals with this matter through Ofgem and the investment criteria for investing companies.

[Lord Marland]

I thank my noble friend for her excellent point. I do not want anyone to go away thinking that electricity prices are going to go down in the foreseeable future. The whole point about this programme is that they will go up less if we do not have to rely on the unpredictable price of gas, which went up by some 80 per cent in four years and which is very volatile at the moment. The department predicts that by 2020 electricity prices will have gone up 33 per cent. This is of course very unsatisfactory, but results from the fact that as a nation we have underinvested in our electricity generation infrastructure for years. We have sat back and relied on North Sea oil and that is now no longer available in the same quantity. However, I assure my noble friend that if electricity prices do go down, they must be passed on to the consumer. This is fundamental to Ofgem’s monitoring of it. Ofgem will be subject to a review, and during that process we will ensure that we take on board her very valuable comments.

[Lord Maclennan of Rogart]

My Lords, I declare an interest as the chairman of a company that is endeavouring to promote renewable marine energy. What limits are there on the additional payments to help to construct reserve plants to cushion the capacity of intermittent providers of electricity—presumably principally wind power—and what calculations have been made as to the possible cost of that to the Exchequer, bearing in mind that many wind farms are in remote areas that do not require energy in the vicinity and that the National Grid indicated in May that it was not prepared to improve the grid in such areas? This problem could be exacerbated by the development of offshore wind. What economic projections have been made by the Government in offering to make these additional payments?

[Lord Marland]

On the last point, the Energy Bill clears the way for offshore wind to link into the grid and to facilitate that. I shall comment on that further when we discuss the Energy Bill. The noble Lord is right that it is fundamental that we have the reserve capacity to cope with peaks, such as the well-known “Coronation Street” kettle peak, or with very cold periods. Therefore, we are developing a capacity payment to encourage people to create facilities for providing capacity at peak storage times. The development of storage technology for wind farms is also fundamental. We will drive forward very hard to ensure that that technology advances quickly.

[Lord Moynihan]

My Lords, in declaring an interest as chair of Pelamis Wave Power, I welcome the Statement. I join noble Lords who have underscored the importance that the Government attach to the all-important issue of creating greater investor certainty in the electricity market. Can the Minister comment on the importance of consulting on the construction of the necessary electricity upgrades and new infrastructure to bring offshore gas and renewables onshore at increasingly competitive prices, including third-party access to pipelines in the gas market? Will he confirm that his department still believes that security of supply is best achieved through diversity of supply?

[Lord Marland]

I assure the noble Lord that, as I think I referenced earlier, third-party access is a fundamental part of the Energy Bill, the Second Reading of which we will debate next week, and we will welcome his contributions, given his knowledge platform. Clearly, this whole EMR seeks to encourage a broad spread portfolio of electricity supply, whether it be renewables, nuclear or clean fossil fuel. As my right honourable friend Chris Huhne said on the radio today, it is rather like having a share portfolio—we cannot rely on one and not the other; we need all of them and a balance of them.

NHS: Reorganisation

Thursday 16th December 2010 Lords Chamber

Debate

13:28

Moved By

[Lord Touhig]

To call attention to the reorganisation of the National Health Service; and to move for papers.

[Lord Touhig]

My Lords, it is a privilege to open this debate on a matter as important as the National Health Service. The NHS was the subject of my maiden speech in the other place more than 15 years ago and, like many noble Lords on all sides of the House, I feel very passionate about the service. It is easy to take this great service for granted, but we should never forget how fortunate we are to live in a country that has such high-quality healthcare available for each and every citizen, free at the point of use.

I pay particular tribute to those who work in the National Health Service. Their commitment to their patients and to ensuring the best outcomes for those whom they treat is the bedrock of the NHS. Without their dedication, the NHS would be nothing. The fact that the service provides some of the best healthcare in the world is a reflection on their professionalism and hard work. We should never lose sight of that.

We have a health service that we can be proud of and that has certainly improved over the past 12 or 13 years, but we now have a new Government who seem determined to impose their own vision on the National Health Service—a vision which, perhaps not surprisingly, is riddled with inconsistencies and risks having a negative impact on patient care. It is notable that the British Medical Association has reacted in a decidedly mixed way to the Government’s proposals. In response to the White Paper, Equity and Excellence: Liberating the NHS, which was published in July, the BMA reacted most strongly against the increased commercialisation and competition that the Government seem determined to foist upon the service. I am sure that I am not alone in sharing those worries.

Most concerning is that, despite the increased emphasis on competition in the recent past, there is still little evidence that such measures have any benefits for the patient. The Government came to power promising to make policy that was evidence based, yet expanding competition in the NHS flies in the face of that pledge. Indeed, increasing competition seems to have more to do with ideology rather than the welfare of the patient. I share the BMA’s view that high-quality care can be delivered in the most cost-effective way by encouraging co-operation across primary and secondary care.

I fear that, rather than encouraging co-operation and collaboration between care providers, the Government’s policy risks discouraging the sharing of information and good working practices. Such discouragement, it seems to me, is the logical consequence of forcing care providers into competition. It is normal commercial practice for competing service providers to keep new information or successful developments to themselves so that they can exploit them and improve their market position. Obviously, such providers do not share information that gives them an advantage over their competitors. That makes perfect sense in the commercial private sector, yet in the NHS such an approach would massively undermine the ability of care providers to adapt to changing circumstances and ensure best practice. Decreasing co-operation and collaboration would, I fear, be the natural consequence of further increasing competition in the NHS—a view that is shared by the BMA. Therefore, I hope that the Government will put patients’ interests and the views of professionals before their ideological agenda.

I am also concerned by the Government’s “any willing provider” policy, which risks exacerbating the difficulties with increased competition. The policy has the capacity to undermine local health economies by replacing existing multiservice natural monopolies with a plethora of smaller units that provide more limited services. As well as radically undermining the efficiency and value for money achieved by the NHS, that risks creating obstacles to the NHS working co-operatively for patients as a public service.

The concept of competition and of the “any willing provider” policy is supposed to allow patients to make meaningful choices about their care, but in my experience—which I am sure is shared on all sides of the House—what most patients want is high-quality providers close to where they live that offer timely and competent diagnosis, treatment and support. I fear that the Government’s policy risks undermining this central patient wish. It risks turning care providers into nothing more than businesses which, rather than supporting each other and striving for better provision of healthcare across the whole NHS, seek only to improve their own market position. If the outcome of increasing competition is to undermine the central priority of patients, I have to question the benefit of increasing competition.

The Government have also decided that they want all NHS trusts to obtain foundation status within three years. That undermines the whole rationale of the concept of foundation trusts, which was that foundation trust status was supposed to be a mark of quality and achievement. Evidently, if all trusts become foundation trusts almost overnight, foundation status will cease to be a mark of quality and in some regards will become meaningless as a concept.

The White Paper signals the Government’s intention to return to the GP fundholding scheme that we had under a previous Tory Government. The noble Lord, Lord Walton, who is held in high regard by noble Lords on all sides of the House, spoke about this in July. He said to the Minister who made the Statement on the White Paper,

“Many of those who are so proud of the NHS have major concerns about the GP-commissioning element of the White Paper”.

The noble Lord continued:

“No doubt the Minister will remember GP fund-holding under the previous Conservative Government, which was not a great success and had to be withdrawn in the end because it failed to fulfil the objectives”.—[Official Report, 12/7/10; col. 537.]

He was right. The House will not need reminding that GP fundholding, which was first trialled the last time that the Conservatives were in Government, did not work.

There are many other lessons that the Government must learn from pushing ahead with such a policy. In 1992-93, 5 per cent of GP fundholders overspent their budgets by more than £100,000. In the same year, 21 per cent—one in five—underspent their budgets by more than £100,000. Across the NHS last year, the underspend was almost £32 million—millions of pounds that Parliament voted for the health service but were not used.

There is now another worry concerning funding. In an analysis of the comprehensive spending review and of the White Paper that the Nuffield Trust published in October, the trust points out a little-noticed proposal in the spending review that would make a major change to the rules governing underspends across government and would have a profound impact for health. The NHS had a £5.5 billion cumulative underspend at the start of the financial year and plans to have a further underspend of around £l billion in 2010-11. The CSR announcement will mean that none of that money will be returned to the NHS. The Nuffield Trust said that, in effect, that amounts to a retrospective cut in health spending.

There is more. It is important in the context of GP-led commissioning that GPs are properly accountable for the decisions that they take. The big concern must be that GP commissioning will be less transparent and less accountable. Inadequate experience of commissioning a range of treatments will lead to a postcode lottery in NHS provision. For example, it would be possible for a group of GPs with a specialist interest who know where to obtain the best treatment to provide high-quality care for cancer patients. Another GP commissioning practice may have no such knowledge or specialist interest so its patients would might not be so well provided and cared for.

The Secretary of State this week attended the Britain against cancer conference hosted by the All-Party Parliamentary Group on Cancer. When the audience of health professionals, doctors, patients and politicians was asked whether GP commissioning would improve or worsen cancer care, the conference voted unanimously for the proposition that care would worsen. With great respect to the Secretary of State, he seemed not to pay much attention to that. He went on to say that GP commissioning was a chance to improve GPs’ knowledge. Turning the National Health Service upside down to improve GPs’ knowledge is one hell of a risk to take. The Secretary of State left the conference with the message that he wanted GPs to be thinking new thoughts. What in God’s name is that supposed to mean? I have no idea whatever.

So far, some 52 GP practices have signed up to become pathfinders for GP commissioning. That number could increase to 500, and those commissioning consortia would replace 150 primary care trusts. However, that leads to further problems. The NHS relies on data collection to improve healthcare. How will that be done, when some 500 consortia are doing the job of collecting the data that are currently collected by 150 PCTs?

The National Audit Office and the Public Accounts Committee in the other place have done excellent work in establishing best practices to achieve value for money across public spending. In achieving value for money, will GP commissioning consortia be incentivised to save money? Perhaps the Minister can tell us. If that is the case, what will the Government do to ensure that the NHS does not drown in a sea of medical negligence claims? If a GP consortium is incentivised to save money, there is a danger that patient care will suffer and that someone will then rush off to the lawyers—it will be a litigant’s paradise—in order to get some redress.

There is a common GP contract in England and Wales. How will the new arrangement in England intersect with what is happening in Wales? Will it mean separate GP contracts? How much will that cost and who will pay? It is clear from the response to the White Paper that many GPs lack the experience to run a commissioning service and many do not want to do so. Will they be encouraged to buy in solutions from private healthcare providers, such as the American-owned UnitedHealth or Humana, which on its website describes itself as the “Human Face of Healthcare”? Those companies are already touting for business and advertising their ability to manage GP consortia on their websites. Does the Minister agree that outsourcing the management and commissioning of health provision can, and probably will, lead to conflicts of interest? What steps will be taken to ensure that a healthcare company brought in to manage a GP consortium will not place work with itself as a healthcare provider?

Many noble Lords want to speak so I shall bring my remarks to a conclusion, but there is one further point that I should like to make. Much has been said in recent times about the enhanced role of the third sector in providing services. Earlier this week, together with a number of noble Lords whom I see in the House today, I attended a meeting of the All-Party Parliamentary Group on Stroke—stroke is the second major contributor to dementia—where we had a general discussion about the planned changes for the National Health Service. Some of the comments that were made at that meeting are worth repeating. “Left entirely to market forces, stroke will slip down the agenda”, was one view. Talking about top-down targets, another contributor commented, “If not targets, we certainly need objectives”. Another asked, “What is the future for the stroke impairment network?”. A final comment was that, “PCTs are at last understanding stroke. If we have to start from scratch again, let’s not lose the gains we have made in transition”. Those remarks will, I am sure, be repeated right across the health-supporting third sector.

The White Paper risks undermining the very fabric of our National Health Service; it risks reducing co-operation within the NHS; and it risks undermining the progress that has been made in improving patient care and outcomes. Most important, the proposals risk moving us away from a National Health Service that works co-operatively for patients as a public service—a move that I think would deeply harm patient care. Those outcomes would be disastrous for patients, doctors and the country as a whole. I hope that the Government will think again about their proposals.

13:42

[Lord Colwyn]

My Lords, I thank the noble Lord, Lord Touhig, for introducing the debate today, and I welcome him to the list of the usual suspects who discuss health matters in the Chamber. I have been discussing these matters here for more than 40 years. I cannot say that he made any constructive criticism at all. I remind the noble Lord that the Government are committed to protecting NHS funding and to increasing that funding every year.

I am aware, of course, that the BMA feels that the Government have not listened to constructive criticism of the plans, and it believes that the changes will be difficult to implement effectively. However, I welcome the reorganisation and look forward to hearing the views of other speakers, as it is my intention to concentrate on the issues that affect dentistry. I declare an interest, as I have been a practising dentist for more than 40 years. I am still on the register and am an officer of the All-Party Parliamentary Group for Dentistry.

NHS dentistry in England is undergoing a major overhaul. Three separate changes—shifting responsibility for commissioning dental care from primary care trusts to a new national commissioning board, the creation of new contractual arrangements for primary care dentistry, and the changes to public health—will all impact on the delivery of primary dental care.

I welcome today’s announcement and publication of the plans for pilots for a new, more preventive contract for NHS dentistry based on registration, capitation and quality, and I hope that the Government will ensure that the pilots are fully evaluated in consultation with the profession. These will begin in 2011. They will test new models that focus on providing continuing care for registered patients and they will improve access. The new dental contract will replace the 2006 Labour contract, which unfortunately continued the “drill and fill” treadmill. Plans to increase access to NHS dentistry and improve oral health include a capitation and registration system. This should bring back the real sense of having your own dentist.

We know that the commissioning of dentistry will change as part of the reorganisation of the National Health Service. The White Paper, Equity and Excellence: Liberating the NHS, outlines that dentistry will be commissioned by the NHS commissioning board. This decision has been broadly welcomed by the British Dental Association. We know that in the past local commissioning has been fraught with difficulties. There are significant advantages in the central commissioning of dental services by the NHS commissioning board, but it is important to emphasise that there will be a delicate balance to be struck between central determination and local flexibility.

Local expertise will continue to be vital in understanding and satisfying local needs. There needs to be a strong channel of communication between those tasked with understanding local needs and those responsible for national commissioning. For example, consultants in dental public health play a pivotal role in identifying need and balancing the provision of services to provide the maximum health benefits to diverse populations. It is central to the long-term efficacy of NHS dental services that the expertise of consultants in dental public health is fully utilised in any new system. Therefore, what plans do the Government have to utilise those local dental experts, including consultants in dental public health, dental practice advisers and local dental committees, in the new commissioning arrangements? In addition, we need to be careful that the Government’s positive work towards a new contract is not inhibited by the simultaneous reorganisation of the NHS.

We know that under the Labour Administration, in 2006, a new dental contract was introduced at the same time as PCTs were reorganised, merging them from 303 to 152. During the restructuring, many dental leads and commissioners were not in post to oversee the implementation of the new contract. This caused a number of problems, with many general dental practitioners being offered a contract in the days and weeks before they were expected to deliver it. As a result, a number of practitioners moved away from NHS dentistry.

At a time when growing bureaucracy, red-tape burden and increasing administration are eroding the morale of high-street dentists—and I do believe that this is a serious problem—what assurances can the Government give that we have learnt from the problems of the past, thereby ensuring that another cohort of practitioners is not lost?

13:48

[Lord Alderdice]

My Lords, the noble Lord, Lord Touhig, in his introduction to the debate talked about a sense of passion for the National Health Service—a passion which I think all of us in this Chamber share. However, it is not the only emotion that is connected with healthcare. One thing that struck me when President Obama embarked on his programme to improve the quality and breadth of healthcare in the United States was the profound emotional reaction against it. I was astonished, when talking to friends and colleagues who are genuine people, to find that they were frightened that any change would lead to disadvantage, when manifestly for many people in the United States such change would open up new possibilities of healthcare.

I think there is a danger that a similar thing could happen to us, and I certainly understand why. It is not just that people are generally frightened when healthcare is touched but in a time of austerity—something we are all very clear about—there is a fear that any change will be primarily financially driven, the purpose being to cut the amount of money going into healthcare. Even when the Government say something different, it is not really believed. That is a sad legacy of how things have been for a time. It is particularly unfortunate because the previous Government increased the resource available. For a long time, we said to ourselves and to each other, “We’re not spending as much per capita as other European countries”, and the previous Government tried to increase it, with considerable success. But it did not lead in all areas in the health service to a better sense of morale that things were improving. On the contrary, many general practitioners and hospital consultants, who are now paid more and do not have to produce more, have a lower sense of morale and a lower sense of empowerment in running the service. They have felt that their concerns as clinicians—this is not just true of doctors, but is true of social workers, psychologists and all sorts of other professions within healthcare—and decisions about the health service have moved away from them towards what I call managerialism. I have had that expressed to me, which is why I am not at all surprised by the BMA’s approach that any new approach to the health service inevitably means fewer resources available—contrary to historic evidence—and moving away from decisions by clinicians to decisions by managers.

When management was introduced increasingly to the health service it was not a bad thing in itself. It was necessary. The world was becoming more complex but there were seeds of difficulty within it. It became apparent, for example, that when nurses, social workers and others were going to be promoted, they were always promoted out of clinical work and they lost touch with what was happening clinically. Doctors tended not to be, at least in the early days, but their priority was always attending to their clinical work and they found that they did not—or would not—attend meetings; they got more and more frustrated and deskilled, and removed themselves from management. Increasingly, management became managerialism so that the driver was not to ensure that the outcomes of the service were clinical and patient-driven outcomes but, rather, management driven.

We want to see increased numbers of things. For example, when the problem of cancer care was addressed, GPs were told that they could flag up cases that should take priority over any other case. What did that mean? GPs quickly discovered that if they stuck a red flag on a case it would get attention above all the rest, which perversely meant that many of the real risk cases in the pathologist’s waiting list did not get attention, whereas the red flagged one did, not necessarily because it was more important but because there was a perverse incentive to the general practitioner to mark it up in that way. That is what I mean by managerialism as distinct from management, which is necessary and essential.

It is also important to understand that when we look at the need for diversity the phrase “postcode lottery” is used. That can happen but there have to be differences in services. In my professional background of psychiatry everyone knows that there is an urban drift. People with chronic psychotic illnesses, alcoholism, and so on, drift to the centres of large cities, so the kind of service you need to provide is different in a city than in a rural area. To say that it is different does not mean it is worse; it may mean that it is more appropriate. But it means that local people—not just clinicians, but local representatives, patient groups and others with a real concern, and, importantly, those involved in social services—need to be involved in the construction of the services that are available.

In looking at the proposals that are coming out, I started from a position where I was becoming increasingly depressed about whether the health service could ever be fixed. When I retired as a doctor earlier this year I felt extremely depressed about the health service. I genuinely think that there is a chance for things to be better if we can ensure that the resources are sustained, which is an important question at this difficult time. We must ensure that all clinicians—not just doctors or GPs—are involved in the commissioning process and that local people, including elected representatives, patients and those who run other third-sector services are involved in that commissioning process, and can hold those principally involved to account. If that can help us to move to greater integration of health and social care, which is already provided by local authorities and is key in so many of our services for the elderly, as well as maternity and psychiatric services, we can put aside our fear that we are moving to some kind of American system—which we are not, and frankly do not want to see—or a completely commercial service. That is the direction we have been moving towards under previous Governments for quite some time, and it is not the direction of travel that we want.

We need to release the creativity and sense of empowerment of those involved in the service, particularly clinicians of all kinds, along with a sense for patients and others that their concerns matter and their ideas can be transformational. Those at the centre should be prepared not just to let go and give them encouragement but to provide the resources and support to make a health service fit for all of us in a variegated pattern that is appropriate across our country.

13:55

[Lord Kakkar]

My Lords, I, too, thank the noble Lord, Lord Touhig, for having secured this important debate and I declare my interest as a practising surgeon, clinical academic and chairman for clinical quality at University College London Partners Academic Health Science Centre.

The purpose of the White Paper and the health and social care Bill that will follow is good. It will ensure that the focus for the delivery of healthcare is very much on patients and on improving clinical outcomes. Those important principles are shared widely throughout the world and the proposals in the White Paper will ensure that the NHS gets to a position globally where it shows leadership in the quality movement, improved clinical outcomes and the efficient and effective use of resources, providing the very best healthcare for the people of our country.

Coupled with the proposals in the public health White Paper, there is the opportunity, if it is handled appropriately, to transform the healthcare experience for patients in our country and, more importantly, to start to focus resources in such a way that we maintain good health rather than continuously focusing only on treating patients, many with chronic disorders. The real question is how effectively we can take forward what is ultimately agreed, and therefore applied, to improve the outcomes and lives of our patients. That will require clinical leadership. It is regrettable that over so many years the National Health Service has failed to develop a sustainable mechanism to ensure that we can engage clinicians in leadership rather than just management. There is a very important distinction between the two.

One of the approaches in which I have been involved—I declared my interest in University College London Partners—is the establishment of the NHS staff college. It is modelled on the Army staff college. Indeed, we have engaged the faculty of the Army staff college to work with us in helping us to identify, through the self-reflection of those involved, and then to develop clinical leaders across the spectrum of primary care, including physicians, those working in secondary and tertiary care, managers and other healthcare professionals, to provide true leadership and ensure that the interests of patients and the utilisation of resource available within our healthcare system is applied effectively, to help these and other changes that may be applied for the benefit of the country. Will the Minister say what arrangements are being made and what strategy is in place to run in parallel with any changes proposed in the health and social care Bill for the sustained development of clinical leaders? That is a crucial issue, which warrants careful attention and appropriate thought to organise a leadership strategy that will help to deliver any changes that are finally agreed.

It is also well recognised that research and academic endeavour is hugely important to improving healthcare. Indeed, patients treated in systems where there is active research activity often tend to have better clinical outcomes. The academic health science centres have been discussed previously debate in your Lordships’ House in the excellent debate initiated by the noble Baroness, Lady Finlay, on academic health partnerships. The academic health science movement is now well established in our country. The issue with the proposed reorganisation is whether the focus on academic health—the partnerships that are required to ensure the leavening effect of academic medicine in improving standards across the entire system—will be sustained. That will require some careful thought in terms of the approach that the future NHS commissioning board takes on the nature of services and some of the innovative work that the academic health science centres can undertake, not only in improving outcomes and ensuring the best delivery for populations within their own remit, but as a test bed for ideas and innovations. By that I mean not only new treatments but new pathways of care that can be tested in the populations associated with the current academic health science centres. If proven effective, they can then be rapidly adopted throughout the National Health Service. Therefore, I ask the Minister whether there will be some opportunity to ensure that, in any discussions about the specific work and purpose of the commissioning board, the importance of academic medical research is well established and plays an important role in determining some priorities that the board may set.

Finally, I turn to education and training, which has been covered somewhat in the response on the White Paper that was published yesterday. We all recognise that the education and training of future generations of doctors—specialists, those working in primary care and those working in hospital practice—and allied healthcare professionals, who play such an important role in ensuring that we have effective teams, must remain a priority. From looking at the response, I understand that there will be further responses on education and training, which should be available shortly. However, there are concerns about the direction in which the education and training of a future workforce are going. Of course, it is well recognised that those commissioning local services will have a rightful interest in understanding what type of workforce—after a period of specialist training —will be available to look after the local healthcare needs for which they have commissioning responsibility. There must also be the opportunity to identify and set priorities at a national level for certain elements of very specialist training, to ensure that our country is able to offer the full range of healthcare that its people require. By that, I mean what is set at a local level and more specialist training, ensuring that we have the very best specialists to deal with some of the most complex problems. Therefore, it is important that education and training remain centre stage in all the decisions and discussions moving forward. I hope that the Minister can address that.

14:02

[Lord Hunt of Kings Heath]

My Lords, I thank my noble friend for securing this debate and for his excellent contribution. I declare an interest as a non-executive director of the Heart of England NHS trust; president of the Royal Society for Public Health, of the Health Care Supply Association and of the British Fluoridation Society; a trustee of the Terrence Higgins Trust; a self-employed consultant on the NHS; and a consultant and trainer for Cumberlege Connections.

The paper published yesterday by the Government claimed widespread support for what they propose, but I have not detected that. In fact, there is wide dismay in the health service about what is proposed and the inevitable train crash that will occur. Of course, many of the White Paper’s intentions are supported—who could argue with wanting a service that puts patients first? However, I fail to understand the means chosen to achieve that. Why not build on what is there? Why is the health service being given four years of disruption and disorganisation? I would have more understanding if the NHS was in such a critical condition that it needed major surgery, but it is anything but. The last decade has seen great strides made—300,000 more staff, new facilities, new services, and waiting times cracked. I refer the noble Lord, Lord Alderdice, to the US Commonwealth Fund’s report last month, which looked at 11 major developed healthcare systems and gave the NHS a glowing report; in fact, it said that the NHS was extremely cost-effective. Only two days ago, the British social attitudes survey showed that when Labour entered office in 1997 only 34 per cent of people were satisfied with the NHS. By 2009, the figure stood at 64 per cent, the highest since the survey began in 1983. What is the case for drastic change? The Government have certainly not made out that case.

There is a great risk in what will happen in the next few years and I would like to make three points to the noble Earl, Lord Howe. The first is on the danger of instability. PCTs are in meltdown, facing a lingering death by cluster. GP consortia, untried and untested, are meant to take up the reins. If resources were flowing, perhaps the system could just about cope, but resources will not flow. Some £20 billion has to be taken out of efficiency savings, at the same time as the NHS is facing the consequences of a huge cutback in adult social care funding. The financial challenge is immense. David Nicholson told the Commons Select Committee:

“It is huge … it has never been done before in the NHS context”.

What an extraordinary time to dismantle the very bodies on which one would depend to achieve the efficiency savings. What are the Government doing to the people who will achieve those savings? It will not be the clinicians—the clinicians are never to be found when it comes to these issues—it will be the managers, and the Government are cutting management costs by 45 per cent over four years. That is sheer madness. No wonder Professor Chris Ham said in October that,

“there is a real risk of losing financial control”.

That view is shared up and down the NHS. Whichever part of the country you are in, that is the view that people express.

I then come to GP consortia. I would be interested if the noble Earl could clarify how many consortia he thinks will emerge. When the White Paper was published, some briefing clearly took place that suggested that there would be around 500, with populations of 100,000. Since then, indications are that they will be much larger than that to spread the financial risk. I understand that but, if you make them very large, do you not undermine the whole purpose of giving individual GPs involvement in the consortia? The Government are taking a laissez-faire attitude towards that, according to the documents published yesterday. However, if the intention is for each contract holder to have a clinician representative on the consortium, as is stated, I wonder about the practicalities. Indeed, I suspect that some consortia will make your Lordships’ House seem rather modest in size.

Then there is accountability. Billions of pounds are to be handed over to GPs. What corporate governance safeguards are to be put in place? As a minimum, surely we must have a non-executive chair and non-executive members. The kind of structure that the Government propose would not reach first base of any corporate governance test in any other organisation in this country. How can it be possible to leave that to each consortium to decide? If noble Lords reject that argument, I ask why we have non-execs on public companies. Why do we have trust boards? Why not just hand things to the consultants and let them develop a consortium and make the decisions? It is absolutely incredible that we should hand so much money over to a group of professionals without proper accountability and without the public interest being maintained by non-executives. When the relevant Bill comes to this House, that is one of the most powerful points that my noble friends and I will make.

I shall finalise my theme in relation to GP consortia. Mr Lansley wants the management of care and the management of resources to be put together at the GP level. What happens when, as is happening at the moment, contracts are overperformed by hospitals because, essentially, the GPs cannot manage demand? In the new structure, the consortia will have to face the financial consequences of that. They will then need to tell poorly performing GPs to change their behaviour, but there are no levers in the White Paper for them to do so. I would have supported the contract being placed at the consortia level, but placing it at the national commissioning board level will lead to huge bureaucracy and leave the consortia with no levers whatsoever. Of course, there would be probity issues, but if you had non-executives, you could deal with those.

I hope that the noble Earl, Lord Howe, will reflect on that. The Secretary of State has shown little sign of being willing to have a proper dialogue. My experience is that Secretaries of State who are not prepared to listen or have dialogue will face the consequences.

14:10

[Lord Rodgers of Quarry Bank]

My Lords, I welcome the noble Lord’s success in the ballot and listened to his speech with great interest. However, I am disappointed that there has been so little discussion of the future of the NHS in your Lordships' House since the White Paper was published in July, five months ago. I had expected a substantive response on one of the Opposition days, as the National Health Service has been a central political issue for more than 60 years. This House is at its best in considered and fair-minded scrutiny, including Official Opposition scrutiny.

I am also disappointed that yesterday's government response to the lengthy process ended with a Written Statement. The House greatly respects my noble friend Lord Howe, but we would have liked to hear his own words. In a recent speech, the Minister said:

“The rhetoric about our reforms is overheated. This is evolution, not revolution”.

With respect, there seems to have been relatively little rhetoric around the White Paper. There are legitimate and strong differences, and a balance of opinion between welcoming radical change and genuine anxiety about upsetting the much improved 21st century NHS. Now, in a document three times longer than the White Paper, the Secretary of State broadly endorses his original thesis.

I was agnostic about the White Paper. I thought that there was too much hyperbole and too much fashionable jargon, and I am not yet wholly persuaded. But I do not share verdict of the hesitant critics, or cautious friends, such as the King's Fund: “Too far too fast”. Once the health Bill has appeared and pre-legislative scrutiny has been completed, I would much prefer Ministers to get a move on. In speaking to the NHS Alliance conference, my noble friend Lord Howe said that, while NHS managers are sometimes misrepresented as bogeymen,

“this is the opposite of the truth”.

He said that he wants a more innovative NHS but that,

“all of our reforms will be impossible without great management”.

I hope that my noble friend will repeat that today and on other major occasions. Hard-working, high-skilled and committed managers are too often diminished as nameless bureaucrats; in contrast to virtuous, efficient doctors and caring nurses.

On the National Health Service as it now stands, it is right to acknowledge that there have been outstanding improvements in the past 10 years. From my personal experience, the National Stroke Strategy is a success story compared to the Comptroller and Auditor General's report, Reducing Brain Damage, covering the earlier part of the decade. Similarly, a few years ago, there was a minimum waiting time for a hearing aid of between nine months and two-and-a-half years, and often there is now no delay at all. Waiting lists for treating major, critical conditions are dramatically down. I will be worried, and patients will be depressed and angry, if there is any reverse of that trend.

On the central issue of the White Paper, I am fascinated by the new NHS commissioning board. It threatens to become the quango of all quangos. In the White Paper, it is described as,

“a lean and expert organisation”,

despite its huge responsibilities—and the new document suggests that there may be more. Its original, tentative, regional dimension seems to have disappeared. I would be grateful if the Minister would explain the regional role of the NHS when the primary care trusts and the strategic health authorities have gone. There is a related problem. Will my noble friend explain the role of A&E departments within the new structure? On the eve of the general election, the then Secretary of State announced that he was personally intervening to prevent the closure of a dozen A&E departments.

Localism is the order of the day. Local people, say Ministers, with real powers, are to decide the services and facilities that they want. On the face of it, local people want high quality and very expensive treatment in every hospital. Who will choose the priorities? Who will decide? I say that because I was impressed by a recent consultation to choose a limited number of new sophisticated stroke hospital units in London. Thirty-one primary care trusts came together to reach an agreement. Who will now come together to make use of the highly contentious and political question of the future of other hospital departments nationwide when the PCTs have gone?

There are still many questions of how to turn the White Paper and yesterday's document into an even better NHS. I hope that I shall soon join the Ministers in the sunny uplands of success, but I have not travelled there yet.

14:17

[Baroness Masham of Ilton]

My Lords, I thank the noble Lord, Lord Touhig, for securing this debate. I have been involved with the National Health Service for many years and it is without doubt in my mind the most valuable asset we have. It is an insurance policy for anyone who may be hit at any time by accident, illness, infection, disability or an act of violence. Over the years, the National Health Service has been subject to reorganisation after reorganisation. It is a vast and complicated organisation and recently, the training of junior doctors has complicated care of patients. Being restricted to 48 hours has compromised their training to be safe and competent doctors and surgeons.

If the reorganisation is going to work, the best people must be involved in leadership who can take responsibility and work in unity. There should be efficient systems in place; patients should not have to be left for long periods in x-ray waiting for a porter to return them to a ward; hospital food should be edible and nourishing; and nurses should see that patients are not left without food and fluid. The correct drugs should be administered by competent people; there should be responsible leadership to see that patients are always looked after; and nurses and care assistants, when at the nurses’ station, should be working on behalf of patients, not chatting about their next social engagement. There are many dedicated, hard-working staff in many hospitals, but in many more improvements should be made as soon as possible.

“Putting patients and the public first” is the heading of Chapter 2 of the White Paper Liberating the NHS. It states that the principle of shared decision-making is to become the norm—

“no decision about me without me”.

Many patients will tell you that they have difficulty getting an appointment with a GP of their choice—it can take weeks. It is important that at this time of change in the NHS, the patient’s voice is heard and listened to. First we had the community health councils, then the health forums, and now LINks. The general public do not really seem to know much about them. When something happens, such as a disaster like the tragic situation at the Mid Staffordshire hospital, the Patients Association is asked to comment by the press. It is a small, independent, voluntary organisation supporting patients and it has been inundated with work and inquiries. This shows what a need there is for an independent body to help and protect patients of all sorts throughout the country.

In the health White Paper it is suggested that there should be an organisation locally called HealthWatch, and a national body called HealthWatch England. I went to Google to find out what it said about HealthWatch. What came up was:

“HealthWatch is an independent registered charity … since 1991, who try to promote EBM. We are not Andrew Lansley’s HealthWatch”.

Several other HealthWatches came up. Could there not be confusion? With different HealthWatches, it is possible.

I tend to agree with the NHS Confederation when it says:

“We applaud the adoption of the principle of shared decision-making between GPs and their patients and the responsibility that will be given to the NHS Commissioning Board to champion patient and carer involvement but it is far from clear what levers they will have to enable this”.

It would be sad if relationships between the doctors and patients were damaged because GPs did not give patients what they feel they need. At least now they can blame the PCTs. Rather than give responsibility for complaints advocacy to the local HealthWatch, it would make greater sense to build on the existing well established network of local citizens advice bureaux. These already deal with health complaints as well as complaints about other local services and benefits. However, this would require appropriate additional resourcing and requirements to link with the local HealthWatch. HealthWatch is unlikely to have sufficient public profile or the resources or capabilities to deliver these functions.

If this new NHS is going to work, people and organisations, primary and secondary health, should be working together with enhanced communication for the good of patients. There should not be conflict and a silo situation. That would be a total disaster.

There is concern from many groups representing people with specialist conditions about the specialised commissioning. Will the 10 specialising groups still exist? I ask the Minister, but I am used to him not answering my questions. GPs who are generalists cannot be expected to know everything. I hope the Minister will be able to help with the uncertainties and concerns surrounding these issues, which include community care.

14:24

[Baroness Williams of Crosby]

My Lords, I, too, thank the noble Lord, Lord Touhig, for introducing this crucial debate in such an effective way. I strongly agree with my noble friend Lord Rodgers of Quarry Bank when he suggests there should be more opportunities for this House—which has a very substantial level of medical knowledge which is not so clear in another place—to debate and discuss reorganisation, an issue which is still very much in the making. The greater the discussion and debate, the more likely it is that we will get an outcome on which everyone can agree.

I should like to add a personal note, and I hope I will not in any way embarrass my noble friend in saying it. My noble friend Lord Rodgers of Quarry Bank is a remarkable example of the successes of the NHS. Anyone who knows what he has climbed back from will, I think, agree with me. On another personal note, my family and I have always been NHS patients and never private patients. I have to thank the NHS for, on at least two occasions, saving the lives of relatives in the most remarkable conditions. I can find very little to fault it with when it comes to critical illnesses and accidents as compared with other health services, some of which I know very well indeed.

I should like to begin by considering the current position, and here I find myself in some agreement with the noble Lord, Lord Hunt of Kings Heath. If you read—as I hope every noble Lord will, especially those involved in health discussions—the quite remarkable report of the Commonwealth Fund, which is nothing to do with the United Kingdom but to do with the Commonwealth of Massachusetts, which is where the word comes from, you would be standing on the rooftops cheering—or at least you would if you were in any other country except our own. The report is remarkable. It shows that our NHS, along with the one in New Zealand, is almost certainly the most cost-effective system we know. Surprisingly—indeed, amazingly—it also shows that the gap between the service provided to those in very low income groups and those in very high income groups is less than in any other developed country. The gap here is 5 per cent whereas in other countries it ranges from 20 per cent in what one might call core Europe, to as much as 60 per cent in the United States. Perhaps even more amazingly, it also shows that the amount of time taken up in waiting to see a consultant or senior clinician in the NHS is very near the bottom of the list. In other services, some of which are much more inclined to be clinician-led, the time spent waiting is much greater.

We have to think very carefully about how to ensure that reorganisation improves the existing NHS and not try to indicate that the NHS has been a failure. By any international standard it is not a failure. It is one of the most remarkable, dedicated public services anywhere in the world.

There is another truly important point. It is clear that the NHS has, over more than 60 years now, won an astonishing level of public trust. The noble Lord, Lord Hunt, mentioned that. Anyone who cares to look at, for example, the recent study of social attitudes in the United Kingdom will see that the NHS is rated as being at the top of all the large public services. It is, rather sadly, ahead of education, but also ahead of almost all other public services. That means that we have to consider very carefully what we do to reorganise it. The bar has been set very high indeed in terms of public trust and public attitudes.

I should like to say one word to the noble Lord, Lord Kakkar, who is no longer in his place. There is a great importance in giving clinicians the widest public say and influence in the services that their patients can expect. I think that all of us in this House—some of us in this House are clinicians, although I certainly am not—would recognise the importance of their influence on the NHS and any other health service. Picking up on the words of my noble friend Lord Alderdice, I suggest that clinicians on their own will not be an adequate response to the need to change the health service for the better.

Wonderful men and women though many of them are, they are not, any more than the rest of us, completely immune from occasional selfish attitudes. I will give an example, which, in the spirit of a bipartisan approach to the problems of the health service, I hope even the noble Lord, Lord Hunt, might conceivably nod at. Many of us recognise that one of the things that went wrong with the NHS in recent years, apart from the increases in expenditure which were clearly good, was the unfortunate contract that enabled GPs to get very much more money and to do so without making any commitment at all to out-of-hours service. I have quite a lot of GP friends, including my own GP NHS trust, who are embarrassed at the way in which they got so much more money for less work at a time when almost all of us can expect not much more money for a great deal more work. The outcome of this debate would be improved if most of us were able to hang up for the moment our tribal loyalties and look at the responsibilities all of us owe to the NHS and to the reorganisation of the NHS. Those responsibilities are honesty, frankness and admission of our own mistakes.

I move on to what most worries me about the reorganisation, apart from the fact that it did not appear in the coalition agreement in any shape or form. Indeed, the coalition agreement specifically promised no more top-down reorganisation and, at least as important, there is reference after reference to PCTs, which would mean that anyone who read it carefully would think that PCTs were likely to survive and not suddenly to disappear.

I want to suggest to my right honourable friend the Secretary of State—and perhaps at least as much to the greatly admired Minister of State, my noble friend Lord Howe, whose devotion to the National Health Service is known to us and who we all, I think, trust and respect very deeply—that a reorganisation needs to carry with it changes that are seen by the public to be improvements. One of those was referred to by my noble friend Lord Alderdice and he is absolutely right. I suggest that clinicians look at the significance of accountability in a public service that is massively financed by the taxpayer.

The provisions for accountability are very weak and not clearly spelt out. I do not understand why it would not be possible with the White Paper to move towards a different system. PCTs are disappearing very fast, as the noble Baroness, Lady Masham, and others have suggested. Commissioning bodies should include not only clinicians but also representatives of the public, some from local areas. The noble Lord, Lord Hunt, was right when he said that there should be an executive lay chairperson whose responsibility would be to the community and not to clinicians or any other group which is bound to have its own concerns and special interests, rather than the wider interests of the public as a whole. The public would buy strongly into that kind of reorganisation. One which leaves that issue of accountability so vague and so little spelt out will not carry the trust that we need. My right honourable friend in another place who is today the Minister of State in the Department of Health, Paul Burstow, has suggested on several occasions the strengthening of accountability. The outcome has been existent certainly, but not strong. We need a much clearer system of accountability.

I will not detain the House for very much longer, but next I want to refer to my noble friend Colwyn who, in discussing the issues of NHS dentistry—I defer to him because he is much more knowledgeable on that subject than I could ever hope to be—referred to trial or pilot schemes.

[Baroness Northover]

My Lords, I hate to do this, but this is a strictly time-limited debate. When the figure seven shows, noble Lords have exceeded their time.

[Baroness Williams of Crosby]

I apologise. I did notice that it was not completely stuck to in several other speeches, but never mind. I will wind up quickly. First, if there were to be a trial period with an outcome that would be open to discussion and debate, I would support it. But that is not my understanding. I believe that these are called pathfinders and are the first wave of the reorganisation. Lastly—

[Baroness Northover]

I am sorry, but no one has got close to this length of time. I realise that this is very significant and I hope that we will come back to it in debate.

[Baroness Williams of Crosby]

I apologise. I said that I would wind up in two sentences and here is the second. I am very worried that if we do not think about the reorganisation thoroughly, we will be in real trouble with the public.

14:35

[Baroness Finlay of Llandaff]

My Lords, like others, I thank the noble Lord, Lord Touhig, for securing this debate at this significant time. Having watched the Health Select Committee questioning yesterday of the Secretary of State for Health, Andrew Lansley, I was left with more concerns than I had previously. As always, the devil is in the detail and the detail is where the problems lie.

The importance placed on the patient voice is welcome, but the new local HealthWatch organisations should have powers to call for an inquiry when there are concerns. Of course, there should be no decision about a patient without the patient being involved in and informed of what is going on. There must be respect for the individual, and provision of care that enhances dignity should be at the heart of every clinician, patient encounter. Attitudes in some areas certainly need to change, both in primary and secondary care, if we are really to have the patient’s concerns at heart. Let us push forward with those measures.

However, my two areas of concern are, first, the “any willing provider” approach and, secondly, the wholesale disbanding of PCTs and the effect on patients of the consequent destabilisation of secondary care. As has already been mentioned by the noble Lord, Lord Hunt of Kings Heath, Chris Ham writes today that,

“what is not yet clear is whether the incentives in the new system and regulatory framework will allow integrated services to grow, rather than stand in the way of their evolution. … We would disagree with the assertion that structural changes will help to meet the productivity challenge and the ambitions of the government’s QIPP agenda. While proposals are being phased in more carefully over four years, we share the concerns set out by the Health Select Committee yesterday, that they will still act as a distraction from delivering the enormous productivity improvements required across the system”.

The “any willing provider” requirement risks fragmentation and cherry-picking, which would leave NHS organisations to struggle to provide for those with multiple co-morbidities and complex needs. The Royal College of General Practitioners and the Royal College of Physicians—I declare that I am a fellow of both—and the King’s Fund and the BMA, of which I declare that I am a member, have all alerted us to the dangers. All support using private and voluntary sector providers to fill the gaps—hospices are a prime example—and to support defined roles. However, hospitals need a critical mass of activity to be efficient. Without that, how will good seven-day cover be achieved?

The Government’s response recognises the fluctuations in need that occur in any one area. Neonatal cots, winter beds and so on are obvious examples. How will flexible provision be achieved if foundation trusts are destabilised by being stripped of their profitable elements by the cherry-picking of private sector providers? Clinicians can tell of many examples of patients suffering when providers are in direct competition and not in collaboration.

The tariffs look crude and contain perverse incentives. For example, specialties that have invested in IT teleconferencing follow-up will not be paid. Clinical leadership in primary and secondary care, underpinned by good management, is overdue, but such leadership must be around pathways of care for patients. That means that secondary care needs to be at the table with primary care, because people do not know what they do not know—advances in different branches of medicine are moving forward so fast that GPs cannot possibly be up to speed with everything. In areas where there are good GPs and good relationships between GPs and secondary care providers, cross-fertilisation will happen but in many areas such relationships are not in place.

What will drive up standards of primary care at local level to ensure that patients with long-term conditions are supported in their own homes? To speak of unscheduled care is to gloss over the reality of out-of-hours work. With only 30 per cent of the week adequately covered, how will the reforms specifically address the needs of patients who want to stay in their own homes? All too often, such patients are put in an ambulance and land in A&E if secondary care provision is not integral to the process of determining pathways of care.

The US model seems to underpin much of the thinking, yet we all know that healthcare per capita in the US is vastly more expensive than that of the NHS despite there being 40 million US citizens without any adequate care. Will the profits from services organised by American systems go to the US? That is not the John Lewis Partnership model, which would reinvest in the NHS.

I turn to PCTs. To have evolution not revolution, why did the Government not put GPs in the driving seat by putting a majority of GPs on the boards of merged PCTs, which could have had a lay chairman? The PCTs could have retained the skills of managers in responding to particular local needs and could have used primary and secondary care working arrangements to make joint plans. If patients can register with any GP anywhere, how will care be provided in the patient’s home when he or she is sicker, older and frailer? Who will want to take on a patient who poses a lot of work? If a GP can jump between consortia, how will stability of commissioning be achieved? Without some baseline stability, quality will not be driven up. We have all seen short-term projects wither. Sir David Nicholson has today exhorted trusts to maintain quality standards. To do that requires stability, not the fragmentation of services.

Many of the partnership agreements between PCTs and local authorities are legal agreements under the Health Act 1999. How will the more than 134 statutory functions of PCTs be discharged? Those include safeguarding children and commissioning for vulnerable groups, prison services and so on. Local authorities are already struggling, so I have no confidence that they will be able to take all this on too. Where will pooled budgets and joint commissioning sit? Will the consortia disband those arrangements, or will they have to respect them and build on them?

With estimates of one in four GPs having a commercial conflict of interest, how will the new model ensure probity in healthcare delivery, given that tendering, done properly, can cost around £500,000? How will the £20 billion saving be found with this massive reorganisation? Redundancies in PCTs are already costing money and losing organisational memory. Staff are then re-employed by private providers. That takes people away from the core task of quality assurance of patient care. The Mid Staffs trust is a glaring reminder of that.

The process seems to be storming ahead, with the detail being clarified as we go. We will be faced with legislation when, as the Health Committee suggested yesterday, the train has left the station at a dangerous speed before we have even had time to scrutinise the Bill.

14:43

[Lord Rea]

My Lords, in thanking my noble friend Lord Touhig for initiating this debate, I apologise to him for missing the first part of his speech because the business moved a little faster than I had been led to believe. In my allotted time I shall talk about the new arrangements for commissioning patient care that are proposed in the White Paper. To illustrate the current situation, let us suppose that Andrew Lansley, the Secretary of State, is a fruit farmer, with PCTs as the trees producing the fruit, which are patient services. The Health Select Committee report on commissioning published in March this year found that some of the trees—the PCTs—were not in good health, with which the incoming Government agreed. Some of the trees were yielding well, but others were in bad shape. They were in need of heavy pruning as they contained a lot of dead wood. However, the Select Committee did not recommend cutting all the trees down. Properly pruned and treated with fertiliser, which can be equated with clinical input, and insecticide, which can be equated with statisticians and healthcare public health specialists—about which I shall say a bit more later—it was felt that the trees would recover and yield adequately.

However, it seems that Farmer Lansley is determined to cut all the trees down and plant new ones of an untested variety that he, an amateur plant breeder, has developed. He thinks they might be of superior taste without seeing first whether they would thrive on his land. Admittedly, he is now nurturing a rapidly growing form of the new variety called “pathfinder”, but this is being grown in special conditions under glass and there is no guarantee that it will grow successfully on a large scale in the open. A new problem has recently arisen; the main PCT orchard has developed a fungal disease popularly known as planning blight, so that yields may well be less for the next few years. This is an especially unpleasant condition in that healthy and productive branches—the most skilled and experienced managers—are starting to drop off and disappear elsewhere. That is because these managers are easily able to find new employment.

By deciding to grub up and remove the current orchard, Mr Lansley has involved himself in considerable expense—much more expense than pruning and treating the existing trees would have incurred. This is before the new variety has even been market-tested and at a time when loans to cover the interim period are very hard to come by.

To leave the analogy for a moment, I mentioned earlier the healthcare public health specialists. These are doctors or other healthcare practitioners who receive special training in assessing the healthcare needs of whole populations and how they can best be met using evidence-based interventions. These are the very skills that are required by commissioning organisations, whether they be PCTs or consortia. Although I am a former GP I believe, like the BMA, that the clinical membership of new commissioning bodies should include representatives of all the healthcare professions, not only GPs. They should perhaps more properly be called clinical consortia. However, I take the point made by the noble Baroness, Lady Williams, that due attention should be paid to the representation of patients and the community on commissioning boards.

One of the criticisms of PCTs made by the Select Committee at paragraph 194 is that:

“PCTs employ large numbers of staff, but too many are not of the required calibre”—

the dead wood, perhaps.

“PCTs need to become better at collecting data, for example of the needs of their population, and at analysing it. In particular, it is essential to exploit existing and developing data sources to provide comparative performance information in terms of cost, activity and outcomes”.

These are exactly the skills provided by healthcare public health specialists, but they are in scarce supply. There are perhaps enough of them to staff the current PCTs, and if they are established in roughly the same numbers, they might be able to cover the new consortia, but their skills will also be needed at the local level to act as directors of public health or as their advisers. Therefore, very careful thought needs to be given to where they are appointed and the powers given to them. Perhaps they should have an executive rather than merely an advisory role, so central to policy are their assessments of the healthcare needs of the population that is to be covered.

There is a lot more about this White Paper that I would like to say, but that will have to wait. I would like just to recommend that the noble Earl passes on to his right honourable friend the Secretary of State two documents, both of which are serious contributions to the current debate. They are Public Health Support for GP Commissioning, which is published by the British Medical Association, and the parliamentary briefing sent to all of us by the King’s Fund in preparation for this debate. It is very sound in its assessment of the situation and in its considered advice to the Government.

14:49

[The Earl of Listowel]

My Lords, I, too, thank the noble Lord, Lord Touhig, for calling for this timely debate. As a citizen I share with him his concern at the emphasis on competition in this paper. Reflecting over the past 20 years, a lack of emphasis on collaboration and co-operation, and a lack of respect for the professionalism of all our providers working on the front line, has tended to undermine morale. That has led to situations, to which the noble Baroness, Lady Williams, referred, such as doctors feeling that they want to go for the best deal for themselves because they are not respected for their work and the care they give the public daily.

In the time available I shall ask the Minister about the impact of reform on specialist mental health services for children. I shall also ask him for reassurance on the future of the family assessment unit at the Cassel Hospital in London. I apologise for not giving notice of that.

I applaud the Minister and his colleagues for deciding to pass decision-making, as far as possible, back to the social workers, teachers, probation officers and doctors nearest the front line. I welcome the fact that it was recently decided that an offender will no longer be automatically incarcerated if he breaches an order twice but that the probation officer will decide what needs to be done. It seems that the Government are operating on a principle across policy in this area, which I welcome. Of course it has to be balanced and not move from one extreme to another, and it has to recognise the problems of professional capacity near the front line.

I am particularly grateful for the comments of my noble friend Lord Kakkar on leadership in the NHS. His reference to clinical leadership led me to reflect on the work of the National College for Leadership of Schools and Children’s Services and the parallels to be found there. I also welcome the injection of more health visitors, an issue about which we will speak on other occasions.

I am concerned about the future of specialist looked-after children’s mental health services, of child and adolescent mental health services and of targeted mental health services for schools. Can the Minister reassure the House that the lessons learnt from the move to commissioning by primary care trusts some years ago have been fully digested by him, particularly in regard to the difficulty in the strategic commissioning of specialist health services?

Specialist looked-after children’s mental health services have been an important success story in an area that urgently needed improvement. In 2004, the Office for National Statistics found that more than 69 per cent of children in children’s homes had a mental disorder and about 40 per cent had a conduct disorder. The latter can be extremely challenging for staff to deal with. The needs of English children in residential care are generally far more intense than those of children in Denmark and Germany. About half the children in local authority care in those countries are in children’s homes. The figure here is only 10 per cent, and they tend to be the ones with the highest needs because of the high cost of residential as opposed to foster care.

In Denmark, 90 per cent of staff have a degree-level qualification and in Germany 50 per cent have such a qualification, while here only 20 per cent of staff are qualified to such a level. Clearly in these circumstances it is imperative that staff have access to the best professional mental health support both to enable them to reflect on their work with their children and for the referral of children.

A psychiatrist managing one such specialist service for a local authority has pointed out that the needs of the children in children’s homes often differ very little from those in adolescent psychiatric units, and yet the latter are managed by clinicians and staffed by nurses while the former may be managed by someone without a degree, and some staff may have no relevant vocational qualification. Certainly when social workers from Germany and Denmark visit this country the thing that shocks them most is the low status of staff in children’s homes. They would say that the most vulnerable and challenging children demand care by the best professionals.

A 16 year-old woman recently spoke at a meeting in the Committee Corridor. Also attending were several mothers who had had their children removed from them by their local authority. The young woman explained that, for her, being taken into care had been a positive experience. In particular, she felt that she had benefited greatly from the therapy she had received from her mental health services. Another woman, in her early 20s, speaking at a meeting of the Associate Parliamentary Group for Looked After Children and Care Leavers, expressed her view that the child she had recently had removed from her would not have been removed if she had had access to mental health services when she had been in local authority care. There is a great deal at stake here.

Specialist looked-after children mental health services have begun to address these issues, but they are not available everywhere. They are expensive to maintain and so are vulnerable to cuts. I ask the Minister for his reassurance that reform will not endanger these services.

Turning briefly to general child and adolescent mental health services, can the Minister say how they may be impacted by reform? In particular, there is concern that senior posts in CAMHS are already being lost under the pressure of spending cuts. How might the reforms play into this? Will they distract from the urgent need to encourage more medical students to choose child and adolescent psychiatry as a specialism? We urgently need more child and adolescent psychotherapists, together with clinical psychologists. Would the money that is being spent on reform be better spent on recruiting more of these professionals? How may the reforms impact on the transition from CAMHS to adult mental health services, which are currently so poor in many areas?

Let me take this opportunity to briefly express my concern about the fate of the Cassel Hospital family assessment service. The hospital is designated as a beacon of best practice; it is an exemplar of what can be achieved. It trains up many excellent professionals and provides hope in an otherwise somewhat barren landscape. It enables mothers who have experienced abuse and failures in the care system to bond with their child and break the generational cycle of failure. We have learnt that its local health trusts will not fund the service in future. Will the Minister please communicate my concern to the Secretary of State about the future of this beacon service and my request that national funding is found to sustain it if possible? I refer your Lordships to the coverage of the Cassel Hospital in, I think, the Times last weekend if they are interested in finding out more.

I look forward to the Minister’s reply. I recognise that I have not advised him of those questions, and if he would prefer to write to me, that would be very welcome.

14:56

[Lord Turnberg]

My Lords, I, too, congratulate my noble friend Lord Touhig on introducing the debate at such a cleverly opportune moment.

As a physician who has spent most of his life working, in one guise or another, within the NHS, I have always thought it self-evident that patients have to be right at the centre of the health service and that much greater responsibility for providing that service should be devolved to the professionals in the field. So I cannot fault the Government’s aspirations. However, when we consider how these aims are to be achieved, we run into formidable difficulties and I cannot help but feel apprehensive.

It is with the roles and responsibilities of the GP consortia, which will play a pivotal role in the Government’s plans, that I have most concerns. These concerns are largely shared now by the Royal College of General Practitioners. First, there is a suggestion that there will be 500 consortia. Is that so? If it is, we will have a range of problems. Where will they all get the expertise in managing the contracting for services? We have enough problems with the variability between PCTs in commissioning—some are good and some are poor—and so 500 will be very difficult. Then there is the problem of the extra cost of all the staff and infrastructure needed to run 500 new organisations. I ask the noble Earl: how many do the Government imagine we will need?

On contracting for uncommon or unusual diseases, it is proposed that larger groupings of consortia will be formed to gather together the relevant specialist expertise. So we will then have at least three tiers of commissioning organisations—consortia, super consortia and the commissioning board. This system is ripe for confusion, overlap and a potential for competition between commissioners, to say nothing of the difficulties of hospital trusts faced with a confusing array of contractors. We know from experience with GP fundholding that the kind of arrangement where groups of fundholders are supposed to join forces just does not work.

Of course, it is valuable to devolve responsibility to the local level but we cannot ignore the likely effect of this on the variability of the services provided in, presumably, 500 or so different areas of the country. Is the postcode lottery likely to be made better or worse in such a system? What safeguards will be put in place that will ensure that patients of one consortium do not complain that they are getting lesser treatment than their neighbours? I know that the Minister takes these matters very seriously. I will in a moment make some suggestions that might help him overcome some of the problems.

GPs will now have financial responsibility for the care of their patients. Two tensions will arise. First, GPs will make decisions about what care the patient sitting in front of them in their surgery should or should not have. If they feel that they cannot afford a particular treatment, it is a recipe for a loss of trust by the patient in their doctor. GPs will have that responsibility. Let us remember that they will no longer have the back-up of NICE to take these difficult decisions off their shoulders. The doctor/patient relationship is threatened when doctors are seen to be the agents of rationing on behalf of the NHS. It could, for example, tempt GPs into trying to tailor their list of patients to those with the least demanding diseases.

The second tension will arise from the patient being able to choose from “any willing provider”, as the White Paper puts it. Quite apart from the conflict that could arise between the GP trying to balance the books on the one hand and the patient demanding some expensive treatment on the other, there is the whole question of whether this combination of choice and willing providers conflicts with the efficiency with which the service can run and the equity of access that we all cherish so deeply. I do not think that this issue has been given sufficient attention in the rush to push the changes through.

It is not much wonder that GPs are worried and that the Royal College of General Practitioners has voiced clear concerns. They are worried about the financial risks that will be placed on their shoulders, about their lack of expertise in the new skills that will be expected of them and about the threats to the doctor, patient relationship.

Noble Lords have mentioned integrated care. There seems little doubt that the best way for patients to have access to a safe, effective and efficient service is through those in primary, secondary and social services working closely together both in designing care pathways and delivering the care. In the words of the college of GPs, this is the essential cornerstone of an effective healthcare system.

When I brought this up in our debate on 28 October, the noble Earl expressed his strong support for the concept, but there is unfortunately little information around as to how it might be put into practice. Indeed, the competitive environment gives little encouragement that integrated care will be given more than lip service. So I ask again whether the Minister has any information on how integrated care might be put into practice.

Perhaps I may make three proposals that might help ease some of these difficulties. First, the number of consortia should be kept low—probably no more than 20 to 50. This will keep the costs down, allow specialist expertise in management and contracting to be equally available to them, reduce the number of confusing tiers of commissioning bodies and take a burdensome load off the many reluctant GPs. It will be interesting to hear about the experience of the pathfinder consortia. Clearly they are the keen minority, but I suspect that they would welcome such a proposal.

Secondly, I respectfully suggest that we keep the roles and responsibilities of NICE as they are and do not change them at all, at least until we can see how GPs get on with their new responsibilities. Thirdly and finally, can we see whether it is possible to develop a proper system of commissioning that incorporates the concepts of integrated care?

15:04

[Lord Mawson]

My Lords, I thank the noble Lord, Lord Touhig, for securing this debate. We are entering one of the biggest reorganisations of the health service since 1948 by passing budgets and power locally to GPs. I welcome this move. However, difficult questions must be asked, not just about how we can more efficiently manage, organise and run the health service but about whether the story that we tell as a nation about our health is true, life-giving and sustainable.

In the health debate in October, I asked how we could provide quality healthcare that meets the real needs of patients in today’s world. Is the popular biomedical model of health in which we invest good for our health and sustainable? Will it help those most in need, or does its internal logic present us with a costly and limited view of what a healthy human being is?

The GPs with whom I work tell me that in deprived communities such as Tower Hamlets 50 per cent of the patients whom they see do not need a doctor. One GP at an NHS walk-in centre told me that, out of the 80 patients he saw in one day, only 20 really needed to see him. A nurse told me of one patient who came into her surgery last week to ask her for hand cream on the NHS rather than buying it at the chemist. Let us tell a story about the personal responsibility of patients. Often, “patients” do not need a doctor; they need something else. What presents itself as a health issue may be more to do with a patient’s isolation or the need for a better job or lifestyle. People have bought into a culture of illness because it costs them nothing, but in reality the cost to our society is running into millions of pounds. A Times article this week stated that 7 million patients failed to show up for hospital appointments in the past year, costing the NHS millions of pounds. If those 80 patients at the clinic had had to pay £5 each to see the doctor, they would first have asked themselves, “Is this visit really necessary?”.

A sensible balance and perspective need to be found. There is a cultural belief that there is a pill for every ailment, and that if there is not there should be. We are in danger of medicalising people out of existence and creating levels of anxiety that have unintended consequences. Only last week, “experts” advised those of us over 50—I declare an interest here—to take an aspirin every day, but the sting in the tale was that, for some of us, it might mean bleeding to death internally. I am in danger of becoming a nervous wreck.

We must return to the question that the innovative Dr George Scott Williamson from the Pioneer Health Centre in Peckham asked all those years ago before the founding of the NHS: “What is health?”. Although we love them dearly, the BMA and their powerful allies in the medical profession have many financial and other interests in keeping the health narrative unchanged and unchallenged. Our health is matter not just for our doctors.

Most of us engage with the health service through primary care and not, fortunately, through the acute sector. It is in preventive medicine in primary care that limited funds can have the most impact. Some fantastic innovative attempts in preventive health care have been made, and some successes achieved, by using the power of modern media to change behaviour. Jamie Oliver, a well known social entrepreneur—not a doctor—challenged our preconceptions about unhealthy eating. The Government have published an excellent white paper on public health, Healthy Lives, Healthy People. It underscores the importance of preventive actions taken at the initiative of the community and local businesses.

My colleagues and I have radical plans for a social business to regenerate communities in east London through good food—I declare an interest here, too. We want to teach non-cooks how to cook in their communities and young mums how to create healthy meals for their children. We have partnered with Jamie Oliver’s team and the most well-known academics in the field. We also have support from the local NHS. However, obtaining start-up grants to support this work has not been easy. We suspect that this is because we are unashamedly a social business and not a charity. Why are innovative projects such as this, with all their potential for cost saving, still so hard to get going? Why are more innovative partnerships such as this not being brought together by local GPs and social entrepreneurs? It is because they live in different worlds, and because government and charitable funding silos discourage cross-fertilisation and make it so hard to do. New thinking comes not out of theoretical clouds but out of novel and unexpected practical partnerships. Yet the present professional structures discourage this. Why?

What might a new health narrative sound like? First, the NHS needs to tell a story about a changing demography and the financial realities that lie behind it. We have an ageing population and a health system that is unsustainable. Let us tell people the truth. We all need to take more individual responsibility for our health. The NHS should be a supportive shoulder on which to lean, if and when required, instead of encouraging a dependency culture and maintaining its present stranglehold.

Secondly, Governments must tell a new story about the importance of preventive medicine and illustrate it by telling the stories of GPs who are now forming relationships outside the box. Governments must be more honest with us all and stop feeding on papers, statistics and structures that can magically be manipulated to tell them exactly what they want to hear. They go home happy; the patients do not.

Why not start asking how government can help to bring together doctors and social entrepreneurs, innovators, artists and creative people in shared health buildings so that we develop innovative approaches to basic health care and prescriptions that meet people's real health and social needs? This is not about new money but about asking how money that already exists in local communities can be brought together in a more integrated and efficient way. Let us bring together practitioners from different disciplines into the same building and move beyond the collocation of services to integration. We have in east London.

Thirdly, let us tell a story that admits that ploughing vast amounts of money into the health service does not inevitably improve people's health; it can have unintended consequences. People in poorer areas still die seven years earlier than in richer areas, and health inequalities between rich and poor are getting progressively worse, even after all the investment in recent years. More money is not necessarily the answer. We need to think more imaginatively than this.

I leave a couple of questions for the Minister. How in practice is government going to use the restructuring of the health service to create a new narrative relevant to modern health? Secondly, what is government going to do to ensure that doctors engage with innovators and entrepreneurs?

15:11

[Baroness Sherlock]

I add my thanks to my noble friend Lord Touhig for securing this debate. Before I start, I declare an interest in that I did some work recently for the Social Care Institute for Excellence on the establishment of a college of social work. The SCIE is interested in the social care elements of this debate.

I spent some time as an adviser in the Treasury, and whenever a new idea came up the kiss of death from Treasury officials was to bill it as “a solution looking for a problem”. When I came up with a pet idea, it was incredibly annoying—I would be pretty clear that it was a great idea—and I would not for a moment suggest to the noble Earl that this was a solution looking for a problem. However, that experience taught me that even when reform is desirable and well implemented, the costs of transition in so many different ways are so huge in terms of a reduction in productivity and all the disruption that it causes that the test has to be set very high to decide that the game is worth the candle. That is something that concerns me now. We have heard a very good defence today from my noble friend Lord Hunt of Kings Heath and the noble Baroness, Lady Williams of Crosby, who remind us that the NHS, with which we are perhaps over-familiar, is a real and rare jewel and something that we should celebrate and defend. It is something that we should take very careful steps to amend only very slowly, if at all, unless the case for change was overwhelming.

Secondly, if there is a case for change, surely if it is on this scale it should happen only when the weather is fair and the wind is at our back. I am afraid that at the moment it does not feel so. We are aware of the constant pressures on the NHS finances of demographics, complex health needs, and the price of drugs and technology. That is why there has been so much investment in the health service in the past decade, which the noble Lord, Lord Alderdice, was kind enough to acknowledge. Now the NHS will face an enormous squeeze; it has to find £20 billion of efficiencies a year, which is a huge challenge. Who will have to find those efficiencies? It will be the PCTs, which will close and their staff face losing their jobs. The PCTs will have to address themselves to the management of change and prepare for the brave new world.

In that circumstance, the only argument for introducing this level of structural change will be if it can be shown that it was necessary in order to achieve those economies. The King’s Fund, for which I have a great deal of respect, as do other Members of this House, has this week disagreed with the idea that structural changes will help to meet the productivity challenge. Indeed, it said that it shared,

“the concerns set out by the Health Select Committee yesterday, that they will still act as a distraction from delivering the enormous productivity improvements required across the system”.

We should take that warning very seriously.

Thirdly, I shall comment on the new governance arrangements. Like many observers, I have been concerned from the first time I heard of these proposals about what would happen to the community aspects of health. We do not live as individuals and we do not experience our health or welfare as individuals; we live in communities. If we move to commissioning by GP practices gathered together in commissioning groups, who will be responsible, and how, for the health of a whole community? I understand from the Government’s response that the local health and well-being boards will be the vehicle for securing collaboration between the NHS, public health, adult social care and other services. Of course, there is also the local government scrutiny, but will not some health and well-being boards have GP consortia that straddle their boundaries, making co-ordination more difficult? How will that be addressed?

There is also the specific role of local authority scrutiny, but this adds up to quite a complex piece of governance machinery. Accountability will run downwards to service users and communities, and sideways through the health and well-being board, the local authority scrutiny group, and perhaps Local Health Watch. It will run upwards to the national commissioning board and perhaps to the CQC, the national health watch Monitor, and the national public health service. That is quite a complex form of governance. What will happen when those different parts of the system pull in different directions? How should a judgment be made by a consortium if one set of pressures comes down from the national commissioning board and another comes locally or sideways for the local variations? How will that work in practice?

I have two specific questions for the noble Earl. Because they are so specific, I would quite understand if he would prefer to write to me. First, much is said about the need for the integration of health and social care. I am very much behind that principle and wish the Government every success in pursuing it, but could the Minister explain how, in practice, social care will be represented on the commissioning boards? How will it have a place in the commissioning structure to ensure that it is delivered in practice as well as thought about in theory?

My second set of concerns relates to the safeguarding of children. I am sure that the Minister is aware of the comments reported in the Telegraph last week by Tim Loughton, the Minister in another place who is responsible for children, who said that it would be more difficult for doctors to spot child abuse as groups of GPs already adopt widely different standards in relation to that. I am sure that the Minister is aware that a number of children’s charities are concerned that aspects of the health service have long been the weak link. That can be a significant concern when one reads serious case reviews. What will happen in this new system? Will the Minister explain how, if the system is to be changed in the way that is described, the Government will ensure consistently high standards of policy, training and practice in safeguarding under the new commissioning arrangements?

Finally, will the Government think of another way of doing this? I was struck by the comments by the noble Baroness, Lady Williams of Crosby, about the expertise in this House. Given that pathfinders will try this in practice—even allowing for the idea of the noble Lord, Lord Rea, that they might do this under canvas—will the Minister consider, when the pathfinders have run their course, pressing the pause button, evaluating carefully what the results tell us and bringing something back for the scrutiny of this House and another place so that we can work out whether people such as me who are worried are wrong? It is very hard for me to admit that I might be wrong, but I concede that on rare occasions this happens—a little less laughter, please. It may even be true of other noble Lords in this House. That would give us an opportunity to take a step back and consider whether our worries have turned out to be right. If they have not, we can carry on with less concern. However, if we are right, we could protect the NHS from damage. The NHS is a jewel in our crown, and we risk public wrath if we do anything that could damage it.

15:18

[Lord Patel]

My Lords, when you are a tail-end Charlie, most of the things that you wanted to say may already have been said. However, the breadth and depth of the proposed reforms are such that there is plenty left for me to say. First, I declare an interest. Like many other noble Lords, I have been a lifelong clinician—in my case for 39 years, in different forms. I have also chaired NHS regulators, standard-setting organisations in quality and safety, and facilitative organisations.

Like other noble Lords, I feel that we need much clarification of the proposed reforms. Apart from the White Paper and the myriad different documents, I have read all the speeches that the Minister has given recently. While his message has been consistent, explanation of how it will all work is not clear. No doubt when we get the legislation in your Lordships’ House we will spend many happy days scrutinising it—and, on my part, helping to improve it.

Today I have some general comments and one or two specific ones. As others have mentioned, the main conclusion of much of the coverage concerns the bringing in of major institutional reforms that attract major costs, coupled with the drive to realise greater efficiency savings in both the health and social care budgets. Small organisations such as consortia may well drive up costs or reduce clinical delivery times. GPs have said that they will need time and resources to develop and deliver a professional-led service. Will the Minister say how this will be possible?

One component of the White Paper is the introduction of an outcomes framework for holding the NHS commissioning board to account. One problem with PCTs was that they contracted with organisations rather than contracting for services and outcomes. The outcomes framework maintains the three domains of quality identified by the noble Lord, Lord Darzi—those of effectiveness, patient experience and safety—and has developed five domains, which on the face of it is all good. However, if the outcomes framework is the means by which the Secretary of State can hold the national commissioning board to account for the performance of the whole NHS, it needs to be much broader. Currently it is focused too narrowly on clinical outcomes. It should be broad and high level. Furthermore, the relationship between the outcomes framework and the commissioning framework needs careful consideration. National goals often become targets that are used for the assessment and management of performance. Does the Minister agree that the commissioning framework for assessing the performance of GP consortia needs to go beyond the outcomes framework to include the commissioning skills and performance of GP consortia?

I turn now to international comparability. Why are we not going to use an internationally recognised framework for assessing healthcare performance, such as the one developed by the OECD, especially as this not only has parallels with the proposed outcomes framework but includes health improvement and risk factors, as well as the three themes of effectiveness, safety and patient experience, with equity as an overarching dimension? The framework also needs to measure integrated care, care pathways and the quality of care, including social care. How will improvement be assessed? What will constitute acceptable and unacceptable performance and how will it be measured?

My next point relates to process measures. The framework accepts that these are important and are needed locally. Why are these not considered appropriate for the outcomes framework? The relationship between GP consortia, health and well-being boards and local authorities seems unclear. GP consortia will have to commission and deliver high-quality care. How will their accountability to the board work, in particular when contracts are held by boards and not by local authorities or consortia?

I turn to regulation. The Care Quality Commission will be the quality inspectorate. In an environment where there will be willing providers and patient choice, how will the CQC ensure the equity or safety of quality for all providers and who will monitor that? The second regulator will be Monitor—the new, stronger economic regulator—with functions to ensure access to key and essential services. What are key and essential services? What is the definition? Will they be available in each geographical area? That needs to be clarified, as does the question of who will ensure that it happens. The other function of Monitor will be to set prices. While sufficient pricing is a worthwhile ambition, the challenge is to set prices at a level that does not compromise quality. In health, as in everyday life, you get what you pay for.

The Government seem to have changed their mind about how maternity services will be commissioned. Initially, they said that they would be commissioned by the national commissioning board. Now it seems that the consortia will do that. The Minister may well be aware, however, that all the professional organisations have accepted that it would be better for the maternity services to be commissioned by the commissioning board and for the maternity networks to be developed to be able to do this.

While we await the Government’s new cancer strategy, I hope that the framework that is produced will recognise that not all cancer services will be appropriate to be commissioned by GP consortia and that commissioning groups should include clinicians with expertise in cancer. Appropriate data related to cancer diagnosis and survival will need to be included and are important as part of the outcomes framework. How information on outcomes is provided to patients so that they can make a choice will also be crucial.

On the question of competition, what evidence exists that increasing marketisation will benefit patients? Is there an example of a country that has had a defined and conscious change to a market-based approach that has led to improved patient outcomes?

15:26

[Lord Beecham]

My Lords, I join previous speakers in congratulating my noble friend Lord Touhig on ensuring that we have had this debate today, and I thank other noble Lords for the thoughtful contributions that we have heard. In particular, I congratulate the noble Lord, Lord Colwyn, on being the only Conservative Back-Bencher to have participated.

I have to begin, somewhat unusually, by declaring a non-interest. The BBC website, in referring to this debate, refers to me as “former president of BUPA”. I have been neither a member nor a president of BUPA. I am, however, a former president of BURA, the British Urban Regeneration Association, in which position I succeeded the noble Lord, Lord Jenkin.

There is a celebrated case in what used to be called “master and servant” law when a workman was denied compensation in a claim against his employer because he had been injured not while going about his employer’s business but when he was on “a frolic of his own”. That phrase might well be applied to the Secretary of State. After all, despite the fact that he has promoted the mantra of “no decision about me without me”, major decisions have been taken without support, or certainly with very little support, from a wide range of consultees including the BMA, the royal colleges, the NHS Confederation, many patient groups and a number of think tanks. Small wonder, then, that he seems to have been supplied with a minder, in the somewhat unlikely shape of Oliver Letwin, to run a rule over what he is apparently doing, and small wonder that apparently today’s Times editorial questions whether No. 10 is continuing to give wholehearted support to these proposals.

Your Lordships have already been reminded of the high level of public satisfaction with the health service by my noble friend Lord Hunt and the noble Baroness, Lady Williams. In addition, as part of the background to this debate, there are of course the pledges that the Government made in their various component parts. There is the issue of top-down reorganisation, to which the noble Baroness referred. That was explicitly excluded in the coalition agreement, but we are now getting not only a top-down reorganisation but a great deal of top-down commissioning as well.

Then of course there is the pledge about the real-terms increase of the health service. Contrary, I am afraid, to the assertion made by the noble Lord, Lord Colwyn, there is to be no real-terms increase for the health service; I refer, as an authority for that, to paragraph 51 of the report of the Health Select Committee, chaired by Stephen Dorrell, the once—and perhaps future—Secretary of State for Health.

Those pledges join a long list of broken pledges across a range of policy areas. There are tuition fees, of course, which we debated in this House this week, real-terms funding increases for schools and, indeed, a range of health issues including a pledge not to close A&E and maternity units, which have in fact closed on the present Secretary of State’s watch. This indeed has become a Government of serial pledge breakers. In fact, there is some danger that they may be becoming addicted to it and need treatment for it.

On the other hand, it is only fair to say that there are changes in the Government's position, seen in this week’s Statement and Command Paper, which are welcome. I certainly welcome the restoration of public health responsibilities to local government and the decision—in this respect, I beg to differ from the noble Lord, Lord Patel—to have maternity commissioned locally rather than nationally. I also welcome the maintenance of the powers of scrutiny of the health service being to local government, which the original White Paper had proposed to take away. Yet there are governance issues that need to be addressed.

The noble Lord, Lord Rodgers, referred to commissioning at a regional and sub-regional level for services which go beyond an immediate locality. There is the accountability of the national commissioning board to the Secretary of State as opposed, perhaps, to Parliament as a whole. There is, if I may say so, something of a degree of naivety in the praise that the document gives this week to the success of the governance of foundation trusts. Whatever their merits, the membership of foundation trusts is very small in relation to their potential membership and the turnout of votes in elections to them is even smaller. There is also the issue, which noble Lords have already referred to, of whether it is sensible to rush forward with the conversion of all trusts into foundation trusts.

Much of this debate has turned on the issue of GP commissioning and it is certainly the case that this is being piloted in a number of pathfinders. I would hesitate before adopting my noble friend Lord Turnberg’s recommendation, which would lead to perhaps only 50 commissioning authorities, but I join him in asking: what number is envisaged and of approximately what average size, when the present range within the pathfinders is enormous? It ranges from 18,000—which is, I suppose, a general practice—to half a million. That is quite extraordinary. What is important is that there should be a strong degree of coterminosity between the GP commissioning consortium and the principal local authority which has responsibility in particular for social care but also for other relevant services.

Moreover, this week’s document says that consortia will be able to contract, to dissolve, to merge and that their boundaries can be flexed. Is that not a recipe for perpetual motion, in a field where we really need stability? Finally, there is the commissioning of GP services, to which many of your Lordships have referred. I return to the proposition of the Local Government Association, and declare an interest as an honorary vice-president of it, to suggest that GP commissioning should be signed off by the local authority in the relevant area. Of course, coterminosity would be needed to do that.

Part of the debate has focused on the issues of choice and personalisation. I said in a previous debate on this matter, as I have said elsewhere and to my own party when in government, that blurring the distinction between choice and personalisation does not help the debate. The two things are not synonymous. Yet if we are to make choice a reality, particularly in providers, to what will it extend? Will it extend to the closures of facilities and will any group of potential patients ever agree to a closure of a facility?

How will the framework proposal for greater choice in mental health services—the framework document was published yesterday—be met under national commissioning? The noble Lord, Lord Alderdice, referred to the problems in urban areas caused by people moving in from outside, very often with acute social problems. Ought not the services for those people to be commissioned locally rather than nationally? Yet that is not what the framework document says. Again, the document makes a rather bold claim for the national commissioning board. It will, it says,

“ensure people who receive services are involved in their planning and development”.

How will a national board do that, as opposed to local organisations?

There has run through this debate and much of the public debate a thread of deep concern about the competitive principle. The BMA is very clear that co-operation, rather than competition, ought to be the watchword. Several noble Lords, including the noble Baroness, Lady Finlay, referred to the issue of willing providers and the need to avoid cherry picking. I ask the Minister whether there will be any safeguards against such practices. Would he care to comment on the OFT investigation into the private healthcare market that has been initiated this week? Five providers apparently deal with 85 per cent of that market, and there has been a suggestion—which is subject to investigation—that that market may have been neutrally managed, not necessarily to the benefit of the consumers. How will that be avoided in the new set-up? To repeat the question of my noble friend Lord Touhig: will the Government ban companies from advising commissioners on the one hand and providing services on the other? It seems fairly obvious that external organisations will do that. Finally, in this rather Darwinian world of competition, what happens to institutions, hospitals and other services that are deemed to be failing? Will they, as we have learnt about schools this week, simply be allowed to fail and close? What happens then to patient choice?

Finally, there is the issue of cost, which the Select Committee looked into in considerable detail this week. It complained that even now there is no robust estimate of the cost of this reorganisation. It has criticised the Government’s figure of a cost of £1.7 billion. Nor does it agree that social care can be sustained without restricting eligibility on the basis of the recent local government finance settlement. I understand from my brief reading of the documents that were published yesterday that a figure for the overall cost of this reorganisation may be given in the impact analysis to be published in January. If it approaches the £3 billion that credible authorities suggest, is that not a complete distortion of spending needs at a time when services will be very much under pressure? Should the Government not reconsider the scale, the timing and, above all, the cost of the reorganisation?

15:37

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, I join other noble Lords in thanking the noble Lord, Lord Touhig, for calling this debate, which has been both wide-ranging and characterised by some extremely thoughtful and eloquent contributions. I welcome the opportunity to discuss these issues, which are so important to us all. Of course, being impressed by eloquence is not the same as being swayed by argument. It will not surprise your Lordships that I cannot identify with the criticisms of the Government’s policy voiced by several speakers. By and large, those criticisms are either misplaced or exaggerated and I hope to show why.

It is perhaps appropriate to start with the question posed by the noble Lord, Lord Hunt of Kings Heath, about why we are reforming the NHS. First, as good as the NHS is, in what is most important for patients and many health outcomes—for many cancers, respiratory disease and heart attacks—we lag behind. Secondly, in its current state, the NHS is unsustainable. We can no longer meet increasing demand by spending ever more money. In every western economy, cost pressures from healthcare exceed GDP growth. There is a basic challenge of affordability. Without reform, the NHS will quickly bend until it breaks.

We seek to address a good part of that challenge through the four pillars of the QIPP programme—quality, innovation, productivity and prevention. In many ways the White Paper is a vehicle for the QIPP reforms, squeezing the most out of every penny invested and creating a better-value and entrepreneurial NHS. Looking more particularly at the prevention agenda, our focus on public health through Public Health England will do as much to keep people healthy as the NHS does to make them well.

Although some see the reforms as a big step—I do not disguise the fact that there will be some big changes—they amount in several other respects to a series of small steps. GP-led commissioning builds on the experience gained from previous reforms, particularly practice-based commissioning and GP fundholding. Our any willing provider policy is an extension of the choice agenda initiated by the previous Government. Without lowering the quality bar—I say that particularly to the noble Lord, Lord Touhig—we are completing the rollout of foundation trusts, only this time with robust arrangements for provider failure. The reforms resolve and bring coherence to a series of sometimes disjointed measures rolled out under the previous Administration. Our aim in doing this is very clear: it is to transform the health service into a sustainable system with outcomes as good as any in the world.

Noble Lords need to ask themselves what the alternative would be. Without reform, the alternative is to salami-slice the health service as it is now, with obvious risk and detriment to patients. We know that the previous Administration put aside £1.7 billion for NHS reorganisation of some sort. We will never know what precisely they would have done, but if it was not something similar to our proposals then I wonder what it was.

The other vital strand to the new NHS—again, this was a clear ambition of the previous Administration—is the genuine integration of health and social care, which was mentioned by a number of noble Lords, including the noble Baroness, Lady Sherlock, and the noble Lords, Lord Turnberg and Lord Beecham. We are putting a lot of money into integrated care. I say to the noble Baroness, Lady Sherlock, that the involvement of social care in commissioning will be a key role of the health and well-being boards and the related joint strategic needs assessments that will need to be undertaken by consortia and local authorities working together. What she will see, based on those joint strategic needs assessments, will be better, more integrated health and social care services for patients.

The Government’s response to the White Paper consultations was also published yesterday. This sets out the legislative framework and next steps for the White Paper as we move towards publishing a health and social care Bill in the new year. I wish to pick out two or three issues from this. First, as regards commissioning, the best decisions are those taken closest to those whom they affect. Unfortunately, time prevents me from expatiating on the excellent theme of the noble Lord, Lord Mawson. However, GP-led commissioning will place decisions about the future design of local health services in the hands of clinicians—GPs and their colleagues across the NHS and social care working together. These are people who see their patients and service users every day.

Last week, in response to the consultation, we announced the first 52 in a rolling programme of GP consortia pathfinders. These are in essence the pilots to which the noble Baroness, Lady Williams, urged us to direct our efforts. This first batch involves more than 1,800 GP practices and covers a quarter of the population—some 12.8 million people. The noble Lord, Lord Turnberg, doubted whether integrated care was truly achievable. I visited a pathfinder last week in Nottinghamshire and came away completely inspired by what I saw there in terms of joint working, creative thinking and the breaking down of professional barriers. Noble Lords who have thus far viewed the Government’s proposals solely from the printed word should consider experiencing what is actually happening on the ground. Pathfinders will enable emerging consortia to become more involved more quickly in commissioning. They will explore the issues involved in effective implementation before consortia take on their statutory duties in 2012-13.

The noble Lords, Lord Hunt and Lord Touhig, and others somewhat poured cold water on the whole concept of GP-led commissioning. However, it will remove the current disconnect between clinical decision-making and financial decision-making by putting both in the same place. Those who question the wisdom of that approach should speak to some of the pathfinder GPs. They do not see themselves as being presented with a problem; they see themselves as being able at long last to manage budgets in a way that will change services and bring maximum benefit to all their patients without “the system” getting in their way. The brutal truth is that a budget that is subject to the kind of managerialism referred to by my noble friend Lord Alderdice risks depriving some patients of the care that they need. To those who question the enthusiasm of GPs, I say that the first application for becoming a pathfinder was oversubscribed. More will be coming on stream. By the middle of 2011, we believe that the vast majority of GP practices will be members of pathfinder consortia.

At the centre of everything should be the patient. The noble Baroness, Lady Masham, was right in her general point, although I did not agree with everything that she said subsequently. The NHS should be accountable to the people whom it serves. Patients and the public should have a say in how local NHS services are shaped and should be able to hold them to account in a meaningful way. Beyond a straightforward legal duty for NHS organisations to consult the public, the new local patient champion, HealthWatch, will ensure that people’s voices are heard and acted on. It will be supported by a new national patient voice, HealthWatch England—a short step from what we have at the moment with local LINks, but an absolutely crucial one. The patient voice will also be vital for the new health and well-being boards, which will join up the local NHS, public health and social care. The fact that these boards will be based in local authorities will, of itself, inject a high degree of local democratic accountability into commissioning.

The noble Lord, Lord Touhig, and others referred to the trend towards competition, arguing that there is little evidence of its benefits. As we set out in the White Paper, choice and competition can be powerful drivers for quality and efficiency and can force providers to develop services that genuinely meet patients’ needs and preferences. However, we do not want to introduce the choice of any willing provider for its own sake. That makes sense only where it is likely to deliver real benefits. Competition should not be at the expense of co-operation and there is no reason why it should be. There will still be a duty in the health Bill for NHS organisations to co-operate in patients’ interests.

The noble Baronesses, Lady Williams and Lady Finlay, and, indeed, the noble Lord, Lord Rea, with his arboricultural hat on, suggested that we keep PCTs and simply populate them differently. Let me say why that would not have delivered the outcomes that we want. PCTs are administrative units. The way in which they are configured bears no automatic relationship to the way in which clinicians want to deliver services, and clinicians feel no sense of ownership of them. The pathfinder consortium that I visited in Nottinghamshire last week is configured in a way that takes account of patient flows between primary and secondary care, is logical in terms of how health and social care services are best integrated and works on the ground in terms of close professional relationships. Doctors and other health professionals have designed it; they own it and they believe in it. That is the difference.

The noble Lord, Lord Touhig, referred to fundholding, which I agree was not a successful enterprise in some respects, although it had some valuable lessons which we are now picking up on. Fundholding had a conflict of interests because, as the noble Lord said, underspends of the commissioning budgets tended to go to the practice involved. This will not be the case for GP consortia. The only way in which GPs will be able to benefit is if they can improve outcomes for patients.

The noble Lord, Lord Turnberg, and the noble Lord, Lord Touhig, referred to the risk of recreating or accentuating the postcode lottery. Perhaps I may say that the prime purpose of the National Health Service commissioning board will be to inject two main things, consistency and quality, into commissioning. The NHS commissioning board, supported by NICE, will develop a commissioning outcomes framework so that there is clear, publicly available information on the quality of healthcare services commissioned by consortia. It will include measures to reflect a consortium’s duties to promote equality and to assess progress in reducing health inequalities.

The noble Baroness, Lady Finlay, and the noble Lords, Lord Touhig, Lord Patel and Lord Beecham, criticised the injection of competition and choice into local health economies and expressed fears about cherry-picking. In the new system, the NHS board and Monitor will develop packages of services and tariffs for services, taking account of the need for individual providers or partnerships of providers to deliver integrated care. Monitor will have a duty to ensure that competition, where it is appropriate, functions effectively, which means developing systems where providers cannot cherry-pick the easiest patient groups.

The noble Lord, Lord Hunt of Kings Heath, and others raised various issues concerning accountability and governance. I suspect that we will get into the weeds of this when the health and social care Bill reaches your Lordships’ House, as there is no time to do so today. We think that consortia should be free to define their own governance processes but within a broad framework that will be set out in the legislation. Noble Lords will have to wait to see what that legislation says but I can tell the House that the NHS commissioning board will have a role in establishing consortia and, in doing so, it will seek to ensure that consortia have the systems in place to fulfil their statutory functions in a proper way that takes account of the stewardship of public money.

My noble friend Lord Rodgers of Quarry Bank asked whether there will be a regional role for the NHS commissioning board. It will be for the board itself to decide how it designs the most effective and cost-effective operating model. The board will determine the optimal configuration of its sub-structures with the freedom to adapt over time.

The noble Lord, Lord Kakkar, spoke, as he always does, about education and training, particularly their impact on research and academic medicine. We shall shortly be publishing a consultation document on future arrangements for education and training, which I hope will begin to answer his questions. The noble Lord talked about the importance of research. As Research Minister, I am enthusiastically on his side on that score. Supporting and promoting research and development will be a core function of the future Department of Health, and the Government remain committed to providing the right environment for innovation to flourish. I think that the increased funding for health research in the recent spending review gives us a strong platform to fulfil that ambition.

The noble Baroness, Lady Masham, asked about the position of the 10 specialised commissioning groups, and the noble Earl, Lord Listowel, referred in particular to specialist mental health services. The new NHS commissioning board will commission national and regional specialised services. The consultation has highlighted the need for criteria to be developed to determine which services should be commissioned by the board or by a lead consortium across a population. We will consider the best way to keep the specialised services portfolio under regular review and, as Minister for specialised services, I can tell the House that I will keep a close personal eye on those issues.

The noble Baroness, Lady Masham, doubted whether the HealthWatch model was the way to proceed and she referred to the constant reinvention of patient and public involvement. While local HealthWatch organisations will retain the current functions of LINks, they will also gain additional functions, providing advice and signposting, as well as advocacy, for NHS complaints. We are continuing to work with LINks to build on the valuable work that volunteers have taken forward. As I mentioned, HealthWatch England will be established as a national consumer champion both to give patients and the public a voice at a national level and to provide advice and support for the new local HealthWatch organisations.

The noble Baroness, in her criticism, was doubtful that the local LINks and HealthWatch, as they are to become, will be up to the job. The Command Paper sets out that, while HealthWatch should have an advocacy role, which is one of the roles that we envisage for it, this will not have to be through its own staff. Local authorities will have the flexibility to commission services from other providers, which could include citizens advice bureaux, for example. We have done this. We have created that flexibility, as we recognised the expertise that is required in advocacy services.

The noble Lord, Lord Kakkar, asked what arrangements there were for the sustained development of clinical leaders. Clinicians with leadership skills are central to our efforts to deliver better outcomes for patients and a critical part of successful commissioning. The National Leadership Council’s commissioning work scheme will provide targeted development for GPs who wish to lead consortia. Its work will ensure that, with the advent of consortia in 2013, there will be a suitably skilled group of individuals prepared to lead these organisations.

The noble Lord, Lord Turnberg, spoke about the role of NICE. There is no time for me to reply in detail, except to say that on this subject he was 100 per cent wrong. I will write to reassure him. He also asked about the likely number of GP-led consortia, as did the noble Lord, Lord Beecham. We are intending this to be a bottom-up process, so we have no set expectations of how many consortia there may be. There are, as I mentioned, 52 pathfinders, which we announced the other day, covering 25 per cent of the population. What we will see emerging is the pathfinders exploring the issues involved, including which services are best commissioned at which level.

The noble Lord, Lord Patel, asked what the key essential services will be and how we will make sure that they are available. We will set out the definition of essential services in the health Bill, but broadly a service will be defined as essential if the commissioner could not turn to a suitable alternative service for patients if the incumbent provider stopped offering it. Monitor will be responsible for the process of identifying essential services and ensuring that they are protected, working closely with the board, consortia and other stakeholders.

As the noble Baroness, Lady Sherlock, suggested, we will return to these issues. The Government are committed to the values of the National Health Service: healthcare for all, free at the point of need. In view of all the talk about privatisation, that needs stating. But we are equally committed to doing everything possible to ensure that the quality of that healthcare, as measured by clinical outcomes, is as good as it is possible to be. I believe that our reforms will enable us to achieve exactly that.

15:57

[Lord Touhig]

My Lords, as barely a minute is left in this debate, I am unable to thank all noble Lords individually for taking part. Other than a general thanks, I cannot comment on all the points that were made. The standard of debate here was much better than in the other place. There is such wide experience, which is a huge benefit. I thank the Minister, who did very well in responding to all the questions raised by noble Lords. His eloquence does not equate to the power of his argument, as those who expressed doubts and questioned these changes won the argument. I have no doubt that we will return to these issues.

Motion withdrawn.

Wireless Telegraphy Act 2006 (Directions to OFCOM) Order 2010

Thursday 16th December 2010 Lords Chamber

Motion to Approve

15:58

Moved By

[Lord De Mauley]

That the draft order laid before the House on 27 July be approved.

Relevant documents: 7th Report from the Joint Committee on Statutory Instruments and 7th Report from the Merits Committee

[Lord De Mauley]

My Lords, the Wireless Telegraphy Act 2006 (Directions to OFCOM) Order 2010 will direct Ofcom to take certain action in respect of radio spectrum management. It is an important step in achieving the Government’s objectives on broadband and the contribution that it can make to a balanced economy.

Wireless communications are now an integral part of everyday life in the United Kingdom. There are now more active mobile connections than people: 3 million access broadband using wireless modems, or dongles, and the arrival of smartphones is changing the way in which people communicate and interact. These devices all require radio spectrum. Without sufficient spectrum being available, mobile services cannot continue to function nor can new and innovative services be brought to market.

The explosion of data traffic across networks is putting the networks under strain. Technical advances can play a part in mitigating the impact of this increased demand but ultimately what is needed is access to additional spectrum. However, spectrum is finite and therefore a scarce resource. Spectrum suitable to deliver mobile broadband services is even scarcer. Where spectrum is available, we need to bring it into use at the earliest possible opportunity. The Government’s proposals will achieve that and accelerate the deployment of high-speed mobile broadband services that can deliver benefit to consumers, citizens and business. It is that desire to secure the release of spectrum suitable for mobile broadband services that is behind this statutory instrument.

I will not detain the House with the detail of the long and tortuous route that has been travelled to bring us to this point, although some of your Lordships will recall it in vivid detail. Some of the issues involved, such as the liberalisation of the 900-megahertz and 1,800-megahertz spectrum, have been the subject of discussion and consultation stretching back several years. This issue has made the progress towards the release of suitable spectrum particularly difficult. That this matter is not particularly politically contentious is demonstrated by the fact that the previous Administration laid a statutory instrument in March, with measures that they considered would address some of the most difficult areas of concern. However, there was insufficient parliamentary time prior to the general election to debate it. There was therefore a need for the new Government to make a decision on how to proceed.

The Government have made it clear that one of their key priorities is to rebalance the economy, in terms both of supporting growth in a broader range of economic sectors and of seeing a more even distribution of economic opportunities across regions and industries. For that balanced economy to develop and thrive, a critical requirement is the right telecommunications infrastructure, specifically the provision of superfast broadband connectivity. The Government have already set out their agenda for accelerating the deployment of higher speed broadband connectivity, and we recognise that the widespread deployment of superfast mobile broadband services will contribute to that objective, delivering significant benefits to businesses and consumers.

In the light of these objectives, careful consideration has been given as to how best to proceed. We have taken into account responses to the initial consultation and have held further discussions with Ofcom and operators to inform our decision. As I have already mentioned, the principal objective is the earliest possible release of this spectrum and to give certainty to the market, so that new mobile broadband services are deployed as quickly as possible. We are already seeing 4G services deployed across the world, including Europe. Further delay would result in the UK falling behind in the availability of these services, and I am sure that noble Lords agree that we simply cannot afford that. We are justly proud of our position as a leading mobile market and we stand to lose that position; indeed, some argue that we already have.

We concluded that intervention by the Government, in the form of this direction to Ofcom, is desirable to achieve an early release of this spectrum, but we are also of the view that the previous set of proposals would have had a disproportionate impact on the functioning of the market. The United Kingdom has enjoyed a competitive mobile market that has resulted in widespread availability of services, and it remains our view that competition will drive the deployment of new mobile broadband services.

For that reason, the Government have decided on a simplified direction. We have been able to remove much of the detail in the draft laid by the previous Administration which we now consider unnecessary. That decision has been further informed by additional analysis by Ofcom on the competitive distortions that might occur through the liberalisation of the 900-megahertz and 1800-megahertz spectrum. Ofcom concluded that the risk of distortion was less than it had previously thought, primarily because of the establishment of Everything Everywhere, the joint venture in the UK between Orange and T-Mobile. It was Ofcom’s view that the joint venture is in a better position to respond to changes in the use of the spectrum than was the case when Orange and T-Mobile were independent of each other.

I recognise that there may be concerns about the removal of the coverage obligations that were included in the original draft order. The Government are committed to achieving the best superfast broadband infrastructure in Europe, and we have recently published our strategy to achieve that goal. Rural and remote areas of the country should benefit from that infrastructure upgrade at the same time as more populated areas.

We also remain committed to ensuring that by 2015 virtually all homes will have access to a minimum level of service of 2 megabits per second. I recognise that there may be concerns about the removal of the coverage obligations that were included in the original draft order. The Government are committing £530 million over the lifetime of this Parliament to supporting the rollout of these services to less well served areas. We will be working with local authorities and communities to ensure that local needs are met. Four superfast broadband pilots have already been announced, which will provide valuable insight into possible technical solutions that can be further exploited. We can expect wireless, whether fixed or mobile, to play its part in achieving these goals.

Alongside that government investment, we expect the market to deliver most of the necessary connectivity. That is why we are directing Ofcom to carry out a competition assessment in advance of the auction, to ensure a strongly competitive market that will help to drive the deployment of services. Ofcom is currently looking at the issue of areas of the country where there is no mobile coverage—either 2G or 3G—known as mobile “not-spots” and how they might be addressed. We also expect Ofcom to consider, as part of the competitive assessment, whether other conditions, such as coverage obligations, are necessary to enable it to deliver its primary duty of ensuring a wide range of electronic services throughout the United Kingdom to consumers, citizens and business. We expect that approach to address the issue of rural connectivity, but we will of course continue to monitor, with Ofcom, the extent to which these services are being delivered to rural and less urban areas.

The statutory instrument will fulfil a number of objectives. First, it will allow the United Kingdom to meet its obligations to implement the European Union’s revised GSM directive, which came into effect on 9 May 2010. That will liberalise the use of 900 megahertz spectrum for new technologies in the hands of the incumbents, and will also implement the accompanying Commission decision harmonising the use of 1,800 megahertz spectrum with 900 megahertz. Those licences will be made indefinite, subject to revocation on spectrum management grounds, and tradable. They will be subject to revised annual fees to be determined by Ofcom.

Ofcom is also being directed to amend licences for the use of spectrum at 2.1 gigahertz, so that they are made indefinite. Those licences will be subject to an annual licence fee once their initial term has expired in 2021. The licence holders will also be required to meet additional coverage conditions, and the licences will also be made tradable. We consider the extension of these licences to be necessary to encourage further investment in 3G services. This technology will continue to be an important part of the wireless broadband landscape for a number of years before 4G services can be fully rolled out. Without the change to the licences, further investment in those networks will be uncertain, to the detriment of users.

We are also directing Ofcom to begin immediately with preparations for the 800 megahertz and 2.6 gigahertz auction. As I have already mentioned, we are requiring Ofcom to carry out an urgent competition assessment in regard to further developments of 3G and future 4G networks, including the potential for new entrants, to inform the design of the auction rules for this spectrum. Maintaining a healthy competitive environment post-auction is a clearly desirable outcome.

That direction to Ofcom will permit the earliest possible release of this important spectrum, benefiting business, the consumer and the telecommunications industry alike, and I look forward to hearing the views of noble Lords.

[Lord Berkeley]

My Lords, I rise to identify a few problems that are occurring in the relationship between this order, which provides for a clearly welcome increase in spectrum availability, and the railways. I declare an interest as chairman of the Rail Freight Group, but the issue covers the whole railway—passenger, freight and Network Rail itself—and could result in some serious problems in the safety and the operations of the railways.

I welcome the Minister’s comments about the need to rebalance the economy and the provision of superfast broadband being an important part of that. However, it is not much use having superfast broadband if it prevents the running of superfast trains—or even ordinary trains—which are another of the Government’s priorities. Perhaps I can explain the problem in a little more detail.

The problem for the railways is that the 900 megahertz spectrum for mobiles sits quite close to that of the GSM-R railway radio system, which is the modern digital replacement for the very much life-expired analogue system. In terms of safety and operations, GSM-R has very great importance. Its rollout on the railway network is largely complete, and about 6,000 driving cabs are being modified to install the new cab mobiles. All this work is being funded by the Department for Transport. As I understand it, the worst-case scenario is that, in order to contain and eliminate interference between GSM-R—both track-side and in-train systems—and the 900 megahertz mobile systems, there would need to be significant modification, which would cost about £100 million. Network Rail would of course seek funding from the Department for Transport, or maybe from BIS depending on how it all worked.

I think that it is extraordinary that things have got this far. As the Minister said, there has been widespread consultation and I am aware that Network Rail responded pretty heavily, as no doubt did other departments, including the Department for Transport.

We seem to be getting into a situation in which the railways and the broadband systems are both seeking to comply with EU-wide rulings that appear to conflict. Network Rail, which identified this issue quite some time ago, aims to move forward from GSM-R to the new signalling system ERTMS, which is being rolled out. ERTMS already operates in many other member states, including Germany and Finland. Network Rail was involved in commissioning a report—report O-8700—that clearly demonstrates the absolute need to co-ordinate the use of technologies such as UMTS 900 where those are used within four kilometres of any railway infrastructure. In this country, four kilometres either side of a railway does not leave much space. From the little that I know about the issue, I am sure that that would not work for the mobile technology.

Unfortunately, the timing of the order is not terribly good, given that Network Rail has employed consultants ATDI to validate previous work and to produce a set of conclusions to inform a meeting of stakeholders that will take place next month. Therefore, the timing is not very helpful. Everyone wants to work together—as indeed they should—to make sure that everyone fully understands the issues involved. However, the problem is that two independent European studies already show that the deployment of UMTS 900, operating at 900 megahertz, affects the performance of GSM-R and causes interference in radio signals between the trains and the signallers.

These technologies are very different from pulling levers—which you still see in one or two parts of the country—that then make the signal go up or down. As we all know, telephone systems, signalling systems and mobile systems sometimes do funny things. As a safety-related matter, the issue is extremely important. It is important that the GSM-R used on the railways is instantaneously available across the whole network to maintain the protection measures. Some measures must be put in between the railway system and the UMTS900. Otherwise, there may be detrimental effects.

Apart from the cost, which is estimated to be about £100 million to change the railway system, I understand that filters would need to be added to the set in each train. There are also timing implications. As with the mobile phone network, there are concerns about the mandatory withdrawal of existing radio systems and the European requirements to have all these things in place by a certain date, which has already slipped. Given the seriousness of the problem and that £100 million plus a lot of delays is at stake, I would be very grateful if the Minister could comment on what could be done to mitigate the effects. Implementing the order without anything else could raise serious issues for the railways. Going through a signal at red—to use older terminology—could cause accidents.

BIS says that it is required to provide UMTS for mobile in order to comply with EU regulations; railway operators say that they are required to do something similar under other EU regulations. I suggest that the aim is for interoperability, which I am sure we would all welcome, whether for mobile phones or the railways. The existing systems are perhaps well past their sell-by date and something should have been done years ago. If we have really have a situation in which the European Union, for better or for worse, has issued two such regulations—or directives or whatever—that need to be complied with across the EU, it is extraordinary that they should come into conflict with each other. Otherwise, someone has got it wrong. I hope that the Minister can tell us a bit more about that.

As for what the Minister might consider by way of giving assurances to the House, I suggest that he could perhaps withdraw the order completely for further consideration. I suspect that a small change to the order would make life a lot easier for everyone and might save us from some of the problems. I believe that it would be possible for Ministers to require Ofcom to ensure that, within the spectrums, the relevant wavelengths—or frequencies or whatever—that cause the biggest problem for the railways are not sold or issued until it has been fully agreed that the railway operators’ system can be maintained in a safe condition. Perhaps the Minister will comment on whether that would be possible for him to give an instruction to Ofcom to do that.

Finally, given that the railways were there first—the issue has been going on for a number of years now—and the telecom spectrum came later, perhaps the Minister will confirm that, if there is any additional cost of modification for the railway system, his department, rather than the Department for Transport, will provide any extra funding necessary.

[Lord Faulkner of Worcester]

My Lords, the Minister will be aware that I wrote to him about this matter earlier today. I apologise for the late notice I gave him, but I did not receive notification about this problem until seven o’clock last night when a member of the railway industry wrote to me to draw my attention to exactly the points just alluded to by my noble friend Lord Berkeley.

This is clearly a significant issue for the railway. It is not a situation where we can take a chance and see what happens. If it is the case that the new broadband width is going to interfere with signalling, obviously the railway will become unsafe. The solution would seem to be the fitting of filters not just to the train sets, as my noble friend Lord Berkeley says, but I understand to trackside equipment as well. The estimate of costs he gave is a figure that I am familiar with as well.

We are all anxious to see the extension of digital Britain. I played a small and modest part in the legislation passed in the previous Parliament, as the Minister knows, and I am keen to see the benefits of broadband extended as widely as possible. This is a potentially unfortunate unintended consequence, but the operation of the railway, if not endangered, will certainly be embarrassed as a result of the introduction of these broadband widths without some mitigating measures. My noble friend Lord Berkeley referred to the possibility of the Department for Business, Innovation and Skills paying the costs, but perhaps it would prefer that the purchasers of the new broadband width should have them built into their contracts. However, it is clearly unacceptable to expect the railway to pay for it, and indeed if the railway were to do so, it would then be for the Department for Transport because it is responsible for the cost of the new signalling system which is being introduced progressively over the next six years.

Again, I apologise for bringing this up so late. It is not a matter that has been considered either in the other place or in your Lordships’ Merits of Statutory Instruments Committee, but it needs to be taken into consideration. I hope that the Minister will be able to give us some assurance.

[Lord Clement-Jones]

My Lords, I suspect that, looking at the numbers in the House, we are in rather arcane territory with this order. We are indebted to Kip Meek, the former independent spectrum broker, for having come up with some solutions that are reflected in the order, but of course he has now gone to run YouView, and good luck to him in that very important project. But luckily today we have my noble friend Lord De Mauley, who was fully conversant with all the discussions over spectrum during the passage of the Digital Economy Bill, so I am confident that he will be able both to reassure and to enlighten me about some of the issues underlying this order. It is also a little bit of a reunion when I see the noble Lord, Lord Young, across the way as well.

I broadly support the order, and for those of us who worked in the salt mines of the Digital Economy Bill, the legislative and regulatory background to spectrum allocation is familiar. For the most part so is the content of this order since we were all ready to debate it before the last election. Indeed, we assumed that it would be reintroduced immediately after the election, but the Department for Business, Innovation and Skills appears to have been ruminating on it for some time.

The Minister helpfully mentioned some of the differences between this order and the draft order we saw in March, particularly simplification of the order and the removal of the coverage obligations, but otherwise it is not entirely clear what other differences there are between this regulation as tabled and the previously tabled regulation. The essence, as I understand it, is because there will now be a competition assessment before the auction takes place. What is the thinking behind this change? Is it because this means that the auction conditions can be tailored in the light of the assessment? This is an important and welcome addition, and if so, can my noble friend say exactly when that assessment will happen and what the process will be? I think he described the assessment as “urgent”, so I assume that means that the assessment is imminent.

Given the importance of fair allocation below 1 gigahertz spectrum, can the Minister confirm that Ofcom will conduct the assessment before the existing 900 megahertz licences are varied? Can he also confirm that the key element of the combined auction for the 800 megahertz and 2,600 megahertz licences will continue?

There is then the issue of timing which, according to the CEO of Ofcom, will be 2014. It will be at least a year before Ofcom issues an invitation to bid for the so-called four key radio frequencies that will allow mobile network operators to offer network speeds that are competitive with fixed-line broadband.

As I understand it, the timetable as set out by Ed Richards is as follows. Starting in February 2011, there will be consultation on steps for a competitive auction. On the consultation finishing, in the early autumn there will be a statement on future competition. At the end of 2011 the final auction regulations will be published. The auction will take place and then finally, in 2014 the 4G networks will be up and running. It will be helpful if the Minister can confirm that that is the expected timetable.

Mr Richards appears to describe this timetable as ambitious, but to many it appears rather slow. After all, the first Meek report came out in May 2009 and the final report came out in September 2009. Mobile network operators have been waiting for 4G spectrum in the 800-megahertz and 2.6-gigahertz bands for several years; they want and need the higher frequencies to relieve congestion in their urban networks and they want the sub-1-gigahertz frequencies, which carry further than 3G frequencies for the same power, so that they can extend their coverage cheaply.

These frequencies are also needed to enable networks to roll out the next generation mobile transmission technology known as LTE. The industry, however, has said that this timetable will put the UK well behind other markets. LTE services are already up and running in other European countries; a few networks in Europe are already running or testing LTE in 1800-megahertz and compatible devices, notably dongles for laptops.

What has been the cause of the delay? Was it the threat of legal action by Everything Everywhere because it feared being locked out of the sub-1-gigahertz spectrum, or the threat of litigation by BT on rather different grounds? Is the competition assessment the price of its withdrawal? Or is the real reason why Ofcom has been delaying the 2.6- gigahertz spectrum release until 2014 because it has no other spectrum ready that could be used for wireless cameras during the Olympics?

Have the Government thought seriously about the consequences of this delay? Is there any way the auction can be brought forward? It has been calculated that delay in the 800-megahertz and 2.6-gigahertz auctions is estimated to have already cost the Treasury £6 billion in lost revenues as industry has spent the money elsewhere in the EU buying spectrum. The longer we delay before the auction takes place, the less money industry, it appears, will have left to spend in the UK. Can the Minister tell us frankly what the situation is and why we are so late coming to this order and adopting such a leisurely timetable?

The form in which the spectrum is released also matters. In the current plans, 2.6- gigahertz is split into two blocks; this means that it is less suitable for use by the technology known as WiMax. Does this not need to be changed to ensure technical neutrality between LTE and WiMax? Alternatively, could some of the 2.6-gigahertz allocation be for WiMax and some for LTE? Otherwise, we run the risk of prejudicing WiMax deployment and failing to be technologically neutral, as Ofcom is obliged to be.

On the position of the emergency services and the spectrum allocated to them, I recently asked the Government a number of Written Questions. Had they agreed to find spectrum for secure broadband services for the emergency services from below 1- gigahertz? If so, what steps were being taken to set aside an allocation from within the tuning range of existing Tetra radios and exempt it from being auctioned? Thirdly, did they need to produce a business case to do so? The reply that I have received is baffling if I have not understood, and unsatisfactory if I have.

The Minister, the noble Baroness, Lady Neville-Jones, has said that it is unlikely that the emergency services will use a spectrum band below 1-gigahertz due to the lack of available spectrum in the range. Furthermore, she claims that the technical benefits would be minimal. Public sector organisations apparently “must engage with the market”; BIS does not currently anticipate exempting any spectrum from auction and no business case has been produced. That is what I would call the dustiest of dusty answers.

16:30

As I understand it, we have an obligation under EU law to agree on spectrum for the emergency services, and agreement was reached at a recent European Council of Justice Ministers. The only really suitable spectrum bands for the emergency services to use are at a much lower frequency, so the state does not have to invest in double the number of masts. The emergency services network has about 3,500 masts to operate in the 400 megahertz band. It would need nearly double the number to operate in the 800 megahertz band.

This rule applies universally: the higher the frequency, the more base stations are needed. This is why there is such interest in the digital dividend spectrum—it is at relatively low frequencies.

The problem for the emergency services is that it appears that Ofcom and BIS do not intend to make any spectrum available to them at any frequency. They will simply say that the business case, which is required for a direction to be made, is too weak. My interest in raising this matter and urging that some spectrum be exempted from the auction is to protect our population and our first responders. Can we please learn the lessons of past disasters? We must have proper communications for our emergency services.

There appears to be something fundamentally wrong with a situation where the emergency services in Dorset cannot use their radios and do not have enough spectrum, while there is spectrum lying fallow here and not being released in a timely fashion. Is it really the case, too, that some police forces are being asked to send text messages from their mobiles rather use their radios because the spectrum is too expensive? Why cannot a direction be given to Ofcom on use of spectrum for the emergency services?

Finally, there is the aftermath of the settlement with the PMSE sector, which ran such an effective Save Our Sound campaign. I am glad that my honourable friend Mr Vaizey ensured that a better deal than that envisaged by the Labour Government was agreed, so that compensation was not based on residual value of equipment. However compensation will cover only 55 per cent of the replacement cost of new equipment. Some people will struggle to find the balance needed. In addition, I understand that final funding will be signed off by the Treasury only in March 2011. Is this correct? It would be extremely awkward to say the least if the Treasury backed off at the last minute. What is the current status of the agreement? When will payments be made? I would be grateful if my noble friend could answer those questions.

Spectrum allocation may not make the front pages of newspapers, but it is a fast-changing area with fast-changing requirements. The last fundamental review of the UK’s spectrum strategy was the 2005 Cave review. The previous Government did not update it more recently, so it seems that all current decisions are based on a policy which we know to be out of date and where the balance between auction and other means of allocation has gone. Some would say that what we are doing is all a bit ad hoc. Are we really confident that we are proceeding in the right way today? I hope that my noble friend can reassure me and I look forward to his reply.

[Lord Young of Norwood Green]

My Lords, this debate is definitely one for the techies. As a football commentator said, it certainly feels like déjà vu all over again.

I was grateful to the noble Lord, Lord De Mauley, for being one of the few Ministers who has not said that he is doing this because of the terrible deficit left by the previous Government. It was a great relief. I hope that that is not a career-limiting observation.

The last spectrum auction took place 10 years ago under a Labour Government and is widely considered to have been a success in injecting much needed competition into the mobile market. The 3G auction specifically reserved a licence for a non-2G licence holder so as to kick-start competition. The result today, with each of the four mobile networks holding roughly the same amount of 3G spectrum, is a highly competitive market where the operators compete to expand and increase their mobile broadband networks.

While we on this side of the House support this statutory instrument, the proposals to liberalise the existing 2G spectrum ahead of agreeing the rules for the auction of the 2.6 gigahertz and 800 megahertz spectrum run the risk of significantly upsetting that competition. I note that Ofcom has concluded that liberalisation does not distort competition, but that is because its competition assessment examined the effect of liberalisation only on the basis of 80 per cent population coverage. Its assessment completely ignored the advantage that holders of the existing 900 megahertz spectrum gain from being able to use that spectrum for rolling out mobile broadband in more rural areas.

Your Lordships will be aware that sub-1 gigahertz spectrum enables network operators to cover significantly larger geographic areas. Indeed, it was estimated that holders of low-frequency spectrum are able to roll out their networks five times more cheaply than operators who hold high-frequency spectrum. It is this low-frequency spectrum that is critical to ensuring that mobile broadband supports the Government’s own broadband strategy and delivers universal broadband coverage to rural areas. However, there is much less likelihood of this being achieved if competition is significantly weakened. It would be ironic if the outcome of this spectrum auction, under the watch of Conservative/coalition Ministers, undermined the competition delivered by a Labour Government. I noted that there were a couple of attempts to cover that area. Although these are indefinite licences, there was the question of revocation and an annual assessment. I welcome those aspects.

What assurances will the Minister give the House that Ministers will give a clear steer to Ofcom that the auction of the 800 megahertz spectrum must be done in such a way as to ensure that the advantage gained by the current holders of low-frequency spectrum is corrected either through a spectrum cap or, as in 2000, through reserving a licence for a non-2G spectrum holder? In another place, the Minister Ed Vaizey said that Ofcom,

“must draw up auction rules to ensure fair access and competition on spectrum”.—[Official Report, Commons, Fourth Delegated Legislation Committee, 1/12/10; col. 11.]

Would the Government consider an auction that resulted in the concentration of low-frequency spectrum in the hands of the two networks that already hold low-frequency spectrum to be a failure? If so, what discussions have the Government had with Ofcom to ensure that the auction is structured so as to avoid this? I welcome the commitment to competition assessment prior to any decisions. I was interested in the point made about the hope that there would be universal coverage. We talk about the importance of rural connectivity, but the fact that it is not stipulated gives some cause for concern.

Given the importance of the digital economy to the UK’s wider economy, do the Government agree that it is essential that Ofcom actively protects competition in the mobile broadband market? While I share the Government’s view that release of spectrum to the market as quickly as possible is critical, does the Minister agree that the long-term interests of consumers depend on ensuring that the release of new spectrum is achieved through an auction that preserves a level playing field in spectrum holdings? Can the Minister give the House an assurance that Ofcom will have the Government’s full support in taking steps to preserve competition in the mobile broadband market, particularly if that is opposed by companies whose actions have delayed the release of spectrum to the detriment of consumers? I share the concerns of the noble Lord, Lord McNally, about the timetable.

[A noble Lord]

Lord Clement-Jones!

[Lord Young of Norwood Green]

My apologies. I meant the noble Lord, Lord Clement-Jones. I hope that he does not take legal action.

I share the noble Lord’s view on the timetable. It would be good for Ofcom to be challenged on the length of the timetable, given the importance of the introduction of 4G.

There is an ambivalent attitude in this country, in that everybody wants a mobile phone and universal coverage, but people do not want a mast anywhere near them. That pushes to one side those who believe, in my view mistakenly, that they will suffer some deadly effect from the rays from mobile masts. It is usually the aesthetics that concern most people. Will the Minister give any steer to Ofcom to ensure that we maximise mast sharing, so that we do not have the countryside or towns littered with more mobile phone masts than we need? I also welcome the commitment to the previous Government’s policy of ensuring universal 2 megabit per second coverage by 2015 and to the superfast broadband trials.

I conclude by sharing the view expressed by the Minister on the role that mobile broadband can play in delivering universal broadband coverage. Does he agree that the best way of extending coverage is through a market where all operators can compete equally? I share the concern of my noble friends Lord Faulkner and Lord Berkeley about the possible impact on rail signalling systems. I would have thought that that would have been drawn to the attention of Ofcom a while ago. No doubt it is something that the Minister will comment on.

[Lord De Mauley]

My Lords, I am very grateful to noble Lords for their comments. We have covered a number of key areas, and a number of interesting and important points have been raised. The Government note the concerns that your Lordships raised during the debate. The noble Lords, Lord Berkeley and Lord Faulkner, raised the important issue of the conflict with the GSM-R rail operators’ frequency. I thank them for that. The Government are fully aware of the potential safety issues involving the use of spectrum, specifically of the 900-megahertz band for mobile broadband services, and of the adjacent spectrum planned for the rail safety network system. Noble Lords are absolutely right that safety is a key priority for the Government, and we will not allow it to be compromised. The level and severity of any possible interference is still being investigated, but discussions are taking place between Network Rail, the mobile operators, Ofcom, BIS and the Department for Transport to address the matter. Further technical work is under way to determine the likelihood of any potential interference and the available technical solutions.

As the noble Lord, Lord Berkeley, said, this is not just a UK issue. The use of these bands is harmonised across Europe, so we are discussing this with the Commission, too. I thank the noble Lords, Lord Berkeley and Lord Faulkner, for their helpful suggestions. I will definitely take them back to the department.

[Lord Faulkner of Worcester]

Will the Minister say something about who might have to pay for modifications?

[Lord De Mauley]

I thank him for that. That issue needs to be part of the discussions to which I have just referred.

My noble friend Lord Clement-Jones asked about the reasons for the delay. That is a very justifiable question. The new Government had to consider the options that are open to them and what they wanted to do against a backdrop of a changing market. The process was completed before Parliament rose in July for the Summer Recess. It was not considered immediately after Parliament returned because of the threatened judicial review by Everything Everywhere, and the need to address that threat.

My noble friend asked about a timetable. Ofcom intends to consult on its assessment in February. The 900-megahertz licences will be liberalised before the 800-megahertz licences become available, but Ofcom’s latest analysis is that the competitive distortion is not so great as to require action in the 900-megahertz spectrum. I confirm broadly that my noble friend's outline timetable is what is anticipated, although if there is anything I can add, I will write to him after the debate. I certainly agree with him that speed is of the essence. However, it is a very complex area and it would be equally dangerous to rush things through.

My noble friend also asked about the emergency services. The Government fully recognise the importance of spectrum in allowing the emergency services to operate effectively. The safety and security of the United Kingdom's citizens is of paramount importance, and the Government have consistently stated that spectrum management should pay due regard to this. However, as I said, spectrum is a scarce resource for which there is increasing demand. In these circumstances, the allocation of spectrum should be as efficient as possible. For that reason, the Government's agreed approach is that, in the first instance, such requirements should be sourced through the market. I hope that my noble friend will be somewhat reassured to hear that where this is not possible, a case will need to be made for an administrative allocation to be considered. Any requirement for additional spectrum by the emergency services will be considered within that framework.

16:45

[Lord Clement-Jones]

I am sorry, my Lords, but the timing of that is rather important. Once the spectrum is subject to auction, the emergency services will not have access to it. The spectrum below 1 gigahertz is of extraordinary importance because it means that the masts do not have to be so close together. It means that you have fewer masts, less cost to the emergency services and so on. What worries me in all this is the question of whether the emergency services should be subject to a market test. It is rather like the NHS—we do not subject that to a market test.

[Lord De Mauley]

I agree with the noble Lord about the seriousness of the matter. It is, as I said earlier, a complex area. It might be helpful if I wrote to him further about that matter.

The noble Lord, Lord Young, expressed a number of concerns about the auction, competition and coverage. The important thing is that we have asked Ofcom to conduct a competitive assessment of the future development of the 3G and 4G markets in the United Kingdom to inform the design of the auction. Ofcom may well decide that some form of capping is appropriate; the noble Lord referred to that. I agree with him about the importance of competition.

The noble Lord also asked about the benefits for consumers. Again, I broadly agree with him. Widespread next-generation mobile broadband services, which are capable of delivering data at speeds that are considerably in excess of today’s offerings, will be of huge value both to consumers and indeed to business. For the consumer and citizen, access to real-time information while on the move will be invaluable as well as offering a considerable market opportunity to creative industries wishing to develop content.

The noble Lord asked about the perceived blight of masts across the country. One has to say that if people want additional coverage of mobile broadband services, some increase of masts is likely. Given the capital expenditure involved, though, no operator will want to deploy more masts than are necessary to deliver an acceptable level of service.

[Lord Young of Norwood Green]

I agree with the Minister that they will not, but I made the point about encouraging mast-sharing. While I am on my feet—I do not want to do this any more than I have to—there is also the question of universal coverage and how concerned the Government are to ensure that the mobile service is less effective in some parts of the country than in others. How much premium do we put on that?

[Lord De Mauley]

I broadly agree with the noble Lord about mast-sharing. We have it already and I have no intelligence that it is not going to continue. It seems to be in the economic interests of all parties.

The noble Lord’s other question is about coverage. Again, I agree with him about its importance. The Government believe that our approach, particularly given the need to crack on with it, is the way to achieve that, and that the competitive pressures and the number of participants will assist it. A number of technical advances will also assist that.

[Lord Berkeley]

On the European network for the GSM-R, my understanding is that Network Rail responded to Ofcom on this some time ago, as well as to BIS. I am concerned about the reported reaction of BIS to these comments, which was, “We understand where you’re coming from, but basically you should have incorporated something into your design in the first place to ensure that the receivers and all the other equipment on the railway were robust”.

The legislation from the commission has been around for a number of years, and I am pretty persuaded that Network Rail and the Department for Transport have got it right, because they take it all very seriously. It seems a trifle arrogant for anyone now to say, “Sorry, mate, something new is coming up and you’d better go and change all your systems—and, by the way, possibly pay for it”. I hope that I have got this wrong. Maybe the Minister could look into that as well.

[Lord De Mauley]

I am grateful to the noble Lord for his comments. If there is some interdepartmental fencing, that is extremely concerning. I will go back to my department and shake some cages. Having said that, I hope that I have addressed as many of your Lordships’ questions as possible and if I have not I will, as I say, write to noble Lords. This is—

[Lord Clement-Jones]

My Lords, I am sorry to interrupt but, when the Minister says that, I hope specifically that he will include the radio mikes PMSE issue as well.

[Lord De Mauley]

I certainly intend to include that.

This area is, as I say, immensely complicated, as I am sure has become abundantly clear in the course of the debate. There are those who assert that the Government’s approach is flawed or lacks ambition, but it is clear that years of debate and consultation have shown that any proposals—whether they come from the Government, the regulator, or indeed the European Commission—are unlikely to receive universal acclaim. Experience shows that any proposal will receive differing levels of opposition and support. The point is that a consensus on what should be done is, frankly, unlikely.

That lack of consensus has been the case over a number of years. Ofcom’s attempts to find proportionate measures to deal with the issues raised by the refarming of 2G spectrum have faced challenges which, in turn, have led to delay. Any further delay cannot be to the benefit of consumers or business users, nor, I suggest, to the operators themselves. Regulatory uncertainty is seldom helpful to industry. The longer we delay, the further the UK will fall behind other countries that are already deploying new high-speed broadband services.

The issues involved have, as I say, already been the subject of considerable discussion, debate and consultation involving industry, the regulator and the Government. In our view, this direction to Ofcom represents the most appropriate way forward to allow the earliest deployment of next-generation mobile broadband services, to make a valuable contribution to the broadband infrastructure of the United Kingdom and to ensure that this country remains competitive in a digital world. I commend the order to the House.

Motion agreed.

House adjourned at 4.52 pm.