House of Commons

Thursday 27th January 2011 Commons Chamber

Thursday 27 January 2011

The House met at half-past Ten o’clock

Prayers

Thursday 27th January 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 27th January 2011 Commons Chamber

The Secretary of State was asked—

[Guy Opperman (Hexham) (Con)]

1. What steps he is taking to encourage the take-up of low-emission vehicles.

[The Secretary of State for Transport (Mr Philip Hammond)]

Eighty-four per cent. of journeys are undertaken by car. Tackling car-produced carbon by fostering and supporting the decarbonisation of motoring is therefore one of the Government’s key transport priorities. The spending review announced provision of more than £400 million for measures to promote the uptake of ultra-low carbon vehicle technologies. Those include support for consumer incentives, development of recharging infrastructure and a programme of research and development.

[Guy Opperman]

My local pub, the Battlesteads inn, which is award winning and excellent, has an electric car-charging point. It is one of the few in Northumberland. The problem is that the ability to recharge is dependent on the north-east’s sole recharging point. When will the system be made nationwide?

[Mr Hammond]

As my hon. Friend knows, the north-east is one of the areas that has been selected for support in the plugged-in places pilot, so there will be a roll-out of further charging infrastructure in the north-east. The Government are currently considering the options for a national roll-out of charging infrastructure and how we mandate that. We will publish our decisions in due course.

[Mr Clive Betts (Sheffield South East) (Lab)]

Is the Secretary of State aware of two interesting companies in my constituency? First, ITM Power produces and develops hydrogen-powered cars, with the ability to produce hydrogen in domestic units at home. Secondly, Magnatec attaches electric motors to diesel-powered vehicles, increasing efficiency by 30%. That system has been running on buses in Denver for more than 10 years, but British buses do not seem interested in taking it up. What steps is the Secretary of State taking with the Department to encourage those firms? Would he like to visit the constituency?

[Mr Hammond]

In fact, yesterday, I met a firm developing innovative battery technology in Aberdeen. We are always pleased to talk to companies that are developing low-emission vehicle technology in the UK. We have deliberately made the incentives technology-neutral so that people developing new and innovative systems can get the benefit of them.

[Simon Wright (Norwich South) (LD)]

One of the quickest and cheapest ways in which to reduce vehicle emissions is through more economical driving habits, but I understand that the take-up by businesses of smarter driving training courses has been disappointing. Will the Secretary of State explore the strategies that are open to the Department to increase take-up of those courses?

[Mr Hammond]

The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker) is looking precisely at how to increase take-up of the smarter driving training courses.

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

As the Secretary of State knows, the Department turned down a joint private and public consortium bid, including Cardiff and Bristol councils and the Energy Saving Trust, for a network of electric car-charging points between both cities on the M4. Will he explain to the people of south Wales why he turned down that bid?

[Mr Hammond]

The number of bids exceeded the available resources for the second wave of plugged-in places pilot schemes. All the bids were evaluated, and those that represented the greatest value for money were allowed to proceed. The promoters of the unsuccessful bids have been debriefed by the team in the Department, so they will have a detailed understanding of why their bid, on this occasion, failed. I hope that they will be encouraged to resubmit a bid in the next wave.

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

2. What plans he has for reform of the rail industry; and if he will make a statement.

[Harriett Baldwin (West Worcestershire) (Con)]

8. What plans he has for reform of the rail industry; and if he will make a statement.

[The Secretary of State for Transport (Mr Philip Hammond)]

Sir Roy McNulty’s rail value for money study has identified areas where significant efficiencies can be achieved. It is clear that the most pressing need is to align incentives across the industry to ensure closer working between Network Rail and the train operating companies. Our franchise reform programme is a key strand in the strategy. Those reforms, together with Sir Roy’s final recommendations, will form the basis of a long-term strategy for the industry. We are committed to publishing those proposals by November 2011.

[Mr Buckland]

Peak-time and season-ticket commuters from Swindon to London on the main line have had to face significant fare increases this month. Will the Government’s new rail franchising reform programme put special emphasis on the need for greater capacity and fairer rail fares?

[Mr Hammond]

We are committed to fair rail fares. Unfortunately, to support the rail investment programme, we have had to project faster-than-inflation increases in fares for the next three years. However, let us be clear: we have to get the cost of our railway down so that the burden on taxpayers and fare payers can be alleviated in future.

[Harriett Baldwin]

It takes 45 minutes longer to travel from London to Worcestershire along the Cotswold line now than it did in 1908. Will the Secretary of State agree to meet me and other representatives of the Cotswold line organisations to see how reform of the rail industry could help improve the timing and frequency of that service?

[Mr Hammond]

I understand my hon. Friend’s concern. Of course, there are far more stops and services than there were in 1908, but I am always delighted to meet her and other colleagues and would be happy to do so on this occasion.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

How will the Secretary of State secure better co-ordination, focusing on the interests of passengers rather than for ever dealing with the consequences of fragmentation?

[Mr Hammond]

The hon. Lady is hinting at the fact that, at the moment, far too much time and energy in the rail industry is spent on allocating blame for things that have happened rather than on working out how to prevent them from happening in future. We believe that aligning the financial interests of the train operators and the infrastructure operators, so that they both have a stake in positive outcomes for passengers, is the way forward. We will await Sir Roy McNulty’s final recommendations and set out our proposals for the reform of the industry on that basis.

[Rachel Reeves (Leeds West) (Lab)]

In west Yorkshire, rail fares are set to go up by the retail prices index plus 5% from next year, which is the biggest increase in the country and 2% higher than in other areas. What will the Secretary of State do to avert those crippling hikes for people in Leeds and the rest of the region?

[Mr Hammond]

I cannot avoid the increases in prices to which the hon. Lady refers. They are partly driven by specific increases in rolling stock to alleviate overcrowding in the area. In the medium term, as I said in answer to the previous question, we must drive efficiency in the rail industry, and ensure that the cost base of our railway becomes comparable with those of other European countries, so that the upward pressure on fares can be alleviated.

[Martin Horwood (Cheltenham) (LD)]

I accept what the Secretary of State has said about the cost of the rail network, but does he nevertheless agree that the quality of passenger experience, which goes far beyond mere punctuality, should play a much greater part in the award of future railway franchises, and in their retention by train operating companies?

[Mr Hammond]

My right hon. Friend the Minister of State has published a consultation on franchising reform, in which she referred specifically to considering passenger satisfaction as one of the metrics. My hon. Friend will no doubt have been as delighted as I was to see the Passenger Focus survey this morning which shows that 84% of rail passengers are satisfied with the service that they receive on the railway.

[Maria Eagle (Garston and Halewood) (Lab)]

I welcome the right hon. Gentleman’s decision to continue the rail industry review that was started by the Labour Government. When Sir Roy McNulty publishes his final report in April, the Opposition will support any sensible proposals that take cost out of the industry without reducing the quality of service for passengers. However, does the Transport Secretary agree with me—and with some Conservative Back Benchers, from what I heard in earlier exchanges—that as the cost to the Government of running the railways comes down, the cost to the public of travelling by train should come down as well?

[Mr Hammond]

I am grateful to the hon. Lady for her expression of support for Sir Roy McNulty’s review and I am happy to acknowledge that that process was set in train by my predecessor. I look forward to taking the review forward on a consensual basis. Of course, the objective of driving efficiency in the railway is to reduce the burden on both the taxpayer and the fare payer. I am glad that she recognises that the only realistic way to do that is to reduce the cost base.

[Maria Eagle]

In view of that, does the Secretary of State understand the anger felt by hard-pressed commuters up and down the country who are facing big fare hikes—record fare rises of over 30%—over the next three years, and often worse overcrowding on services that will not really improve over that period? The initial findings of Sir Roy’s review suggested that savings of £1 billion could be found without cutting services, so will the Secretary of State now commit to sharing the benefits of those savings with passengers, and rethink his plan to impose record fare rises?

[Mr Hammond]

Sir Roy McNulty’s suggestion that £1 billion a year could be found refers to 2017-18. It will take some time before we get to that level of achievement, but it must remain our aspiration. In the meantime, the hon. Lady has answered her own question. Overcrowding is a key issue, and if we are to address it we must continue to invest in additional rolling stock and infrastructure on our railways, as we have committed to do. I am afraid that means that the relief that passengers seek will not come in the next couple of years, although it will come.

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

3. If he will consider the merits of authorising traffic signals to display only flashing amber aspects in the early hours of the morning to reduce journey times.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

The Department is looking at various options for traffic signalling during quieter periods of the day and the flashing amber signal is just one of the techniques being considered among many others. However, in the interests of safety, it is important to ensure that any signalling technique provides a consistent and unambiguous message to all road users.

[Mr Baron]

May I point out to the Minister that other countries operate such a system, but in a written response to me the Government stated, somewhat condescendingly:

“The British motorist would find this system confusing.”

Will the Minister consider a pilot scheme for such a system, perhaps in my constituency, which would speed journeys and reduce emissions?

[Norman Baker]

As I mentioned, we are having a review of signs generally and that suggestion is being considered as part of that process. The difficulty is that the flashing amber signal already has a specific legal meaning in this country, where it is used to indicate legal precedence for pedestrians at pelican crossings. That means that we could not authorise a trial or the use of the flashing amber signal for any other application without first changing the meaning of the signal in regulations. A dual meaning might not be a very good idea.

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

4. What assessment he has made of the effect of the outcome of the comprehensive spending review on road improvement schemes in east Yorkshire.

[The Secretary of State for Transport (Mr Philip Hammond)]

There were three road improvement schemes in east Yorkshire under consideration at the time the spending review was announced. Of those schemes, the Beverley integrated transport scheme has been classified as in the development pool and the A164 Humber bridge to Beverley improvement scheme has been classified as in the pre-qualification pool. Both are currently subject to the prioritisation process set out in the document that was made available to Members in this House on 26 October.

The Highways Agency scheme to improve the A63 Castle street in Hull has been identified as a scheme with a positive business case for potential construction in future spending review periods.

[Diana Johnson]

As the Secretary of State has said, in the October announcement the upgrade of the A63 was put back until at least 2015. Since then, we have had the announcement from Siemens that it will develop the green energy industry along the Humber. In light of that announcement, will the Secretary of State think again? The A63 upgrade would have a positive impact on the economic regeneration of east Yorkshire and local businesses are really pushing for it.

[Mr Hammond]

I am aware of the relevance of the A63, having sat in a traffic queue on it not so long ago. The Highways Agency budget for the current spending review period has been allocated to schemes that have been approved to proceed, so there will be no more funding available during the funding review period. However, that scheme is value for money and I expect it to go forward in a future spending review period.

[Angie Bray (Ealing Central and Acton) (Con)]

5. What assessment he has made of the effects of the ending of the west London extension of the congestion charge zone.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The removal of the western extension of the congestion charging zone is a devolved matter for the Mayor of London.

[Angie Bray]

Does the Minister of State agree that one of the beneficial effects will be for those who live or try to run small businesses around the perimeter of the zone, for whom life was made very expensive? However, perhaps the biggest benefit will be for City Hall in the restoration of a reputation for proper democratic governance.

[Mrs Villiers]

My hon. Friend has a strong record in her former capacity as a London Assembly Member for representing the views of residents on this issue, as she has in her current capacity as the hon. Member for Ealing Central and Acton. There are always pros and cons to be considered in relation to the impact on business of congestion charging schemes. No doubt when the Mayor made the decision on the western extension zone he will have taken on board her concerns about the impact on small businesses on the periphery and boundary of that zone.

[Clive Efford (Eltham) (Lab)]

Notwithstanding the fact that this is a devolved matter, the Department provides a great deal of resources to the Mayor of London for traffic issues. His removal of the western extension has cut £70 million annually from his revenue stream. Did the Department express any concerns at any time about the effect of that cut on funding for future transport schemes in London? The rest of us are paying higher charges and fares as a result of that hole in the Mayor’s budget.

[Mrs Villiers]

This is a devolved matter. The settlement was established by the Labour Government, who made it clear that congestion charging matters were rightly for the Mayor of London to decide and not for Ministers in Whitehall.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

6. What plans he has for the reform of rail franchising; and if he will make a statement.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

11. What plans he has for reform of rail franchising; and if he will make a statement.

The Minister of State, Department for Transport (Mrs Theresa Villiers): On 19 January, the Government set out a new approach to franchising, taking account of the consultation that took place last summer. We expect the reforms to deliver a railway that is more responsive to passenger needs and provides better value for taxpayer investment.

[Andrew Jones]

I thank the Minister for that answer. Last week, the east coast main line announced a new direct service from London to Harrogate—the first for 20 years—after some excellent local work promoting the economic case for that service. As the new franchise requirements for the east coast main line are developed, will that economic case see Harrogate-London links built into those requirements?

[Mrs Villiers]

I thank my hon. Friend for his question. I have been impressed with the work done by him, the Harrogate chamber of commerce and Harrogate business interests to make the case for improved rail services between Harrogate and London. I would encourage them to continue that input when the consultation takes place on re-letting the east coast franchise. We will, of course, take those representations into account in our decisions on Harrogate services.

[Eric Ollerenshaw]

Given the announcement last week that the west coast main line franchise will be up for renewal, how soon does the Minister think we will see the extra carriages and, perhaps, the extra trains that we need to relieve the severe overcrowding on the line, particularly for my constituents in Lancaster?

[Mrs Villiers]

The Government will be funding 106 extra carriages on the west coast main line, which are due to come into operation with the new franchise. Some of those carriages will be available in a new train that will be available earlier, once its testing period has been completed. At that point, it will be available for Virgin to sub-lease, if ordinary commercial terms can be agreed.

[Mr David Hanson (Delyn) (Lab)]

Will the Minister give an assurance that under the new franchise services to north Wales, in particular, will not be reduced, especially given the news this week that services from Wrexham to Marylebone will cease as of Friday?

[Mrs Villiers]

We are engaged in a consultation on the level of services and the configuration that will go into the west coast main line. We fully appreciate the importance of the services in Wales, including north Wales, and I would encourage the right hon. Gentleman to take part in the consultation. Of course, we are very much aware of passengers’ disappointment at the closure of the Wrexham and Shropshire service, and we will take that on board in the decisions that we make on the west coast line.

[Alison McGovern (Wirral South) (Lab)]

Could the Minister say how the reform of rail franchising will support infrastructure investment, especially the necessary electrification on the Wrexham to Bidston line, for example, which runs through my constituency?

[Mrs Villiers]

I believe that longer franchises, which are a key part of our reform, will provide stronger incentives for private sector investment in improving stations, rolling stock and—potentially—infrastructure. The current short franchises, through which it was difficult to get a return on significant investments of that sort, made it difficult for the private sector to maximise its investment in the railways. The rail franchising reform will therefore help to deliver the sort of improvements that the hon. Lady talks about.

[Guto Bebb (Aberconwy) (Con)]

As part of the consultation on the inter-city west coast main line, will the Minister consider the negative impacts of the use of power boxes and mechanical signalling on the ability of franchise holders servicing the north Wales coast to provide an enhanced level of service to my constituents?

[Mrs Villiers]

We do not seek to micro-manage Network Rail’s decisions on signalling—we take a technologically agnostic approach to that—but we encourage it to deliver its renewals and upgrades in the most cost-effective way possible, and I am happy to pass on my hon. Friend’s points to Network Rail, so that it can take them on board in its decisions.

[David Wright (Telford) (Lab)]

The demise of the Wrexham-Shropshire service is particularly sad. Local people really valued it, not just because it provided the direct link to London, but because the staff provided a superb service. Would the Minister be willing to meet MPs from all parties with constituencies along the line to discuss how we can consider not just how open-access services operate generally, but how we can put the line through Shropshire and up to north Wales back into the west coast franchise?

[Mrs Villiers]

I would be happy to have that meeting. I encourage the hon. Gentleman, as I did the right hon. Member for Delyn (Mr Hanson), to take part in the west coast main line consultation under way.

[Duncan Hames (Chippenham) (LD)]

How will the Minister’s franchising reforms facilitate much-needed investment, both trackside and on train, in smarter signalling, such as in the world-class systems developed by Invensys in my constituency, which I would be delighted to show her, if she would be so kind as to visit Chippenham?

[Mrs Villiers]

I shall certainly try to fit a visit to Chippenham into my diary. As I said to the hon. Member for Wirral South (Alison McGovern), I believe that longer franchises with more flexibility will encourage private sector investment in the railways. Longer franchises in the past for Chiltern Railways have enabled the train operator to become involved in signalling work. However, we have to acknowledge that major infrastructure works will need to continue to attract public funding, although there is no reason to believe that rail franchising reform could not assist private sector and train operator involvement in improving signalling.

[Gareth Johnson (Dartford) (Con)]

7. What steps he is taking to reduce the incidence of people driving while uninsured.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I am pleased to confirm that a new offence of keeping a vehicle with no insurance is being introduced, and that supporting regulations were laid before Parliament on 11 January 2011. Enforcement of the offence is planned to commence in the spring. The scheme for continuous insurance enforcement identifies uninsured drivers by comparing the Driver and Vehicle Licensing Agency’s vehicles database with the motor insurance database.

[Gareth Johnson]

I am grateful to the Minister for his reply. I am sure that he would agree that uninsured drivers are selfish in the extreme. Can he tell the House how much money will be saved for responsible drivers as a result of the changes, and will he also confirm that the police will retain the power to seize vehicles that are uninsured?

[Norman Baker]

I am grateful for my hon. Friend’s welcome for the steps that the Government are taking. I can confirm that the police will continue to have the power to seize vehicles, and he may be interested to know that last year they seized 180,000 such vehicles. Around 1.4 million vehicles are uninsured, which costs responsible motorists around £30 extra in their premiums each year. We think that the measure will save about £6 for each motorist.

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

Does the Minister not recognise that insurance costs, particularly for young drivers, are reaching ridiculous levels? The AA premium index suggests that they could rise by 40% this year, which he is making worse with the rise in insurance premium tax. Given that fines are so low, will that not mean that people will sometimes be incentivised to avoid paying their insurance? What on earth will he be doing about that?

[Norman Baker]

I understand the hon. Gentleman’s point, and my Department is in discussions with the Ministry of Justice about that specific matter. However, I hope that he would also welcome the steps taken today to clamp down on uninsured drivers, who are costing motorists more money.

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

9. When his Department plans to publish its consultation on changing the law to allow UK nationals with diabetes to drive heavy goods vehicles in the UK.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The Department for Transport plans to publish the consultation document very soon. We welcome views from anyone interested in the proposed changes and will consider all representations before making our final decisions.

[Mr Kennedy]

I thank the Minister for that reply. She will be aware from correspondence that my question arises from a rather long-running constituency case, which is not untypical of those of other hon. Members across the Chamber. Given that the EU directive dates back to August 2009 and that we have an utterly inconsistent position in the UK—registered diabetic heavy goods vehicle drivers from elsewhere in the European Union can drive on our roads, whereas UK-registered diabetic HGV drivers cannot—can she give some consideration as to how quickly this glaring anomaly can be cleared up?

[Mrs Villiers]

We will certainly be working hard to get the consultation document out as quickly as possible. However, given that what is being contemplated is a relaxation of current road safety rules, I am sure that my right hon. Friend will agree that this is not something to be undertaken lightly. We must ensure that we take the time to consider all the relevant factors to ensure that it is safe to make the change.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

10. When he plans to publish his proposals for the modernisation of Her Majesty’s coastguard.

[The Secretary of State for Transport (Mr Philip Hammond)]

The consultation on proposals to reconfigure coastguard maritime rescue co-ordination centres was launched on 16 December and will run until 24 March 2011. After that all responses received will be reviewed and analysed before we make a decision. At present there is no final timetable for the decision, as the time required for analysis will depend on the volume of responses received. In our view, it is more important to make the right decision than to make a quick decision.

[Gemma Doyle]

I have been contacted by several constituents who are concerned about the proposal to close Clyde maritime rescue co-ordination centre. They are worried that the loss of local knowledge will risk coastal safety in and around the waters of the Clyde. Will the Secretary of State give a commitment to listen carefully to those concerns about the closure of coastguard stations and, in particular, rethink the proposal to close Clyde MRCC?

[Mr Hammond]

Of course we will give careful consideration to all the representations made in the consultation. I should emphasise to hon. Members that we are talking about search and rescue co-ordination centres. They are not front-line delivery points; they are the centres that manage and co-ordinate the calls coming in, and task the front-line rescuers. The driver for the change is managing the work load and interlinking the centres across the country, so that they can best manage fluctuations in work load and provide a 24-hour competent service.

[Mr Adrian Sanders (Torbay) (LD)]

Have not the regional fire centre proposals, which were based on pretty much the same principles, been abandoned? Was not consideration given, before the consultation paper was published, to where this could end?

[Mr Hammond]

Indeed; I looked at precisely that point. The difference is that fire and rescue services are localised—there are different fire and rescue services around the country. Her Majesty’s Coastguard is a national service, operating as such, and the reconfiguration will provide nationally networked co-ordination centres that will deliver across the whole country.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Today’s Liverpool Echo calls into question the genuineness of the consultation on the coastguard service. If we take into account the scrapping of Nimrod, the ending of the emergency towing vessel contracts, the selling off of air-sea rescue, the prospective closure of coastguard stations and the sacking of coastguards, what assurance can the Secretary of State give to shipping, where there is real concern about the future of safety? Can he assure us that there will be no compromising of maritime safety?

[Mr Hammond]

It is a bit rich for the hon. Gentleman to talk about the selling off of search and rescue, when the search and rescue private finance initiative project was initiated by the Government in which he served and had been running for at least three years before the general election. On the specific point about the Liverpool coastguard co-ordination centre, Ministers looked at the proposals made by officials in the Department and judged that the decisions to be made between Belfast and Liverpool and between Stornoway and Shetland were so close that the consultation should go forward while making it clear that there was a judgment call to be made within each of those two pairs of stations. There was not a clear and definitive business case, which I think is what has given rise to the story in the Liverpool Echo to which the hon. Gentleman has referred.

[Mr Iain Wright (Hartlepool) (Lab)]

12. What plans he has for the future of bus services.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

My aim is to improve the entire bus journey for passengers. That means better integration between bus and rail services, better passenger information, smarter and more integrated ticketing, greener buses and better accessibility for people with reduced mobility. That will be achieved through incentives for commercial bus operators, funding local transport schemes through the local sustainable transport fund, but, above all, through operators and local transport authorities working together.

[Mr Wright]

In my area, Stagecoach is blackmailing Hartlepool borough council once again by claiming that it cannot run an evening bus service without getting yet more public money. Stagecoach made £126 million profit from its bus operations last year, but seemingly cannot operate an evening service after 7 o’clock in Hartlepool. It is very clear that the current system is not working, so will the Minister bring forward proposals to re-regulate local bus services?

[Norman Baker]

There is, in fact, a large range of powers available to local authorities, not least through the Local Transport Act 2008, which enables quality partnerships, and even quality contracts, to be established, so if his local authority feels that it has an unsatisfactory relationship with the bus company in question, it is open to it to look at the options available in legislation.

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

I hope the whole House will join me in extending condolences to the parents, family and friends of the 12-year-old boy tragically killed while crossing the A64 to catch the school bus.

On the wider question of rural buses, what assurance can my hon. Friend give to those living in rural areas that we will have a more extensive service—or at least as good a service as we have at the moment?

[Norman Baker]

I echo the condolences expressed by my hon. Friend about that tragic accident.

We are conscious of the importance of rural areas, which is why the issue was flagged up in the local transport White Paper. I changed the guidance on concessionary fares to ensure that the special position of rural and long-distance routes was specifically recognised in that regard. We have been in touch with local authorities to look at innovative schemes, such as dial-a-ride and so forth, to ensure that local services, which are essential to rural areas, are maintained.

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

13. How many commercial vehicles underwent Vehicle and Operator Services Agency roadside inspections in December 2010.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

Approximately 7,000 vehicles underwent Vehicle and Operator Services Agency roadside inspections in December 2010. That was a combination of trucks and trailers, cars, buses and vans. That number comprised just over 17,000 checks of individual areas, such as checks for mechanical defects or drivers’ hours offences.

[Andrew Bridgen]

I thank the Minister for that answer. However, considering that the weather in much of December was so severe that it had a major impact on economic growth in this country and caused major disruption to the transport infrastructure, does he agree that VOSA should have a much more flexible and business-friendly attitude to conducting roadside checks, when hauliers and transport operators are struggling to supply the economy during severe weather conditions?

[Norman Baker]

I sympathise with my hon. Friend’s point, and he may be happy to know that VOSA did take a pragmatic approach to enforcement during the recent unusually difficult weather. In fact, in December 2010 it carried out only 60% of the tests it carried out in 2009. It has also taken account of a number of relaxations that the Government have made to drivers’ hours regulations because of the weather, and it has had regard to the inevitable delays that such weather can cause to journeys. However, we must ensure that all journeys on our roads are safe.

[Kerry McCarthy (Bristol East) (Lab)]

The Minister will be aware that there is real concern among staff who work at VOSA that the testing transformation programme, with the move towards private sector test stations and the closure of the VOSA test station network, is privatisation by the back door. Will he tell the House why there is such a push towards private sector test stations, and will he confirm that privatisation is not on the agenda?

[Norman Baker]

I assure the hon. Lady that the objective of the change is to make the arrangements more accessible. That, not her rather lurid explanation, is driving the changes.

[Mark Lancaster (Milton Keynes North) (Con)]

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

[The Secretary of State for Transport (Mr Philip Hammond)]

Since I last answered questions, I have published details of our proposed route for high-speed rail, launched the local transport White Paper, including the bidding guidance for the £560 million local sustainable transport fund, set out our proposals for reforms to the rail franchising system, which will deliver better value for money for taxpayers and better service to passengers, and announced tough new measures to tackle uninsured driving.

[Mark Lancaster]

Investment in the west coast main line is most welcome but mainly benefits long-distance travellers, while short-distance travellers remain overcrowded. Is there any light at the end of the tunnel for Milton Keynes commuters?

[Mr Hammond]

There are two separate lights at the end of the tunnel—[Interruption.] Neither of them is a train coming the other way. First, as my right hon. Friend the Minister of State said earlier, 106 additional Pendolino carriages for the west coast main line have been ordered and will come into service in 2012. Secondly, as the proposed HS2 line, if approved, is built it will provide massive additional capacity on the London-west midlands route, and capacity will be freed up for new high-speed, longer-distance commuter services from places such as Milton Keynes to London.

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

Ministers have spent weeks creating confusion over fuel prices. Will the Secretary of State say what he plans to do to help hard-pressed motorists? If he is so concerned now, will he say whether he thought it was fair to impose a VAT hike on fuel just three weeks ago?

[Mr Hammond]

The hon. Gentleman is a spokesman for a Government who proposed the fuel price increases that are now coming into effect, and who were planning to put VAT up, as we discovered from leaked documents before the general election. I am pleased to say that it is not my business to do anything about this, as it is a matter for the Chancellor of the Exchequer.

[David Morris (Morecambe and Lunesdale) (Con)]

T3. Some 84% of rail users are currently satisfied with their service. Does my right hon. Friend agree that that is welcome news, and will she elaborate on that statement?

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

Obviously, we welcome the positive response from the Passenger Focus survey. We are aware that there is always a need to improve provision of services on the railways, and that is one of the main reasons why we are supporting the work of the McNulty review to get costs down, to make it easier to deliver the improvements that people want.

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

T2. Has the Department carried out a study of the likely effects of massive rail and bus fare increases on the number of people who are able to use such services in the future?

[Mr Hammond]

The Department did, of course, carry out the usual equalities impact study that is required, before making the proposals. There is a hidden premise behind the hon. Gentleman’s question. Nobody increased rail fares ahead of inflation happily or gladly. The decision whether to protect the planned investment in reducing overcrowding by delivering additional rolling stock, or to scrap that programme, was a difficult one. We decided to protect investment for the medium and long term, and unfortunately that means three years of further above-inflation rail fare increases.

[Richard Harrington (Watford) (Con)]

T4. Many of my constituents and those of other Members were severely disrupted by the effects of the weather on airports in London and elsewhere. Does the Minister agree that the Civil Aviation Authority needs more powers to assess the situation and hold airport operators to account?

[Mrs Villiers]

My hon. Friend has raised an important issue. There was real concern about the way in which Heathrow dealt with the severe weather. That is one of the reasons for our plans to reform airport regulation, which include a new licensing system that will indeed give the CAA more powers to ensure that airports are properly prepared for winter.

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

The marine environment is dangerous, and we are fortunate to have Stornoway coastguard, which is based in my constituency. However, I have been told that the Government’s reorganisation proposals are not accompanied by any proper risk assessment. Is that true?

[Mr Hammond]

Of course the proposals have been risk-assessed. They have been around for more than two years, since before the general election, and there is a long slow-burning fuse behind them. They are now out for consultation, and the hon. Gentleman can and, I am sure, will make forcefully the case for retaining the station in Stornoway.

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

T5. Can the Minister give us a likely date for the decision on electrification of the Great Western line to Swindon and beyond?

[Mrs Villiers]

My hon. Friend is a staunch campaigner for further electrification. We have already announced electrification of the lines to Oxford, Newbury and Didcot, and we will shortly announce what further electrification of the Great Western line can be achieved in co-ordination with the linked inter-city express programme.

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

You will recall, Mr Speaker, the procedural exchange that you and I had earlier this week about the failure of the Department for Transport to answer questions about river and port pilotage. The first question has now been answered inaccurately; as for the second, the Department refuses to publish the advice that it has received. This is a fundamental matter of safety. Will the Secretary of State examine it personally and review the decision to refuse to publish the information, in order to give us confidence that our pilots are properly trained?

[Mr Hammond]

I am not aware of the written answer to which the hon. Gentleman refers, but I will look it up when I return to the Department, and I will write to him.

[Mark Pawsey (Rugby) (Con)]

T6. In my constituency, an average of 27 people a year are killed or seriously injured in crashes involving young people. That includes a tragic accident over the Christmas period involving a friend of my son. Graduated driver licensing, enabling a new driver to proceed to a full licence over a period, has been shown in many countries to reduce the number of casualties in that vulnerable group. What discussions has the Secretary of State had about introducing such an approach to improving road safety in this country?

[Mr Hammond]

My hon. Friend will know that the United Kingdom actually has an enviable record on road safety. Many of the countries that operate graduated licensing suffer worse safety records than the UK. Our policy is to avoid additional regulation whenever possible, and we would be very concerned about imposing any regulation that reduced the mobility of young people who had acquired driving licences, because of the impact that it would have on their participation in the labour market and in further and higher education.

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

Apropos the disruption at Heathrow, the temperature has dropped again today. Ministers need not go abroad to find examples of the way in which airports can cope with snow. Aberdeen airport, which is also owned by BAA, managed to cope perfectly well with 2 feet of snow, while Heathrow was closed for nearly two weeks because of 2 inches of snow. What guarantee will the Government give passengers—not just those like me, but the many people who travel through Heathrow, which is one of the major hubs—that such disruption will not occur again?

[Mrs Villiers]

We must be realistic. When the weather is as severe as that which we witnessed before Christmas, there is bound to be some disruption. I pay tribute to airports such as Aberdeen, which worked very hard to deal with it—as did Gatwick—but we must recognise that Heathrow airport faces special challenges that make it tougher to respond to such conditions. Heathrow is conducting a review, and the Department is carrying out an investigation through the South East Airports Taskforce. There may be lessons that we can learn from measures taken by other transport systems, such as the imposition of emergency timetables when severe weather seems likely to reduce capacity significantly.

[Nicky Morgan (Loughborough) (Con)]

T7. Some of the residential areas in Loughborough face considerable pressure on parking as a result of having houses occupied by students, each of whom brings a car to the town. Can the relevant Minister confirm that under this Government local councils, communities and universities will continue to be able to implement local solutions that suit the local needs of the town?

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I am happy to give that assurance. The whole thrust of the Government is to free up councils, remove regulations and make it easier for councils to reach the correct arrangements in conjunction with their communities.

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

I heard what the Minister said about uninsured drivers, but what thought has he given to requiring drivers to put details of their insurance on the car windscreen, which works well in a number of other countries?

[Mr Hammond]

The hon. Gentleman may know that the Department has introduced a programme of rolling monitoring of insurance, where anyone whose vehicle is uninsured now has to make what is, in effect, a statutory off-road notice declaration. The police will have access to the database and will be able to monitor, in real time, whether vehicles are insured or uninsured. That will give rise to a much more effective level of enforcement.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

T8. I know that the Minister is aware that Fleetwood has a railway line that has been redundant since the 1960s but which has most of its infrastructure intact. What hope can she offer my constituents that there may be a chance of reopening the line and providing much-needed regeneration to the town?

[Mrs Villiers]

I know that my hon. Friend has championed this cause, and I enjoyed my visit to the disused rail line. Programmes such as he outlines can confer significant local benefits, but it is primarily for the local authorities to identify the funding to restore railway lines and, importantly, to identify the funding for any ongoing subsidy that is needed. Local authorities may well wish to consider those options in order to enhance economic growth in their areas.

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

What assessment has been made of increasing fuel prices and the rising costs of motoring in rural areas, particularly for lower-income households?

[Mr Hammond]

No specific assessment has been made by my Department, but I can tell the hon. Gentleman that independent assessments suggest that between 1997 and 2010 the real cost of motoring has declined by 7%.

The Minister for Women and Equalities was asked—

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

1. What discussions she has had with the Secretary of State for Business, Innovation and Skills on the effects on gender equality in the workplace of her proposals for flexible working.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

I have had several discussions with ministerial colleagues on these issues. Flexibility in the workplace is good for all employees—men and women. On gender equality specifically, flexible working allows many women with caring responsibilities to continue in work. Evidence also shows that flexibility is good for business and good for society. This Government are committed to extending the right to request flexible working to all employees, and we expect to begin consulting on the details shortly.

[Julian Smith]

Does my right hon. Friend agree that as we develop important policies in the area of equality we must avoid adding to the regulatory burden on small business? Will she listen carefully to the thousands of very small businesses in Britain that are concerned by some of these proposals?

[Mrs May]

My hon. Friend is a great champion of small businesses and their concerns. I hope that he will have seen from today’s announcement by the Department for Business, Innovation and Skills on the issue of employment tribunals that the Government understand that there is a real difference between how small businesses can cope with regulation and that burden and how a large business with a big human resources department can cope. We have already started discussions with the Federation of Small Businesses on flexible parental leave and flexible working, and we will be taking those issues forward. We are concerned to ensure that anything we do involves the least possible administrative burden for small businesses.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

These measures on flexible working are welcome, but they will not be taken up if people are afraid that their employer can still dismiss them without any consequences. Today, the Department for Business, Innovation and Skills is announcing measures to remove protection against unfair dismissal for people who have been in jobs for less than two years. The right hon. Lady will know that women are more likely than men to be in jobs for less than two years and so, once again, they will be harder hit by these proposals. There is no sign yet of an equality impact assessment from BIS this morning. Can she tell me whether one has been done? Has BIS examined the impact on equality? What is she doing to stand up for women across the Government?

[Mrs May]

I remind the right hon. Lady that the Business Department is today issuing proposals, on which it is consulting, on the future of employment tribunals. It is important that we take action on employment tribunals, because I have discovered from my discussions with businesses that they are often wary of issues such as flexible working and the extension of flexible working, precisely because of the tribunal costs that they could incur, were those regulations to be put in place. The right hon. Lady asked what I was doing to stand up for women. We are going to extend the right to request flexible working to all, which is more than her Government did.

[Pamela Nash (Airdrie and Shotts) (Lab)]

2. What steps she plans to take to address the trafficking of women and girls.

[The Minister for Equalities (Lynne Featherstone)]

Policy responsibility for human trafficking rests with the Minister for Immigration. Combating human trafficking, including the sexual exploitation of women and girls, is a key priority for the Government. We are committed to tackling organised crime groups who profit from this human misery, and to protecting victims. Tackling organised immigration crime, including trafficking, is a high priority for the Serious Organised Crime Agency, of which the UK Human Trafficking Centre is now part.

[Pamela Nash]

I thank the Minister for her answer, and I appreciate that this subject also falls under the category of immigration. Given that the European Union directive on trafficking would ensure that the UK provided further protection and support for victims, does she agree that we should enter into that commitment without further delay?

[Lynne Featherstone]

We have said all along that we would look at what was happening in the European directive. The wording was decided on the 13th, and the member states are now deciding whether to opt in or not. When that has happened, we will take a look, and if there are further things that we think would be helpful, we will make a decision then.

[Mr Peter Bone (Wellingborough) (Con)]

I welcome the Government’s review of the policy on human trafficking. Will the Minister tell us whether all non-governmental organisations with an interest in this field, including the all-party parliamentary group on human trafficking, are being consulted on the review?

[Lynne Featherstone]

As far as I am aware, the NGOs are being consulted, although there is not a public consultation.

[Fiona Mactaggart (Slough) (Lab)]

The Minister says that her Government are making anti-trafficking a high priority. Now that the directive has been completed, is she seriously saying that she is going to wait for other states to make a decision before Britain does so? Should not we be in the lead on this issue? The directive has been supported by Members of the European Parliament of all parties represented in this House. Is it not time for her to adopt the directive? If she is not planning to do so yet, will she tell us why not?

[Lynne Featherstone]

We have to look at it and then make our decision. On 14 October, during the anti-slavery day debate, the Minister for Immigration announced a new strategy to tackle human trafficking that involved disrupting the practice in the country of origin and on the border, as well as supporting the victims. We will have to see what the EU directive adds or does not add, and we will make our decision in due course.

[John Glen (Salisbury) (Con)]

3. What steps she plans to take to increase the number of women on corporate boards.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

Lord Davies has been appointed by the Government to look at how obstacles can be removed to allow more women to make it on to corporate boards. We look forward to his recommendations for a business-led strategy, and we will respond in due course. Measures that we are taking, such as flexible working and shared parental leave, will also help to address some of the barriers to progression that women face in the workplace.

[John Glen]

A recent Crown Prosecution Service report by Dr Catherine Hakim found that women were more likely to reach the top in business in countries such as the United States, where there are relatively few female-specific employee rights, as opposed to Scandinavian countries, which have lots of parental leave and much more job segregation. Will the Government consider putting much more emphasis on support in the workplace, rather than having a quota system, which many women find demeaning?

[Mrs May]

I am grateful to my hon. Friend for pointing out that there is varied experience across the world with regard to what works in ensuring that women can get to the top. The Government have no intention of introducing legislation on quotas in this area. We will listen to what Lord Davies says, and I have been party to some of the round-table discussions that he has had. From what I have seen so far, I am sure that he will come forward with some very practical ways in which we can help to unlock the barriers to women reaching their place on corporate boards. It is this Government’s firm determination to do more to ensure that more women are on corporate boards.

[Mr Denis MacShane (Rotherham) (Lab)]

Will the Minister for Women and Equalities confirm that this great panjandrum Lord Davies, who is going to get more women on to boards, is a man?

[Mrs May]

Yes.

[Bob Blackman (Harrow East) (Con)]

4. What her policy is on the hosting of civil partnership ceremonies in religious establishments.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

In June 2010, the Government published “Working for Lesbian, Gay, Bisexual and Transgender Equality”, which made a commitment to talk to interested groups about what the next step should be for civil partnerships, including on this issue. The Government have held a number of meetings on the topic with various groups, including those representing faith groups, lesbian, gay and bisexual people and the registration service. We will announce the next steps in due course.

[Bob Blackman]

I thank my right hon. Friend for that answer. Many religious groups are openly hostile to the concept of civil partnerships because it offends their religious doctrine. Lord Alli’s amendment in the other place would permit ceremonies within religious establishments. Will my right hon. Friend confirm that the Government do not intend to introduce compulsion for religious organisations that do not want to have civil partnerships in their buildings?

[Mrs May]

My hon. Friend raises an important point. This was a significant part of the debate when Lord Alli’s amendment to the then Equality Bill went through in the House of Lords before the general election. It is clear in his amendment that this is a permissive power, and that is the basis on which the Government are operating. We have no intention of introducing any element of compulsion. It will be for religious groups and faith groups to decide whether they wish to take up this opportunity.

[Chris Bryant (Rhondda) (Lab)]

I do not think anybody wants a form of compulsion that forces churches to do anything they do not want to in this field. That is a bit of a red herring. The right hon. Lady has said that the Government are considering allowing the use of religious rituals, ceremony and symbols at civil partnerships. If she is going to do that for civil partnerships, may I urge her to do it for civil weddings? Many people do not want to get married in church but would none the less like to have some religious readings or music.

[Mrs May]

In response to the hon. Gentleman’s first comment about no compulsion, I am grateful that he supports Government policy on that issue. He is right that extending the ability to have religious elements to a civil partnership ceremony or to hold such partnership ceremonies on religious premises raises an issue about the equality with civil marriage. We are taking steps as regards the Lord Alli amendment and we will make announcements in due course.

[Jo Swinson (East Dunbartonshire) (LD)]

6. What assessment she has made of the effect on the well-being of women and girls of body image representations in the media.

[The Minister for Equalities (Lynne Featherstone)]

I would like to congratulate my hon. Friend on her tireless commitment to this area of work. I, too, remain deeply worried about this issue. I have met too many people, both male and female, whose lives have been affected by negative feelings about their body shape. Recently I convened a group of experts to discuss our shared concerns and the evidence that they had assembled. I am working with them and with relevant industries to identify non-legislative ways of tackling the issue.

[Jo Swinson]

Girlguiding UK regularly surveys young women and girls in the country and consistently shows that girls are unhappy with the prevalence of heavily airbrushed images and the ultra-thin ideal in the media. The Committee of Advertising Practice, which sets the advertising rules, is either oblivious or complacent about this problem, however, recently stating in a letter that it has

“seen very few ads that are targeted at children which appear to have been airbrushed”,

and that it does not think that this is “a widespread practice”. Will the Minister reassure the House that she will not let the advertising industry get away with dismissing this issue?

[Lynne Featherstone]

I can assure my hon. Friend that the advertising industry is more than well aware both of her work and of the Government’s intention to work with interested partners on this issue. I am sure that Members of all parties recognise that it is a real issue for girls, women and young men in this country.

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

7. What discussions she has had with the Secretary of State for Work and Pensions on the effect on women of changes to the state pension age.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I wrote to and met the Equality and Human Rights Commission during the Government’s review of the increase in state pension age to 66 to ensure that equality issues were fully considered. A full equality impact assessment was also published as part of the Government’s White Paper, which sets out the effect on women of changes to the state pension age.

[Luciana Berger]

Will the Minister please update the House on the coalition agreement, which committed to make no change to the state pension age for women before 2020?

[Steve Webb]

The hon. Lady is not accurately quoting the coalition agreement. My right hon. Friend the Chancellor made it clear before the election that the pension age would not be 66 for men before 2016 or for women before 2020, and we have kept to that.

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

8. What steps she is taking to eliminate discrimination in employment law on the grounds of gender.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

We are committed to tackling discrimination in the workplace. The Equality Act 2010 makes it unlawful to discriminate against men or women because—the answer I have here says because of “sex at work”, but I think it means on the basis of gender—or when providing an employment service. We will shortly be launching a consultation on the coalition commitment to encouraging shared parenting from the earliest stages of pregnancy, including through a system of flexible parental leave. We want to make changes to ensure that the law better supports real families juggling work and family life and helps businesses that employ them. Some interim measures are already in place. From April this year new parents will be able to share a period of paid leave through the introduction of additional paternity leave.

[Mr Raab]

I thank the Minister for that answer and those clarifications. Does she agree that making maternity leave transferable will help to eliminate anti-male discrimination in the workplace and will give couples greater choice in addressing the career-family balance together?

[Mrs May]

My hon. Friend raises the issue of work-life balance and choices for families. The introduction of flexible parental leave will do two important things. First, it will give families the choice to decide which parent stays at home to look after the child in the early stages, beyond a period that will be restricted for the mother only. Secondly, it means that, in future, employers will not know whether it will be the male or the female in front of them seeking employment who will take time off to look after a baby. I think that is an important step in dealing with discrimination. We should try to get away from gender warfare and the politics of difference, as my hon. Friend has said, but I suggest to him that labelling feminists as “obnoxious bigots” is not the way forward.

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

Last night’s television programme “Posh and Posher” observed that there are more male Cabinet members from one Oxford college than there are women of any background in the Cabinet. Given that, does the Minister for Women and Equalities agree with the hon. Member for Esher and Walton (Mr Raab) that her work colleagues get a “raw deal” at work because of feminist “bigots” being unreasonable on issues such as equal pay?

[Mrs May]

I think I caught the hon. Lady’s gist in relation to membership of the Cabinet, and I simply point out that she should look at the balance in the previous Cabinet under the Labour Government. The Prime Minister has made it absolutely clear that he has a commitment to ensure that a third of ministerial places are taken up by women by the end of the Parliament.

[David Mowat (Warrington South) (Con)]

9. What discussions she has had with the Secretary of State for Justice on custodial sentences for women with children.

[The Minister for Equalities (Lynne Featherstone)]

No recent discussions have been held on this issue. Sentencing is entirely a matter for the courts, which take account of all the circumstances of the offender and the offence. This will include consideration of whether or not the offender is a primary carer. We have a continuing programme of work under way to divert women away from custody for those who do not pose a risk to the public. We must ensure that women who offend are successfully rehabilitated, whether they serve sentences in custody or in the community.

[David Mowat]

I thank the Minister for that response. She will be aware that, according to the Corston report, one third of custodial sentences for women go to women who are lone parents. That has severe knock-on effects for their children. What further guidelines can the Minister issue in this area?

[Lynne Featherstone]

Yes, we have taken the Corston recommendations very seriously and we are developing a strategy to ensure that the women’s estate is fit for purpose in both custodial and community settings. We are also following on with programmes to divert women away from custody: more than £10 million has been provided to deliver 44 community-based interventions for women to tackle the underlying causes of their offending as part of robust community sentencing.

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

Can the Minister say whether the Ministry of Justice is on target to reduce the number of women in custody by 400, as has previously been agreed?

[Lynne Featherstone]

I am not in a position to say, because I have not had that discussion this morning.

Business of the House

Thursday 27th January 2011 Commons Chamber

11:34

[Hilary Benn (Leeds Central) (Lab)]

Will the Leader of the House give us the business for next week?

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

The business of the House for next week is as follows:

Monday 31 January—Second Reading of the Health and Social Care Bill.

Tuesday 1 February—Conclusion of consideration in Committee of the European Union Bill (Day 5).

Wednesday 2 February—Opposition Day [10th Allotted Day]. There will be a debate on the performance of the Business, Innovation and Skills Department followed by a debate on the future of the Public Forest Estate in England. Both debates will arise on an Opposition motion, followed by a motion to approve European documents relating to the Court of Auditors’ 2009 report.

Thursday 3 February—Motion relating to consumer credit regulation and debt management, followed by a general debate on reform of legal aid. The subjects for both debates were nominated by the Backbench Business Committee.

Friday 4 February—Private Members’ Bills.

The provisional business for the week commencing 7 February will include:

Monday 7 February—Opposition Day [un-allotted day] [half day] [first part]. There will be a half-day debate on a Scottish National party and Plaid Cymru motion.

Tuesday 8 February—Second Reading of the Education Bill.

Wednesday 9 February—Motions relating to the police grant and local government finance reports.

Thursday 10 February—Motion relating to voting by prisoners. The subject for this debate was nominated by the Backbench Business Committee.

Friday 11 February—Private Members’ Bills.

I should also like to inform the House that the business in Westminster Hall for 10 February will be:

Thursday 10 February—A debate on onshore wind energy.

[Hilary Benn]

I am grateful to the Leader of the House for his statement. Will he clarify what the rest of the business will be on 7 February, apart from the half-day Opposition debate he has just mentioned?

Last Friday, the then Member for Belfast West wrote to you, Mr Speaker, seeking to resign as a Member of Parliament, but as we know, such a letter has no effect, as the only way for a Member to resign is to apply for the Chiltern Hundreds. On Monday, the Treasury told the BBC that no such application had been received, and yet yesterday we were informed by the Prime Minister that the Chancellor of the Exchequer had appointed Mr Adams as Baron of the Manor of Northstead.

The Chancellor’s power effectively to disqualify a Member must be exercised correctly. It does not seem that in this case that long-standing precedent was followed, so can the Chancellor come to the House and tell us when he received a letter from Mr Adams applying for the Chiltern Hundreds or, if he received no such application, explain on what basis he appointed Mr Adams to the post previously mentioned, given that “Erskine May” states that those offices are

“given by the Chancellor of the Exchequer to any Member who applies for them”?

Does the Leader of the House agree that it is time we changed these ancient ways of enabling Members to step down and moved to a simple system whereby a Member can write to you, Mr Speaker, to resign?

Last week, the Leader of the House said in answer to a question that

“this Government did something that the previous Government refused to do—we set up the Backbench Business Committee”—[Official Report, 20 January 2011; Vol. 521, c. 1025.]

I gently point out to him, in the interests of accuracy, that the decision to set up that Committee was in fact taken by the House on 4 March 2010, when we were in government and Members agreed to a motion moved by my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman).

Can we have a debate on the Government’s handling of the economy? Only a few weeks ago, the Chancellor assured us that the recovery was on track. On Tuesday, we discovered that growth has in fact stalled. The Chancellor blamed the snow. It is not the wrong kind of snow; it is the wrong kind of policies. That is why the outgoing director general of the CBI, Sir Richard Lambert, this week warned that the Government have no strategy for growth and criticised Ministers for being

“careless of the damage they might do to business and to job creation”

Yesterday, George Soros said that the cuts could not be implemented without pushing the economy into a recession. Is it any wonder, therefore, that families up and down the country, who are worried about their jobs, rising prices and falling incomes, are beginning to ask themselves whether this lot know what they are doing?

Can we have a debate on the shambolic way in which the counter-terrorism review has been conducted? Last Thursday, the Immigration Minister promised that the draft emergency legislation on detention would be placed in the Library of the House. It has still not appeared. Will the Leader of the House tell his colleagues that when they promise to put something in the Library, Members expect it to be available soon? It is now all too obvious that that legislation is not ready.

In opposition, the Lib Dems criticised the Labour Government’s approach to dealing with terrorism and made another of those firm pledges—a firm pledge to scrap control orders. In the past few weeks there has been a lot of bravado briefing by the Deputy Prime Minister, promising that the orders would go, yet what was announced yesterday? Control orders by another name—with curfews replaced by “overnight residence requirements”. Liberty is very unhappy this morning, saying that control orders have been “retained and rebranded”. Why has that happened? Because the Government have rightly recognised that there is a threat to the public from which we need to be protected, and the responsibility that comes from being in government has finally dawned even on the Deputy Prime Minister.

Following the release of the extraordinary photographs showing the dismantling of the £4 billion fleet of Nimrod long-range reconnaissance and surveillance aircraft, which will then apparently be sliced up in an industrial shredder, can we have a statement from the Secretary of State for Defence on the letter that the six former defence chiefs have sent today, describing the decision to destroy the aircraft as “perverse” and warning that it will create

“a massive gap in British security”

Finally, can we have a debate on the machinery of government? Because it is pretty clear, from what has been going on this week, that this Government are not actually very good at governing.

[Sir George Young]

I am grateful to the right hon. Gentleman for his points. The business for the week after next is always provisional and changes are made, so at this stage I cannot announce the business for the second half of that Monday, but it is unlikely to be Government legislation.

On the substantive issue the right hon. Gentleman raises about Gerry Adams, as the right hon. Gentleman said, Gerry Adams wrote on 20 January making it absolutely clear that he wanted to relinquish his seat and stand in the Irish general election. As Gerry Adams should have known, a Member of Parliament may not resign; there are no means by which a Member may vacate his or her seat during the lifetime of a Parliament, other than by death, disqualification or expulsion. The Chancellor of the Exchequer, therefore, in line with long-standing precedent granted Mr Adams the office of profit under the Crown of steward and bailiff of the Manor of Northstead, so we delivered Mr Gerry Adams to the required destination, although he may have used a vehicle and a route that was not of his choosing.

Yesterday, Mr Speaker, you informed the House that, owing to that appointment, Gerry Adams was thereby disqualified from membership of the House by virtue of section 1 of the House of Commons Disqualification Act 1975. You also stated:

“The Chancellor of the Exchequer has exercised his responsibilities”;

and:

“He has done so in an entirely orderly way.”—[Official Report, 26 January 2011; Vol. 522, c. 405.]

During the subsequent exchanges, Members raised the hypothetical possibility of a future Chancellor appointing a Member without a firm application for a relevant post from that Member. I find it inconceivable that such a situation would occur; it is a matter of constitutional principle that a Chancellor does not act without an unambiguous request from a Member to relinquish his or her seat. In this case, that request was a letter of resignation. In addition, there is a protection in the form of provision in the 1975 Act for a Member not to accept any office that would lead to his or her disqualification. I have to say in response to the right hon. Gentleman’s final point on the matter that this law on resignation from the House has served us well for 260 years—and the Government have no plans to change it.

On the right hon. Gentleman’s next point, I am amazed that he raises the issue of the Backbench Business Committee. The Parliamentary Secretary, Office of the Leader of the House of Commons, my hon. Friend the Member for Somerton and Frome (Mr Heath), and I consistently raised the previous Government’s failure to enact the establishment of such a Committee, but my predecessor as Leader of the House refused to bring forward the relevant motions, so it was indeed this Government who established the Backbench Business Committee. I am surprised that the right hon. Gentleman ventures into that territory.

On the economy, if only the right hon. Gentleman’s party had bequeathed to the coalition what we bequeathed to Labour in 1997, we would not face the problems that we face today. We bequeathed a golden inheritance: fast growth, falling unemployment and decreasing inflation. Let us compare that with what Labour left behind: a trillion pounds of debt for the first time ever, the largest deficit in the G20 and in our peacetime history, and the deepest and longest recession in the G20. He quoted Richard Lambert, who also said that

“the tax and spending policies of the last Government created a substantial structural deficit…That’s what made substantial spending cuts inevitable, irrespective of who won the last election.”

He went on to say that

“public finances in the UK are in a mess, to a degree that threatens our long-term economic stability.”

On counter-terrorism, the Home Secretary made a statement yesterday, as the right hon. Gentleman knows, and answered some of the questions that he has raised. The Government will subject draft emergency legislation on 28-day pre-charge detention to pre-legislative scrutiny. That is currently being drafted and will be deposited in the Library of the House shortly. I was here when my hon. Friend the Minister for Immigration made the statement last week. He did not give a specific time when the draft legislation would go into the Library. We will set out the suggested approach for the scrutiny when the draft Bill has been completed, although that is, of course, a matter for the House.

The decision to cancel the Nimrod project was not taken lightly by Ministers and service chiefs. It is a consequence of the £38 billion deficit in the defence budget that we inherited from the outgoing Government. The project was nine years late and involved a cost increase of 300%. None of the nine aircraft was operational, only one was fully constructed and that one had not passed its flight tests. The cancellation will save £2 billion over 10 years. Since the Nimrod MR2 was taken out of service by the previous Government in March last year, the impact has been mitigated by the use of other military assets, including Type 22 frigates, Merlin anti-submarine helicopters and Hercules C-130 aircraft, and by working with allies and partners where appropriate.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A great many right hon. and hon. Members are seeking to catch my eye, and I should like to accommodate them all. Single, short questions and the characteristically pithy replies of the Leader of the House will be essential if I am to have a reasonable chance of doing so.

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

My constituents in Oxford West and Abingdon value their library services greatly, not just for lending, but for the role that they play in their communities. I have received hundreds of letters and e-mails about the proposals to close the Summertown, Botley and Kennington libraries in my constituency. The recent Westminster Hall debate showed that there is interest in this subject from both sides of the House. Will the Leader of the House provide Government time for a debate not only on the cultural and community value of libraries, but on how we can continue to support them in the difficult economic climate bequeathed to us by the previous Government’s irresponsible fiscal policies?

[Sir George Young]

I am grateful to my hon. Friend. There was a debate in Westminster Hall on library services on 25 January, and she might like to look at that. I spent three years at Oxford and I am afraid that I did not spend nearly as much time in the libraries as I should have.

Public libraries are a hugely valued service, which allows free access to information and services. It is important that her local authority has a strategy for any reorganisation of its library service, which takes into account the needs of local people and the views of the local Member of Parliament. As she may know, the Secretary of State has residual powers. She may wish to contact him if necessary.

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

The Backbench Business Committee now meets on a Tuesday at 1 o’clock. As a result, far more Back Benchers come to the Committee with ideas about what debates we should schedule. Another result is that more Back Benchers are asking us why we continue to have to schedule debates on a Thursday. Of the 13 and a half days of debates that we have held in the Chamber, one has been on a Monday, two and a half have been on Tuesdays—two of which were end-of-term debates—and 10 have been on Thursdays. Will the Leader of the House please consider giving us days in different parts of the parliamentary week? Will he also say when he will come up with an answer on how many additional days the Backbench Business Committee will be given to allocate to Members as a result of the extension of the parliamentary timetable?

[Sir George Young]

I am grateful to the hon. Lady for all the work that she is doing with her Committee, and I note her public service announcement about the new time for that Committee’s meeting. About one in three of the days that we have allocated have not been Thursdays. We should not devalue Thursdays—they are important days. However, I understand her request and I hope shortly to be able to make some progress and to shift the centre of gravity a little away from Thursdays. On her final point, we will be having discussions, not only on the allocation of Backbench business time, but on Opposition days and private Members’ days, to reflect the likely extended length of the Session, subject to the Fixed-term Parliaments Bill going through.

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

I have in my hand a piece of paper, which is the written statement on the future of the public forest estate in England. Does the Leader of the House share my disappointment, and that felt by all of us who are committed to saving the public forests, that there was not an oral statement? Will he explain why there is not to be a debate in Government time on the future of that valuable public asset?

[Sir George Young]

I understand my hon. Friend’s strong feelings on the matter. The Public Bodies Bill is currently in another place, and I hope it will reach this House once the Lords have sorted themselves out. There will be an opportunity then for him to speak on that specific issue, but as I have just announced, there will also be an Opposition day debate on it next Wednesday. I hope that he has read the written ministerial statement and seen that we are ensuring that public benefit is written into the change. The Government have no plans for a widespread disposal of assets in order to raise money. We want community trusts and local organisations to take ownership of some of our valuable woods.

[Mr David Winnick (Walsall North) (Lab)]

Instead of farcical exchanges about stewards and barons in relation to resigning from the House, would it not be better, as my right hon. Friend the Member for Leeds Central (Hilary Benn) has suggested, and as I did yesterday, if a simple letter of resignation were sufficient? Why should we keep a procedure simply because it has been in existence for the number of years that the Leader of the House mentioned?

[Sir George Young]

For the last 13 years we had a Modernisation Committee and, to my knowledge, not once did it consider the procedure for resignation, so it clearly did not think that it was a priority. The procedure has worked perfectly well for 260 years, and given all the pressures on the House’s time, I wonder whether we should really give priority to this matter.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

In Crewe and Nantwich, many families lost significant fees and deposits that they had paid to their children’s nurseries, and had major disruption to their child care arrangements, when the company running them went bust recently. May we have a debate to discuss how parents can be better protected in such circumstances rather than being left exposed both financially and in their home environment by finding themselves in a long queue of creditors?

[Sir George Young]

I am very sorry to hear of the plight of those who have paid up front for child care or nursery places and then found that the provider has gone into liquidation. I shall raise the matter with ministerial colleagues at the Department for Business, Innovation and Skills, who have responsibility for the Insolvency Service, and I would point my hon. Friend’s constituents to the local authority’s family information service, which may be able to help find alternative places for those who have been affected.

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

May we have a debate on the prerogative powers of the Chancellor of the Exchequer? Given that the Leader of the House informed us earlier that there is provision in legislation to refuse appointment to an office of profit under the Crown, will he confirm that since Gerry Adams—or Baron Adams, as he is better known now—has now been disqualified, it follows that he has indeed accepted Crown office?

[Sir George Young]

The right hon. Gentleman is venturing into territory that is occupied by you, Mr Speaker, and you made the announcement yesterday evening. Under the House of Commons Disqualification Act 1975, there is provision to refuse office. No refusal was received, so it was deemed to have been accepted.

[Priti Patel (Witham) (Con)]

The Leader of the House will be aware that yesterday afternoon, the Parliamentary Assembly of the Council of Europe debated and voted on a report containing scathing criticism of the UK for not granting thousands of prisoners their apparent right to vote, and recommending tougher sanctions against the UK Government in respect of the implementation of decisions of the European Court of Human Rights. In view of that, will he explain what action the Government are taking to ensure that decisions concerning our judicial system will be made in Britain by British law-makers?

[Sir George Young]

I am grateful to my hon. Friend. As I announced a few moments ago, there will be an opportunity for the House to debate the issue shortly in Backbench Business Committee time, and the relevant motion is now on the Order Paper. I have seen the report to which she refers, and it actually sets the UK apart from the other states mentioned. It calls on us to implement the judgment of the ECHR on prisoner voting, and notes that the Government have announced that they will do so. We are bound by that judgment and take our legal obligations seriously, but as I have said, we will listen very carefully to the debate in a fortnight’s time.

[Angus Robertson (Moray) (SNP)]

The wasteful destruction of the Nimrod fleet leaves a hole in national security and in the communities around RAF Kinloss, where it should be based. The Secretary of State for Defence assured me personally that the review of military bases would be concluded within weeks of all military recommendations being made at the end of February. We now learn, however, that it has been put back to the summer. That will cause untold economic uncertainty and damage to defence-dependent communities such as Moray, so may we have a full statement and a debate in Government time on the delay and on what concrete financial support the UK Government will provide immediately?

[Sir George Young]

I understand the hon. Gentleman’s deep concern. There will be Defence questions on Monday, at which he might have an opportunity to raise the matter. As he knows, we have concluded that RAF Kinloss and two other bases are not required by the RAF. The review to which he refers is now under way and will assess the overall needs of our armed forces, the long-term future that the bases may have and what alternative military requirements they could meet. I understand the urgency of an early decision, and I will pass that on to my right hon. Friend the Secretary of State for Defence.

[David Tredinnick (Bosworth) (Con)]

The mess in Parliament square is now the subject of part 3 of the Police Reform and Social Responsibility Bill, but as that Bill cannot possibly become law before Easter, will my right hon. Friend consider asking for it to be split? Having taken advice from the Clerks, I understand that it is in order to split the Bill in Committee, so that part 3 could make its own way through both Chambers in that time.

[Sir George Young]

I will put that proposition to my right hon. Friend the Home Secretary, whose Bill it is. My hon. Friend will know that Westminster city council is taking action, which I am sure he welcomes, to remove the tents that are out there. I understand that notices have been served, and I hope that follow-up action will be taken by the courts, and if necessary by the police.

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

The Leader of the House is fully aware of the deep angst on both sides of the House about yesterday’s shambles over the resignation of the former Member for Belfast West. Will he ask the Northern Ireland Office to confirm what role, if any, it played in persuading the Chancellor to take the unprecedented steps that we saw yesterday?

[Sir George Young]

I reject the assertion that what happened yesterday was unprecedented. There are precedents for Members who write in to resign without specifically asking for Crown office to then be appointed, so what my right hon. Friend the Chancellor did was perfectly correct in delivering the hon. Member’s wish to resign, and he followed precedent.

[John Stevenson (Carlisle) (Con)]

In the coalition agreement, there is reference to giving Select Committees, the obvious example being the Treasury Committee, the power to approve senior appointments. There is also reference to constitutional change—in other words change to the House of Lords. Given both those points, has not the time now come for the appointment of members of the Supreme Court to have parliamentary approval? Will the Leader of the House agree to a debate on that important issue?

[Sir George Young]

I understand my hon. Friend’s interest in the matter, but I believe that that would run the risk of politicising judicial appointments. He may have seen the Government’s response to the report of, I believe, the Liaison Committee. We are perfectly prepared to broaden the range of appointments that require pre-appointment approval by Select Committees, but my right hon. Friend the Lord Chancellor stated before the Lords Constitution Committee on 19 January that he was against such an approach in the case of the Supreme Court because of the risk of politicising judicial appointments.

[Hugh Bayley (York Central) (Lab)]

This morning, the Yorkshire regional flood defence committee was told that the budget for capital works for flood protection would be reduced by 27%, as a result of which no new flood protection schemes will go ahead in Yorkshire for the foreseeable future. Both the Prime Minister and the Chancellor said that flood protection money would be protected, so may we have an urgent debate to discuss a supplementary estimate to ensure that sufficient funding is made available in Yorkshire and elsewhere?

[Sir George Young]

The hon. Gentleman will have an opportunity to raise his concerns this time next week, at Environment, Food and Rural Affairs questions. The Government have had to make some difficult decisions on public expenditure because of the situation that we inherited.

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

Since October, the people of Terrington St John have been forced to use a mobile surgery while a fully kitted-out GP surgery lies empty nearby. Will the Leader of the House ask for a statement from the Secretary of State for Health about how he will address the issue, which is creating distress, inconvenience and cost for local residents?

[Sir George Young]

I understand my hon. Friend’s concerns, which I will share with the Secretary of State for Health. I understand that Norfolk primary care trust has reopened negotiations with the two GPs who own the now disused St John surgery building, with the clear aim of reaching a settlement which would allow the new GP practice to move in.

[Mr Dennis Skinner (Bolsover) (Lab)]

Whatever happened to the oral statement on the wholesale privatisation of forests? Sure we could have expected an oral statement on that matter today. Will the Leader of the House answer the questions? Is it going to be a free-for-all? Will the sleazy bankers be able to buy up large chunks? Shall we have a Fred-the-Shed Goodwin memorial park? Will the supermarkets be allowed to buy: Tesco—“Buy two forests, get one free”?

[Sir George Young]

The short answer is no, no and no. It sounds as though the hon. Gentleman has not read the consultative document. It is not a statement of Government policy. Under the previous regime, the Forestry Commission disposed of some 25,000 acres without the sort of precautions that we are including in the Public Bodies Bill.

[Jo Swinson (East Dunbartonshire) (LD)]

The Leader of the House is to be congratulated on introducing the motions to implement the Wright Committee reforms, such as setting up the Backbench Business Committee, which is widely agreed to be a success under the leadership of the hon. Member for North East Derbyshire (Natascha Engel). Given that success, will the right hon. Gentleman say what progress he is making on another Wright reform—creating a House business committee, so that transparency and democracy can be brought to scheduling Government business?

[Sir George Young]

The House business committee was another commitment to which the previous Government refused to commit themselves. We are committed to it, and it will be introduced within three years of this Parliament. We want the current regime to run for about a year, when we will review it and then have serious discussions about how we move to stage 2 —the House business committee, which will merge my responsibilities with those of the Backbench Business Committee, so that one Committee will deal with the future business of the House.

[Kevin Brennan (Cardiff West) (Lab)]

May we have a debate on the Government’s use of Orwellian language? We have had doublespeak and newspeak, and now we have Mayspeak in the Home Secretary’s renaming as the “Freedom Bill” a measure to keep people under surveillance, and renaming curfews “overnight residence requirements”. Is it true that she is to rename electronic prisoner tags “involuntary pagers”? Frankly, we need some sort of cross-party conversation, otherwise known as a debate, about it.

[Sir George Young]

The hon. Gentleman reiterates an exchange that took place yesterday when his colleagues raised those points, which the Home Secretary dealt with very adequately. She has rebalanced the competing demands of liberty and security in an intelligent way. There will be an opportunity to debate the Bill to which she referred when it is introduced. The provisions may not be in the Freedom Bill.

[Matthew Hancock (West Suffolk) (Con)]

The people of East Anglia and hon. Members of all parties were delighted when the Government decided in the spending review to dual the remainder of the A11. This morning, there was a serious accident on the A11. Can the Leader of the House therefore find time for a debate on when the improvements will begin?

[Sir George Young]

I am only sorry that my hon. Friend was not in his place an hour ago, when we had Transport questions. He might have been able to catch Mr Speaker’s eye and ask the Secretary of State that question. [Hon. Members: “He was here.”] I regret his failure to do so. I will draw to the attention of my right hon. Friend the Secretary of State for Transport the concerns about road safety on the A11 and ask him to write to my hon. Friend.

[Lilian Greenwood (Nottingham South) (Lab)]

We have already heard that defence chiefs have said that scrapping the RAF’s Nimrods leaves a massive gap in British security. I listened to the right hon. Gentleman’s reply to my right hon. Friend the Member for Leeds Central (Hilary Benn), but will he arrange an urgent debate in Government time to discuss the scrapping of planes that are vital to our national security and the consequences for our ability to defend our country?

[Sir George Young]

I understand the hon. Lady’s concerns. The decision was announced in the strategic defence and security review in October. We then had a debate in Government time on precisely the issue that she has raised. The House has therefore had an opportunity to discuss our decision on Nimrod and other assets. Around £2 billion will be saved in the next 10 years by not bringing Nimrod into service. Against the background of the challenging circumstances that the Government face, we had to make difficult decisions about the defence budget.

[Mr Robin Walker (Worcester) (Con)]

Yesterday, my hon. Friend the Member for Redditch (Karen Lumley) raised the question of school funding in Worcestershire. Although, like her, I welcome the impact of the pupil premium on our county, I am concerned that research from the campaign group F40 shows Worcestershire still languishing near the bottom of the league tables for per-pupil funding. Will the Leader of the House tell me what opportunities the Government can provide to debate the need for further reform of the national funding formula?

[Sir George Young]

I am grateful to my hon. Friend. There will be a debate on the Education Bill, which could be an opportunity to raise the matter. I have also announced that we will debate the police grant and revenue support grant settlements, which may provide another opportunity. However, I agree that the system of school funding is unfair and needs reform. We are currently considering the school funding formula to develop a clear, transparent and fairer national funding formula based on pupils’ needs.

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

Will the Leader of the House arrange for an urgent statement on what is to replace the education maintenance allowance? Last week, the Education Secretary made several commitments about transport costs and funding for looked-after children, students with learning difficulties and young carers. I understand that Library research, which my right hon. Friend the Member for Leigh (Andy Burnham) commissioned, suggests that fulfilling all those promises could cost as much as £420 million—three quarters of the current budget and a great deal more than the discretionary fund so far proposed. The Education Secretary is raising expectations and causing great confusion. Will the Leader of the House arrange for him to come and explain himself?

[Sir George Young]

My right hon. Friend the Secretary of State for Education will come and explain himself on Monday week, when he answers questions. We have just had a debate on the EMA, so it would not be realistic to expect the Government to find another opportunity, and I am not sure whether the right hon. Gentleman will be able to raise the issue that he has just mentioned on Second Reading of the Education Bill.

[Gavin Barwell (Croydon Central) (Con)]

In the light of the incredible assertion by the shadow Secretary of State for Education that the Government’s focus on young people getting a good GCSE in English, maths, a science, a humanity and a foreign language is elitist, will my right hon. Friend assure me that the debate on the Education Bill will give us the chance to discuss the incredible lack of faith in our young people?

[Sir George Young]

My hon. Friend makes a powerful point, which I hope that he will be able to make at greater length and with even greater force when we debate the Education Bill, if he is successful in catching your eye, Mr Speaker.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

The Leader of the House will recognise the good work that the staff of Remploy do throughout the United Kingdom. Will the Government give time for a debate about what they can do to help relations between staff and management, which are obviously in a bad way, and to find out why the staff have now been waiting nearly a year for last year’s pay rise?

[Sir George Young]

I understand the important issue that the hon. Gentleman raises. I do not know whether he is able to go to the Backbench Business Committee next Tuesday and submit a bid for a debate on that important matter, or apply for an Adjournment debate or a debate in Westminster Hall.

[Charlie Elphicke (Dover) (Con)]

In the light of the shadow Chancellor’s assertions that we should have a splurge of new borrowing and spending, may we have a debate on interest rates? Low interest rates keep my constituents in their homes and help small business keep ticking over. It is important for the House to explore whether interest rates would be raised by the Opposition’s policies.

[Sir George Young]

My hon. Friend raises an important issue. Our success in tackling the deficit means that the interest rate regime will be lower than it otherwise would be. If we listened to Opposition Members’ policies, there would be a real risk of interest rates increasing, and home ownership, investment—and, therefore, jobs—becoming more difficult. I would welcome such a debate.

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

The Leader of the House will be aware of some disquiet among Welsh farming unions and the Welsh Government about the UK Government’s position on CAP reform. Will he ask the Secretary of State for Environment, Food and Rural Affairs to make a statement on progress on developing a negotiating position that takes account of the devolved Governments’ views?

[Sir George Young]

I will give my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs advance notice that, next Thursday, she is likely to get a question from the hon. Gentleman on those issues. I will see that she is well briefed.

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

May we have a statement from the Defence Secretary on the possibility of preserving a proportion of the withdrawn Harrier jump jets on the basis that, over 10 years, some form of conflict might arise unexpectedly, in which the versatility of those valuable aircraft would be needed?

[Sir George Young]

There will be an opportunity on Monday to raise that matter with the Secretary of State for Defence. I understand that following the strategic defence and security review, the Harrier aircraft were retired from service on 15 December, and that at the moment, there are no plans to retain them as a reserve or emergency capability. The decision to retire the fleet was agreed collectively by the service chiefs. As I said, my hon. Friend will have an opportunity on Monday to share his concerns with my right hon. Friend the Defence Secretary.

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

Will the Leader of the House arrange a statement on the replacement for the financial inclusion fund, which funds independent advice agencies to give debt advice, and which we have learned will close at the end of March? That means that the local citizens advice bureau in my borough of Trafford will be forced to reduce the number of cases that it can handle by 500. Please can we urgently be told what Ministers intend to do to ensure that good-quality debt advice can be continued?

[Sir George Young]

The hon. Lady is quite right that the Government have decided that the fund to which she refers will be wound up. We are in the process of developing a free, national finance advice service, and I should like to write to her, or to ask the Minister responsible to do so, with further details of that service.

[Mr William Cash (Stone) (Con)]

Given the remarks of George Soros yesterday and today on the failure of the economic governance arrangements, will the Leader of the House be good enough to arrange a debate on the reasons for our low growth? They are connected with the failure of the EU and the failure to repatriate powers. Repealing EU social and employment legislation would enable our own small and medium-sized businesses to grow.

[Sir George Young]

I say to my hon. Friend that I honestly think I have provided enough time for the House to debate matters related to the EU. I see that a high proportion of the time that we have made available has been occupied by him—[Laughter.] I mean no discourtesy. The answer is that I will not provide at this stage additional time to debate the matter he raises.

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

Liverpool city council workers have today been told the terrible news that 1,600 people are to made redundant as a result of the Government’s 22% cut in its funding—that is the hardest hit to any core city. The council has been praised by the Government for the action it has taken to cut the pay of senior managers and reduce administrative costs, but it has so far been unable to secure the Government’s agreement to spread the cuts over the spending period to protect front-line jobs. Instead, harsh, front-loaded cuts are being imposed. May we please have an emergency debate on the impact that the Government’s front-loaded spending cuts are having on employment and local economies?

[Sir George Young]

I understand the hon. Lady’s concern, and when we debate the local government revenue support grant, she will have an opportunity to raise it. However, the plans of the previous Chancellor were for cuts only £2 billion lower than the coalition cuts next year, so the sort of challenges faced by her local authority would have arisen whoever had won the last election.

[Sajid Javid (Bromsgrove) (Con)]

On Tuesday this week, the Office for National Statistics released a devastating economic figure—the revision of our national debt to £2.3 trillion, which at 155% of gross domestic product is higher than that of Portugal, Ireland, Greece and Spain and equal to that of Lebanon and Jamaica. Does my right hon. Friend agree that that is the true economic legacy of the Labour party, and may we have a debate on it?

[Sir George Young]

I would welcome such a debate. My hon. Friend may have seen in The Independent today that the public have no confidence in the Labour party to run our economy. The previous Government’s efforts to forecast growth over the past 13 years—they were out by, on average, £13 billion—are the reason why we now have independent forecasts from the Office for Budget Responsibility. We lost confidence in their forecasts.

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

May we have a debate on the Business Secretary’s plans to make it easier to sack people and more difficult to retain the services of employment tribunals, which were announced this morning? That will profoundly affect a very high proportion of employees, particularly in constituencies such as mine, where a number of people are already on very insecure terms of work.

[Sir George Young]

There will be a debate on BIS next Wednesday. However, the current regime actually deters potential employers from taking people on, because of the circumstances that surround their potential dismissal. I honestly believe it right to try to recalibrate the balance of power between employer and employee, in order to encourage employment and remove one of the barriers to it.

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

Will the Leader of the House allow a debate on the progress made on rebalancing the economy? Some excellent manufacturing output data were published recently—they showed strong growth over the last two quarters—and such a debate would give the House an opportunity to reflect on them.

[Sir George Young]

There have indeed been some very encouraging manufacturing figures, to which my hon. Friend refers, and some buoyant export orders, which I also welcome. Coupled with our proposals to cut corporation tax and cancel the increase to employers’ national insurance contributions, and other steps to promote growth and prosperity, the background that he outlines gives us reasons for optimism.

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

Scotland’s other national drink, IRN-BRU, is headquartered and housed in Cumbernauld in my constituency. It provides hundreds of good local jobs, but the company tells me that it is being affected deleteriously by the substantial increase in the price of sugar over time. May we have a debate on the impact of rising commodity prices on British consumers and British industry more widely?

[Sir George Young]

My hon. Friend the Deputy Leader of the House advises me that that company has today announced record profits. I am delighted that it has managed to overcome the rise in commodity prices. I do not know whether with a bit of ingenuity the hon. Gentleman could develop his point at greater length in the debate on the Scotland Bill later today.

[Neil Carmichael (Stroud) (Con)]

In the light of the situations in Tunisia and Egypt and the Foreign Secretary’s visit to Syria, would it be possible for the House to debate foreign policy on north Africa and the middle east?

[Sir George Young]

I understand my hon. Friend’s request. He may have heard the Foreign Secretary speak on precisely those issues on the “Today” programme. We have no plans at the moment for such a debate. Perhaps the Backbench Business Committee could see whether, among all the bids it receives, there is a slot for a debate on foreign affairs in its future programme. The debate on Afghanistan in the autumn was greatly welcomed, and I hope that the Committee can find a slot for a debate on north Africa and the middle east. My hon. Friend might like to go along next Tuesday and make a bid for such a debate.

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

Even during the recession, the UK film industry has proved to be very successful. Most notably, “The King’s Speech” has 12 Oscar nominations and receipts to date of—I think—$108 million. May we have a debate on whether the Government’s plans for the UK Film Council are the very best way of nurturing this country’s film industry in such a competitive worldwide market?

[Sir George Young]

I will raise the hon. Lady’s concerns with my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport and ask him to write to her, but I commend the work of Colin Firth, Tom Hooper and the others who made “The King’s Speech”, and I wish them all the best in their bid for Oscars in the near future.

[James Morris (Halesowen and Rowley Regis) (Con)]

Given the urgent need to rebalance the economy, especially in areas such as the west midlands, may we have an urgent debate to discuss what the Government are doing to support and develop manufacturing businesses in the black country?

[Sir George Young]

I understand my hon. Friend’s concern. We have acted to improve the environment for manufacturers both nationally and in the midlands through lower and simpler business taxes, investment in apprenticeships, creating wider access to finance, a Government-wide commitment to boosting exports, the £1.4 billion regional growth fund and other improvements. I hope he will intervene in the debate next Wednesday to develop his arguments further.

[Mr Denis MacShane (Rotherham) (Lab)]

Last week, the Leader of the House rather brushed aside my request for a debate on Tunisia, but following on from the question asked by the hon. Member for Stroud (Neil Carmichael), the House must debate more frightening revolutionary changes. A thousand people have been arrested in Egypt and others have been killed. The world is changing fast and we are not debating it in the House. The Government’s decision on the BBC World Service shows the shrinkage of Britain’s influence and status around world. Do not put it off to the Backbench Business Committee or to Foreign Office questions next week. Let us discuss foreign policy seriously in this House of Commons.

[Sir George Young]

The right hon. Gentleman says, “Don’t put it off to the Backbench Business Committee,” but in my view, the House took the right decision when it decided that the Government should no longer have an exclusive monopoly on what subjects were debated. That is why at least 35 days a year are given to the Committee, leaving the Government with responsibility for the legislative programme. It is up to the right hon. Gentleman and my hon. Friend the Member for Stroud (Neil Carmichael), who feel strongly about foreign affairs, to go and make their pitch to the Backbench Business Committee to try to secure time for such a debate.

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

The previous Labour-run local authority in Reading has left huge debts of several thousands of pounds for each of my constituents. May we therefore have a debate in Government time to look at these irresponsible levels of local government debt?

[Sir George Young]

I am sorry to hear of the legacy bequeathed to my hon. Friend’s constituents. As I announced a few moments ago, there will be a debate on the revenue support grant on Wednesday week, and I hope that that will be an opportunity for him to raise those issues at greater length.

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

In answer to a written question, the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk), confirmed that the Government are likely to spend more than £100 million a year on redundancies and cancelling operating contracts made by the regional development agencies. May we have an urgent debate on the impact of scrapping the RDAs in terms of cost to the taxpayer, the impact on growth and the loss of support for functions such as regeneration, which will not be continued by the LEPs?

[Sir George Young]

I believe that the replacement of the RDAs by local economic partnerships will save money and be more effective. I will ask my hon. Friend to write to the hon. Gentleman about the £100 million.

[Harriett Baldwin (West Worcestershire) (Con)]

I note that the outrageous filibustering tactics of Labour Lords in the other place have still not been brought under control by the Leader of the Opposition. Will the Leader of the House please let us know when we might have a chance to debate the amendments to the Parliamentary Voting System and Constituencies Bill?

[Mr Speaker]

Order. Before the Leader of the House replies, I wish to say that I recognise that there are real tensions between the two Chambers on this matter, but I remind the House—and this may be of particular benefit to new Members—that we must preserve some basic courtesies in the way in which we deal with the other place, as we expect them to do with us.

[Sir George Young]

I hope that the Leader of the Opposition will make contact with his supporters in the other place and ensure that that House is not brought into further disrepute by the tactics that are being adopted. The Government very much want to make progress with the legislation. That is our intention and I hope that there will be reflection over the weekend. The second Chamber is a revising Chamber, and I know that it would want to think very carefully before it blocked a Bill that had received the support of this House.

[Henry Smith (Crawley) (Con)]

Last Thursday evening it was my pleasure to take part in the Gatwick Diamond young start-up talent event, which is a “Dragons’ Den”-style event for young people with entrepreneurial ideas. Can we find time for a debate, perhaps through the Backbench Business Committee, to discuss ways in which we can better help young people with entrepreneurial ideas to get ahead?

[Sir George Young]

I understand my hon. Friend’s concern, and I was delighted to hear about what happened. We are putting more resources into apprenticeships and the enterprise allowance scheme. We have made a change this week to the amount of time young people can spend on work experience without losing access to benefits and we are introducing the new Work programme. I hope that we can reduce the large number of young unemployed that we inherited from Labour and encourage them to become entrepreneurs.

[Christopher Pincher (Tamworth) (Con)]

Will my right hon. Friend ask the Chancellor to make a statement on deficit reduction, which would give the House an opportunity to hear what progress is being made? It would also give the shadow Chancellor an opportunity to clarify his Bloomberg speech and state clearly whether he remains a deficit denier.

[Sir George Young]

It is very important that we establish whether the shadow Chancellor is on the same wavelength as his leader on deficit reduction. On that point, I was interested to see that the former Chancellor under the last regime said that the key to getting growth in the long term is first to get the deficit down. That is not exactly what the Leader of the Opposition said yesterday.

[Mr Peter Bone (Wellingborough) (Con)]

Yet another of the Government’s excellent moves to put Parliament first is to allow Government Back Benchers free votes in Committee. When the BlackBerrys go off now notifying a Division, we are not told how to vote. We are no longer lobby fodder. May we have a statement next week from the Chief Whip so that this policy can be expounded further and he can get the congratulation that he deserves?

[Sir George Young]

I would not wish to raise my hon. Friend’s expectations by suggesting that my right hon. Friend the Chief Whip has any plans to come along. In any case, I do not think that my hon. Friend was ever regarded as lobby fodder.

[David Mowat (Warrington South) (Con)]

In 2004, the Lyons report on property strategy, as updated last year by Smith, said that significant savings could be made by transferring up to 15,000 civil servants out of London to the regions. May we have a statement from the Minister for the Cabinet Office on the Government’s property strategy and their progress on this issue?

[Sir George Young]

I understand my hon. Friend’s concern. It is indeed our policy to continue to decentralise from London wherever feasible. I will ask my right hon. Friend the Minister for the Cabinet Office to write to my hon. Friend with details of how we are getting on with our proposals.

[Guy Opperman (Hexham) (Con)]

The renewable heat incentive scheme has been delayed again. When will we have a decision on this and, more specifically, may we have a statement on the point?

[Sir George Young]

I understand my hon. Friend’s concern. We are committed to a massive expansion in renewable energy and supporting renewable heat is an integral part of that. We expect to be in a position to announce shortly the details of the scheme, including renewable heat incentive tariffs and technologies supported, and for it to be open for business later in the year.

[Bob Blackman (Harrow East) (Con)]

Two NHS trusts in my constituency are considering merging. Their letter notifying me of their actions so far reads like a script from “Yes, Prime Minister”. The “options appraisal” leads on to “a Strategic Outline Case” to be followed by the “Outline Business Case”, which will become “the Full Business Case”, which then may or may not lead to a consultation with the public. All that will entail enormous amounts of bureaucracy and consultants, which will take money that should be spent on patient care. Can my right hon. Friend facilitate a statement on doing away with this bureaucratic nonsense and getting the money spent on the front line?

[Sir George Young]

My hon. Friend will know that there is a Health Bill before the House at the moment. It is the intention of the coalition Government to do away with the bureaucracy that he mentions and put the resources into front-line care. He gives a graphic exposition of where economies can be found.

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

Will the Leader of the House allow time for a debate on economic confidence, especially in light of this morning’s ComRes poll, which clearly shows that my right hon. Friends the Prime Minister and the Chancellor are far more trusted on the economy than their shadows?

[Sir George Young]

My hon. Friend draws attention to the poll in today’s edition of The Independent. My own view is that until Opposition Members accept some responsibility for what went wrong, they will have no credibility with the general public.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

rose—

[Mr Speaker]

The hon. Gentleman assures me that he was present at the start of the business statement. I am grateful for that confirmation and I wish to hear him.

[Mr Stuart]

I am grateful, Mr Speaker, although disappointed that you did not notice me from the beginning. After a collapse in manufacturing employment over the last 10 years or so, there are optimistic signs, not least in Hull, where Siemens is investing in a major renewable energy plant that may employ 10,000 people or more. Other companies are following. May we have a debate on the infrastructure to support that development? The Humber offers huge economic opportunity for this country and we need to ensure that we have the infrastructure in place to support it.

[Sir George Young]

The regional growth fund is set up precisely to support infrastructure in areas such as Hull, and there will be a debate in Opposition time next Wednesday when my hon. Friend may have the opportunity to raise that point. It is worth reminding the House that the Office for Budget Responsibility has forecast an increase in employment of 1.3 million over the lifetime of this Parliament, which puts some of the debate on the economy in a more glowing perspective.

[Mr Speaker]

I am grateful to the Leader of the House and to colleagues for their co-operation, as a result of which, after the exchanges between the Front Benches, 47 Members were able to contribute in 42 minutes. I am very grateful.

Points of Order

Thursday 27th January 2011 Commons Chamber

12:28

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

On a point of order, Mr Speaker. In an answer by the Leader of the House about employment tribunals, he said that all would be revealed next week. I have asked questions of the Ministry of Justice to elicit information about the number of people who have been unfairly dismissed with between one and two years’ service and have gone to a tribunal. I was told that the answer could not be given without disproportionate cost. Surely that is wrong if we are to debate that subject?

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order, which of course requires a ministerial reply. I do not know whether he was seeking to elicit something from the Leader of the House, who is welcome to comment, but under no obligation to do so.

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

I will pursue this matter with my right hon. Friend the Secretary of State for Justice, but it has always been the practice that where an answer would require disproportionate resources, an answer is not provided.

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

rose—

[Mr Speaker]

The morning would not be complete without a point of order from the hon. Member for Dunfermline and West Fife (Thomas Docherty).

[Thomas Docherty]

On a point of order, Mr Speaker. Further to business questions earlier—obviously, we have not yet had a chance to see the official record—I think that I am right in saying that the Leader of the House appeared to indicate that you, Mr Speaker, had some discretion on whether the Member for Belfast West (Mr Adams) had resigned his seat by his new appointment. There clearly continues to be dissatisfaction with the whole process. What options are available to Members of the House to have a proper and thorough discussion of the whole sorry affair?

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order. All I want and need to say is that the notification of the disqualification of a Member appears on page 641 of yesterday’s Votes and Proceedings. I have nothing further to add to my ruling yesterday, and there are no procedural issues within my discretion on which I can rule. Doubtless, these matters will continue to be discussed, but there are no issues to be decided now.

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

Further to that point of order, Mr Speaker. Is there any way in which I can, within the rules of order, place on the record my appreciation of the fact that Gerry Adams might not have wanted to accept the authority of the Crown when entering Parliament, but evidently has had to accept its authority in order to leave Parliament?

[Mr Speaker]

The short answer is no, but the hon. Gentleman has done so anyway.

Scotland Bill

Thursday 27th January 2011 Commons Chamber

Second Reading

[Mr Speaker]

I have to inform the House that I have selected the amendment on the Order Paper.

12:32

[The Secretary of State for Scotland (Michael Moore)]

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

Over the past decade, the devolution of power and decision making from this Parliament to the Assemblies of Wales and Northern Ireland and to the Parliament in Scotland has transformed the constitutional arrangements of the United Kingdom. With this Bill, we begin a new phase of devolution in Scotland—a phase that we enter with cross-party support and the support of individuals and organisations across the country. The Scotland Bill is, of course, an important step in the coalition Government’s programme to modernise and reform the United Kingdom’s constitution, but its origins lie in the Scottish Parliament itself and in the support given by the previous Government, which I am happy to acknowledge. The Scotland Bill will further empower the Scottish Parliament and make it more accountable to those who elect it. In doing so, it will strengthen Scotland’s position within the United Kingdom.

Let us reflect on how we got here. The late Donald Dewar famously said, while quoting from the first line of the Scotland Act 1998:

“‘There shall be a Scottish Parliament’…I like that”.

He was not alone. His sentiments were, and continue to be, widely shared in this House and throughout Scotland. It is important to pay tribute to Donald Dewar for his historic role in shaping modern Scotland. He was a true statesman, serving both as Secretary of State for Scotland and as Scotland’s original First Minister. In the creation of the Scottish Parliament, he has a fine legacy. However, he would have been the first to insist on recognising the countless others, across different parties, and, crucially, from many different backgrounds in Scotland, who patiently built the case for devolution over many years, indeed decades. Likewise, we should acknowledge those in this place, the Scottish Parliament and beyond who supported the early years of the devolved institutions, building their capacity and establishing their credibility. Today, we build on that work.

When taking the original Scotland Bill through this place, Donald Dewar said that the creation of a Scottish Parliament was not just for Scotland. Nor was it just routine tinkering with the detail of our political system. Rather, it was a fundamental, radical reform of the UK’s constitution. After more than a decade of devolution, the Scottish Parliament is firmly established as part of the fabric of Scottish life. More than that, however, devolution—not just in Scotland, but right across the United Kingdom—is now part of our national life too. The Parliament was established to bring power closer to the people of Scotland, to make government more responsive to their needs, and to put their priorities at the heart of Scottish governance. It has succeeded: decision making on education, health and the environment, among many things, is closer to the people whom those decisions affect. The experience of Scottish devolution has changed the terms of the debate. Few would seriously now argue that there should be no Scottish Parliament.

The Bill builds on the achievements of the 1998 Act and on the experience of devolution, and it further strengthens Scotland’s place within the United Kingdom. Just six months after being elected, we introduced the Scotland Bill on St Andrew’s day. In doing so we made good the Government’s formal pledge, in our programme for government and the Queen’s Speech, to implement the recommendations of the Commission on Scottish Devolution—the Calman commission, as it is more commonly known. However, this was not our commitment alone. The Labour party also pledged in its manifesto to implement the commission’s recommendations, and I welcome its ongoing support without seeking to compromise Labour Members’ important role in scrutinising the detail of the Bill. Once again, however, measures brought to the House on a major piece of Scottish constitutional legislation are founded on support from across the Chamber and within Scotland.

After the first decade of devolution, it was right to review the Scotland Act, to assess how devolution was working, and to ensure that the Scottish Parliament had the right powers to deliver for people in Scotland. In December 2007, the Commission on Scottish Devolution was established by a vote in the Scottish Parliament. Chaired by Professor Sir Kenneth Calman, the commission included Conservative, Labour and Liberal Democrat representatives, but it was independent of any political party and embraced representatives from business, education, the wider public sector and across civic Scotland. It gathered evidence from a wide range of sources and engaged directly with people in Scotland and elsewhere in the United Kingdom, through detailed consultation, public engagement events, oral evidence from a spectrum of interests in Scottish public and business life and survey evidence. Let me record my thanks to Professor Sir Kenneth Calman and his commissioners for their thorough, inclusive and well-evidenced work. I would also like to acknowledge the impressive and detailed work of Professor Anton Muscatelli and the independent expert group on finance, which supported the commission.

The commission’s final report was submitted jointly to the Scottish Parliament and the UK Government in June 2009, and was widely welcomed. Based firmly on the commission’s findings, the Scotland Bill seeks to implement its key recommendations. The commission’s first and overarching conclusion was that devolution had been a real success; that it was here to stay; and that the balance between reserved and devolved policy powers and functions was, broadly, in the right place. However, it also concluded that there was a shortcoming in how the Parliament was funded, specifically in terms of accountability. At the centre of the commission’s report and the Bill, therefore, are measures to improve the financial accountability of the Scottish Parliament.

The Scottish Parliament can determine policy on a wide range of subjects and how and where money is spent, but at present it cannot be held effectively to account for raising the money it spends. The commission recognised this imbalance. The Bill addresses that imbalance by providing a package of taxation and borrowing powers that will see the Scottish Parliament become accountable for more than a third of the money it spends. In doing so, the Bill represents the largest transfer of fiscal powers from central Government since the creation of the United Kingdom. It is a radical but responsible step. Most significantly, we will create a Scottish income tax. We will create that tax by cutting 10p off the basic, higher and 50p rates for Scottish taxpayers, adjusting the block grant in proportion and allowing the Scottish Parliament—indeed, obliging it—to apply a Scottish income tax at a level of its choosing to meet its spending plans.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

Can the Secretary of State tell me and those who have asked me to probe this point what will happen when companies in my constituency or those across the whole of Scotland are paid from south of the border? How will that problem be overcome?

[Michael Moore]

The hon. Gentleman makes a very fair point. Let me reassure him, first, that we have given a lot of attention to the technical issues of implementation, both in a high-level implementation group and, now, technical groups led by Her Majesty’s Revenue and Customs, which are looking at all the different issues. The good news is that the software systems that were created for employees paying the Scottish variable rate under the original legislation were future-proofed and can identify Scottish taxpayers on the payrolls, wherever the company’s head office is, ensuring that the identification of taxpayers is made as painless a process as possible and that the right amounts of tax are taken.

[Mr Donohoe]

But what happens—this is the question that has been asked of me—when the person is domiciled both in Scotland and in England?

[Michael Moore]

They cannot be domiciled in both places. A person’s status as a Scottish taxpayer will be determined as set out in the Bill. If the hon. Gentleman looks more closely at the detail, I hope that he will be reassured.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

Before the Secretary of State moves on from this point, can he outline to the House what he expects the costs to the Scottish Government to be of the annual adjustment from HMRC? What will the cost of the variable tax rate be to the Scottish process?

[Michael Moore]

I do not know whether the hon. Gentleman is asking what the costs of running the system will be, but if he is, the draft regulatory impact assessment—I do not know whether he has had a chance to look at it yet—sets out our provisional estimates of the marginal costs of creating this functionality in the system. They are £45 million, with annually recurring costs of around £4 million. However, I should say to him—I am grateful for the chance to emphasise this—that a lot of that will depend on the detail that the Scottish Government and other stakeholders wish to see on documentation such as P60s. That will influence where those costs fall.

[Mr Frank Doran (Aberdeen North) (Lab)]

Following the point that my hon. Friend the Member for Central Ayrshire (Mr Donohoe) made, I can see that there will be formulae for different categories of employees. As a Member of Parliament who is based here in the House of Commons and whose main home is in London, I want to be taxed in Scotland, but will the Bill allow that?

[Michael Moore]

Unfortunately for the hon. Gentleman, he will have to pay the Scottish rate of income tax. Parliamentarians are obliged to pay it regardless of where their main home might be.

As I was saying, the new powers will give Scottish Ministers and the Scottish Parliament a much more significant stake in the performance of the Scottish economy. The level of the Scottish rate will be Scotland’s to decide, and those who set the rates will answer directly to those affected by them. Power will rest with the Scottish people. In addition to income tax, the Scotland Bill will devolve to the Scottish Parliament responsibility for stamp duty land tax and landfill tax. That will complement its policy responsibilities for housing, planning and the environment. The Bill will also allow the Scottish Parliament to propose new devolved taxes, to sit alongside the other powers. However, the fiscal powers are not limited just to tax; they extend to borrowing powers, too. The Bill will allow Scottish Ministers to borrow up to £500 million for current spending when tax receipts fall short of those forecast.

[Angus Robertson (Moray) (SNP)]

Will the Secretary of State confirm that the UK Government are currently negotiating with the Northern Irish Government about the devolution of corporation tax powers to Northern Ireland? Why would a UK Government consider that appropriate for Northern Ireland but not for Scotland?

[Michael Moore]

I would not characterise those discussions as negotiations per se, but people have certainly been raising possibilities in connection with what taxes might be suitable for other parts of the United Kingdom. As I have said, our proposals in the Bill are founded on careful consideration, and on impressive and important academic research that made it clear that if we wish to preserve the United Kingdom—I understand that the hon. Gentleman does not—we should ensure that, in increasing accountability in Scotland, we focus on income tax rather than corporation tax, and I am satisfied with that.

[Stewart Hosie (Dundee East) (SNP)]

The Secretary of State says that all this is part of defending the Union. Obviously his colleague Tavish Scott would share his view, but in his submissions to the Steel commission and then the Calman commission he suggested devolving

“income tax; corporation tax; fuel duty…tobacco and alcohol duties; betting and gaming duties; air passenger duty; insurance premium tax; climate change levy and landfill tax; inheritance tax; and stamp duties”.

Surely the Secretary of State does not disagree with his own colleague in the Scottish Parliament, does he?

[Michael Moore]

What I absolutely agree with is the process that we went through as three different parties that came together in the Calman commission, examining the options, scrutinising them and coming forward with a balanced set of proposals. We look forward to seeing fully costed proposals from the hon. Gentleman and his colleagues. They have had months to produce them— indeed, years—but as yet we have seen nothing. That is something that the House will note and that will perhaps reduce the bluster on the part of some.

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

To supplement the extensive list that my hon. Friend the Member for Dundee East (Stewart Hosie) read out, may I add the power of the Crown Estate being returned to the Scottish Parliament? Indeed, four or five years ago five Liberal highlands MPs supported that very proposal in a ten-minute rule Bill. Is that still the position of the Liberal party? If so, will the Liberals try to use the Scotland Bill to ensure that the Crown Estate is returned to Scotland?

[Michael Moore]

The hon. Gentleman is tempting me to get slightly ahead of myself. He will see the proposals that we have set out in the Bill, taking account of the evidence that was supplied to the Calman commission.

[Anas Sarwar (Glasgow Central) (Lab)]

Does the Secretary of State agree that those Scottish National party Members who are getting animated on this issue could easily have made a submission to the Calman commission if they so wished? Instead, they stood for self-interest, rather than Scotland’s interest.

[Michael Moore]

If I may say so, the hon. Gentleman makes the point very neatly. Like him, I await the SNP’s detailed proposals on either fiscal autonomy or the Crown Estate, so that they might be debated. I believe that what we have in the Bill is the right balance, which will give Scotland the powers and accountability that it should have.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

On taxation generally, is not the lesson that we have learned, from the original Scotland Act 1998, through many Standing Orders over two Parliaments, that we are involved in an iterative process? What can be devolved should be devolved, but at a gentle pace, so that we can assimilate what has happened. In that regard, the agreement that the three parties have come to is the correct way to proceed at this time, but does not preclude further devolution when appropriate at a later stage.

[Michael Moore]

I quite agree with my hon. Friend, who puts his point in such an elegant way.

[Sir Menzies Campbell (North East Fife) (LD)]

I hope that my right hon. Friend is not accusing the Scottish National party of inconsistency. Its attitude towards the Calman commission is entirely consistent with its attitude towards the Scottish Constitutional Convention, which it also declined to join.

[Michael Moore]

Once again, my right hon. and learned Friend puts it very elegantly.

As I was saying before that brief diversion, the fiscal powers included in the Bill are not limited to tax; they extend to borrowing as well.

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

Will the Secretary of State give way?

[Michael Moore]

I had nearly got back to the point I was at, but I shall give way.

[John Robertson]

On that point, I listened to the Secretary of State on the “Today” programme this morning, when he spoke eloquently about who would foot the bill if borrowing went—shall we say?—awry. What is to prevent a Government in Scotland from borrowing £500 million just before they lost power, to ensure that the incoming Government were saddled with a bill they could not pay?

[Michael Moore]

I would hate to destroy the cross-party consensus by making any inappropriate reference to a £155,000 million deficit, so I will move swiftly on. On the technical point the hon. Gentleman raises, if he looks again at the Command Paper, he will see that there are provisions to ensure that no Government will be able simply to borrow in order to stack up a capital reserve to spend in the future or to land a subsequent Administration in debt.

[Mr MacNeil]

On a point of clarification, would the right hon. Gentleman like to see power over the Crown Estate devolved to the Scottish Parliament?

[Michael Moore]

Those provisions are not in the Bill. That case has not been put forward in detail either by the Government of Scotland, of whom his colleagues are members, or by others. If such proposals were to come forward some time in the future, there could be a public debate, but as far as the Scotland Bill is concerned, it is consistent with the Calman commission and will make sure, formally, that we have a Scottish commissioner. That will ensure that Scottish interests on the Crown Estate are well represented in future.

As Secretary of State for Scotland, I am fully aware of my role in ensuring that we keep the Crown Estate focused on its interests across the whole of the United Kingdom. I have had two formal meetings so far and another is planned. That is probably as good a record as most recent Secretaries of State. I assure the hon. Gentleman and others who are concerned about the Crown Estate that we will continue to work to make it more accountable, more transparent and more focused on Scotland’s and the rest of the UK’s interests.

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

I thank the Secretary of State, who is generous with his time. He keeps on saying that the provisions were in the Calman proposals, but only 35 out of the 63 proposals are in the Bill. Issues such as immigration, benefits, aviation and aggregates are all out. Why is the right hon. Gentleman so negative about so many of the Calman proposals, and why did he not implement those important measures?

[Michael Moore]

I understand that the hon. Gentleman will seek to catch your eye later, Madam Deputy Speaker. I am sure that he has studied the Command Paper along with the Bill in great detail, in which case he would have seen what we said about the aggregates levy and aviation duty. We made it clear that there is a difficulty with the aggregates levy because of issues before the courts, so it would be inappropriate to bring forward proposals at this stage. However, we make clear in the Command Paper our intention to devolve that area. Likewise on aviation duty, the Government are reviewing the position, and we still intend aspects of it to be devolved. It is the same with welfare. The Command Paper talks about the major reforms we are introducing and the fact that they will fully take account of devolution and reflect the spirit of what was in the Calman report. I hope that that goes some way towards reassuring the hon. Gentleman, although I suspect it will not.

Beyond the power to borrow up to £500 million for current spending, a Scottish cash reserve will be created so that the Government will be able bank and save money where tax receipts exceed those expected. These provisions will allow for effective financial management to deal with fluctuations in the new revenue stream of tax receipts.

We also set out in the Bill a brand new capital borrowing power of up to £2.2 billion. This will provide the Scottish Government with new means to invest in major infrastructure and other projects. It will be for Scottish Ministers and the Scottish Parliament to decide whether to borrow and, if so, for what purpose—a new Forth crossing, new hospitals, new schools or perhaps even a railway—and it will be for them to account to the Scottish people for those choices.

As a consequence of increasing the financial freedom and accountability of the Scottish Parliament to raise its own revenues, there will be a reduction in the existing block grant. The grant will continue to make up the remainder of the Scottish budget, however. That will ensure financial stability; it will ensure continuity of public service provision; and it will maintain the economic union that is so central to our United Kingdom. I know that views differ—both in this House, and further afield—on the broad issue of the block grant and, specifically, on the Barnett formula that underpins it. I do not expect those differences to be resolved today; indeed, the funding formula is not part of the Bill.

The Government have set out their position on the Barnett formula in their programme for government. While recognising the need to review the arrangements in time, our overriding priority is to tackle the deficit, and we will not consider a review until the public finances are returned to good health.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I welcome the fact that the right hon. Gentleman is dealing with the Barnett formula. Will there be anything in the new proposals to prevent a Scottish Government from receiving funding for one purpose and using it for something completely different?

[Michael Moore]

I am not entirely clear what the right hon. Gentleman has in mind, but it is the essence of devolution that the Scottish Parliament be free to spend the money it receives—either through the block grant or as a consequence of its tax-raising powers—on what it wants to spend it on.

[Mr Clarke]

The right hon. Gentleman might have had the opportunity to look at last week’s Sunday Herald, which led on the issue of disabled children in Scotland and their families and carers. It pointed out that £34 million, arising from UK Department for Education funding, had been allocated, but that the money had not been received. In the new approach to these matters, will there be more accountability than can be seen in that case?

[Michael Moore]

First, I pay tribute to the right hon. Gentleman’s distinguished career of campaigning on these issues and to all the hard work and effort he has put into that over many years. The fundamentals of devolution since 1999 mean that the Scottish Parliament and then the Scottish Government are able to decide how to spend all the revenue that comes to them, whether it be directly through the grant or, to use a shorthand term, as a result of the Barnett consequentials. The hon. Gentleman is, of course, entitled to draw a distinction between how the money is spent south of the border and how it is spent north of the border. On occasions, the advantage might be the other way round, but I am afraid that that is the essence of devolution—it is for them to decide. The Bill enhances those principles rather than claws anything back.

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

The right hon. Gentleman is right that the essence of devolution means that the Scottish Government should not have their funding ring-fenced, as some have suggested it should be. However, the point raised by my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) related to accountability. I do not think that he was suggesting that we should ring-fence the funding transferred to the Scottish Parliament. It is a question of how there can be accountability to the UK Parliament. Perhaps there could be some way of bringing to this Parliament the ability to question the way in which money is spent by the Scottish Parliament. Intergovernmental and inter-parliamentary co-operation should allow such questioning to be pursued and, although my right hon. Friend has been trying to do that, he has not always been successful in getting the Scottish Parliament to respond.

[Michael Moore]

I respect the hon. Gentleman’s interest in these matters and I commend the way he has followed devolution developments over the years. The primary responsibility for accountability is to the Scottish Parliament. Governments of different hues have gone before the committee system and made statements in the Scottish Parliament; there are 129 Members of the Scottish Parliament and that is their primary function. Ultimately, as in this House, all are accountable to the electorate. What we are trying to do with accountability in this Bill is enhance the financial powers so that parliamentarians in Scotland can be made accountable not just for the spending decisions, but for the tax-raising decisions that precede them.

Let me finish my point about the Barnett formula. We do not intend to alter it or review its arrangements at this time. Nothing in the Bill, however, prejudges future changes to the funding formula. Rather, the Bill’s effect will be to make the Scottish Parliament more reliant on its own revenues and less reliant on the block grant to fund public spending in Scotland.

[Stewart Hosie]

In the Secretary of State’s comments on the Barnett formula—before the interventions—he said that he would not seek to change it until the economy has returned to rude health. I presume by that he means that this Government’s priority is to tackle the deficit. I see him nodding to that. It worries me slightly, then, that the additional capital borrowing powers require a consent per project, so will the right hon. Gentleman confirm that when a good, sensible, costed project comes up looking for additional capital consent, this Government will not use the excuse of the deficit in order simply to say no?

[Michael Moore]

I respect the thoroughness with which the hon. Gentleman usually approaches such matters, and he has clearly spotted the bit in the Command Paper that says that, as of 2013, we will introduce the new capital borrowing powers. In the first couple of years, there will be additional Treasury constraints in relation to the feasibility and appropriateness of projects, as a precursor to those capital powers being fully available, in 2015, to the Scottish Parliament and the Government formed from it.

[Stewart Hosie]

The Secretary of State has not quite given me the assurance I seek. The Command Paper also says that the powers will be subject to Her Majesty’s Government limits and controls. Will he confirm that the Government will not use their deficit consolidation plan as an excuse to say no to important new capital investment?

[Michael Moore]

I hoped that I had been clear, but I am happy to refer the hon. Gentleman back to the Command Paper, which is crystal clear on the availability of those powers from 2013, on the annualised basis set out. When the right projects are brought forward—as he and I seem to agree on this occasion, such projects will be those that help growth—such consent will not unreasonably be withheld. I hope that that reassures him.

Aside from the Government’s proposals, another set of financial arguments has been put forward as an alternative to the measures in the Bill. In recent months, there has been some discussion in the Scottish Parliament and the Scottish press about other approaches to fiscal devolution, and specifically about the idea of fiscal autonomy. However, its proponents have failed to come up with any credible proposals, or indeed any detailed proposals at all, while the economic arguments advanced in support of fiscal autonomy lack any firm evidence to support them.

[Stewart Hosie]

This is ludicrous. The Scottish Government have published the document, “Fiscal Autonomy in Scotland: The case for change and options for reform”. Saying that no work has been done is neither helpful nor accurate.

[Michael Moore]

The essence of debates in the House is that we are allowed to have opinions. I carefully used the word “credible”, and credibility is lacking in the Scottish Government’s proposals. The desperate efforts to undermine the proposals in the Bill have now been exposed for what they are.

[Malcolm Bruce (Gordon) (LD)]

Have the Scottish Government given an indication of the share of the national debt, and the share of the underwriting of the bankrupt Scottish banks, that the Scottish Parliament would be willing to undertake under fiscal autonomy?

[Michael Moore]

None whatever.

Implementing our new financial arrangements will require detailed work by the United Kingdom Government, the Scottish Government and a range of other stakeholders. We will approach the task in a carefully planned and phased way. The Bill provides the overall framework for the new arrangements, but more than legislation alone will be needed to give effect to the measures set out.

[Mr MacNeil]

On fiscal autonomy, how is it that tiny places such as the Faroe Islands, with a population of 48,000, and the Isle of Man, with 100,000, have infinitely more power than the Scottish Parliament, which represents more than 5 million people? Does the Secretary of State not see an anomalous situation there? The Scottish Parliament could easily have fiscal autonomy and control our fuel price, which in the Hebrides is £1.45 a litre, but in the Faroe Islands is £1.10 and 94p for petrol and diesel respectively.

[Michael Moore]

If the hon. Gentleman wishes to make his case in that way, people may or may not pay attention to him. What I am suggesting is based on Scotland’s size and where it is within the United Kingdom. I respect the fact that he and I fundamentally disagree about our vision for the future of Scotland. Those of us who are committed to the United Kingdom want a sustainable new financial basis on which Scotland is part of the Union. We believe that the Bill provides that basis, unlike the proposals that his party advocates.

The Bill and the Command Paper are not just about finance. The Calman commission examined the whole of the devolution arrangements and found that the division of policy responsibilities in the original Scotland Act worked well. It did, however, make recommendations to improve it further, which are reflected in the Bill. On justice, we will give the Scottish Parliament the power to legislate on air weapons, and give Scottish Ministers the power to set the drink-drive limit and a Scottish national speed limit. On health, we will give Scottish Ministers the power to decide which doctors in Scotland should be able to use drugs for the treatment of addiction. We will give the Scottish Government a formal role in key appointments to the BBC Trust and the Crown Estate.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

On the question of health, will the Secretary of State explain why the power to make decisions on abortion in Scotland will not be devolved?

[Michael Moore]

If I may say so, that is a delicate subject, which was debated carefully in relation to the original Scotland Act. The decision of the House at the time was that the matter would not be included within that Act, and there was no such proposal brought forward by the Calman commission or in any representations that I have received subsequently.

We will give the Scottish Parliament power to administer its own elections, processes and procedures. There are also some areas where, for good and practical reasons, the Calman commission recommended re-reservation of powers to Westminster. These, too, are included in our Bill: for example, the regulation of health care professions and corporate insolvency.

Finally, we have taken the opportunity to address the question of the official title of the devolved Administration: “the Scottish Executive”, as it is currently styled. The term “Scottish Government” has now become broadly recognised. We propose to make that official.

[Gordon Banks]

On the Secretary of State’s comments about insolvency, the Bill seems to take responsibility for liquidations back to the UK Parliament, and I support that, but why not do the same for receiverships?

[Michael Moore]

The Bill reflects the balance of the representations that we have seen and the different legal basis on which matters have been approached in Scotland to date. If the hon. Gentleman wishes to make the broader case in Committee, we look forward to hearing that.

[Jim McGovern (Dundee West) (Lab)]

On the Secretary of State’s point about the change to the Scotland Act to allow “the Scottish Executive” to become “the Scottish Government”, that term has been quite commonplace since the last Scottish general election. However, if there is no such thing as the Scottish Government in legislation, does he believe that the amendment tabled by the six separatists in the House is competent, as it refers to “the Scottish Government”?

[Michael Moore]

Far be it from me to be drawn into these matters. I can only assume that the amendment is competent, as it is on our Order Paper this afternoon. However, the common parlance is now “the Scottish Government”. It will help if Government Departments no longer feel that, legally, they must refer to the Scottish Executive, when nobody else does. Also, we will be able to refer to “the Scottish Government” in the House, rather than “the Scottish Executive”.

The Bill does not set out every proposal from Calman. In some cases, legislation is not required. For example, the commission recommended much closer co-operation and communication between Administrations and between Parliaments. Many of the proposals require change to working practices, to which the Government are committed. I know that Mr Speaker, the Lord Speaker and the Presiding Officer will determine the appropriate basis on which to develop relationships between our Parliaments.

In fulfilling our commitment to implement the Calman recommendations, there are some cases in which we have deviated from the precise recommendations because the policy content at UK level has changed, for example in relation to air passenger duty, which the Government are reviewing. In other cases, however, we have gone further than the commission, building on and strengthening its recommendations. This is the first time since the creation of devolution that a Government have brought forward legislation with such wide-ranging effect on the current settlement. Indeed, the Bill will fundamentally change the powers and responsibilities of the Scottish Parliament. For that reason, the Government will proceed with the Bill only with the formal and explicit consent of the Scottish Parliament. It is right and proper that the Scottish Parliament should examine the measures that we set out in the Scotland Bill. I welcome the thorough way in which it is going about its business, and I look forward to returning to discuss the provisions with the Bill Committee in the Scottish Parliament next week.

Devolution breathed new life into Scottish politics and Scottish society. It brought government closer to the Scottish people, and it shaped a more confident Scotland in a more secure United Kingdom. The Bill extends that settlement for the future. The first chapter of devolution began with the Scotland Act 1998; the second chapter opened on St Andrew’s day, when we published this Bill. The Bill reflects the work of many across this Chamber and in Holyrood: work that we have undertaken together with consensus, strengthening Scotland’s future within the United Kingdom. I commend it to the House.

[Jim McGovern]

On a point of order, Madam Deputy Speaker. I raised this point earlier with the Secretary of State. Is the amendment competent, given that it refers to a Scottish Government who apparently do not exist at the moment?

[Madam Deputy Speaker (Dawn Primarolo)]

The amendment is in order, otherwise Mr Speaker would not have selected it for debate.

13:11

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

Now that we have resolved that little matter, I beg to move an amendment, to leave out from “That” to the end of the Question and add:

That this House, while recognising the need to further enhance the powers of the Scottish Parliament, nevertheless believes that the measures the Scotland Bill seeks to devolve are inadequate to meet the ambitions of the Scottish Government for the people of Scotland; considers the measures relating to air weapons, road safety and drink driving to be incomplete; regrets that the Calman Commission’s recommendations to devolve the aggregates levy and air passenger duty, and to devolve responsibility for the marine environment to match the Scottish Parliament’s responsibility for fisheries, as well as its proposal for a Scottish role in welfare benefits, have all been abandoned; regards the proposals for the Crown Estates Commission as inadequate; deplores the proposals in the Bill to re-reserve already devolved responsibilities; concludes that the tax varying provisions would embed a long-term deflationary bias in Scotland’s budget and that the proposed borrowing powers remaining subject to HM Treasury controls and limits render them insufficiently flexible; and therefore considers the Bill as a whole to be unacceptable.

I welcome the Second Reading of this Conservative-led Government’s Scotland Bill, and, like my hon. Friends, look forward to debating the further transfer of powers and responsibilities to the Scottish Government. The House will find the Scottish National party a willing and diligent partner in ensuring that the Bill is debated properly. What we have seen today, however, is remarkable. We have seen a Liberal Secretary of State for Scotland lead, on behalf of a Conservative-led Government, a debate on a Conservative-led Scotland Bill that was initiated in the Scottish Parliament by a former leader of the Scottish Labour party. This is cross-Unionist consensus in all its Conservative-led glory. I believe that, given the consequent lack of scrutiny that will be offered by Her Majesty’s Opposition, along with the disappearance of what remains of independent thought on the Liberal Benches, the task of scrutinising the Bill will be left to the Scottish National party. It is we who will scrutinise the Bill in the interests of the Scottish people, and we will do so most diligently and sincerely.

[Malcolm Bruce]

If that is the attitude of the Scottish National party, why have its members taken no part in the constitutional convention or the Calman commission over the years, and then appeared at the last minute, in a grudging and curmudgeonly fashion, to take part in a debate that they have not entered into for 25 years?

[Pete Wishart]

It is a matter of principle. I know that the right hon. Gentleman knows very little about principle in the context of the Liberal Democrats, but we happen to believe in independence. It may have escaped his attention, but that is what our party is all about. The fact that a reference to independence was not included in—indeed, was intentionally excluded from—the wording of the Calman report meant that if we were to retain our principled position, we could not participate. That is what we call principle, and perhaps that is a little lesson for the right hon. Gentleman.

[Anas Sarwar]

The hon. Gentleman has criticised the Calman process, which involved three parties working together. We rarely agree on much, but we did agree on Scotland’s future. The SNP, however, had the “national conversation”, which cost almost £1 million, asked only seven questions, received a grand total of 222 responses, and has not resulted in a single new power for Scotland. It was nothing more than a vanity project for the SNP. It was not a national conversation, but a national waste of money.

[Pete Wishart]

I thank the hon. Gentleman for his intervention.

[Several hon. Members]

rose—

[Pete Wishart]

I will take interventions in a minute, but, if hon. Members do not mind, I will make a little progress first.

As I was saying, scrutiny will be left to the Scottish National party. Throughout the Bill’s passage, we will support measures that will effectively transfer power from the House of Commons to the Scottish Parliament. We will offer solutions to the inconsistencies and problems that have been identified. We will strenuously oppose the parts of the Bill that suggest the re-reservation of certain matters such as the regulation of health professionals and insolvency. We will also strenuously oppose financial measures that would mean a cost to the Scottish people of £8 billion since devolution.

[Michael Moore]

Will the hon. Gentleman give way?

[Pete Wishart]

I will certainly give way to the Secretary of State.

[Michael Moore]

I want to nail this nonsense about the £8 billion. Of course it is possible to take one particular year, which happens to be the worst year in the middle of the worst recession since the war, and to make assumptions about a 20-year period on the back of it, but that is complete and utter nonsense. It is not the way the figure should be calculated. I refer the hon. Gentleman to the figures from the Scotland Office, which show a £400 million surplus.

[Pete Wishart]

I am grateful to the Secretary of State for that correction. He has conceded that it is possible that this could have happened. However, I heard him say on the radio this morning that the figure was not £8 billion, but £700 million. That makes it all right, does it? That is all that Scotland would have lost over the past 10 years.

[Michael Moore]

The hon. Gentleman is usually fair, and I should hate him to miss the opportunity to be fair on this occasion. [Interruption.] Okay, I am being generous.

What I was doing was correcting the hon. Gentleman’s colleague in the Scottish Parliament, who had suggested that the figure could be £700 million. Again, it would depend on where the line in the sand was drawn. Conveniently, in this instance the line was drawn in 2010-11. When we roll forward to 2014-15, we arrive at a £400 million surplus rather than the nonsense of the £8 billion that the hon. Gentleman is talking about.

[Pete Wishart]

And the Secretary of State accuses me of being selective! It is not possible to be more selective than he has just been.

We will never agree on these issues. What we have seen as a result of the work of the Scottish Government is an £8 billion loss to the Scottish budget since devolution in 1999. The Secretary of State, making the same assumption, said that £700 million would be lost to the Scottish people over the past 10 years. That is unacceptable to us, and we will have nothing to do with it.

[Stewart Hosie]

I think that the Secretary of State is confused. He has talked of basing the figure on a single year, which was the worst year, and has said that there would not be an £8 billion shortfall. Of course he is right, but no one has ever said that. We are talking about the cumulative impact had the Bill been in operation between 1999 and 2011-12, not 2014-15. I am disappointed, because the Secretary of State is normally fair, but on this occasion he has failed even to understand the argument that has been advanced against him.

[Pete Wishart]

I am grateful to my hon. Friend, who knows about these issues and understands the difficulties that the Bill would create.

Why are we giving the Scottish Parliament new fiscal responsibilities that would damage it? That is one of the proposals that we will seek to correct during the Bill’s passage. We will be making suggestions about how it could be dealt with. We are prepared to work with the Government, because we want to improve and strengthen the Bill. We want to make it a powerhouse Bill that will serve our nation and be a credit to the communities that we serve.

As we have heard, the Bill has already been debated in the Scottish Parliament, and has been subject to what has been described as an independent Bill scrutiny Committee. I certainly hope that the proceedings in the House of Commons will be a bit more useful and relevant than what we have seen in the Scottish Bill Committee thus far. We have seen a Labour convener haranguing and harassing independent witnesses, as a result of which several have decided not to take part in the proceedings because of what they feel is an in-built bias. The Scottish Bill Committee seems to be more interested in considering options that are not even in the Bill than in examining the dangerous tax plans that it contains. I hope that we can do a bit better than that down here, Madam Deputy Speaker. As you know, and as we are already observing, Scottish debates in the House of Commons are always characterised by their good nature and conviviality.

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

The hon. Gentleman cannot have it both ways. He cannot say that he wants rigorous scrutiny, and then say that we were too hard on people who provided false information in support of his case.

[Pete Wishart]

I do not know what the hon. Lady is referring to. I have never said anything about false information.

In a spirit of consensus and co-operation, let us start with the issues on which we all agree, for obviously there are such issues. We all agree with the Secretary of State and with our Labour colleagues that devolution is, in the words of Donald Dewar, a process and not a one-off event, and that is important. We may disagree on the conclusion of that process—we believe in independence, and my Labour colleagues believe in something else—but we all agree that devolution is a process, and that we will continue to see a transfer of powers from the House of Commons to the Scottish Parliament.

A point was made earlier about the reference to the Scottish Government in the amendment. When I first came to the House 10 years ago, Labour Members were appalled at the prospect of a Scottish Government. The Secretary of State probably remembers the debates in which they expressed their view. They helpfully said, “They can call themselves ‘The White Heather Club’ if they want, but they will never be a Government.” We are a Government now, thank goodness, and the Labour dinosaurs, some of whom I see in their places, will never go back to having an “Executive” running Scotland. That is a good thing too.

An important new development is that we all agree now that some financial powers—fiscal powers—should be devolved to the Scottish Parliament. We never had that important source of agreement before. We fundamentally disagree on the measures in the Bill, but we agree that financial responsibility should be a feature of the Scottish Parliament. I look forward to that, and that is another area of agreement. We will oppose measures in the Bill, but it is good that we now all agree that financial powers are required for the Scottish Parliament.

The most important thing that everyone in this House can agree on—this ran through everything to do with Calman—is that the Scottish Parliament has been an overwhelming success. The Secretary of State is of course right to say that there is no question—only people on the fringes of politics in this House would even suggest this—of ever going back to having no Scottish Parliament again. What typifies that more than anything is the fact that a Conservative-led Government are legislating for more powers and responsibilities to be given to the Scottish Parliament, because only 12 short years ago the Tories campaigned so energetically against the Scottish Parliament. That shows the progress that we have made, and there will be areas of agreement as we go through the Committee stage in this House.

Although we agree on many things in the Bill, there are many things with which we fundamentally disagree.

[Margaret Curran (Glasgow East) (Lab)]

rose—

[Pete Wishart]

This is probably one of them.

[Margaret Curran]

The hon. Gentleman’s contribution seems to contain an inherent contradiction, because he is saying that he welcomes the Government’s introduction of this Bill, yet it is widely observed that they are doing this because of the work of the Calman commission and his party has criticised and refused to participate in its work. The Calman commission has led to great progress for Scotland but, yet again, the Scottish National party has opposed the Calman commission and held it back.

[Pete Wishart]

That was an unfortunate intervention, because I give the hon. Lady more credit than that. I was trying to think of issues on which we agreed and I thought that we would hear a more helpful intervention. It was just the Labour party resorting to type and it was unfortunate that we had to hear it.

Although we agree on much, there are a few areas where we disagree.

[Mr Donohoe]

Then give us some.

[Pete Wishart]

I will oblige the hon. Gentleman. The Bill is a massive wasted opportunity for Scotland, because so much could have been included in it and we could have done so much to improve the position of Scotland. The Bill could have included measures to help our economic performance and increase growth. The Bill seems to contain a wee modest set of proposals that lack any real ambition to propel Scotland forward; it offers few solutions to provide Scotland with what it needs to take our nation forward; and, as I have said, it offers nothing in the way of a framework to increase economic growth in Scotland.

[Anas Sarwar]

Will the hon. Gentleman give a direct answer to something? Why did the SNP not make a submission to the Calman commission?

[Pete Wishart]

The Calman commission was proposed by the three Unionist parties, and discussions have gone on all the time with the Scottish Government about implementing the Calman proposals. Who put two of the main Calman proposals—on airguns and speed limits—before the Scottish Parliament? We could have legislated on those last year. The SNP said that it was prepared to take forward the Calman proposals where they were useful and helpful to the people of Scotland. Who refused to allow us to take those proposals forward? It was the Labour party, so I will take no lessons about trying to ensure that the Calman proposals are taken forward.

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

Does the hon. Gentlemen agree that had the SNP been more engaged with Calman and taken part in the coalition building that was necessary to come forward with the Scotland Bill, it might have got more of its views reflected in the Bill? By not taking part in that process, the SNP ensured that those views were inevitably not considered.

[Pete Wishart]

Why was independence excluded in the setting up the Calman commission? Why could we not have included everything? Had we done so, everyone would have taken part and put forward their own proposals to move Scotland forward. But, with their legendary cunning, the oh-so-clever Unionists said, “How do we trap the Nats when it comes to looking at how devolution continues?” They resorted to type, as they did on the constitutional commission. These cunning Unionists sitting around the table said, “What we’ll do is exclude independence from any discussion about the future of Scotland,” and that is what they did.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

May I ask the hon. Gentleman what happened to his party’s cunning plan: the referendum on independence?

[Pete Wishart]

The right hon. Gentleman asks a fair question, and he will find out the response in May, when a Conservative-led Government attempt to secure and save their seats in Scotland. Then we will have a debate about full powers for the Scottish Parliament and then we will see the result in his constituency and area.

I shall try to get back to what I was discussing. Believe it or not, I was still talking about areas of agreement, although I was moving on to areas of disagreement. As I said, the Bill contains modest ambition for Scotland but it also contains a range of very dangerous tax plans that could significantly hurt the Scottish economy and short-change the Scottish people. As we have seen in today’s exchanges, the tax plans are the most hotly contested, keenly debated and contentious part of these proposals. As I have said to the Secretary of State, by way of figures that he keenly and hotly disputes, this approach would have cost the Scottish people some £8 billion since the establishment of Scottish devolution in 1999. I heard him on the radio saying, “It would only have been £700 million”, but what we are starting with is devolving a series of measures—

[Michael Moore]

rose—

[Pete Wishart]

I think we have been through all this before, but the Secretary of State might want another shot.

[Mr Donohoe]

On a point of order, Madam Deputy Speaker. May I suggest, Madam Deputy Speaker, that you gently remind the hon. Gentleman that he should speak to his amendment? He has been talking for some 15 minutes and I have not heard anything about the amendment.

[Madam Deputy Speaker (Dawn Primarolo)]

I am grateful for your assistance in this matter, Mr Donohoe. I will decide whether the hon. Gentleman is in order. At the moment he still is and he is taking interventions. I am listening to all the contributions keenly, and I believe that the Secretary of State was about to give a response.

[Michael Moore]

Thank you, Madam Deputy Speaker. The hon. Member for Perth and North Perthshire (Pete Wishart) cannot keep repeating this figure of £700 million. I was pointing out how it was slightly unfortunate that his colleague in the Scottish Parliament, Fiona Hyslop, chose to use one figure and ignore the £400 million surplus, which is the more relevant figure.

[Pete Wishart]

I am grateful to the Secretary of State for finally clearing that up.

I was talking about a measure that is actually a Tory budget cut to the Scottish Parliament and, unfortunately, the nodding dogs of the Labour party are supporting the Conservative-led Government’s cuts and assault on the Scottish budget. Why have they taken us into this measure, which is to the great detriment of the Scottish budget? The SNP will not accept a Tory cut of this magnitude.

[Gordon Banks]

May I try to bring the hon. Gentleman back to his amendment, or even encourage him to start discussing it? Does he intend to vote against the Bill? After all, his amendment states that he

“considers the Bill as a whole to be unacceptable.”

Is he going to support new powers for Scotland or rule against them?

[Pete Wishart]

Hon. Members seems to want to hear so much about our amendment. It states that the Bill is unacceptable; a cut of this magnitude to the Scottish budget is unacceptable. As I said, the SNP will scrutinise the Bill as it goes through Committee. I am not expecting any scrutiny of the Bill from Labour Members; I just expect them to sit there agreeing, complicit with the Conservative-led Government. We have tabled a reasoned amendment and, thankfully, Mr Speaker has accepted it. However, we will allow the Bill to proceed to Committee and seek to improve it there. Right now, the Bill is a broken Bill that needs to be fixed. There are serious difficulties with it and we will try to improve it. The challenge for the Labour party is this: will it support us in trying to improve the Bill?

[Sir Menzies Campbell]

In the interests of clarity, will the hon. Gentleman tell the House whether he intends to divide the House on his amendment?

[Pete Wishart]

We would not table a reasoned amendment if we did not intend to divide the House. Of course we are going to divide the House. The Bill is unacceptable, as we have said. If the right hon. and learned Gentleman wants to go home, he can do so, although I would suggest that he hang around.

[Anas Sarwar]

rose—

[Pete Wishart]

I am going to make a bit of progress because, to be fair, I have taken a number of interventions from the hon. Gentleman.

[Mrs Eleanor Laing (Epping Forest) (Con)]

Will the hon. Gentleman give way?

[Pete Wishart]

No, I am going to try to make progress, if the hon. Lady will allow me.

[Mrs Anne McGuire (Stirling) (Lab)]

rose—

[Pete Wishart]

I will give way to the right hon. Lady later, but I now wish to get through my speech.

Parts of the Bill are unacceptable to us, but, in other ways, it is merely perplexing. We shall, thank goodness, finally get devolution on the regulation of airguns. I have campaigned on that issue, as have colleagues in the Scottish Parliament. Airguns cause such a blight to so many communities.

[Anas Sarwar]

Will the hon. Gentleman give way?

[Pete Wishart]

I want to make some progress.

Airguns blight so many communities in Scotland, but it is perplexing that we shall get devolution on all airguns except the most dangerous ones. I am sure that the less dangerous ones also have an impact on communities, but surely, by definition, the most dangerous ones must cause most of the damage. Similarly, we are going to get devolution on speed limits.

[David Mundell]

Will the hon. Gentleman give way?

[Pete Wishart]

I am going to try to make a bit of progress, even though it is the Minister’s good self who wishes to intervene.

Thank goodness we are getting devolution on speed limits, because we have long argued for that. Some of my colleagues in the Scottish Parliament have campaigned hard for it. However, we find that we are not going to get control over freight, heavy goods vehicles or anything that is towing a caravan. The most perplexing thing of all—you will like this one, Madam Deputy Speaker—is that the regulation of activities in Antarctica are to be reserved to this House. Just in case anyone was in any doubt, Antarctica is now listed as being reserved to the Westminster Parliament. Colonies of penguins are already pulling down the saltire and hoisting the Union Jack in joyous celebration of that fact. Thank goodness for the Scotland Bill letting us know that fact about Antarctica!

[Mrs McGuire]

Will the hon. Gentleman please explain what the Scottish Government would do in their relationship with Antarctica if he had his way and the matter remained devolved to Scotland?

[Pete Wishart]

I know that it has been a feature of the Labour party in Scotland, particularly through its leader, to upset and antagonise friendly nations around the world. If you will excuse me, Madam Deputy Speaker, I will refrain from making any more comments about Antarctica.

How has the Bill been met in Scotland? There has been a curious sort of disappointment about it, and an “Is that it?” shrug of the shoulders. There has been no bunting hung out in the streets of Edinburgh, and no images of the Secretary of State emblazoned from the flagpoles of the nation. There is a real sense of frustration that civic Scotland has effectively been excluded from any proceedings on the Bill. We have heard many people ask why they were not consulted on it and brought on board. There has been very little consultation on the Bill, and there is a great deal of frustration about that.

This Bill is what happens when a cross-Unionist consensus gets put through the wringer by a Tory Government in Westminster. It was a Labour Government who initiated the Calman proposals, and it will be a Tory-led Government who will conclude them. In that process, the stuffing has been knocked out of some very good Calman proposals. As I have said, only 35 of the 60 proposals have survived.

[Mr Donohoe]

The Calman report proposed that air passenger duty should be included in the provisions, but it has been excluded for very good reasons. Can the hon. Gentleman give an estimate of the amounts that would be raised through air passenger duty from Scottish airports? And, just as an aside, can he tell us what the level of duty is at the moment for people travelling from Scotland to England?

[Pete Wishart]

The Secretary of State said in response to an intervention that air passenger duty could not be considered because it is being considered by Europe just now, but it was being considered by Europe when Calman was looking at these matters as well. There is no real difference between then and where we are now.

I am not just talking about aviation duty. I am talking about the fact that only 35 of the 60 Calman proposals have survived. This is a question not so much of Calman-plus, as the Secretary of State and the Liberals like to say, as of Calman-half. Useful Calman proposals such as those on the devolution of welfare measures—including much-needed measures on immigration—on the marine environment and on taxes on aviation and aggregates have been left out of the Bill. Other Calman proposals have been significantly watered down. They include the proposals on the administration of elections, which will still effectively be reserved to this House, on appointees to the BBC and on the Crown Estate, about which we have growing concerns.

We will be constructive in trying to get this Bill through, but I really hope that the Tory-led Government will take seriously our attempts to improve it. I do not know whether Labour Members will continue to be nodding dogs as the Bill goes through, or whether they will join us in trying to improve and strengthen the Bill to ensure that we get better legislation for the people of Scotland. It most definitely needs improvement if it is to meet the aspirations and ambitions of the Scottish people.

[Mrs Laing]

The hon. Gentleman is making an important point about the aspirations of the Scottish people. He also made an important point about the financial position. Is he arguing that £800 million—or a similar figure, whatever it might be—was spent in Scotland over the past decade and that, had the provisions of the Bill already been in place, it would not have been spent in Scotland? If that is his argument, where did that money come from?

[Angus Robertson]

Scottish taxpayers.

[Pete Wishart]

As my hon. Friend has just said, it came from Scottish taxpayers. I am grateful to the hon. Lady for asking that question, because that is exactly what would have happened: we would have been deprived of that budget if these proposals had been in place. That is why we are saying that they are so dangerous, and why they should be considered once again.

When the 1998 Scotland Bill went through, the then Labour Government were prepared to accept only one amendment. It related to the devolution of the regulation of stage hypnotists. I am sure that stage hypnotists were delighted that they were going to be regulated from Scotland. As we take this Bill through the House, let us try to do a bit better than that. The fact that we are having this debate at all shows that we are on a journey down the road of constitutional reform. We will be having the debate in the run-up to May this year, and I know where I want it to conclude. We have the opportunity to strengthen the Bill.

[Anas Sarwar]

The hon. Gentleman has said repeatedly that he agrees with parts of the Bill, and he accepts that 35 new powers are being devolved to Scotland, but his amendment ends by proposing that the House

“considers the Bill as a whole to be unacceptable.”

Will the hon. Gentleman, who believes in independence, be voting against new powers for Scotland?

[Pete Wishart]

Of course we will not be voting against new powers for Scotland. We will be raising, throughout the Committee stage of the Bill, the dangerous proposed tax powers and the £8 billion that would have been lost to the Scottish people over the past 10 years had they been in place.

[Mr MacNeil]

Surely the big question for Labour Members is whether they want a strong Scottish Parliament to protect Scotland from any cuts that will come from the Tories and the Liberals. In the 1980s, we saw the Conservatives preferring Margaret Thatcher to independence; this time, we see Labour preferring a Tory Government to an independent Scotland. That is the reality.

[Pete Wishart]

rose—

[Madam Deputy Speaker (Dawn Primaralo)]

Order. Perhaps we could now return to the amendment, Mr Wishart.

[Pete Wishart]

Thank you very much, Madam Deputy Speaker. My hon. Friend has made his point in his typical and obligatory forthright manner.

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

I am not sure whether the hon. Gentleman understands the procedures of the House. Does he not realise that, if his amendment were successful, these 35 new powers would not be transferred to the Scottish Parliament? He and his colleagues are trying to prevent the Scottish Parliament from getting the new powers.

[Pete Wishart]

This is a reasoned amendment. We are inviting the House to look at the many difficulties in the Bill and to consider how it might be improved.

[Graeme Morrice (Livingston) (Lab)]

rose—

[Gordon Banks]

rose—

[Pete Wishart]

I will not give way because I am about to finish my speech.

We have the opportunity to strengthen the Bill, and I want Labour colleagues to work with us to—

[Anas Sarwar]

Will the hon. Gentleman give way?

[Pete Wishart]

I am about to conclude, if the hon. Gentleman will allow me.

This is clearly an insufficient Bill, a broken Bill, a Bill that does not serve the interests of the Scottish people. There are many things that we could do if we could work together, but we have to hear from Labour Members that they accept that the proposed tax powers are dangerous and that we have to do something about them. We cannot have this Tory-led Government bringing forward a budget cut in disguise. We need Labour’s support if we are to try to prevent that.

[Anas Sarwar]

On a point of order, Madam Deputy Speaker. Before the hon. Gentleman concludes, may I point out that I do not feel he has spoken about the amendment? I wonder whether he will do that before he concludes.

[Madam Deputy Speaker (Dawn Primarolo)]

Fortunately, it is not for the Chair to remind Members that they have not necessarily referred to every point in their amendments. Members of the House can draw their own conclusions.

[Pete Wishart]

Thank you very much, Madam Deputy Speaker. I am sure that the hon. Member for Glasgow Central (Anas Sarwar) will get to make his own point in his own forceful way if he catches your eye.

I was about to conclude, Madam Deputy Speaker, and I shall conclude on the subject of the reasoned amendment. I want right hon. and hon. Members to support our amendment. We want to try to improve this Bill. It is a broken Bill; it is a Bill that does not serve the people of Scotland. The tax powers will be dangerous if they are implemented. I hope that hon. Members will support our approach as the Bill goes through. Let us strengthen it and make it a powerhouse Bill that serves the people of Scotland. As it stands, it is a broken Bill that cannot serve the people of Scotland because of the financial powers in it. I urge everybody to support our reasoned amendment.

13:39

[Mrs Eleanor Laing (Epping Forest) (Con)]

It is always a pleasure to speak after the hon. Member for Perth and North Perthshire (Pete Wishart)—and sometimes at the same time as him. I always admire his passion and his genuine belief that he is doing the best thing for Scotland. I hope he does not mind me saying that his heart is in the right place, but unfortunately his head and his fiscal understanding are not.

The hon. Gentleman made some important points, particularly about tax-raising powers and the effect of this Bill. I was much perplexed by his response to my intervention a few moments ago. Whether the amount is £800 million or £600 million—or whatever the very large sum is that he and his party argue was spent in Scotland over the past decade but would not have been if the Bill had been in place—his answer was that that money came from the Scottish taxpayer. That is not correct: the money came from the UK taxpayer.

With equal passion, the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who has unfortunately just left the Chamber, begged a few moments ago that the people of Scotland should be protected from cuts. The people of Scotland cannot be protected any more than the people in the rest of the United Kingdom from the effects of 13 years of bad financial management of our country’s economy by the Labour Government.

[Mr Donohoe]

Oh come on now, Eleanor.

[Mrs Laing]

The hon. Gentleman seeks to disagree with me, in a mild way and from a sedentary position, but the facts speak for themselves. The country’s finances are in a mess. Yes, we all want to protect people in all parts of the country, but there is no argument for protecting Scotland to a greater extent than the rest of the United Kingdom.

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

Does my hon. Friend agree that the operation of the Barnett formula in its strictest sense will protect the Scottish budget at times of reduction in the overall UK level of public spending? A population change is taken on the basis of a higher-than-average base line, so in times of public expenditure reductions, that will protect the Scottish block.

[Mrs Laing]

I entirely agree with my hon. Friend and I am grateful to him for making that point at this stage in the debate. I am glad to say that he is something of an expert on this subject, having been steeped in it for many years. He is absolutely right; it is also very important, for the reasons he has just stated, that we keep the Barnett formula. That is the way to protect the people of Scotland not from the effects of the Conservative-led coalition but from the effects of 13 years of Labour mismanagement of the economy.

[Stewart Hosie]

I am grateful to the hon. Lady, who is sadly wrong, as is her hon. Friend the Member for Milton Keynes South (Iain Stewart). Barnett is of course a convergence formula and, far from protecting in the way that the hon. Gentleman suggests, it squeezes. More importantly, the hon. Lady was making the case that we should not do things differently, but of course that is the nature of devolution. If the Scottish Government had proper fiscal and economic control, they could well take steps different from those taken throughout the UK to protect and grow the economy. What would be so wrong with that?

[Mrs Laing]

That is exactly why the provisions of this Bill, which give more accountability and power to the Scottish Parliament, are absolutely right. The hon. Gentleman makes a good argument in favour of the Bill.

Until a few moments ago, I was going to say that it is good to see such cross-party consensus on the Bill. Of course, we have cross-most-party consensus, but not consensus with those in the Scottish National party. We understand that however much they seem to be stepping back from their long-held belief that we ought to move towards an independent Scotland—I do not understand why they do not have the courage of their convictions and go ahead and ask the people of Scotland—they want to go on a different path from the rest of us on protecting and helping Scotland, and giving it the best chance for the future.

I want to pay tribute to Donald Dewar, who did a wonderful job in setting up the Scottish Parliament. That was not what I said in 1997 and 1998 as we debated the original Scotland Bill for hour after hour, day after day and week after week. It was strange that the hon. Member for Perth and North Perthshire said at the beginning of his speech that this Bill would not be properly scrutinised. I can assure him that those of us who spent weeks and months scrutinising the Bill that became the Scotland Act 1998 will find this nice little Bill a piece of cake in comparison. Of course it will receive proper scrutiny.

Back in 1997 and 1998, we properly scrutinised the Scotland Bill. Many of us said over and over again that the devolution settlement that was being created would not work in the long term and would have to be amended and improved. I am very pleased to see this Bill make the improvements that some of us have thought necessary for a long time.

[Mrs McGuire]

I am one of the campaign veterans from those long days and nights spent scrutinising the Scotland Act 1998. Will the hon. Lady remind us of the position of the Conservative party at that time? I am not sure whether it was so much about scrutiny as about opposition.

[Mrs Laing]

It was; the right hon. Lady is right. As I said when I paid tribute to Donald Dewar a moment ago, that was not what I said in 1997 and 1998. The position of the Conservative party at that point was to oppose devolution. Of course it was; it is no secret. I for one thought that that was the best settlement for Scotland. I appreciate, however, that the Scottish Parliament has grown in stature and become an important part of the lives of the people of Scotland. It is there, it performs an important duty and it defends the law of Scotland—the right hon. Lady will agree that I always defend that. The Scottish Parliament performs an important function in our new constitutional settlement in the United Kingdom.

Although I would originally have preferred to have seen an enormous amount of taxpayers’ money saved by our not setting up the Scottish Parliament, I now appreciate—I speak only for myself, not for my party—that it performs an important duty. As I have said for more than 12 years, however, it is essential that the constitutional settlement be improved. Donald Dewar, to whom I am still in the middle of paying tribute, worked for decades to achieve the Parliament and I am sure that all hon. Members will agree how sad it is that he did not live to see the complete fruition of his labours. Had he done so and remained the First Minister for a longer term, I believe the standing and status of the Scottish Parliament would have grown more quickly. However, it is where it is now.

[Mr McCann]

I might not agree with the hon. Lady’s view of the economic situation, but does she share my view that the difference between the parties in this House that back the Union and those on the nationalist Benches is that we want to finesse the devolution settlement to make it better, while they see this as a foot in the door to move further towards independence?

[Mrs Laing]

I am very pleased to agree entirely with the hon. Gentleman—this is an unusual debate.

During the passage of the original Scotland Act, many of us argued that it would work in that form only if one made the assumption, as the then Government understandably wanted to, that there would always be a Labour Government in Westminster and a Labour majority in the Scottish Parliament. That is how the settlement was set up. Now that the situation has, happily, changed, it is important that the whole constitutional settlement should be updated to take account of that.

[Mrs McGuire]

I respectfully suggest to the hon. Lady that that was not how the settlement was established. I do not think that any Labour or Liberal Democrat Member at that time would have expected that, for ever and a day, there would always be a convergence of the same political parties in both Westminster and Scotland. I would have hoped that the hon. Lady would give us credit for having established a far more robust devolutionary settlement than that. I think the past few months have vindicated the work that was done at that time.

[Mrs Laing]

It would be wrong to go back over arguments that we had more than a decade ago, but I stick to my point: it is necessary to make updates because of assumptions that were made then.

[Mr Donohoe]

Will the hon. Lady explain why, if the Labour party was so self-centred at that time, we allowed proportional representation?

[Mrs Laing]

I have never understood that and it is not for me to give the answer.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

The hon. Lady’s memory has been clouded through the years because at no point was the Scotland Act set up for a time when there would be solely Labour government at Westminster and Holyrood.

[Mrs Laing]

We are going back over old arguments now. I merely make the point that we always said that the devolution settlement would have to be improved and I strongly welcome the Bill, which does improve it.

The Calman commission is to be praised for the many years of work that were undertaken and for the careful and studied way in which its proposals were brought forward. This has not been a rushed job; I pay tribute to the previous Labour Government for setting the commission up and to the current Government for taking its recommendations forward. It has produced the right answers. By giving greater power to the Scottish Parliament, the Bill also gives a greater say to the Scottish people about how our democracy works. That is the most important point. It is right that greater power should require greater accountability and responsibility, as the Secretary of State has eloquently explained. If democracy is to work properly and if the people who vote and choose a Government are to be treated responsibly and have their opinions properly translated into action, it is very important that a Parliament such as the Scottish Parliament should not only be responsible for spending taxpayers’ money, but be held responsible, at least to some extent, for raising it.

I welcome the better clarification of the balance between devolved and reserved policy matters—those which ought to be taken at Holyrood and those which ought to be taken in this House. If we do not have that clarity, the whole constitutional settlement will lack the gravity I would like it to acquire, so the new clarity that comes from the Bill is very welcome.

I promise that when we scrutinise the Bill in Committee, it will, contrary to the assertions of the hon. Member for Perth and North Perthshire, be properly scrutinised, and I look forward to our scrutinising it in great detail. The best thing about the Bill and the changes it will make to the constitutional settlement is that it strengthens and entrenches Scotland’s position within the United Kingdom, which most people in the House and, I fervently believe, in Scotland want to see entrenched, protected and encouraged. Although this is 27 January and not 25 January, I hope I will be forgiven for invoking the bard, as this is the week that we celebrate our national poet, Rabbie Burns. I shall not quote his best-known works, which are often so badly misquoted south of the border.

[Mr Donohoe]

On a point of order, Madam Deputy Speaker. I must correct the hon. Lady. Rabbie Burns was never known as Rabbie Burns. Rabbie, in Ayrshire parlance, is the village idiot: Robert was never known as Rabbie.

[Madam Deputy Speaker (Dawn Primarolo)]

We will take that as a point of clarification rather than a point of order.

[Mrs Laing]

I entirely take the hon. Gentleman’s point—I was being far too familiar and colloquial. Let me be more formal. This week, we celebrate the anniversary of the birth of our great Scottish national poet Mr Robert Burns, and one of his best poems makes the point that he was a true Unionist. “The Dumfries Volunteers” says clearly, at the end of its second verse:

“Be Britain still to Britain true,

Amang oursels united;

For never but by British hands

Maun British wrangs be righted!”

Long may it continue, Madam Deputy Speaker. We welcome the Scotland Bill because it totally strengthens Scotland’s position within the United Kingdom.

13:58

[Ann McKechin (Glasgow North) (Lab)]

It is now more than 12 years since the then Labour Government guided the pioneering Scotland Act 1998 through this House. I was proud to join thousands of fellow Scots of different political persuasions and of none in campaigning for its creation. It was undoubtedly one of Labour’s most important achievements. It has strengthened our democracy and brought government closer to the people and it works well in practice.

However, we recognised the need to review the challenges that the Scottish Parliament had faced in almost 10 years in operation—first, in how it could meet people’s desire to strengthen its functions, and secondly, in how to increase its financial accountability to the people of Scotland. The resulting Calman commission report was a serious, balanced and thorough analysis of Scotland’s constitutional arrangements. I would like to take this opportunity to commend Sir Ken Calman and his fellow commissioners for their work and the manner in which it was conducted. Despite the fact that the call for the establishment of the commission was initiated by a clear majority at Holyrood, it was rejected by the SNP Government, who preferred instead to engage in a costly, unpopular and one-sided so-called “national conversation” on a wholly independent Scotland.

[Pete Wishart]

Will the hon. Lady remind us how much the Calman commission cost?

[Ann McKechin]

The hon. Gentleman will no doubt remind us how much his national conversation cost, which resulted in not one piece of legislation and no change for the betterment of Scotland, whereas the Bill, we recognise, will strengthen our democracy and will be to the benefit of the people of Scotland.

[Pete Wishart]

The Calman commission cost £614,000, which is an extraordinary amount of money. It is what David McLetchie called “unionists talking to unionists”.

[Ann McKechin]

Sadly, the hon. Gentleman has not informed the House that his national conversation—the big blether with Alex—cost more than £1 million, and we have not had one single benefit as a result. That is a test that the very sensible people of Scotland will apply. They deserve better.

The Caiman commission agreed with our fundamental view, set out in our 2009 White Paper “Scotland’s Future in the United Kingdom”, that together the nations of the United Kingdom are stronger and that together we share resources and pool risks. Nowhere was that more apparent than in 2008 with the vital bail-out of our major banks by the Labour Government, which included two major Scottish institutions. The cash injected to salvage our Scottish banks was the equivalent of £10,000 for every man, woman and child in Scotland. Without the Union and the intervention of the UK Labour Government, Scotland would have been plunged into the depths of economic despair that smaller countries such as Iceland and Ireland, the previous poster boys of independence for the SNP, are sadly still suffering from.

[Mr Frank Roy]

Will my hon. Friend tell the House what would have happened had Scotland at that point been part of an “arc of prosperity”?

[Ann McKechin]

SNP Members have made no mention today of an analysis of what would have happened under fiscal independence during the period from 2007 to 2009. In fact, the SNP has produced no governmental analysis for that period. Recent estimates by experts indicated that Scottish tax income would have dropped by nearly £2.5 billion—and that includes a per capita share of North sea oil, before the Secretary of State and his colleagues on the Front Bench ask about that. The SNP Government have continually failed to produce detailed modelling of their case for separation. The analysis has to be done not only in the good times but in the bad times as well.

Indeed, the SNP’s case for fiscal autonomy is so weak and unconvincing that its Ministers in Holyrood are now accused of having had to resort to playing fast and loose with the facts of economic research to substantiate any case at all. We are firmly of the view, based on sound, independent evidence, that the economic union is Scotland’s greatest economic opportunity and that together we are stronger.

Let us be clear that the Scotland Bill was born of consensus and consultation and is a model example that Government should always follow, whether here in Westminster or at Holyrood, before laying legislation on such fundamental constitutional reform. While in government, we sought political consensus from the start. We initiated independent commissions and reports, embarked on a robust consultation with the public, civic society and experts, and we listened carefully when those people spoke. There is no such consensus and there was no such consultation prior to the Parliamentary Voting System and Constituencies Bill or, indeed, the Fixed-term Parliaments Bill, and the result has been rushed and biased legislation, which insults our democracy. The Tory-led Government have steamrolled those Bills through this House of Commons and into the House of Lords, showing scant regard for proper scrutiny and completely disregarding the opportunity to engage with interested parties and experts or the electorate whom they serve.

However, the Bill we are debating today is the antithesis of the Government’s other shoddy constitutional efforts. On the whole, it reflects most of the Calman commission’s recommendations, and accordingly there is much that we agree on. As the official Opposition, however, we will rigorously scrutinise the Bill to ensure that it represents the best deal for the people of Scotland. There are some areas of concern and issues that will require further clarification and amendment as we continue into the Committee stage, although I can assure the Secretary of State that we will not press the Antarctica clause to a vote. I am astonished that the dogma of the SNP is such that this one simple clause, which was clearly a mistake in the original legislation and has now, I understand, been corrected, will enable one of our finest universities to mount an expedition to Antarctica. Instead, the hon. Member for Perth and North Perthshire (Pete Wishart) seems to be more concerned about where the First Minister might spend his summer holidays.

[Pete Wishart]

I am relieved that we will see no Labour amendments on Antarctica. I am grateful that the hon. Lady said that the Labour party will be engaged in scrutinising the Bill, which is good news. What sort of amendments can we expect to see tabled in Committee?

[Ann McKechin]

Unlike the hon. Gentleman, who wants to stop this process in its tracks this evening, I believe that the Bill requires a proper period of thorough examination. There will be amendments that we believe are appropriate on technical issues and on the substance of the Bill.

[Gordon Banks]

Will my hon. Friend confirm that any amendments that we table in Committee will have more bearing and substance than the amendment that has been spoken about by SNP Members today?

[Ann McKechin]

I am happy to provide my hon. Friend with that assurance. Unlike some other parties, we are already listening carefully to and speaking with people and bodies in Scotland, as we have done throughout this process, which has already lasted three years.

There has been much discussion, both in the Scotland Bill Committee in Holyrood and beyond, of the effect of the proposed devolution of the fiscal powers set out in the Bill to the Scottish Parliament. We urge the Secretary of State to set out and make transparent at the earliest opportunity the precise plans that the Government intend to introduce to ensure operational stability during the transition and the measures he intends to put in place to control the costs incurred during those changes. In particular, it is imperative that the Scotland Office, the Scottish Government and Her Majesty’s Revenue and Customs are in full and frank consultation and that operational systems are put in place to ensure that changes are fully effective so that Scottish taxpayers do not see public moneys wasted during a period of difficult financial constraint. What discussions has the Secretary of State held with HMRC and the Scottish Government on the initial planning required to implement those substantial changes, and will he undertake to report regularly to the House on progress during the preparation period leading up to the next general election?

We also seek clarity on the definition of “Scottish taxpayer”, which experts have already highlighted could lead to a series of what we suspect are unintended anomalies. According to the Institute of Chartered Accountants of Scotland, a worker who spends 101 days in Scotland, 99 days in England and 165 days working overseas, for example, will still be deemed to be a UK resident and a Scottish taxpayer, despite spending less than half the calendar year in Scotland. A person who lives in Scotland but works in England would derive all their income from their activities in England but still be classified as a Scottish taxpayer because that is where they end their day. As the Secretary of State and his No. 2, the Under-Secretary of State, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), both represent border constituencies, that issue might be of direct relevance to their constituents. We understand that HMRC currently has no intention of introducing a concession to split the tax fiscal year to deal with the movement of workers across the border. None of those consequences seems particularly sensible, so we urge the Government to look carefully at the definition.

We are disappointed that the Government have not taken the opportunity to tackle the problems caused by the different approaches to the definition of “charitable purposes” and “charity” in the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Act 2006, which applies to England and Wales. They have failed to use this opportunity to introduce measures to reduce the regulatory burdens on UK charities that operate in both Scotland and other parts of the UK —particularly in difficult times when charities are already affected by the spending review cuts and bearing the brunt of the economic downturn. The Bill is the ideal place to address the issue, and to quote the Secretary of State’s right hon. Friend the Prime Minister, “If not now, then when?”

Let me conclude by reminding the House that the Bill is intended to preserve the political and economic union that has benefited both great countries over the past three centuries. The case for fiscal autonomy has disintegrated around the SNP, and its vision for Scotland is small, isolated and weak. Conversely, the Bill is designed to ensure that Scotland’s future in the United Kingdom is strong, enabling the Scottish Parliament to flourish further and to carry on improving the lives of people in Scotland.

[Mark Lazarowicz]

A large number of charities are headquartered in my constituency, and they regret the fact that the opportunity has not been taken to deal with this anomaly. Does my hon. Friend agree that, to allow the point to be dealt with, the Government could well consider tabling amendments in Committee? I myself am a director of a Scottish charity, but it is a local one that is unlikely to be affected by the provisions.

[Ann McKechin]

I am grateful to my hon. Friend. On that point, I agree that it would be helpful if the Government reconsidered their response to that recommendation by the Calman commission, because there is an additional burden on many very good charities that operate not only in Scotland but in other parts of the UK. They face two licensing processes and two sets of regulatory burdens, and, for a Government who always lecture people on reducing the regulatory burden, this is a good opportunity, working with the consensus among charities, to try to alleviate the amount of time they have to spend on paperwork and to increase the amount of time they have to spend on charitable purposes.

We will support the Bill’s Second Reading, not the Scottish National party’s amendment, if it is put to a vote. That does not mean we will not scrutinise the Bill carefully and closely, but, after almost three years of study and engagement with the Scottish public and with experts, and given the express will of the Holyrood Parliament, whose Committees are currently considering the matter in close detail, it is now important to get on with business and to put the Calman commission into legislation.

14:12

[Malcolm Bruce (Gordon) (LD)]

I am very happy to follow the hon. Member for Glasgow North (Ann McKechin), who made a fair analysis of the co-operation and consensus that have characterised the process over many years. She presented a constructive role for the Opposition, as is right and proper, in scrutinising and trying to improve the legislation, and in addressing some of the issues. I certainly hope that matters are proceeded with in that spirit.

I am very happy also to welcome the Bill, as someone who has been involved in the process since its very early days—indeed, for 25 or more years. Frankly, however, I see it as a further step along the way to home rule within the United Kingdom. I never thought, any more than others did, that the Scotland Act 1998 was the end of the process; most of us recognise that the constitution is evolving. The first Act, which established the Scottish Parliament, was seminal legislation, but it was always work in progress, and this Bill falls into the same category.

I hope that my right hon. Friend the Secretary of State for Scotland does not find any discomfort in that, but I completely understand that his role in government, operating on an agreed cross-party consensus, is to put forward a Bill that commands the support of the House and the Government and does not prevent any of us from arguing the case for further reform and development. That puts the SNP in a difficult position, but that is precisely where it wants to be.

For many of us who have been through this debate a few times, my previous point might sound ponderous, but we are making history because we are shaping the evolution of the United Kingdom’s constitution, and this stage will be monitored for many years to come as one of the stages along the route. It will represent the foundation of a much more radical and decentralised United Kingdom over time.

[Stewart Hosie]

I respect the right hon. Gentleman’s view that this is a process, and that he wants to reach what he calls home rule within the UK. I suspect that that probably means, in his mind and those of his honourable colleagues, effectively a federal position with full fiscal autonomy. I respect that position, but we do not have that before us, so why is he prepared to settle for a Bill that, while devolving speed limits for cars, will not allow the devolution of speed limits for cars drawing caravans? Why is he prepared to accept something so weak?

[Malcolm Bruce]

If the hon. Gentleman will let me proceed with my speech, he will receive the answer, precisely because I took part in the constitutional convention when it was set up in the 1980s. At that time, we and the Labour party were in opposition, but the Conservative party largely ignored the convention and the SNP boycotted it. Yet that constitutional convention carried out detailed and thoughtful work that laid the foundations for the first Scotland Bill and, in my view, for this Bill and probably the next one. The difference between my party’s approach and that of the SNP is that we, as a single party with an ambition, recognise that we cannot achieve on our own everything that we want; we have to work with others who do not necessarily share all our views. By working with them, however, we can progress towards what we want to achieve; if we refuse to co-operate, we cannot.

[Mr Mike Weir (Angus) (SNP)]

Will the right hon. Gentleman give way?

[Malcolm Bruce]

I shall make a little progress, if the hon. Gentleman will allow me.

At the time when the constitutional convention was established, there was a minimalist position. Many people in the Labour party were prepared to consider an assembly. I accept that many were passionately in favour, but others had reservations, and the minimalist position involved an assembly, elected by first past the post, funded by a block grant and operating with even fewer powers than the then Scotland Office.

The process—this is the real point that the SNP should take on board—of the constitutional convention meant that we finished up with a Parliament, with all the powers of the Scotland Office at that time, with a proportional voting system to make it much more nationally acceptable and, in fact, with non-defined reserved powers attached to the Parliament. That was a much more radical outcome than the original agenda, and one that would not have been achieved if my party and others had not engaged. At the time, I challenged the SNP to take part, because I wanted it to be there, knowing that it wanted independence but accepting that the party probably would not get it. The SNP’s involvement, however, might have helped us to gain more powers than we did. That is why I continually regard its all-or-nothing approach as damaging to Scotland and, ultimately, to the party’s own interests.

We got quite a lot of agreement, and that is relevant to this debate. Indeed, I think we got agreement in the convention on tax-raising powers, but they did not follow through into the original Scotland Bill. I remember that Donald Dewar even renewed his passport to travel to Germany, and Jim Wallace, Ray Michie and I went to Spain to look at that country’s arrangements. On our return, we more or less agreed on the proposal to assign half of all income tax revenues, and VAT and excise duties, to the Scottish Parliament. The fact that those proposals did not carry through into the first Scotland Bill—I think; I suspect—owes a lot to the resistance of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). The convention largely agreed to them, however, so I am particularly pleased that the Bill before us moves in that direction and will allow them to be introduced.

I also firmly believe—the Scottish National party ought to give thought to this—that those of us who have brought forward and will take forward this legislation are working with the grain of majority opinion in Scotland, in terms of wanting both more power and a step-by-step approach. Those of my constituents who are sympathetic to the SNP cause are puzzled as to why it cannot work with other people and take a step-by-step approach. We could all decide at what point we wish to get off, but that does not happen because the SNP knows that the majority of people in Scotland would get off long before it did.

[Stewart Hosie]

The right hon. Gentleman makes the interesting assertion—it is only an assertion—that he believes he is working with the grain of Scottish public opinion. I doubt that a single person has said to him, “That’s right Malcolm, we want 50% of the basic rate of income tax, 25% of the 40p rate and 20% of the 50p rate—that’s the grain in my street.” I do not think he is right when he says that.

[Malcolm Bruce]

No, but people have said to me, “I want independence, as long as I can still be a British citizen.” There is confusion in the minds of many people about what independence is. Two facts are clear: the majority of people vote for Unionist parties, and the majority of people say repeatedly that they want more power, but that they want to take it in an orderly and measured fashion. It is up to the politicians, to some extent, to work through what the priorities are and how they should be worked up. That is precisely what this legislation does.

In the end, the SNP’s position is anti-democratic, because it does not represent the majority. More to the point, it is unproductive. Frankly, it is downright lazy, because many of us have done an awful lot of work to bring these proposals forward. Having done nothing to create the Scottish Parliament, the SNP is happy to use it and abuse it. It takes a similarly curmudgeonly approach to this legislation. Of course it will not provide fiscal autonomy, which is, of course, a technical term for separation from the UK, as was pointed out by the Steel commission, of which I was a member. There is no mandate for that. The proposals do not go as far as I want them to go, but I have no hesitation in welcoming them as a constructive step forward that will allow us to test how greater responsibility and accountability will work. In my view, as and when that does work, it will justify future extension.

The Bill will give Scotland control over about 35% of its budget, which I hope will increase over time. It will ensure that Scotland has the capacity to demonstrate responsibility and accountability to justify more devolution. In an ideal world, I would like each tier of government to have access to part of the taxes that broadly finance its operations. In other words, each tier should be able to get more or less all its revenue from its own tax base, subject to the recognition that the UK Government have fiscal transfer responsibilities. Perhaps on a smaller scale, the Scottish Government should have some internal fiscal transfer responsibilities. That would be my ideal in the long run, but one has to take these things a step at a time and by negotiation.

I want to pick up on the point on which the Secretary of State has intervened two or three times. On a few occasions, I have heard the assertion—stated as a matter of absolute fact—that had this arrangement already been in place, Scotland would have lost £8 billion. As has been pointed out, if that were true—which it is not—it would be a clear demonstration of the benefit of being part of the United Kingdom, because that £8 billion would have been a transfer from the UK taxpayer to Scotland. Of course, the assertion is perverse nonsense. It is also retrospective, at a time when the balance is changing. It showed that, at a time of rising public spending, the Barnett formula delivered for Scotland at a faster rate than the rate at which incomes rose. Of course, at a time of public spending constraint, the reverse will be the case—the income tax take will rise faster than the Barnett formula consequentials. Over time, that can be averaged out—that is what the cash borrowing is for. That is the way that we should look at it.

The proposals give the Scottish Government the capacity to benefit from economic success, which grows the tax base and can potentially grow the revenue base. If they use their powers well, they will benefit from the buoyancy of the revenues. Of course, if they mismanage the economy, the reverse will be the case. The advantage of the Bill is that the transitional arrangements and the cash borrowing adjustments will provide a cushion to minimise the extremes of that effect. However, they will not deny a bit of pain if it goes wrong and a bit of benefit if it goes right. Over time, one hopes that that will become a more substantial amount.

[Stewart Hosie]

The right hon. Gentleman is simply wrong about this matter. Although the Scottish Government will control 15% of the taxes raised in Scotland, if GDP rises and the tax take rises, the rise in the income tax take will be lower than the average. That will have a deflationary effect on the Scottish budget and will not allow the Scottish Government to benefit in the way that he describes.

[Malcolm Bruce]

On the models that I have seen, the reverse is the case, particularly at a time of public spending constraint. The point is that it will depend on changes over time—some years it will be up and some years it will be down. However, the proposals provide the potential for successful economic management to provide genuine benefit.

I would give more credibility to the SNP claims that the measures are inadequate to grow the Scottish economy if its record in government showed that it was using the powers it currently has in ways that will grow the Scottish economy, but it has not done that. We have seen a succession of populist consumer gimmicks; almost a complete collapse in public investment; and the slow strangulation of local autonomy. Local councils have less and less control and more and more centralised management through the freezing of council tax. There is effectively less flexibility across Scotland to gear responses to meet local needs.

[Margaret Curran]

Will the right hon. Gentleman comment on the Scottish Futures Trust? Does he see that as a model for using the levers appropriately to grow the Scottish economy?

[Malcolm Bruce]

My next paragraph relates to my constituency, and I am sure the hon. Lady can predict the answer to that question. I did not have a problem with the SNP saying that there were weaknesses in the public-private partnership method of financing, and that it wanted to look for a better method. I had a big problem with it abandoning all those projects and failing to come up with a better method, leaving us in total limbo. That has been catastrophic for investment in Scotland—catastrophic, not just seriously bad.

I am fortunate, privileged and honoured to represent the dynamic economy of the north-east of Scotland, which is probably the most dynamic economy in the whole of the United Kingdom at the moment. I and my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) represent the constituencies with the lowest unemployment rates in the United Kingdom. I appreciate that other hon. Members face serious problems of unemployment in their constituencies, so I am not boasting about this; I am simply acknowledging it. The point is that Scotland has a region with the capacity to deliver economic growth, yet the Scottish Government have conspicuously failed to deliver what they should have been doing to facilitate that growth.

There is no Aberdeen bypass. The Scottish Government today announced the go-ahead for an upgrade of the A90 north of Aberdeen. I am glad about that, but all they have done is to announce, a year after the public inquiry, that they intend to go ahead with it. There is no date, and it is dependent on the resolution of the western peripheral route, which is still subject to legal argument. When the SNP loses office in May, not one stretch of tarmac will have been laid and not one ditch will have been dug—nothing will have happened on the ground.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

What did the right hon. Gentleman’s colleagues in the previous Scottish Administration do to progress the Aberdeen western peripheral route? When did they make a decision to go ahead with it?

[Malcolm Bruce]

They published the line of route for both that and for the A90. It took the SNP four years to make no progress at all. It has not indicated how it will find the money or when the scheme will ever start.

I do not know what it is about the SNP, but it has a total hostility to railways. It either scraps, delays or fails to take forward every rail project. Part of the transport needs of Aberdeen, and part of the proposal for our bypass, was a commuter rail service to restrict the growth of road traffic and give people choices. Progress was being made with that, but not even the provision of one additional station has progressed under the SNP, in spite of cross-party support from all other quarters. We have had an SNP Government for four years, and they have had the powers to do things to grow the Scottish economy—limited those powers may be, but they have had them—and they have not done so. They should prove that they can do that before they demand more powers that they do not appear competent to use.

[Mr Weir]

The right hon. Gentleman has just made an outrageous attack on the subject of rail. He should ask the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) about the reopening of Laurencekirk station, for example. What about the Bathgate rail line? What about the Alloa-Stirling line stations? All those things happened under the SNP Government. What he said is simply incorrect.

[Stewart Hosie]

Withdraw! You said “no new stations”. Withdraw now!

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Mr Hosie, I think that is my business, not yours, and I would be very grateful if you did not shout across the Chamber.

[Malcolm Bruce]

I acknowledge that some of those things have happened, but the SNP has been very good at cutting the ribbons on projects that were announced, organised and set in motion by previous local or national Administrations.

[Gordon Banks]

The hon. Member for Angus (Mr Weir) mentioned the Sterling-Alloa railway line. The right hon. Member for Gordon (Malcolm Bruce) is exactly right—the SNP came and cut the ribbon, but the hard work was done under the previous Administration, not the current one.

[Madam Deputy Speaker]

Order. Many speakers have gone very wide of the subject in illustrating the points that they wish to make. Mr Bruce, I would be grateful if you came back to the subject of the Bill in responding to the intervention.

[Malcolm Bruce]

I will of course observe your strictures, Madam Deputy Speaker, but when we are talking about powers, it is important that we also discuss our capacity to use those powers effectively. My contention is that the points I have made show why we need to take a step-by-step approach and demonstrate how well we can use our powers, and then hopefully take more of them.

Those who want to go faster have to acknowledge that Scotland’s capacity to take on the full responsibility for its own financial affairs is beyond credibility in the present circumstances. The UK is struggling to tackle a massive financial problem, and Scotland has a disproportionate share of that problem in its needs, its share of the national debt and its share in the underwriting of the banks, which has brought us to this pass. The reality is that Scotland’s future lies absolutely within the UK, but it is important that we have the power to take appropriate decisions, accountable to the people of Scotland, in ways that can help us make our own contribution to solving those problems in our own way.

As one or two Members have mentioned—it was alluded to by Calman—the transfer of benefits policy to Scotland has been suggested. That might happen in the longer term, but most people would acknowledge that the administration of certain aspects of benefits could be devolved or shared. At the moment, however, Scotland’s benefits bill is disproportionate, so the matter is much better shared across the UK, especially during these particularly difficult times.

We have embarked on a fundamental and radical welfare reform, which, leaving aside any controversial aspects, many people recognise has merit if it can deliver responsive benefits, value for work and so on. In the longer term it might be possible for Scotland to take a role in administering welfare, but now would hardly be the right moment to do so, as we are in the middle of a major funding deficit and a major reform programme. We must make common-sense decisions, taking on board what can practically be done now and acknowledging that further transfers could happen in the short term, when we are good and ready. Consideration at a later date can take us further forward.

I should like clarification on two questions that have been raised with me. One relates to the progressive commitment that the coalition Government have made on the threshold level of tax. As a former Treasury spokesman for my party, our commitment to raising the level at which people pay tax to £10,000, starting with £1,000 in the current year and progressing during this Parliament, is dear to my heart. I wonder whether the Under-Secretary in his reply can explain how that will be accommodated in calculating the tax revenues that would accrue to Scotland, or compensated for so that it does not create a disadvantage out of a good and progressive reform.

My second question relates to some aspects of charity law, which are not just peculiar to Scotland. When public authorities are looking to charities and the voluntary sector to take on more responsibilities for delivering public services, it raises questions about their status, and particularly their VAT liabilities. If a local authority or a health board provides services, there is no VAT, whereas if such services are provided by a voluntary organisation, there may be VAT liabilities. That may inhibit the transfer arrangements, which might otherwise be welcome. I acknowledge that that probably involves the Treasury and the Scotland Office, but I would appreciate some clarification if possible.

In the past 20 years, we have embarked on a process of restructuring the UK in a radical and decentralised way. As has been said in the past, devolution is a process, not an end product. No piece of legislation ends it. The Scottish National party wants the end to be independence. That is a perfectly respectable position, but for that, it has to win the support of the people of Scotland, which it is conspicuously failing to do. In the meantime, for those of us who want a stronger Scotland, with more control over its affairs and playing its full part in the United Kingdom, the Bill represents a major and significant step forward. It will, in my view, strengthen the United Kingdom, strengthen Scotland’s role and accountability, and perhaps enable the people of Scotland to look to their destiny and say, “We cannot always blame London and other people, we have to use the instruments that we have to help ourselves, and co-operate with others to ensure that we tackle the bigger problems together.” That is what the United Kingdom is about, and also what the devolution home rule settlement is about. They are not incompatible; both are essential. The Bill is a positive step forward, and will be beneficial to Scotland and the United Kingdom.

14:36

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

I pay tribute to the right hon. Member for Gordon (Malcolm Bruce) for an illuminating and useful contribution to today’s debate. I am afraid that mine will not be as lengthy, but I humbly hope that it will also illuminate the debate.

I am sorry that the love of Scotland of the hon. Member for Epping Forest (Mrs Laing) could not hold her in the Chamber longer, because she expressed disappointment that today’s debate is not taking place on the birthday of Mr Robert Burns. However, I can confirm that it takes place on my birthday, and I can think of no better way to celebrate than to speak in support of the Scotland Bill.

[John Robertson]

How sad!

[Fiona O'Donnell]

I expect that it is a reflection of what has happened to my life since coming to this place.

I begin, rather unusually, by apologising to the hon. Member for Perth and North Perthshire (Pete Wishart) for my rather bad-tempered intervention. It makes me angry when I hear the SNP, given its record, complaining about the process that has brought us here today, and the Calman commission. It also makes me angry when the hon. Gentleman questions whether the Bill will receive due scrutiny. I hope that, now he has heard the comments of my hon. Friend the Member for Glasgow North (Ann McKechin), he realises that Labour will give the Bill due scrutiny, and that he will also welcome the inquiry by the Scottish Affairs Committee, on which the hon. Member for Banff and Buchan (Dr Whiteford) serves. That will give us further opportunities to examine the Bill.

I remind the hon. Member for Perth and North Perthshire that the Calman commission consulted the public, experts and interested groups at 12 local engagement events all over Scotland. It received 300 written submissions, and held 50 public and 27 private evidence sessions. That compares more than favourably with the national conversation. The hon. Gentleman asked my hon. Friend the Member for Glasgow North how much it had cost. A conversation among Unionists is a far bigger conversation than one just among nationalists.

I am particularly pleased to be speaking in today’s debate because I follow in the footsteps of John P. Mackintosh. His approach was one of integrity and commitment, and he wanted genuine constitutional reform and the flourishing of the democratic expression of the Scottish people. I should like to remind Members who have visited the Scottish Parliament, and to inform those who have not, that the Donald Dewar room at Holyrood carries this quote from John P. Mackintosh:

“People in Scotland want a degree of government for themselves. It is not beyond the wit of man to devise the institutions to meet these demands.”

Labour finally devised the institution to meet those demands and delivered on Keir Hardie’s original aim of home rule. Another of my predecessors, John Home Robertson, not only believed in home rule, but lived and breathed it as he served East Lothian in both the House of Commons and the Scottish Parliament.

Constitutional reform should rise above party politics. The SNP has shown throughout today’s debate not only that its politics are separatist, but that its approach to politics—the way it does politics—is separatist. The Labour way is to work with other parties to achieve consensus, which is what it has done through the Scottish Constitutional Convention and the Calman commission. SNP representatives were absent from both, which must make theirs the longest political huff in history. They are less outside the tent than squatting on a different campsite altogether. Indeed, they have not been happy campers, although there have been an unusual number of references to caravans.

We today take Scotland forward to a new era. It is right and it is time that the Scottish Parliament takes greater responsibility for its expenditure and matches that with accountability. Of course, the Bill goes further than that in giving substantial borrowing powers to Scotland. I hope that we can now move away from a time when the SNP Government used every capital building programme as an opportunity to fight at Westminster, rather than as an opportunity to fight for Scotland.

SNP Members have still to tell us whether they will vote for the Bill or seek to wreck it today. They have an opportunity to see Scotland move forward, but they appear to be unwilling even now to rise to give us clarity on that question—[Interruption.]

[Pete Wishart]

I just got bored listening to this. I’ve heard it all before.

[Fiona O'Donnell]

If the hon. Gentleman is bored, he could make the debate more interesting by intervening to answer that question, but he remains silent.

The SNP has argued for full fiscal autonomy for Scotland, but that is not what Scotland needs. Scotland needs the security that is offered by remaining part of the Union, which is what the Bill gives it.

What would the SNP have done with the banks in an independent Scotland? [Interruption.] Yes. I am afraid that it is all fantasy and Brigadoon on the SNP side. I urge SNP Members to think again—in the words of another Scottish poet—and to consider giving their support to the Bill. I also I urge them not to press to a Division an amendment that seeks to deprive Scotland of an opportunity to move forward.

I thank the House for the short time that it has indulged me, and urge hon. Members to support the Bill.

14:44

[John Stevenson (Carlisle) (Con)]

I am grateful for the opportunity to participate in this debate. My contribution will be modest, given that I am not versed in the intricacies of the politics of Scotland, although I am learning quite a lot this afternoon. As a Scot who has family in Scotland, I have a great interest in what happens there and I would like to see Scotland succeed. I am also interested in the continuing relationship between the devolved Government and the national Government. Most importantly, I represent a constituency on the border, so I want to be aware of the implications of the Bill for my constituents.

I appreciate that the Bill is primarily relevant to Scotland, but it does have a potential impact in England, and that impact will be most pronounced in the border area, affecting seats such as Berwick-upon-Tweed, Hexham, Penrith and the Border, Workington and, of course, Carlisle. Indeed, in my part of the country, we have an unusual relationship with Scotland in that we were not in the Domesday book because we were part of Scotland at the time. Subsequently, we had the “Debatable Lands”, the reivers, and the movement of the border to Hadrian’s wall and so on. Indeed, that continues to this very day with the invasion of Carlisle every Saturday by people coming over the border to shop and for entertainment. I therefore have a slightly different perspective on this debate from that of many hon. Members north of the border.

There will no doubt be some concern in my area about the Bill and the impact, in particular, of the tax-raising powers. In reality, many of the issues already exist: there are separate laws on housing, inheritance and planning. In some ways, the planning laws have been beneficial to parts of Scotland, with Gretna being an example. Traditionally, licensing laws were different. I remember when I moved to Chester from Scotland, I got a shock when the pub closed at 10.30 rather than 12, but England has since progressed. Scotland was also ahead of the curve on the smoking ban, to its credit. At times, Scotland can be more progressive and innovative. Indeed, those who live on the border are often more aware of the differences between the two countries and the various laws that affect them.

I welcome the Bill and its proposals. They are very much in line with the recommendations of the Calman report, which has broad support in this Chamber. It is also in line with my own philosophical viewpoint and that of the Conservative party—and of the Liberal Democrats—including a belief in localism, decentralisation and financial accountability. Devolution is now an accepted part of our political culture and is generally accepted by most people. Therefore, the issues that we now have to debate are the workings of devolution, how to make it better, how to achieve the right balance and the powers that we give to the devolved Assembly. Giving powers away is very much in line with the localism agenda, including the need for responsibility and the link between spending and taxation. Indeed, in many respects, that link has been missing in the English local government debate as well as in the Scottish one, but I am delighted that the Government are starting to address that issue for English councils just as they are for Scotland in this Bill.

The aim of the Calman commission was to recommend changes to the present constitutional arrangements in three ways—to serve the people of Scotland better, to improve the financial accountability of the Scottish Parliament and to continue to secure the position of Scotland in the UK. It is in terms of those three key points that we must consider the Bill.

As Calman said, the devolution settlement is a “real success” and “works well in practice”. In many respects, that outcome is supported by the Bill, which does not dramatically rewrite the devolution settlement, but fine-tunes and adds to it. As hon. Members have said, the key aspect of the Bill is the changes on tax, but it also includes drink-driving limits, speed limits and other measures. I suspect the drink-driving limits and speed limits will be of more interest to those of my constituents who travel over the border.

One omission from the Bill is welfare and social security. It will be interesting to see how the Government approach that in due course, but I appreciate that a national debate on that subject is going on. The reforms that the Government are proposing nationally must have priority.

Income tax is the obvious area that could have an impact on cross-border relationships. There are people who live in Scotland and work in England and vice versa. However, I believe that there is nothing wrong in having different tax rates between different places—we see it at local government level with domestic rates—and allowing the Scottish Parliament to be able to set its own income tax rate creates accountability, responsibility and transparency.

The tax that I am probably most interested in, and the one that gives Scotland a real opportunity to be innovative, relates to old-fashioned stamp duty land tax and how it could be applied to commercial and residential property. If the Scottish Parliament is innovative, that will give it the opportunity to gain a commercial advantage, which could be beneficial to the local economy. However, the Bill is not just about transferring powers; it is also about providing the tools for Scotland to improve itself. The really exciting part of the Bill is that the Scottish Government and Parliament will receive incentives and control over their own economic destiny.

In my view, the Scottish economy needs to have a smaller public sector and a much larger private sector. Scotland needs to grow its private sector, and by doing that it needs to increase its population, build more houses and create more businesses. It will now have some of the tools to achieve that, via business rates, SDLT and income tax. This is a real opportunity for Scotland. If it can grow its tax base, it can reap the benefits. So I welcome the Bill. It achieves the key objectives of the Calman commission. It gives Scotland a greater opportunity to do things differently and, perhaps, better, and interestingly enough, the 2015 election will give the political parties an opportunity to offer different visions of a future Scotland. That is healthy for Scottish democracy and the Scottish Parliament, and will help to strengthen the Union.

[Anas Sarwar]

I welcome the hon. Gentleman’s comments and am pleased that he supports the Bill. I just want to highlight the irony of a Tory Back Bencher supporting more powers for Scotland, but the Scottish National party voting against it.

[John Stevenson]

There is certainly a degree of irony in that. I welcome the Bill.

14:51

[Graeme Morrice (Livingston) (Lab)]

I congratulate my hon. Friend the Member for East Lothian (Fiona O'Donnell) on her excellent and entertaining contribution. I would also like to congratulate her—on behalf of the whole House, I am sure—on it being her birthday. She tells me that she is 21. That is 21 plus VAT at a rate of 30%—do the math! [Interruption.] She is the same age as me—well, slightly younger.

I am grateful for the opportunity to speak in this debate. There can be no matter of greater importance to Scotland than the question of how we strengthen the devolution that has helped to improve the lives of our constituents over the past 11 years. Nor should we forget that it was a Labour Government who brought devolution to Scotland, through the creation of a Scottish Parliament with a significant and comprehensive range of statutory powers. Now, after more than a decade of devolution, the time is right to take the next steps in developing Scotland’s democracy and its relationship with the other nations of the United Kingdom.

That opportunity was provided, of course, only through the establishment by the previous Labour Government of the Calman commission. The proposals in the Bill, which are rooted in Calman’s cross-party work, reflect the overwhelming desire of the Scottish people to anchor Scotland’s future firmly in the United Kingdom. On that basis, I support the principles in the Bill. There are differences of detail, of course, between Labour’s approach and the plans in the Bill. For instance, the aggregates levy, food labelling and charity registration have been omitted from the Bill. Matters of considerable detail will need to be thrashed out, but the principles are the right ones. Greater magnitude of fiscal autonomy and improved accountability and transparency will ensure that Scotland’s stability and her place in the United Kingdom remain strong.

There are those who say that the Bill is part of the slippery slope to independence. There are those who said the same thing about creating a Scottish Parliament, but 10 years on, support for independence is at an all-time low. Strengthening devolution does not undermine the United Kingdom; it makes it stronger. The importance of that strength could not have been demonstrated more acutely than by the economic events of the past three years, yet the SNP still preaches separation. Rescuing the Scottish banks could never have transpired under independence, and the turmoil in the Irish economy demonstrates how vulnerable independence would have left the Scottish people.

The question of devolution is settled; how we make it work better for Scotland is the challenge that the vast majority of Scottish people want us to address. It is perverse that the SNP, which stands on a platform of autonomy, has refused to engage with the Calman commission to create and shape new powers for Scotland. There is an incredible irony at the heart of the SNP position. It rejects the Calman commission because it exposes Scotland to falling tax receipts. The SNP talks about full fiscal autonomy as an answer to Calman, but exposure to falling tax receipts would apply to Scotland’s budget whatever the degree of financial powers it acquired. Far from improving, the position under independence would be considerably worse.

[Stewart Hosie]

The hon. Gentleman is wrong. Any country will see its tax revenues fall or rise with the economic cycle—the one that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) said he had ended. The difficulty with the proposals in the Bill is not that tax revenues may go up or down, but that they embed a deflationary bias in the Scottish budget.

[Graeme Morrice]

I am obviously aware of the objection to the Bill from the SNP—it is an objection that we often hear—which is that it would mean less money for the Scottish Parliament. Indeed, the First Minister claims that the Scottish budget would have been considerably worse under Calman, compared with the current regime, yet Alex Salmond refuses to publish the numbers setting out what his plans for fiscal autonomy would have meant for the Scottish budget in the last 10 years.

[Pete Wishart]

It is not just the First Minister who has said that there is a fiscal drag with the current plans— £7 billion is what we argue—but the Secretary of State, who said that the figure would be £700 million, so we are in pretty good company. If that was the loss to the Scottish budget, would the hon. Gentleman object to these tax proposals?

[Graeme Morrice]

The reality is that Government expenditure in Scotland is considerably greater than the sums raised in taxes. In fact, in 2008-09, the last year for which figures are available, total public sector revenue in Scotland was £43.5 billion, whereas total public sector expenditure was £56.5 billion. Under the separation that Mr Salmond wants, that would lead to a fiscal deficit of £13 billion. Let us turn to the fallacy peddled by the SNP that only under a system of full fiscal autonomy would Scotland’s economy be able to generate growth. There is little evidence to suggest that this is the case. Professor Lars Feld, one of the world’s leading authorities on decentralisation, has concluded:

“We do not find any robust significant effect of decentralisation on economic growth”.

Professor Anton Muscatelli of Glasgow university has said that

“there is absolutely no statistical relationship between fiscal autonomy and growth, nor can there be.”

The Scottish Parliament’s competencies are already substantial, but we need to do more to increase accountability. Unlike the funding of most devolved regions by national Governments around the world, Scotland’s block grant is unconditional and can be spent in whichever way chosen. Voters in Scotland and Members of the Scottish Parliament are therefore not exposed to the choice between public expenditure and additional taxation. The Bill ensures that those choices are made. More shared taxes; new devolved taxes; greater borrowing; greater transparency; a fair balance of shared risk across the United Kingdom—that is a fair balance of new powers to create the accountability that the Scottish Parliament needs. The Scottish Parliament will be answerable to the Scottish people for the money that it raises and spends. That is what the vast majority of Scottish people want. They do not want separation, but they do want a Scottish Parliament that is responsible for the decisions that it takes, and that is why I am supporting this Bill.

14:59

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

I welcome the opportunity to speak in this debate. Although I represent a seat south of the border, I have a long-standing interest in devolution matters. I not only spent my formative years in Hamilton, but when the original Scotland Bill passed through the House in 1998, I acted as an adviser to the then shadow Front-Bench team, which included my hon. Friend the Member for Epping Forest (Mrs Laing). I have thus gained a probably unhealthy level of detailed knowledge of the Scotland Act 1998, and I hope to draw on it a little in my contribution.

I trust that the House will not object if I draw on a book on the Barnett formula and fiscal autonomy, which I co-authored in 2003 with the eminent Scottish lawyer, Professor Ross Harper. For the avoidance of doubt, let me say that I am not seeking to advertise the book: it is no longer for sale and I received no royalties for it at the time. Let me just say that it was not troubling “Harry Potter” for the No. 1 spot on the best-seller list. Nevertheless, I hope that the research we did for the book will help our deliberations today.

I want to put on record the fact that I was sceptical about devolution at the time of the referendum in 1997. I campaigned and voted against the devolution measures. I am happy to say that many of the doubts I had at that time have not been borne out by events. I believe that the Scottish Parliament reflects the settled will of the Scottish people and that, on the whole, it has been a success. Our job today is to improve and strengthen it, thereby strengthening the Union. The Scottish Parliament is not perfect, however, as there are some deficiencies, but I believe that the Bill goes a long way towards improving them.

I want to focus, as much of the debate has, on the transfer of fiscal powers. It is right that the Scottish Parliament is more accountable for the money it spends—a flip of the old adage, “No taxation without representation”. It is right for the Scottish Parliament to be held accountable to its electors for its own spending decisions. Going back to the 1997 referendum, I was intrigued by the option that did not get much coverage at the time, when the debate centred on the “yes/yes” or the “no/no” campaign. Some people believed in the “no/yes” option—they did not want a Scottish Parliament, but thought that if there was to be one, it should have proper fiscal powers and be held accountable.

I hope that the Bill will improve participation in Scottish Parliament elections. Although the turnout is higher than for local government, it is lower than for elections to this place, in which turnout is in no way at a particularly high level. Part of the reason for that lower turnout is that Members of the Scottish Parliament can make spending decisions without being directly accountable to their taxpayers and electors for them. I strongly support the Bill’s principles in addressing that point.

Speaking as an English Member, I want to put on record the fact that I often hear representations from constituents about why Scotland has free tuition, free prescriptions and so forth, which people do not have in England. I explain that the financial relationship between Scotland and England is much more complicated than the Barnett formula, which people often use as a shorthand to explain the whole fiscal relationship between Scotland and the United Kingdom. The point is nevertheless an important one, because if that concern is left unchecked, the Union will suffer. If people in England think that Scotland is getting an unfair advantage from the financial arrangements, the Union will suffer. As a Unionist, I make no apology for saying that; as a Unionist, I say that the Union suffering is the last thing I want to see. If Scotland wants to increase spending in a particular area, or introduce free care, tuition fees or whatever, the Scottish Parliament will now have to find more of that money, and that is an important point for strengthening the Union.

[Mr Weir]

I am listening carefully to the hon. Gentleman. He talks about the financial responsibility of the Scottish Parliament, but why does he feel that that should be confined to income tax? Does he not agree with Lord Forsyth, a former Tory Secretary of State for Scotland, who said:

“The SNP quite rightly argues that you can’t just limit it to income tax and stamp duty if you want to manage the economy. You can’t play golf with just one club”?

The point is that if the Scottish Parliament is to have responsibility, it must have responsibility not just for varying income tax, but for managing the economy.

[Iain Stewart]

I beg the hon. Gentleman’s patience, as I will turn to those points in a moment.

[David Mowat (Warrington South) (Con)]

My hon. Friend makes a powerful point about the threat to the Union posed by a perception of unfairness in relative funding, and giving Scotland control over its tax revenue raising will partially address that. However, it is widely accepted that the baseline, under the Barnett allocation, is 15% to 20% higher than it would be in equivalent places in England, and that is an issue for the Union.

[Iain Stewart]

I am grateful to my hon. Friend. I am not sure whether his birthday is coming up, but I will happily send him a copy of my book, which goes into the matter in some detail. The baseline funding for Scotland is an important point, but whether to have a needs-based assessment is not part of the Bill, although the Bill opens up the possibility that that will be reviewed in future.

[Malcolm Bruce]

No one can deny that these are legitimate issues for debate, but does my hon. Friend not acknowledge that when we look at the matter detail by detail—my right hon. Friend the Member for Yeovil (Mr Laws), when he was adviser to my party, did some work on this—we see that a high proportion of the spending differential is justified by remoteness, the different balances, benefits and so forth? A part of it is not accounted for, but the gap is nothing like as big as my hon. Friend the Member for Warrington South (David Mowat) suggests.

[Iain Stewart]

My right hon. Friend makes an important point. The whole subject is difficult and complex, given the shorthand of Barnett and the vast difference between public spending in Scotland and England. In some areas, however, for the reasons that he has set out, there is a big difference, and those reasons will also be found in England. For instance, in remote parts of Cumbria or Devon, spending per head will be higher than in central London or Manchester.

[Pete Wishart]

If the hon. Gentleman looks at the study by Oxford Economics, he will find that London secures more public spending than any region or nation in the UK. If he and the hon. Member for Warrington South (David Mowat) are concerned about grant formula and Scotland’s spending relative to England’s, I have good news for them: they can vote to change that in the next few weeks and allow Scotland to have full fiscal responsibility. That would allow all the Barnett issues to disappear. If we were allowed to have the economic levers to grow our economy, we would be self-reliant on taxation.

[Iain Stewart]

As I said to the hon. Member for Angus (Mr Weir), if the hon. Gentleman allows me to make a little progress, I will come to the issue of full fiscal autonomy in a moment.

Clearly, the existing Scotland Act contains some fiscal powers for the Scottish Parliament: principally, the ability to vary the basic rate of income tax by 3p higher or lower than the UK rate. That has never been used, partly because the SNP Administration in Edinburgh has allowed the levy required each year for the mechanism to stay in place not to be paid. There is a more fundamental point, however: the administrative and set-up costs for making that small change in the income tax rate are disproportionate to the revenue that would be raised.

When the House was considering the Bill that became the Scotland Act 1998, it was calculated that it would raise, at the most, an additional £450 million. Given a total Scottish Office budget of over £22 billion, it was a tiny measure and would involve considerable start-up and administrative costs and not generate enough revenue. I can understand why it has not been introduced so far.

[Stewart Hosie]

The hon. Gentleman talks of the amount that might be raised if the tax rate were put up. There is, however, a built-in perverse disincentive to lower the tax rate. If the income tax rate, for example, were lowered and that stimulated economic growth, and if the benefit were paid from higher corporation tax receipts, the Scottish Parliament would take the hit of reduced income tax, while the United Kingdom Government would gain the advantage of enhanced corporation tax.

[Iain Stewart]

I am explaining why I do not think the provisions in the current Scotland Act are sufficient, and why I welcome the measures to increase substantially the power of the Scottish Parliament to raise a significant chunk of its own revenue. There are still concerns about how they will be implemented, and I raised that point during Scottish questions yesterday. I have been reassured that proper consultation is taking place with members of the business community in Scotland, who will have to administer many of the new arrangements, but I urge my colleagues on the Front Bench to keep a close watch on the increased regulatory burden on businesses at a time when they can ill afford much additional bureaucracy.

I think the HMRC bodies should consider the possibility of certain unintended consequences. There is, for instance, the question of how payments into personal pension plans which attract the adding back on of basic or higher-rate tax contributions should be treated. If in the past contributions have been made at the United Kingdom rate and added back on, a different Scottish rate will create potential anomalies when it comes to how that income is treated. I suspect that a fairly small amount is involved overall, but it is an important detail that ought to be clarified before the Bill is implemented.

I welcome the move to devolve some taxes, and I hope that more can be devolved in time. I hope that, for instance, the issues surrounding the aggregates levy and air passenger duty issues will be resolved. I do not believe that this is the end of the story; I trust that those two taxes will eventually be devolved, and that the Scottish Parliament will be given greater fiscal autonomy.

I referred earlier to the book that I co-authored. Part of our research involved international comparisons.

[Mrs Laing]

I hesitate to interrupt my hon. Friend, but he has just demonstrated that he is one of the few people who understand, and have carried out an in-depth study of, the relationship between United Kingdom and Scottish finance. He is being modest about his book, but I need not be modest on his behalf. It is an excellent publication, which I have consulted on many occasions. May I ask him to show the House his book and tell us its title, so that every Member in the Chamber—[Interruption.] I do not think he will make any money from it. However, some Members might be better educated in future if they knew more about it. I believe that it is called “It’s Our Money! Who Spends It?”

[Madam Deputy Speaker]

Order. That was a very long intervention. I think that the hon. Lady has given the hon. Gentleman his advertisement; perhaps we can now return to the debate.

[Iain Stewart]

Thank you, Madam Deputy Speaker. I sense a rising demand for my book. Next Christmas is a little way off, but I have a couple of boxes of back copies which I will happily distribute.

As I was saying, part of our research involved examining the way in which other countries—Australia, Germany and Canada—operated financial relationships between state Governments and federal Governments, or provincial Governments, or whatever the term was in those countries. What struck us was that each of those countries has a system that comes close to what the Scotland Bill is proposing to introduce. Certain taxes are levied at the federal level. The example in each country varies, but some taxes are levied at the provincial level—the state level—and sometimes the state level has the power to introduce specific taxes of its own. That is balanced by a form of fiscal transfers between the federal level and the state level. There are perpetual arguments in all those countries about what the right level of spending, taxes, transfers and so on is—we will never get away from those—but on the whole the arrangements are stable. We can draw some comfort from the fact that the lessons from abroad point to the sort of system that the Bill is trying to introduce.

Conversely, there are few examples of a federal or devolved system of government where the lower level has full fiscal autonomy. Our research encountered only one example that came quite close to such an arrangement, which was in the Basque part of Spain. Since we did our work Catalonia has also adopted such an arrangement, but it is still fraught with difficulties. I do not believe that there is sufficient evidence from abroad to warrant the type of policy that the Scottish nationalists wish to introduce.

[Stewart Hosie]

The hon. Gentleman says that the approach of the Basque country and others may be fraught with difficulties, but that country’s gross domestic product growth is now 30% higher than that of Spain as a whole and its credit rating is stronger than that of Spain as a whole. Although that sort of model may need to overcome obstacles, it clearly has had some success.

[Iain Stewart]

The hon. Gentleman has a more detailed knowledge of the current state of the Basque economy than I do, but our research showed that there were specific problems there. I shall discuss them in a moment, as they are directly relevant to the example in Scotland.

[Malcolm Bruce]

Does my hon. Friend acknowledge that joining the inland revenue contribution club is not a popular sport in Spain? The Spanish have found that devolving this responsibility results in the tax collection rate increasing substantially. No comparison can be made with the situation in this country, because one cannot escape the Inland Revenue.

[Iain Stewart]

My right hon. Friend makes a powerful point.

[Mark Lazarowicz]

Perhaps I should add that the Basque country and Catalonia have always had higher gross national product rates than the rest of Spain, so I do not think that the point made by the hon. Member for Dundee East (Stewart Hosie) has much weight.

[Iain Stewart]

I am grateful for that intervention. I think it is unhelpful to make an exact analogy with a particular model. Spain has a very curious multi-speed system of devolution between its different constituent parts.

I promised to discuss why I do not believe, certainly at this point, that fiscal autonomy is feasible or desirable for the Scottish Parliament. There are huge unknowns in the fiscal relationship between Scotland and England, for the simple reason that we have never assigned tax revenues or allocated public spending on a straight territorial basis—that just has not happened. As part of our research for the book, I spent many hours enjoying and analysing the various forecasts and documents that the Scottish National party had published over the years giving its view on what Scotland’s net contribution to or net borrowing from the United Kingdom had been.

Part of the SNP’s criticism was that the official Government figures, as published in the annual Government Expenditure and Revenue Scotland survey, were based on assumptions about what Scotland’s share of corporation tax or income tax should be. However, the SNP’s own figures are based on assumptions and projections. They disagree with the assumptions made, but they could not analyse particularly and exactly what the Scottish revenues were.

[Stewart Hosie]

rose—

[Iain Stewart]

Before the hon. Gentleman intervenes, I wish to illustrate that point by discussing two SNP publications that examined the period between 1979 and 1997. In one document, published in October 1996, the SNP estimated that Scotland had contributed £91 billion to the UK over that period. Three months later, however, it published a separate report covering the same period which calculated that the figure had been £27 billion. Well, what is £60 billion between friends? The point is that anyone wanting to analyse this has to do it on the basis of assumptions, not hard facts.

[Stewart Hosie]

I certainly agree that the Government Expenditure and Revenue Scotland—GERS—survey is based on certain assumptions and calculations. Most of the documents, certainly over the past decade, have effectively taken the GERS assumptions and, if they have differed from them, have always explained why. Those differences tended to be marginal. The key question here is not SNP figures versus those of another party; it is the work done by organisations such as Oxford Economics or, about a year ago, Reform Scotland, which calculated a broadly balanced budget of about £50 billion out and £50 billion in. Those seem to be generally accepted pre-recession figures.

[Iain Stewart]

But surely the point is that, if we want to set up new fiscal arrangements between the constituent parts of the United Kingdom, we should not do it on the basis of assumptions. We should do it on the basis of hard facts, and one of the conclusions of the book is that we need to do more hard research and assign revenues and spending on a territorial basis. Such proposals are not in the Bill, but I hope that the Government will take those matters forward.

I shall give the House an example to illustrate why there would be a huge debate about the revenue. Let us take Standard Life, which is headquartered in Edinburgh. If corporation tax were devolved, the company would be domiciled as Scottish, yet it trades throughout the United Kingdom and has many policyholders in England who contribute to its profits. How would we determine which profits were Scottish and which were English? These are huge issues and they would have to be resolved before a full system of fiscal autonomy could be introduced.

[Mr Weir]

Surely that is a problem that affects all companies that operate across national borders, of which, in this globalised world, there are many thousands. Why would that present a particular difficulty for Scotland?

[Iain Stewart]

I believe that it would be a difficulty, and I have seen no evidence from the Scottish National party that properly costs this or assesses what the split would be.

[Mark Lazarowicz]

Are not the economies of England, Scotland and the rest of the UK so closely integrated and dependent on each other that the consequences would not be the same as might be the case for, say, Germany and France? On the hon. Gentleman’s point about Standard Life, I am not normally someone who tries to air scare tactics about what might happen to the financial services sector under independence, but would there not be a danger that some companies, faced with the choices and difficulties that he has outlined, might choose to move their headquarters out of Scotland precisely because of the consequences of a differential in corporation tax rates?

[Iain Stewart]

That is exactly the point. The relationship between Scotland and England is so interwoven that to start to unpick it now would be hugely complicated and difficult. On the point about pensions, I have mentioned the potential difficulties under the current proposals that would need to be clarified. If there were full fiscal autonomy, those problems would be magnified many times over. People might have made national insurance contributions all through their lives. How would all that be untangled to sort out the different rights and contributions? The process would be enormously complicated. I am not saying that it would be impossible, but I do not believe that it is practical at this point in time. I hope that my right hon. Friends on the Front Bench will take up my point that we should move towards assigning revenues and spending on a straight territorial basis, so that in time we might be able to move to a system involving much greater devolution of fiscal power down to the Scottish Parliament.

[Stewart Hosie]

The hon. Gentleman’s speech is throwing up practical issues that would have to be resolved in any circumstances. On his first concern, would the broad principle not be accepted that the tax liability would follow the economic activity? On his second concern about corporation tax rising, I would prefer to see corporation tax falling. Is it not odd that we have a party that is very keen on tax competition until it comes to Scotland’s competing? Is that not slightly contradictory?

[Iain Stewart]

It is not a contradictory at all and I am not saying that I rule out that possibility. My book does not rule it out. All I am saying is that at this point in time it would be an enormous leap in the dark that would throw up so many unintended consequences that it would be a foolhardy move. I welcome the sensible incremental step that the Bill is taking.

I have probably been indulged by the House rather longer than I intended. I want to move briefly to one other point before I resume my seat. It concerns another part of the Bill about which I have a specific concern, and that is the proposal to devolve down to the Scottish Parliament the power to set the drink-driving limit. I am a member of the Select Committee on Transport and we have just concluded an investigation into the drink-driving limit. Part of the evidence we received was a strong representation from the police that we should not have a different drink-driving limit in different parts of the United Kingdom. I am not against the power’s being devolved, but want to put it on the record that I would not wish the consequence of that devolution of power to be a marked difference in the Scottish and English drink-driving limits. That might cause some practical problems in border constituencies such as that represented by my hon. Friend the Member for Carlisle (John Stevenson), who is no longer in his place.

In conclusion, I welcome the Bill. It is a huge step forward, even for people like me who were devolution sceptics to begin with. It will do an enormous amount to strengthen the Scottish Parliament and the Union. I look forward to supporting it in the Lobby tonight.

15:27

[Mrs Anne McGuire (Stirling) (Lab)]

It is a great pleasure to follow the hon. Member for Milton Keynes South (Iain Stewart). I listened carefully to his analysis and, 13 years on, I now realise why the hon. Member for Epping Forest (Mrs Laing) was so well briefed in some of the intricacies of the Barnett formula. The hon. Gentleman has posed some fascinating and interesting questions this afternoon.

I made my maiden speech in 1997 on the Referendums (Scotland and Wales) Bill, which paved the way for the Scottish Parliament. It is fair to say that both the hon. Gentleman and the hon. Lady recognised that, collectively, we have travelled a long way in this House—at least, most of us have. I shall come on to those who are still stuck at the station a wee bit later.

We have travelled a long way and in many ways the Members who are participating in today’s debate reflect that. We have a former Member of the Scottish Parliament, who, as the Under-Secretary, will be helping to drive this Bill through along with most of us. Of course, we have two current Members of the Scottish Parliament, my hon. Friends the Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Glasgow East (Margaret Curran), both of whom have extensive experience not only of the workings of the Scottish Parliament but of the workings of government in Scotland, as they are both former Ministers.

Collectively, in the Chamber today we have a unique opportunity to discuss the importance of the Scotland Bill. I recognise its importance and identify with the statement made by Donald Dewar—devolution was

“a process and not an event”.

We are all part of that process. In my opinion, there is no doubt that the relationship between the UK and Scotland and their governmental institutions has matured to a point where there is widespread recognition that the devolved approach has strengthened the United Kingdom and its four nations, working together. There are still some cynics among us—the ultra-Unionists, who perhaps do not see this as a way forward for the United Kingdom, and their uneasy bedfellows, the nationalists, who have a fundamental view. I fully accept their right to hold that view. I do not have any problem with their ultimate aim of independence; I just thank God every day for the sanity of the Scottish people, who have never accepted that analysis, but that analysis is obviously still there. The majority of people in Scotland want good government that brings decisions closer to them, so I welcome the principle of the Bill. I particularly welcome the strengthening of the Scottish Parliament’s fiscal powers.

[Anas Sarwar]

Is it not alarming, given the Scottish National party’s amendment, that those Members will be voting against the new powers for Scotland? Does that not show that they are now the conservatives in Scotland, supporting the status quo over new powers for the Scottish Parliament?

[Mrs McGuire]

I do not wish to interpret the SNP’s tactics, but it is certainly bizarre that their amendment says that the “Bill as a whole” is “unacceptable”, given that the mover of the amendment, the hon. Member for Perth and North Perthshire (Pete Wishart), tried to appear consensual on some of the areas on which there is agreement. I do not know which part of the brain was not working when the amendment was tabled, but it definitely calls on the House to vote against something that SNP Members agree with in some way. That is a question for them to answer, but I am delighted that my hon. Friend the Member for Glasgow Central (Anas Sarwar) has raised it.

The Bill, like the Scotland Act 1998, was developed as a result of consensus, as the right hon. Member for Gordon (Malcolm Bruce) has highlighted. The engagement of civic society, communities and individuals, as well as of political parties, is the hallmark of the legislation—as it was of its 1998 predecessor. In terms of political party consensus, there have been positive developments over the years. As the hon. Member for Epping Forest has clearly shown, the Conservative party in Scotland and across the UK boycotted the Scottish Constitutional Convention in the early 1990s, campaigned for a no vote in the 1997 referendum and voted against the first Bill when it came through Parliament. However, it is now working in partnership with other political parties that see the strength of the Union as key to the future of our country. I always welcome the sinner that repenteth.

Some things never change, though. The SNP stood apart from the consensus building up to 1998 and boycotted the Calman commission for reasons that I cannot understand and have not heard properly explained. I think the SNP amendment is somewhat churlish and flies in the face of all the views that have been expressed by the Scottish people through elections and consensus. If the SNP wants an independent Scotland, its first aim must be to prove its case to the Scottish people.

[Fiona O'Donnell]

As the SNP has fallen silent, will my right hon. Friend tell us why she thinks the party bottled it when offered the chance of a referendum by Labour in Holyrood?

[Mrs McGuire]

I gave up many years ago trying to get into the political mind of the SNP and I do not know if I want to revisit some of those early nightmares I had in trying to understand it.

I want to concentrate on the additional fiscal powers. Some of us in the House are old enough to remember the 1978 proposals of the then Labour Government, one weakness of which was that they contained no taxation powers—no variation to what was then called the Scottish Assembly was to be allowed. To an extent, that lesson was learned when the 1998 legislation was introduced. The plus or minus 3% provision was intended to deal with the flaw in the earlier legislation, which of course failed the somewhat artificial 40% referendum test. The discussion around Calman recognised that the time was right to build on the 1998 Act and devolve more responsibility for revenue raising to the Scottish Parliament.

In addition, the Bill gives us a package of other changes that will enhance the Scottish Parliament’s fiscal responsibility, including new borrowing powers, a stamp duty land tax, a landfill tax and, of course, the power to create new taxes, subject to the approval of both the Scottish and UK Parliaments, which I think is a responsible way forward. The assessment of those new taxes, however, must be open and transparent so that it does not feed into the arguments of the conspiracy theorists who will interpret anything less as an attempt to undermine Scotland. However, the Scottish Parliament should recognise, as I am sure it will, that any proposed new tax must be assessed according to its potential impact on economic incentives in Scotland.

I want to raise one area of concern on the new Scottish rate proposals. The implementation and impact of that power must be thoroughly tested and developed, and not only with Her Majesty’s Revenue and Customs, important though that is. I know that the qualification for liability for the Scottish rate will be the same as or similar to those already set out in the Scotland Act 1998. Although we can easily see the implications for the basic and higher rate taxes, people in Scotland must also have clear information on the impact on their tax liability of pension contributions, to which the hon. Member for Milton Keynes South referred, and any unearned income, such as dividend receipts and bank interest. That sounds as though it concerns only a small group of people, but many people in Scotland earn interest through bank accounts and from dividends. I ask the Minister, both today and throughout the Bill’s scrutiny, to consider how the current regime of tax credits on dividends, for example, will be managed if there are different tax rates in different parts of the UK.

What discussions have there been about the implications of variable tax? What will happen if someone uses an address for their unearned income, such as a bank based in London, Cardiff, Halifax or wherever, that is different from that used for their individual taxation north of the border? I know that those problems are not insurmountable. There might be issues of detail, but frankly, we want the system to be robust and watertight from the beginning, otherwise the Bill will be nothing other than a job creation scheme for accountants—having been married to an accountant for 39 years, I have no problem with that in principle. The Secretary of State, given his previous career as an accountant, will have some knowledge of how accountants can take a piece of legislation, dissect it and then work their way around it. I hope that those issues can be solved properly so that we can ensure a robust system.

The Bill certainly makes some common-sense adjustments to the devolution settlement, such as the licensing of controlled substances and appointments to the BBC Trust, and there are other changes that are welcome in principle. However, greater discussion and clarification will be needed as the Bill goes through the House. For example, the power to set drink-driving limits, which has been mentioned by several hon. Members, should be considered. Different limits north and south of the border could cause confusion. Again, that is an issue not of principle, but of clarity. If we are to devolve power on the licensing system for air weapons, we will undoubtedly need a clearer definition of what constitutes an air weapon than that currently specified in the Firearms Act 1968. I assume that the Secretary of State will be having discussions with ministerial colleagues in the Home Office to ensure that the power that is being handed over will take account of how technology has changed in the intervening years in the manufacture of air weapons.

Let me deal briefly with some of the attacks that have been made on the Bill, which are crystallised in the SNP amendment. It has been criticised for not giving meaningful economic powers, and yet the Scottish Parliament will now be able to raise significantly more income as a result. In addition, there will be additional borrowing powers of up to £3 billion. When there is a cyclical fall in tax receipts, which we might see during a recession, there are powers to manage that problem.

I know that the hon. Member for Dundee East (Stewart Hosie) is, or appears to be, an expert on all things fiscal, but, although he might be able to identify some of the problems, his analysis and conclusions are sometimes questionable. I advise him that not all of us agree with his suggested outcomes. Of course, we know that all that is code for fiscal autonomy, which in turn is camouflage for independence. I have no problem engaging with that argument, but we have to be realistic and admit that that is what the debate is all about: it is a debate for those who want to see the United Kingdom broken up and those of us who want to see it strengthened through the greater devolution of powers.

I am delighted to support the Bill, and I resent what almost amounts to rivialisation of some of its elements. The Scotland Act 1998 was one of the most complicated pieces of legislation ever to go through this House. It had to unpick legislation dating back over 300 years, since the union of Parliaments, so it was not straightforward. Stage hypnotists might not have been at the top of the political agenda, but legislation on stage hypnotists had to be dealt with as part of the Act. Indeed, given the number of hours we spent on it, I wonder how we did not realise that we had given Scotland power over Antarctica. I do not quite know how that slipped through in all those hours, but we should not trivialise the detailed work that had to be done to present that Act and to deliver a Scottish Parliament, or suggest that it somehow undermines the Scottish people’s right to autonomy through devolution.

Issues of detail and clarification will undoubtedly need to be debated in the Chamber over the next few weeks, but the Bill is a natural progression along the road that we set down in 1998, and if Donald is up there on his cloud, he will definitely see that it is part of the process, and that 1998 was not just an event.

15:42

[David Mowat (Warrington South) (Con)]

Before I get into my remarks, may I apologise to the House for three things? First, it is not my birthday; secondly, I have not written a book; and thirdly, I think I am the first speaker in the debate not to have a Scottish accent. I do have a Scottish name, however, so I shall do my best with that.

I really have only one point to make about the Bill to those on the Government Front Bench. Overall, it is a good Bill that takes what Calman recommended and implements it sensibly. Indeed, a whole set of well-made recommendations will be introduced. The principal part of the Bill, as others have said, relates to fiscal autonomy, the change in the level of the block grant and the compensatory change to income tax. The theory behind it is absolutely spot-on, because it is right that Scotland is given an incentive to nurture its own tax base and to become accountable for how it spends that money. The important issue, which is not directly in the Bill but an unintended consequence of it, however, is the baseline for that allocation, the current Barnett settlement. The Barnett formula is not a subject for today’s debate, but others have spoken about it, and I shall put in my tuppence-worth.

The formula has been going for 35 years, and the most recent review of it was last year by the Lords Barnett Formula Committee, which produced an excellent report that received a poor response from the then Government. People accept that the formula no longer represents a needs basis for the allocation of moneys. The Calman report accepted that point, too, but the reason why we persevere with the formula is inertia. In the response to the Lords Committee, it was accepted that the formula was straightforward, but there are two reasons why it provides the wrong result. First, there has been no attempt to make any changes based on relative population movement over the past 35 years between the three countries in the Union which are most affected, Wales, England and Scotland. The result, as Holtham stated, is that the settlement for Scotland is about £4 billion more than it would be if it was worked out on a needs basis.

How does that relate to the Bill? The baseline will use that higher amount to set income tax, and to flex it up and down. In consequence, it will be harder to change the Barnett formula in future, because it will be linked directly to the level of income tax in Scotland in a way that it is not at the moment. From a political point of view, it would be hard for people to accept that the UK Government, while making a fairer allocation, were forcing up income tax in Scotland.

A second unintended consequence of the current baseline is that Scotland will for ever have a larger public sector in its economy than in England. I say to colleagues on the Government Benches, of whom there are not many, that it is wrong for us to go on about Scotland having to rebalance its economy towards the private sector and away from the public sector if we approve a formula that makes it arithmetically impossible for that to happen.

[Mrs Laing]

Does my hon. Friend accept the point made by my hon. Friend the Member for Milton Keynes South (Iain Stewart) that the Barnett formula works in the way it does not just because Scotland is Scotland, but because Scotland has certain features, such as areas of deprivation in its inner cities and very rural areas where transport costs are enormous, that mean that it deserves greater spending in certain areas? Such areas are also found in certain parts of England and Wales.

[David Mowat]

I thank my hon. Friend for that intervention. She made two points, the first of which was about sparsity. Scotland is more spread out than the rest of the UK. Page 18 of the Holtham report takes that sparsity into account. The Scottish national health service has to take sparsity into account in the allocation of money. Parts of Scotland are very spread out, such as the highlands and islands, Orkney and the Hebrides. The Scottish NHS adjustment in respect of that, which was validated by the Holtham formula, was 1.5%. We are dealing with a figure of 20%.

The second point that my hon. Friend made was about deprivation. There are areas of deprivation all over the country. That is why it is so important that the formula is based on need. There can be no argument about that.

[Anas Sarwar]

When discussing the rights and wrongs of the Barnett formula, would it not be sensible to compare the averages for Scotland and Wales to different regions of England, because the north of England receives almost the same amount per head as Scotland?

[David Mowat]

Paradoxically, the part of England that receives the most per head is London.

[Pete Wishart]

The hon. Gentleman said that London secures the most identified public spending—that is before we get into unidentified public spending. I am grateful to him because he has been very consistent in his view, which is a valid view held by Conservative Back Benchers, that Scotland’s budget should just be cut. Those on the Government Front Bench, with Labour support, want to cut Scotland’s budget through the financial measures in the Bill. The hon. Gentleman and I can surely agree that the way to resolve this is to give Scotland full financial autonomy on these issues—he would benefit and I would benefit. Surely that is the right way forward.

[David Mowat]

What I think we would agree about—I think this has been the consensus—is that we should have a needs-based formula. What possible objection could anybody have to a formula based on need? Members have mentioned adjustment for deprivation, and fine, let us go with that, but the difficulty that we have got into is that we have never adjusted the Barnett formula for population change.

[Iain Stewart]

I must correct my hon. Friend. The Barnett formula has been adjusted in the past to take account of population changes. He is quite correct to suggest that it was not adjusted for the first 15 or 16 years, which led to a more generous settlement year on year than a strict population count would have allowed, but I believe that it was Michael Portillo, when he was Chief Secretary to the Treasury, who introduced a mechanism by which the percentage by which Barnett changes each year would be directly related to Scotland’s share of the UK population.

[David Mowat]

My hon. Friend is right to say that the Barnett consequentials each year take the correct, current relative population into account. However, the formula does not do that to the body of spending that is adjusted by those consequentials. He will find that very clearly in the reports of the House of Lords Select Committee and the Holtham commission.

[Iain Stewart]

One of my bugbears in this debate is that when we talk about the Barnett formula, we forget that Barnett does not change the baseline lock, it aggregates the annual changes in UK Departments’ spending and then adds on a population share percentage and a relevance factor percentage. My hon. Friend’s point is about changing the baseline. I believe that the Government have opened up the possibility of that in future, but we must be careful to point out that the Barnett formula deals only with year-on-year changes.

[David Mowat]

I thank my hon. Friend, but I have two points in response. First, the Government have said that they will not review the formula in the lifetime of this Parliament. Secondly, the outcome allocation that is consequent on what we call the Barnett formula takes into account two things—the spending brought forward and the Barnett consequentials. The first of those is not adjusted for population, and the second is.

Since I have nearly got to the end of my remarks, I will not take any more interventions on this subject, but—

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

rose—

[David Mowat]

Maybe one more.

[Gemma Doyle]

I am very grateful. Is the hon. Gentleman aware that the proposals to which he refers, which he seems to support, could actually lead to a £4.5 billion cut in the amount of money spent on Scotland? Is that what he proposes, and does he want to see it happen?

[David Mowat]

What I propose is that the allocation be done on a needs basis that is fair to the constituents whom I represent as well as to hers.

[David Mundell]

I very much respect what my hon. Friend says. He took part in a Westminster Hall debate on the issue, and I am sure the Chancellor and other colleagues are listening to him. We need to be clear, though, about whether he is arguing for a needs-based assessment across the whole UK. The hon. Member for Glasgow Central (Anas Sarwar) drew attention to the fact that there are significant differentials within England. The difference between the highest and lowest per capita public spending in England is £2,537, which is much greater than the difference between the Scottish and English average. We need to be clear about whether my hon. Friend and those who make the same argument want a change in spending within England, or just between the constituent parts of the UK.

[David Mowat]

The difference that we are really talking about today is the one between the constituent parts of the UK, but I have no difficulty with also applying that to the constituent parts of England. As I said, a needs-based formula is fair.

If my constituency of Warrington South, which has areas of great deprivation and some better-off areas, were in Scotland, the average constituent would receive £900 more. That is not fair—I get a considerable postbag about it. Today’s debate is not on the Barnett formula, but unless we address the matter at some point, it will become a tension in the Union from the other direction. We need to be cognisant of that, and we need to be careful.

[Ann McKechin]

The hon. Gentleman mentions basing the determination on needs. In last Wednesday’s Adjournment debate, to which the Under-Secretary referred, there was some discussion about the system in Australia. It is based on needs, and there is a commission that makes a judgment. There is frequent argument between the federal states about the definition of needs, and some commentators are now saying that they want to move back to a per capita formula, just like the Barnett formula. Does the hon. Gentleman agree that stability might be a better prize?

[David Mowat]

I do not agree that stability is a better prize if it is based on something that is wrong. I agree that it is difficult to compute need, but that is no reason not to try. We have let the matter drift. One of the determinants is relative population movement—I repeat that, notwithstanding the comments of my hon. Friend the Member for Milton Keynes South (Iain Stewart); I guess we can discuss that later in the bar.

I ask the Under-Secretary to table a simple amendment to the Bill to provide for revising the block grant allocation to take account of relative need, in the way that the House of Lords Committee on the Barnett formula and the Holtham commission recommended last year and in previous years.

15:56

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

It is a pleasure to follow the hon. Member for Warrington South (David Mowat). I also enjoyed the contribution of the hon. Member for Milton Keynes South (Iain Stewart). I have not read his book and, having listened to his speech, I do not think that I will buy it. [Hon. Members: “Oh!”] Let us face it, anyone who campaigned on a no/yes vote in the referendum for a Scottish Parliament meant, “I don’t want a Scottish Parliament, but give us the money anyway.” I have some problems with the economics of that position and wonder what the hon. Gentleman was thinking of at the time.

I am a unionist—with a small “u”. I am also a member of the Labour party. In the past 10 years, the Labour party has been the Unionist party in the House. We have supported the United Kingdom more than any other party. Around 2005 to 2010, the then Opposition, who now lead the coalition, had an anti-Scottish slant. I found it sad that we were treated in such a manner, but I have noticed that, since they came to power, we do not seem to hear the same anti-Scottishness from them. I am pleased about that, if nothing else.

Many hon. Members know that I followed Donald Dewar into the House. I had the pleasure of being his election agent in the 1997 and 1999 elections and of representing him in his constituency while he was away campaigning in 1998. Those of us who fought hard for a Scottish Parliament and an excellent vote, particularly in Donald Dewar’s constituency, had the reward of getting the Parliament. That is not to say that I agree with everything that has happened. I do not agree with hon. Members who said that this is the first time that we have revisited the Scotland Act 1998, because we have done that a couple of times. Yet Donald Dewar said to me that the Act was not to be played about with. Devolution might be a process and a project that will develop, but the Act should not have been tweaked as often as it has been. I hope that, if we tweak it this time, we will leave it to settle in properly. Ten years is not a long time for a political institution.

We still have to grow up when it comes to Scottish politics, as can be seen by some of the bunfights between the party that will remain nameless—I know that its Members count the number of the times that it is named—and Labour. It should not be a bunfight; we should think of the people of Scotland and try to do what is best for the nation.

The Bill goes a way along that road. Everything in it is not necessarily right, and some things that are not in it should be. Let me concentrate on those for a moment. The voting system for the Scottish Parliament is wrong. I particularly dislike the top-up of Members, and the votes of the people of Glasgow, part of which I have the honour of representing, are not proportionately counted.

There was a great deal of talk in debates on other Bills—they were not consulted on, just as this Bill was not consulted on—about how one person’s vote in one constituency is worth more than someone else’s vote in another. However, the second votes of 45,000 people in the Glasgow area do not count for the top-up list. Not one Member is elected by those 45,000 votes, which I believe is inherently wrong. It is not right to conduct a parliamentary election on first past the post and then, just because a party is so successful in gaining seats, for 45,000 votes to be discounted. I expect that 45,000 to be a lot more come the next election.

[Pete Wishart]

The hon. Gentleman is the epitome of reason, and his speech differs greatly from some of the incoherent rants from his colleagues—we are likely to hear more such rants from the next few speakers. Is he really suggesting that we get rid of proportional representation for the Scottish Parliament? Surely we cannot go back to the old days of Glasgow council, when Labour members gained majorities on vast minorities of support.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Before the hon. Member for Glasgow North West (John Robertson) resumes his speech, I should say that he is now going through things that are not in the Bill. If he goes on at length on those matters, he is clearly going to make a lengthy speech before he even gets on to measures that are in the Bill. Will he now direct his comments towards what is in the Bill?

[John Robertson]

Thank you for your guidance, Mr Deputy Speaker; I am hoping to speak to amendments in Committee that might deal with those matters, and to develop that argument and discussion in greater detail. To answer the hon. Member for Perth and North Perthshire (Pete Wishart), I have never been spoken to so nicely. He called me reasonable. I have always thought I am reasonable, but sometimes people say that I rant.

It is important for people to have representation. I do not believe that voting for a loser to represent me is right. I want to vote for a winner, and I believe the person who wins the vote should look after me. That is how I was elected. I like to think that I have done a good job. Admittedly, when someone gets over 50% of the vote, they would say that, but they might not if things were a bit closer. I still believe that people would like to vote for a winner and not a loser to be their elected representative; sometimes even somebody who comes in third place will be elected. I hope to set out that position in Committee.

Consensus is important. The SNP has tabled a reasoned amendment, but at the end of the day, SNP Members want the same thing that I want: the best for the people whom they represent. However, you have to listen to the other side. The right hon. Member for Gordon (Malcolm Bruce) made a very good point when he said that the fact of the matter is that the Scottish people do not agree with the SNP. If 70% or 80% of the Scottish people do not agree with you, you might be wrong. You should actually listen to that 80% and find out why they disagree with you. You might want to persuade them in the years to come, but we are not at that stage. To go back to my initial point, we are developing and broadening out what the Scottish Parliament does and trying to make it better. That will not be achieved in one go.

[Stewart Hosie]

The hon. Gentleman is being unreasonably reasonable. The amendment is not only reasoned, but reasonable, and it specifically fails to seek to decline to give the Bill a Second Reading. If he reads the amendment carefully, he will quickly appreciate that we seek to improve those areas in the Bill that we believe are weak, and that we are criticising the exclusion of recommendations by the Calman commission, which was the genesis of the Bill.

[John Robertson]

The hon. Gentleman sounds very reasonable, but I do not believe he is being reasonable, and I shall explain why—[Interruption.] Let me explain why you are not being reasonable. You have put forward an amendment that—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I have not put forward any amendment to the Bill. The hon. Gentleman has used the word “you” several times and I would be grateful if he could speak through the Chair.

[John Robertson]

Thank you, Mr Deputy Speaker. The “you” is, of course, a Scottish phrase that you have misunderstood—[Laughter.]

The hon. Member for Dundee East (Stewart Hosie) has put forward an argument that is wrong, because it would wreck what we are trying to do today. It would be much better to table amendments to improve the Bill. I hope that the amendment will not be accepted so that we can carry on—and that is probably what will happen. The amendment tabled by the hon. Member for Perth and North Perthshire is ill conceived. It is a mistake and he should not have tabled it.

[Ian Murray (Edinburgh South) (Lab)]

My hon. Friend is making a powerful argument about the amendment tabled by the Scottish nationalists. The amendment concludes that the Bill is considered

“as a whole to be unacceptable.”

The amendment therefore suggests that the Scottish nationalists do not want the Bill to go forward.

[John Robertson]

My hon. Friend makes my point. That is why the amendment was a mistake, and I think that the Scottish nationalists did not really mean to go down that road. If they put that in deliberately, I am wrong and will admit as much. We have to fight them on that point.

Another aspect of the Bill that needs amendment is the provisions on energy. It is a reserved matter, but if we wished to build a nuclear power station in Scotland, the present Administration say that they would use the planning rules to stop it. By the middle of this decade, we might be short of electricity, so we have to make decisions now. In fact, we should have decided years ago—my party must take much of the responsibility for failing to do so—what we should do in relation to energy, and we cannot have a devolved Administration with the power to stop developments that are happening everywhere else. Each power station that is built is the result of billions of pounds of investment in jobs and future jobs after the station has been built. Some 9,000 jobs are created when a new nuclear power station is built. We should consider having legislation to make such planning issues a reserved matter, with the Secretary of State having the power to put forward reasons why such issues should go ahead.

[Dr Whiteford]

I wonder whether the hon. Gentleman’s constituents would like a nuclear power station in their backyard.

[John Robertson]

The hon. Lady has obviously not consulted people in areas where nuclear power stations have been built. They want new stations built, because of the investment that that brings for local infrastructure. If the lights were about to go out, people in Anniesland probably would want a new power station. They would like any power station allowing us to keep the lights on. We are digressing on to a subject that has nothing to do with the Bill, and I know that you would stop me talking about it if I continued, Mr Deputy Speaker. However, I hope that the hon. Lady gets my point.

Overall, I welcome the Bill. It has some good points. Fiscal powers have always been a wee bit of a problem. Why is that? Let us have a look: in the mid-1990s, the Conservative party did away with the two-tier system north of the border—we had local government in local and regional areas. Cities such as Glasgow did very well under the old Strathclyde regional council, but once we did away with it, the money started to drift away from the centre of where the work was being done. Under the present incumbent north of the border, business rates for Glasgow were taken into a central pool and spread over the rest of Scotland, so that, in effect, the business rates in a city that created wealth and employment for people living outside Glasgow did not pay for anything. Those people came into Glasgow and used all the facilities, roads and everything else that the city council now had to pay for. I cannot remember the exact figures for now, but of £180 million collected in business rates, Glasgow used to get back £100 million.

In effect, Glasgow—the biggest area for employment—was taking £80 million out of its city centre and giving it to the rest of Scotland. I believe that that was done out of political expediency. It was agreed before the last election that the money would be returned to Glasgow, but we have since seen even more attacks on the city from the Scottish Government. If we are to go down the fiscal road, we have to consider very carefully the political stance, the areas where the money should go and the areas of high deprivation. For deprivation, Glasgow rates higher than any other city in the United Kingdom. Six of Glasgow’s constituencies—in those days, it had nine—used to be among the top 10 worst in the UK, and certainly plenty of its now seven constituencies are still among them.

Yes, we do need help, and we do need money. What we do not need is money disappearing. The fiscal powers must be used very carefully to ensure that the money taken in goes to the areas that need it. The hon. Member for Milton Keynes South (Iain Stewart) talked about how we could do that. If the Scottish Government are to have such powers, however, I want to be able to know where the money is going. Why am I saying this? There has to be an audit trail if the UK Government are to give to the Scottish Parliament money and the means to collect taxes. For example, if this Parliament is to give the Scottish Parliament Barnett formula increases—my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) mentioned this earlier—of about £34 million for disabled children, but that money does not go there, I want the ability to ask where it went. If I were told, “It just went into the budget, and we do not know exactly how it was spent,” that would be fine, as I could use it for political purposes. However, I want to know where the money is, and I want the House to be able to audit every penny that comes from the UK taxpayer.

[Mr Weir]

Is the hon. Gentleman seriously suggesting that the Scottish Government can spend money from the block grant only on whatever this place determines? In effect, does he want to export changes in this place, for example in the NHS, into the Scottish system? That is ridiculous.

[John Robertson]

What I think is ridiculous is £34 million not going to disabled children.

[Mr Weir]

It did.

[John Robertson]

Well, I think that the money went to trying to support a Scottish Parliament and a Scottish Government who were trying to keep councils’ payments down, and that people were getting bought off with it. I do not believe that one thought was given about a disabled child going short or a home not getting the money it needs. I take that view, and I am entitled to my opinion. I believe that we have to go ahead with this.

I have ranted on long enough. I support the Bill. I believe that scrutiny has to happen, and that there are areas where we can make it better. I also believe that there are probably areas where we are thinking about making things better where we may have to reign in, but the most important thing is for the Bill to proceed and for the Committee to look at it even more closely.

16:15

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

It is a pleasure to follow my near parliamentary neighbour, my hon. Friend the Member for Glasgow North West (John Robertson). Before I address the substance of the Bill, let me place on record my thanks for the great work done by the previous Government. In particular, I thank my hon. Friends the Members for Rutherglen and Hamilton West (Tom Greatrex)—I thank him in the capacity in which he assisted that Government— and for Glasgow North (Ann McKechin), and my right hon. Friend the Member for East Renfrewshire (Mr Murphy), along with those Members from other parties who took part in the Calman process and the leaders of the parties in Scotland. A great deal of thanks for the impetus behind the Bill, as for the original Scotland Bill, should go to Wendy Alexander. It is important that we should thank her from the Labour Benches in this debate for her great efforts on devolution.

The key principle of the constitutional reforms that were adopted by the previous Government was cross-party support. As my hon. Friend the Member for Glasgow North stated, there is a real contrast between the great cross-party consensus that has been achieved in the preparation and discussion of this Bill, and some of the frankly gerrymandered changes that we have seen in the Parliamentary Voting System and Constituencies Bill and the Fixed-term Parliaments Bill. I hope that right hon. and hon. Members on the Government Benches will recognise that when they bring forward further constitutional legislation in this Session, such as the House of Lords Reform Bill.

This Bill is good for Scotland, and that is why Labour Members will support it. As paragraph 2.34 of the Calman report states:

“the Scottish Parliament controls 60% of identifiable public spending in Scotland,”

but is directly responsible for

“only 10% of the taxation levied in Scotland.”

If the Bill is passed, thankfully that will change. The Bill will increase the level of taxes levied in Scotland to 35%, which is comparable to the level in devolved legislatures in Belgium, Italy, Spain and Australia. Added to that, the Bill provides for welcome revenue and capital borrowing powers, which will extend borrowing from £500 million a year, under the Scotland Act 1998, to £2.2 billion. That will release proceeds for much-needed capital projects in Scotland, such as a Glasgow airport rail link—a matter on which I have spoken a great deal in the past and on which I will continue to speak—and will raise the opportunity for investment in high-speed rail track between the major cities of Scotland and the Scottish border. That will be a helpful economic lever for Scotland. Added to that, the detail of the tax powers will see a variation of plus or minus 10% from 2016, and the welcome devolution of stamp duty land tax and landfill tax.

I welcome the fact that income tax is the principal lever being used to give the Scottish Parliament extra fiscal powers. Giving evidence to the Scottish Parliament on 18 January, Sir Kenneth Calman set out an important principle for where our economy should be going:

“If you change the financial levers, that in itself will not change anything; what you…need is to have in place the right policies.”

That is right. Speaking about those levers, Professor François Vaillancourt of Montreal university, also giving evidence on 18 January, said:

“I believe that the instrument that has been chosen, personal income tax, is the best one for the purpose. Corporate income tax is difficult to administer at a personal level, because of tax shifting between various jurisdictions…Personal income tax allows people to see a relationship between what they pay and what they get, and it is linked to the responsibilities of the Scottish Parliament, such as education, social services, health, long-term care and so forth. It is, therefore, an appropriate tool.”

I agree.

What we have also seen in the last two weeks is a real weakening of the argument for fiscal independence as propounded by some Scottish National party Members. Professor Muscatelli, whom I believe my hon. Friend the Member for Livingston (Graeme Morrice) has already referred to, makes it clear that the Bill does not seek to adopt some of the more volatile taxes, such as corporation tax and other taxes that would inject more risk into the Parliament’s revenues. He expressed the view at Holyrood on 18 January:

“Income tax has less impact in terms of tax spillover or tax competition, so it is the obvious place to start.” [Scottish Parliament, Official Report, Scotland Bill Committee; 18 January 2011, c.200-40]

Again, this is someone who speaks with real expertise, so the House would do well to take note of his views.

Some issues will have to be scrutinised closely as the Bill progresses, particularly if it receives a Second Reading and proceeds into Committee. It will be important to probe the precise detail of the definition of “a Scottish taxpayer” and to deal with some issues that my hon. Friends and Government Members raised earlier.

It is important to emphasise the necessity of proper economic forecasting in Scotland. Given the frankly lamentable performance we have seen from the Scottish Government and their ill-starred cast of economic advisers put together by the First Minister, we need a proper and robust system for forecasting growth and the impact of increases or reductions in income tax that the Bill, if enacted, will permit. I was impressed by the idea set out by the Scottish Council for Development and Industry when I went to meet its representatives in central Glasgow last week. It recommended the establishment of a Scottish office for budget responsibility—a devolved office that would examine the effect of devolved Government policies on growth and would be able to forecast properly and stress-test the impact of varying income tax, up or down, which I think is an idea with many attractions. I hope the House will be able to explore it further in Committee.

As my hon. Friend the Member for Glasgow North West mentioned, it is important for the Scottish Parliament to make the most of the totality of powers it has from the Scotland Act 1998, which it will still have if the Bill is passed. That must mean a real emphasis on growth. It is true that the income tax-varying power in itself will not necessarily produce additional growth, but it will be a tool, allied with investment in capital projects and skills and with diversifying the Scottish economy by providing more manufacturing and more help for construction, which the stamp duty tax might afford. All these are important if we are to avoid seeing the gap in employment and growth in Scotland widen in comparison with the UK as a whole over the last couple of years.

This is a good Bill, but by no means a perfect Bill. We shall scrutinise it closely if it reaches Committee, but it has the support of my constituents and it will have the support of all the key political parties that are in favour of a decent and decentralised system of government within the United Kingdom.

16:24

[Margaret Curran (Glasgow East) (Lab)]

I apologise for not being able to stay to hear the concluding remarks today. This is explained by the fact that, along with my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), I have current responsibilities as a Member of the Scottish Parliament. We are still trying to juggle some of those responsibilities, so I hope I can be forgiven by my colleagues, friends and opponents on these Benches. I obviously do not have to apologise to too many of my hon. Friends—although there is a valiant crowd left.

I am in a privileged position as I have the honour of representing the people of Glasgow East in this august institution that has such great traditions, but I can also participate in this debate with the benefit of my experience as a Member of the Scottish Parliament for 12 years, since its inception. This is a significant debate, on which we will all look back in years to come, as we are at a key stage in the devolutionary process. The Scottish Parliament is firmly established in the governance of Scotland and has addressed the fundamental democratic deficit that generations of Scots felt. Many of us campaigned long and hard for the establishment of a Scottish Parliament, and are proud of many of its achievements, as it empowered us to address problems and galvanise responses to meet challenges, within the framework and partnership of the United Kingdom. Perhaps we are in a position where we get the best of both worlds.

My experience is that the Scottish Parliament has, as the right hon. Member for Gordon (Malcolm Bruce) said, acted within the mainstream of Scottish opinion. The Scottish people have strongly supported the Scottish Parliament, which has kept their faith as it has developed. In some ways, its operation is in the character of Scotland. We criticise the Parliament and keep it on its toes, and many of its Members have faced criticism, but the Scottish people would never tolerate its abolition and would wish to protect it.

The Scottish Parliament has not been without its controversies and weaknesses, which we hope to address through the Bill, but it has had notable successes. I am pleased that this august Chamber has also learned from the Scottish Parliament, which led the way on the smoking ban and on free public transport. Scotland has what is called the most progressive legislation on homelessness. With the housing stock transfer, in which I was particularly involved, we managed to develop the means to have perhaps the highest level of housing investment, in the needier parts of Scotland, that has ever been achieved. That speaks to one of the great successes of the Parliament, which is the focus on the experience of Scottish people: to be hard-nosed and hard-edged; to focus always on the Scottish people’s interests; not to allow ourselves to be diverted into eccentric political debate; and always to keep the mainstream of Scottish interests at the forefront of our minds. I hope that the Scotland Bill will allow that to continue.

I am sure that my hon. Friend the Member for Kilmarnock and Loudoun, who shares my privileged position, has also often been asked to draw parallels between the experience at Westminster and in the Scottish Parliament. Although I would not want to digress, I make two comments about that. In the early days of the Scottish Parliament, the worst thing that we could do, and that we would be chastised for—I am sure that the Under-Secretary, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), would agree—was to emulate Westminster. If we behaved in any way that was comparable to Westminster, we were criticised enormously. We saw ourselves as a more consensual, transparent and accessible Parliament. I would argue that the high number of women in the Parliament helped to establish that, although I am less on the consensual end of the spectrum than some others, such as perhaps my hon. Friend the Member for Kilmarnock and Loudoun.

I am struck by my experience in this place, however, and I think that the Scottish Parliament now does need to learn from Westminster’s much more sophisticated mechanisms for ensuring that Government, as opposed to Parliament, are held to account. The Bill begins to address that. This Parliament’s treatment of its authority and reach is also much more thorough than that of the Scottish Parliament. That might be explained to some extent by the Scottish Parliament’s youth, but the time is right to consider those big issues. The Scotland Bill allows us to do some of that.

According to international research and assessment, one of the strongest features of the Scottish Parliament is its Committee system. That system allows people to be interrogated about legislation and research to be consulted. It is based on the principles of evidence, engagement and analysis, and serves as a model in that regard. The Calman commission could be said to have copied that system, and to have done so very effectively. Evidence-led policy development must be centre stage.

Like others, I thank and congratulate those who served on the commission. They devoted time to taking stock of where we are in Scotland, and to outline an agenda for taking Scotland forward. I hope that, as we examine their conclusions and the extent to which they have been incorporated in the Bill, we will learn from a process that managed to bring the broader body politic into the detail of some of the commission’s discussions, because I think it can enhance democracy considerably.

One of the principles of such a process is that it is cross-party. As those who are familiar with Scottish debate will know, that is not easy to achieve in Scotland, as the current operations of the Scottish Parliament illustrate. The Scottish Government rarely command a majority vote in the Parliament: education motions, for example, are regularly defeated, and the Government pay no attention. I think that that is very serious, but it contrasts starkly with the majority support for Calman’s work, which is highly significant.

I recognise the work that the Government have done in the Bill in relation to borrowing powers and financial accountability, which will advance the Scotland debate significantly. However, I want to draw attention to a very important issue that is particularly relevant to my constituency. As many Members will know, it was the death of a very young child that triggered—if the House will forgive the expression—the debate in Scotland about the use of airguns. A young boy, Andrew Morton, who was only two years old, was shot dead in my constituency with an airgun. I pay tribute to the Morton family, who have campaigned for many years. They have lived with terrible tragedy, but ,with great dignity, have managed to pull themselves together and argue the case for the banning of airguns.

I have listened carefully to what many people have said about the difficulties of legislating on such matters. Let me take this opportunity to thank my hon. Friend the Member for Kilmarnock and Loudoun, who at the time of that terrible death was Minister for Justice in Scotland. She met the Morton family, and worked closely with them to see what could be done. We appreciate that there is no easy solution, and that simply banning something does not mean that the problem will go away. I do not necessarily want to cause difficulties for sporting communities in Scotland, and I realise that we must test the legislation as we go through it in order to ensure that it is proportionate. However, I plead with the Minister to bear in mind the experience of the Morton family, to bear in mind the fact that 11,000 people signed the petition they delivered, and to understand the basic, essential, human emotion involved.

That airgun was not the most dangerous kind available, and it was a kind that is easily available. However, although it was not particularly dangerous in itself, in the wrong hands it caused terrible tragedy. We must do all that we can to protect people from the worst excesses caused by the use of such guns.

The other key aspect of the Mortons’ experience was that they saw the Scottish Parliament as the place to go to protect their family. That was right and understandable, because at the time crime and justice were the subject of a huge debate in Scotland, led by my hon. Friend the Member for Kilmarnock and Loudoun. I think that we too should have that debate, and I plead with the Minister to allow it to take place.

In conclusion, the Bill is a key stage in the development of devolution in Scotland, and I believe that it speaks to majority Scottish opinion. We perhaps need to test some of the powers more thoroughly to ensure that they properly address the economic interests of Scotland, but I emphasise again that on some of the more significant human experiences we have within our grasp the powers to act to address things that matter fundamentally to Scots. I hope that we take the opportunity to do so.

16:34

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I am particularly pleased to have the opportunity to speak in this debate. As the hon. Member for Epping Forest (Mrs Laing) said, this is Burns week, when people across the world celebrate their Scottish roots. I always enjoy this time of year because people are asking me for advice on how to pronounce particular Scots words, rather than gently—or perhaps not so gently—mocking my native Ayrshire accent. Some of my Scottish Parliament staff have found the transition to Westminster slightly more difficult. At one point, my diary secretary had to explain what was meant by the fact that my diary was “stappit” and I was therefore unable to make a particular event. For the benefit of the Hansard reporters and any translators, I should say that “stappit” simply means very full.

In the past week, the new Burns museum opened in Alloway, in the constituency of my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne), and that superb new venue hosted the Burns humanitarian award ceremony, with Linda Norgrove being a very worthy posthumous winner. With due deference to my hon. Friends the Members for Ayr, Carrick and Cumnock and for Dumfries and Galloway (Mr Brown), we Mauchline residents are fond of saying that although Robert Burns was born in Alloway and died in Dumfries, he lived in our village. It was therefore a pleasure to join the Mauchline Burns club to lay a wreath at the Burns national memorial in Mauchline on Burns day this week.

I reassure you that I am not about to continue a treatise on Robert Burns, Mr Deputy Speaker, as there will be other opportunities for that. However, the references to him are relevant, because Burns was intensely concerned about Scotland and the Scottish people and, despite what some SNP Members might claim, not from a narrow nationalist perspective. Burns was an internationalist who looked beyond geographical boundaries and got to the heart of humanity, and that is very much the spirit of Scotland today. We are all proud to be Scots and we will be passionately patriotic at football and on the full range of other areas, but we all know that Scots have made a much wider contribution to the world than simply looking after our own backyard. The vast majority of working-class Scots certainly know that we have more in common with our neighbours who live south of the border in similar communities than divides us.

So when we take forward the debate on the Scotland Bill we must focus on what we can deliver for people in Scotland; this cannot simply be an academic exercise that bears no relation to the lives of the people who send us here to represent their views. I am proud to have represented the Scottish Parliament constituency of Carrick, Cumnock and Doon Valley for more than 10 years, and I will continue to represent it for the next 54 days as I count them down. I hope that, rather than that simply being a matter for the public record, it might help to offer a distinct perspective to the matter in hand, as was the case with my hon. Friend the Member for Glasgow East (Margaret Curran).

As a number of hon. Members have said, the Bill is broadly based on the Calman commission report, and I, too, wish to put on record my appreciation for what was a thorough and robust process involving a broad section of Scottish civil society. Sir Kenneth Calman has produced a significant body of work in which all those associated with it can take pride. I am in broad agreement with the aims of the Bill—perhaps people will say that that is no surprise—and I will be supporting it. However, as I shall set out, I believe that some aspects of it should be thoroughly and robustly examined, not least by the Select Committee on Scottish Affairs, and scrutinised in this Chamber.

In the foreword to the White Paper on devolution, Donald Dewar wrote:

“The Government’s aim is a fair and just settlement for Scotland within the framework of the United Kingdom—a settlement which will be good both for Scotland and the United Kingdom. The Scottish Parliament will strengthen democratic control and make government more accountable to the people of Scotland.”

That was the basis of the Bill that fundamentally altered the structure of power in the United Kingdom.

On 11 September 1997, just over five months after Labour came to power, 74% of Scots voted in favour of the establishment of a Scottish Parliament. On 1 July 1999, the Scottish Parliament was officially convened. That date marked the transfer of powers and devolved matters to Scottish Ministers, and it was a time of immense pride for the vast majority of the Scottish people. As my hon. Friend the Member for Glasgow East has observed, those of us who were fortunate enough to be part of that day will forever feel that we were part of the history of Scotland. So quick and seamless were the transfer of powers and their incorporation into Scottish life that the enormity of the development and the significance of the change in a relatively short time might not always be acknowledged in the manner that it should be.

Notwithstanding the controversy over the Parliament building, my right hon. Friend the Under-Secretary—I will call him my right hon. Friend in recognition of the days that we spent in the Scottish Parliament—will recall that some of the other debates in those early days were passionate and had a real energy and enthusiasm for the change that was taking place. That was due in no small part to the work of the Scottish Constitutional Convention over almost two decades, as was acknowledged by the right hon. Member for Gordon (Malcolm Bruce). The convention was established in 1989 and consisted of representatives of civic Scotland and of most of the political parties. It drew up a detailed blueprint for devolution and outlined the proposals for the directly elected Scottish Parliament, crucially with the legislative powers that were finally achieved. That also formed the basis for the further proposals that were introduced by the UK Government in 1997.

I am proud to associate myself with the achievements of the Scottish Parliament over the past decade. As a Parliament, we set out to change Scotland for the better. A substantial body of work was undertaken, starting with the abolition of a millennium of feudal tenure, with communities being given the right to buy and manage the land on which they lived and worked. This was symbolic as well as practical. We also ensured that our elderly people could live with dignity and respect by introducing free personal care. We led on public well-being in the UK by introducing the smoking ban in public places, which represented a step change in the way we dealt with health issues in Scotland.

The Scottish Parliament also introduced an unprecedented programme of school and hospital building, ensuring that our children no longer had to be taught in substandard buildings and that our sick would no longer be abandoned to Victorian conditions in hospitals. We abolished up-front tuition fees and introduced bursaries for the less well-off students, which resulted in more young people going on to further education in Scotland than ever before. We also introduced a ban on fox hunting. I was particularly pleased with the establishment of a Children’s Commissioner for Scotland, for which I had campaigned for about 10 years before I even thought of becoming a full-time politician. The repeal of section 28 was controversial at the time, but now it is completely accepted as having been the right thing to do in the pursuit of equality. It was a Parliament that challenged Scotland to think about its future. It tried to engage every Scot in the challenges that we faced, and it led public debate in civil society. It is a Parliament that continues to ensure that there is a focus on protecting the most vulnerable, and it has made a real difference to the lives of everyone in Scotland.

The Calman commission came along at the right time, however. It published its findings after just a decade of the devolution settlement, and that seems an appropriate length of time after which to offer an initial assessment of how the Parliament has worked, as well as how we need to move on. Since 1999, the devolution settlement has remained relatively static, but I think that that was right at the time, as it allowed things to bed in and allowed the Parliament to take shape. Some minor changes were made. The Scottish Parliament (Constituencies) Act 2004 retained the current level of representation at 129 MSPs. That was done in recognition of the youth of the Parliament as well as the range of work that it was undertaking at the time. We have heard other examples of minor tweaks, not least the Railways Act 2005—perhaps not so minor a tweak—which allowed Scottish Ministers to prepare a strategy for carrying out their functions in relation to railways and railway services. That was another practical and sensible change.

It is now time, of course, to consider the future. The task that the Calman commission was set was:

“To review the provisions of the Scotland Act 1998 in the light of experience and to recommend any changes to the present constitutional arrangements that would enable the Scottish Parliament to serve the people of Scotland better”—

for me, that is the critical point—as well as to

“improve the financial accountability of the Scottish Parliament”.

That is what I want to talk about now.

The Calman analysis of the current settlement, notwithstanding some of the criticisms we have heard in the Chamber today, is persuasive. England and Scotland have been part of the Union for three centuries but Scotland maintains its own identity and now has its own devolved political institutions. Overall, people would say the devolution settlement has been shown to work pretty well. It has not led to the convoluted or confused relationship with other partners in the United Kingdom that some people thought it might; nor has it led down a one-way street towards independence, as others feared. There are changes that we can and must make in order to take forward this work in the future.

There is cross-party understanding that the financial arrangements lack the financial accountability we will want to see as the Parliament progresses. By depending wholly on the Westminster grant, the budget bears no relation to economic performance in Scotland. As we have seen in recent years with differing strands of opinion in power at Holyrood and Westminster, that can result in friction between Governments. The premise of the Calman commission was that election to the Scottish Parliament should be accompanied not just by being there to divide up the block grant but by having fiscal accountability, too. Under the proposed arrangements, Scotland will become more dependent on and more accountable for the tax revenue it raises.

As we have heard, the Bill replaces the Scottish variable rate of income tax with a new Scottish rate of income tax that will be decided by the Scottish Parliament annually and applied consistently to the basic, higher and additional rates of income tax. The grant from the UK Government will automatically be reduced by 10p in the pound and the Scottish rate will be added to it. In principle, I support the proposed measures, but we must ensure that there is proper and thorough scrutiny of what they will mean as the Bill goes through Parliament.

Under the proposals, the UK will retain control of exemptions and reliefs and Scottish tax revenues will be subject to Westminster control. One concern that has been raised is that when the UK takes decisions such as increasing the personal allowance to £9,000 or eliminating the 50% top rate, that will affect Scottish revenues. We have heard criticisms of that today as well as some attempted reassurances. A critical point that we must reach in Committee will involve ensuring that we receive reassurances about how that will work as well as assurances that it will not cause further problems or lead to unintended consequences, as has been suggested in Scotland.

Borrowing powers will also be introduced, another move that I broadly support. We have heard that from 2015, Ministers will be allowed to borrow up to 10% of the Scottish budget in any one year subject to an overall limit on capital borrowing of £2.2 billion. In principle, that will be a positive step that should allow key infrastructure projects to proceed as and when the Parliament believes they are necessary. The Bill also provides, however, that the Scottish Parliament will be able to borrow £500 million through new revenue borrowing powers when tax receipts fall short of those anticipated. At first glance, that offers limited flexibility and would mean that Scotland could be under pressure to make spending cuts should a significant shortfall arise. I am sure that that will be considered further as the Bill makes progress.

As scrutiny takes place, we must ensure that we consider the financial calculations and the financial implications of Calman in light of our present economic circumstances. That is the right and responsible approach as we continue to scrutinise the Bill. It is not enough simply to say, as SNP Members appear to be saying, that the Bill does not go far enough, so they are going to vote against the extra powers it will give. That is a rather odd stance for them to take. I might have misunderstood them, and no doubt they will correct that misapprehension if I have, but it certainly sounded like that to me.

I hope that one option we will consider during our scrutiny of the Bill is whether the proposal regarding the Scottish Parliament’s borrowing powers can be brought forward slightly more quickly than the Bill proposes. That is up for debate and would be useful to allow the planning of key infrastructure. It would also have the benefit of assisting what is currently a pretty beleaguered construction sector in Scotland.

Several issues have not been mentioned and I shall mention them briefly before concluding. The measures on licensing the prescription of controlled substances to deal with certain addiction problems make sense and I am sure we will want to consider that issue in more detail in Committee.

As my hon. Friend the Member for Glasgow East has highlighted, the devolution of the competency over air weapons to the Scottish Parliament will potentially allow the introduction of a different approach and licensing system there. She mentioned my time as Scotland’s Justice Minister. In that role, I had discussions with different Home Secretaries—four at the last count—to decide how best to ensure that people in Scotland were protected from those who would use air weapons irresponsibly. We agreed that our approach should not be taken forward in an ad hoc way and should not simply be a soundbite solution that would please a few people but would not actually deliver. That is why I am pleased that we will have the opportunity to scrutinise that issue properly and come up with a workable solution.

As I have said, the financial relationship between the Scottish Parliament, the people of Scotland and the rest of the UK is vital. Let me respond to some of the comments from SNP Members about our scrutiny of the Bill. I do not recall being given much quarter by Labour Back Benchers when I was a Labour Minister in the Scottish Government—I have no problem calling it that although it is technically called the Scottish Executive—and I am sure that during our debates on this Bill, Labour Members will properly seek to scrutinise every clause and line of the Bill to ensure that we are doing the right thing.

We should keep at the forefront of our minds the reason why we are doing all this. It is not a dry, academic exercise only for text books and discussion in learned tomes. It is about making a difference for the people of Scotland whom we represent. We must make the Bill relevant to people, because nothing will drive them away faster from engaging in the process than if they believe it is not a Bill for them—that it is only for politicians and will not affect their lives. If that happened, we would lose a considerable amount because we would be moving away from the intention of the late Donald Dewar, which was to make the Government more accountable to the people of Scotland.

There is plenty of public opinion and evidence in Scotland that people want a stronger form of devolution than at present, and they look to us to find the way forward. They might not know exactly the chapter and verse—where they want the t’s crossed and the i’s dotted in the legislation—but they look to us to take forward the principles and spirit of devolution and to come up with solutions. We have a unique opportunity in this Parliament to reshape how devolution works with a more comprehensive approach, so I welcome the Bill and look forward to our continued scrutiny of it as it goes through Parliament.

16:54

[Stewart Hosie (Dundee East) (SNP)]

It is a genuine pleasure to follow the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), who said a number of things with which I agree entirely. Twice she said that this should not be a dry, academic exercise, the first time stating that it was not about the powers, but the policies that they are used for.

On the Bill’s proposals for enhanced financial powers, with which we agree, I wish to set out in a little detail precisely what we would do with them and why we back them. I would also like to clear up a slight misunderstanding: we will absolutely not stand in the way of the Bill. The SNP will never stand in the way of additional powers coming to Scotland. The reason for the reasoned amendment, and for the amendments that we will table in Committee and beyond, is our desire to strengthen the Bill by ironing out some of the flaws and making it better. That is what we should all be doing. Notwithstanding the fact that we are only 100 days away from the Scottish election, at heart we all want the Bill to be as good as it can be.

[David Mundell]

I am afraid that I do not understand the logic of the hon. Gentleman’s argument, because his so-called reasoned amendment suggests that the Bill is “unacceptable”. The logic of his argument is that if he does not succeed in making the amendment—and he must accept that he is unlikely to do so—he will be unable to support the Bill in an unamended form.

[Stewart Hosie]

It is rather obvious that we are seeking to make the Bill better. In its current form it will not work, and I will explain why in a moment. I do not believe that it will meet even the honourable objectives that the Government have set out.

[David Mundell]

I think that the House deserves some clarification from the hon. Gentleman. If the amendment that he is promoting does not prevail and the Bill progresses in essentially the same form, perhaps with only some minor amendments, is he saying that his party will not accept it?

[Stewart Hosie]

I now see what the Minister is asking. I have every confidence that, when we coalesce in Committee, the common sense of Members from all parties will lead to a number of successful amendments that will improve the Bill, perhaps by addressing the weaknesses in the financial powers, for example, to which the hon. Member for Kilmarnock and Loudoun alluded. We will wait until the subsequent stages before deciding on the Bill, which might have been changed substantially by then.

[Cathy Jamieson]

Will the hon. Gentleman give way?

[Stewart Hosie]

I will take one more intervention before starting line 1 of my speech.

[Cathy Jamieson]

My understanding was that the hon. Gentleman indicated earlier that he would divide the House on the amendment, the last line of which states that the House

“considers the Bill as a whole to be unacceptable.”

Given the spirit of consensus that appears to be breaking out, will he now consider withdrawing the amendment so that we can move forward on the basis of consensus?

[Stewart Hosie]

The arguments in favour of the reasoned amendment will be made and they will explain, I hope with some support, why there are flaws in the Bill.

The Bill contains two fundamental fiscal measures: first, the reduction in the basic higher and additional rates of income tax by 10p, and the setting of a Scottish rate to compensate for that; and secondly, the availability of limited revenue and capital borrowing powers. Revenue borrowing will fill a part of the gap left when revenue decreases and a limited increase in capital borrowing will enhance direct capital investment.

However, the income tax powers are inadequate and include an in-built, long-term deflationary bias in the Scottish budget. The borrowing powers, particularly the revenue powers, are so tightly controlled that they are unlikely to be effective in delivering the sensible outcomes that many of us want. It is also worth noting that even the devolution of the income tax, the small stamp duty land tax and the landfill tax means that the Scottish Parliament will still have direct control of only 15% of the taxes raised in Scotland, with the remaining 85% accruing directly to London. I do not intend to talk about full fiscal autonomy, which there has been some talk of, but as a comparator we can look to the Basque country, which has been mentioned. It controls around 86% of its revenue.

I want to concentrate on the specific problems with income tax provisions. Receipts are sensitive to changes in economic circumstances and might fall dramatically in a downturn, as I will explain later. That presents an instability to the budget in Scotland, because we are talking mainly about income tax and the shortfall that would not be matched by the Bill’s provision of very limited borrowing powers. Growth in income tax revenue is low when compared with that of total tax revenue, and that is obviously deflationary, because only the modest growth in income tax will accrue to the Scottish Parliament, with the higher growth in total tax accruing still to London.

The figures between 2004-05 and 2008-09, for example, show that total tax revenue increased by £13.7 billion, but under the proposed plan the Scottish Government, although they control 15% of the tax, will receive only 9% of the increase. That automatically begins to squeeze the Scottish budget. Even within income tax, the most significant growth comes from the higher rates, and most of that growth will not be available to Scotland.

Historically, higher rate taxpayers account for a larger share of the growth in tax receipts, and therefore most of the growth in income tax receipts will accrue directly to Westminster, not to Scotland. We might, in fact, receive a declining share of Scotland’s income tax yields, because we are assigned half the basic rate, one quarter of the 40% rate and only 20% of the 50% rate. The impact of that deflationary bias can best be demonstrated by assuming that the powers had been in place since 1999-2000. Since then, the impact of the shortfall against forecast departmental expenditure limits would have represented an accumulative cut of about £8 billion.

[David Mowat]

I understand the hon. Gentleman’s point about a deflationary bias vis-à-vis the total tax take, but, in comparing the proposal before us with the status quo, what is relevant is the increase in income tax versus the increase in public spending. That is the basis on which the current Barnett allocation works, and on that basis Scotland is likely to do better in the short term.

[Stewart Hosie]

That is not necessarily true, and we need to look at both these measures: the growth in income tax versus the growth in total tax, and the percentage of the share of growth that we receive from income tax alone, owing to how it will be assigned to Scotland, with most of the higher parts being accrued still by the UK, where growth is likely to be higher.

[Anas Sarwar]

Does the hon. Gentleman accept that, under the arrangement imposed by the Bill, we would share not only the potential benefits, but the potential risks?

[Stewart Hosie]

Notwithstanding the deflationary bias, there might be growth in some elements of income tax revenue, but in terms of sharing risks the downsides for Scotland are much greater. In an intervention, I said that, if a future Scottish Government chose, for example, to reduce income tax to stimulate economic growth and it worked, they would take the hit in reduced income tax revenue, but the UK Government would benefit from the additional corporation tax yield. There are probably more downsides than upsides, because the range of devolved taxes is limited and, in cash terms, involve almost exclusively income tax.

The other problem is that the provisions fall foul of not being fully devolved. Income tax rates do not stand on their own; they must be looked at alongside allowances and thresholds, neither of which is being devolved. So the consequence of a significant change, in particular the UK Government’s plan to increase personal allowances to £10,000, which in principle is a very good policy, could mean a reduction in funding to Scotland of between £800 million and £1 billion a year.

[Iain Stewart]

Will the hon. Gentleman give way?

[Stewart Hosie]

One second.

I am sure that such a change will not be allowed to happen, but UK Governments have announced 17 changes to income tax since 2007, and they would have affected the proportion of income tax revenue or receipts assigned to the Scottish Government. Those changes included not only the big headline splash on the £10,000 threshold, but 16 others, each of which would have affected the assignation of receipts to Scotland.

Even if the provisions did not result in a real-terms cut to the Scottish budget, which I believe they do, and even if they did not create an in-built deflationary bias, which I believe they do, they would still provide an unstable platform for the Scottish Government, precisely because of the volatility of income tax receipts in difficult times. At no time was that clearer than between 2007-08 and 2009-10, when income tax receipts fell by 7.3%. Over those two years, that would have led to a drop in Scottish revenue in excess of £1 billion, and that is presumably the point at which the revenue-borrowing powers are meant to kick in and help. I shall take the hon. Gentleman’s intervention now, because the next part of my speech is complicated.

[Iain Stewart]

I want to return to the hon. Gentleman’s point about changes to income tax allowances and other changes to the UK rates of income tax that would have a consequential effect. If I have read the Command Paper correctly, there will be a no-detriment rule. Therefore, if a change in the allowance structure has a consequential effect, the block grant will be adjusted appropriately.

[Stewart Hosie]

That is what the Command Paper says, but because the Barnett rules have the effect of squeezing income, we will have to see precisely how the no-detriment clause works. Will it be an up-front no-detriment clause that pays against forecasts, or will it be retrospective and pay only if the estimate be lower than the forecast? None of that is at all clear yet. That is precisely the kind of issue that we want to probe with more detailed amendments in Committee.

The limited borrowing powers are slightly poorly designed and would constrain the Scottish Government, rather than assist them. Fundamentally, the borrowings can be made not against forecast reductions in revenue, but against reconciled outturn receipts 12 months after the end of the financial year. That means that revenue borrowing cannot even act as an automatic stabiliser to fill the tax gap during a downturn—something that every party accepts is necessary and supports. In short, the powers will expose the Scottish Government to the full negative impact of the economic cycle, rather than present them with the ability to mitigate those problems.

Secondly, revenue borrowing will be capped at £200 million in a single year and at £500 million in total. Therefore, even if the timing of the borrowings could have been sorted out, the limits would have been inadequate to close the revenue gaps in 2008-09 and 2009-10, when the calculated budget shortfalls were £400 million and £800 million respectively. That might be what the hon. Member for Kilmarnock and Loudoun meant when she referred to the economic parts of the Bill.

Thirdly, the repayment of borrowings within four years almost certainly means that repayments will have to be made at precisely the wrong point in the economic cycle. To make that point more solid, I should explain that the proposals would have required the revenue borrowing needed to cover the shortfalls between 2008-09 and 2009-10 to be repaid in the current comprehensive spending review period, when the Scottish block grant is already under pressure from proposed cuts of more than £3 billion. Borrowing and repayment should be possible over the entire economic cycle and should not have arbitrary timelines attached to them. Cyclical borrowing can mitigate volatility, but the proposals will generate additional volatility in future budgets.

The highly limited revenue borrowing powers that are proposed will be further constrained because the first 0.5% of any shortfall—about £127 million in 2014-15—will have to be found from cuts in the cash reserve before retrospective revenue borrowings can even be found.

The second borrowing power in the Bill is for capital expenditure. It is welcome, but could be improved. The cumulative borrowing total that is set out is £2.2 billion. That is quite low compared with recent Scottish Government investment of more than £3 billion a year. Borrowing in any year will be limited to 10% of the capital DEL—approximately £230 million by 2014-15—not the total budget. For example, a replacement Forth crossing costing between £1.7 billion and £2.2 billion would use up the entire additional capital borrowing, if we were able to secure it under the constrained limits set out by the Treasury. The only way to increase the limit to allow additional borrowing would be for the UK Parliament to agree to a legislative amendment. I am not sure that that is the best approach for securing long-term sustainable capital investment.

The borrowing powers in the Bill will limit the Scottish Government to certain types of borrowing. They will be able to use loans, rather than bonds or other instruments that would provide greater flexibility. Transport for London, which is a local authority in respect of its borrowing powers, is currently issuing commercial paper worth £7 billion for Crossrail and other projects. Birmingham city council issued paper to the tune of £250 million in 2006, and it seems passing strange that what should be seriously enhanced powers for the Scottish Parliament would not even put it on a par with TFL or Birmingham city council in its ability to raise cash through commercial paper for important national infrastructure works.

We are also concerned, like the hon. Member for Kilmarnock and Loudoun, that the Bill might not provide access to capital quickly enough to meet Scotland’s needs. The proposal is that access will commence from 2013, subject, as we heard earlier, to Treasury approval on a per-project basis. In the face of the budget cuts and the urgent need to invest in infrastructure, that is not soon enough.

The remaining tax proposals in the Bill are limited, although welcome. I have to say, however, that the Conservatives appear to have U-turned on some of the taxes that Calman said should be devolved. As I said, this is not a dry, academic exercise, and we would like stamp duty to be incremental, so that people do not pay the full whack for hitting the threshold. I am glad that responsibility for that is being devolved. It was worth £593 million in Scotland in 2008-09, but that was only 1.4% of all the non-North sea revenue raised in Scotland.

[Fiona O'Donnell]

The hon. Gentleman has been very reasonable in acknowledging the parts of the Bill of which he approves. Would his amendment not therefore have been more reasonable if it had said “on the whole” rather than “as a whole”?

[Stewart Hosie]

There are forms of words that can be accepted, tabled and selected and forms of words that cannot. I stand by the amendment, because it is important to challenge the Bill in areas in which we do not believe it comes up to scratch, and it would appear that many of our concerns are shared among the parties. To have a dry, sterile debate about the words in the amendment rather than its substantive nature does the Labour party no good. That is the only time I have been partisan in my entire speech, and I will stick to that.

[Ian Murray]

rose—

[Anas Sarwar]

rose—

[Stewart Hosie]

I am going to go on with my speech.

We would like the landfill tax to be used to support waste separation at source, recycling, waste minimisation and packaging reduction, so we welcome its being devolved. However, at £85 million, it represents only 0.2% of Scotland’s non-North sea revenues. We welcome parts of the Bill, but there are significant weaknesses and flaws in it, and I believe that I have explained the potential deflationary bias in its main economic powers.

I have said that there are bits of the Bill that we like and bits that we need to change, and it is hugely disappointing that some of the Calman tax proposals have been excluded. The Government have decided not to devolve air passenger duty or aggregates duty. They argue that since aggregates duty is subject to challenges at EU level it cannot be devolved, but had it been devolved, the Scottish Government would have been required to take exactly the same cognisance of an EU decision as the UK Government. The same applies to other taxes. The Government argue that air passenger duty is under review and cannot be devolved, but the whole purpose of devolving responsibility is to allow the system to be different if it is sensible or necessary. They should devolve the matter first and then have the review in England. If the Scottish Government decided that they needed to have a review, they could do so in their own good time.

I am further disappointed that, as the right hon. Member for Stirling (Mrs McGuire) said, the Calman proposal on revenue from savings and dividend income was not included in the Bill. That would have been extremely important because of the link with income tax, and because of the complexity of the rates about which she spoke.

We will not stand in the way of the Bill, although we have set out a series of issues in our reasoned amendment.

[Anas Sarwar]

The hon. Gentleman has been very generous in giving way. He says that he will not stand in the way of the Bill, but the amendment clearly states that the SNP

“therefore considers the Bill as a whole to be unacceptable.”

That means that if the amendment is not accepted, he will vote against the Bill and against new powers for the Scottish Parliament. Is that the wording in the amendment wrong, or is it just the wrong politics from the SNP?

[Stewart Hosie]

We are 10 years into devolution. We have a Scottish Parliament, of which everyone speaks highly. The Bill purports to devolve some significant powers and give additional responsibility, which is good. However, those powers are not good enough. If all Labour can do is snipe, “They didnae do that, they didnae do this,” rather than consider the substantive issues—[Interruption.] I shall tell hon. Members what we will do: we will press our reasoned and reasonable amendment to a vote, but we will not oppose the measure. I hope that, when we deal with the matter seriously, through amendments on issues that we have identified in common, we will have less Second Reading, pre-election banter and make the Bill much better.

17:14

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The hon. Member for Dundee East (Stewart Hosie) mentioned banter, and before I deal with the substance of the debate, I wish my hon. Friend the Member for East Lothian (Fiona O’Donnell) a very happy birthday. She made an excellent speech, despite the rather churlish sedentary comments of another hon. Member. It was not quite as good a speech as she made last night—but for those who missed that particular speech, I am afraid that it is not in Hansard, which is probably just as well.

I welcome the opportunity to speak about the Bill, which will strengthen devolution and increase the accountability of the Scottish Parliament to the people of Scotland. It will build on the historic work of the Labour Government in establishing the Scottish Parliament.

I campaigned for a Scottish Parliament as a teenager in 1997, even though I was not old enough to vote in the referendum. In the past decade, devolution has proved to be the right form of governance for Scotland. The Parliament has delivered free personal care for the elderly, guaranteed a nursery place for every three and four-year-old and led the way for the rest of the UK, as my hon. Friend the Member for Glasgow East (Margaret Curran) said, by introducing the smoking ban, among other measures.

The Scottish Parliament has been a great success, but after a decade of devolution, it was time to review how it works in practice. That is why the Labour Government established the Calman commission in response to the cross-party calls in the Scottish Parliament. The exception was, of course, the Scottish National party, which refused to have anything to do with those much-needed discussions.

Calman made several recommendations, including on tax-raising powers and responsibilities for capital borrowing. The Scottish Government have been accountable for spending taxpayers’ money for the past 12 years, and it is now appropriate that they will be accountable for how it is raised. The powers will increase the proportion of revenue that the Scottish Parliament raises from around 15% to 35% and give the Parliament the ability to borrow nearly £3 million in capital and revenue expenditure. Greater powers over taxation will give Members of the Scottish Parliament a significant ability to stimulate sectors of the Scottish economy.

[Pete Wishart]

I am sure that the hon. Lady listened carefully to my hon. Friend the Member for Dundee East (Stewart Hosie) when he explained his problems with the Bill. He described a deflationary bias that is built into the heart of its financial provisions. Why does the hon. Lady not think that there is a deflationary bias? How is there no deflationary bias in the proposals as they stand?

[Gemma Doyle]

If the hon. Member for Dundee East (Stewart Hosie) would like to discuss that with me, I would be happy to do so when he is in the Chamber or on another occasion.

In addition to new powers on funding, Calman also recommended devolving powers to regulate air weapons, set the drink-drive limit and determine national speed limits. The inclusion of the transfer of those powers in the Bill is welcome. However, some points of concern obviously remain, such as the aggregates levy, food labelling and charity registration. We would welcome an update from the Under-Secretary on those matters. On the whole, the Bill is the right approach to strengthening devolution and preserving the Union.

In addition, the vast majority of Scots want that approach. Polls show that most want more powers for their Parliament while remaining within the UK. Indeed, some might say that Scottish people know that they have the best of both worlds: an effective Parliament that enables them to find Scottish solutions to Scottish problems while being part of the fifth largest economy in the world.

As the nationalists encourage us to engage in flag waving and sentimentalism, we should keep sight of the vital importance of our economic and cultural partnership in the UK. As I have already mentioned, Calman was established as a consequence of cross-party support, but it did not receive unanimous backing. Far from seeking to strengthen devolution within the Union, it is the ultimate goal of the SNP to break up Britain and to break the historic, cultural and economic ties that bring strength to Scotland and breadth to Britain.

Rather than engage in the process of making the Parliament stronger, the SNP chose to indulge in its own national conversation, as my hon. Friend the Member for Glasgow Central (Anas Sarwar) mentioned. By its own admission, it spent nearly £2 million on a conversation with itself on the terms of a referendum on full independence, which would have cost £9 million but was later abandoned anyway. That was a complete waste of money.

So obsessed is the SNP with its separatist agenda that it refused to accept that most Scots do not want independence. The SNP does not understand that the priorities of ordinary Scots are protecting and creating jobs, better schools and hospitals, and making our communities safer. That is why Scots are not listening to the SNP any more.

[Ian Murray]

My hon. Friend mentioned the SNP obsession with independence. Does she agree that it is a sad indictment of the SNP that it was so desperate for a Conservative Government—against the wishes of the Scottish people—further to advance its independence agenda?

[Gemma Doyle]

That is very worrying. Before the general election last year, Alex Salmond in fact said that he would prop up a Tory Government if necessary, and as such I agree with my hon. Friend. When I talk to people in my constituency in West Dunbartonshire—

[Mr MacNeil]

Will the hon. Lady give way?

[Gemma Doyle]

Not at the moment.

People in my constituency tell me that their biggest concerns are about jobs. There are reports that there could be 1,700 local redundancies—[Interruption.] That illustrates the difference between Labour and SNP Members. I am talking about jobs in my constituency and not about independence, which is why I am not giving way at the moment. My constituents are concerned that there could be 1,700 local redundancies in my constituency alone as a result of the actions of this Tory-led Government. They are concerned about the impact of the VAT increase, spiralling fuel price increases, and the effects of cuts in tax credits and child benefits on their families. They fear the impact on local hospitals and their children’s schools of the SNP’s cuts in teachers and NHS staff.

[Mr MacNeil]

Would the hon. Lady prefer that powers over aspects of Scottish life that are important for keeping jobs in her constituency and my constituency were controlled in the Scottish Parliament, or would she prefer them to be controlled by the Tory-Liberal Government here in London? Does she prefer the Scottish Parliament or the Tory-Liberal Government?

[Gemma Doyle]

At the moment, I am afraid that I am not too keen on either, but we must work in both Parliaments.

People in my constituency do not share the SNP’s obsession with the constitution, which is another reason why Scots do not listen to the SNP anymore. Who can blame them, given its record in government? Before the Scottish election in 2007, the SNP promised the earth to the people of Scotland, but it has broken promise after promise. It broke promises on schools and promises to scrap the council tax. Its promise to write off student debt and many others were also broken.

People are furious that the SNP Government are doing the Tories’ job for them in Scotland. They are repeating the mistakes of the Thatcher years by cutting key economic budgets, and by cutting teachers and NHS staff by thousands.

[Mr MacNeil]

Will the hon. Lady give way?

[Gemma Doyle]

I have already given way to the hon. Gentleman, so may I make some progress please?

One reason why Scots voted for devolution in ’97 was that they lived through a Tory Government in the ’80s who did not care about us, and who indeed used Scotland as a testing ground for their most reviled policy—the hated poll tax. The establishment of the Scottish Parliament should mean that we in Scotland have some defence against the worst excesses of any Tory Government, but that will not happen now that we have an SNP Government in Scotland.

People in my constituency have been hit by an SNP double whammy. An SNP-run council is mounting an attack on the most vulnerable by imposing unfair charges on the elderly and disabled, and an SNP Government are making cuts to local services that are deeper in my area than across the rest of Scotland. The figures bear that out. The SNP in government has seriously failed the people of Scotland and Scots continue to reject separation in massive numbers. As the SNP continues to pursue its obsession with separation, it becomes more and more out of touch by the day. That was highlighted by the hon. Member for Perth and North Perthshire (Pete Wishart) when he spent his time failing to speak to his amendment, but talking about Antarctica and caravans.

[Pete Wishart]

It is really sad that we are back to incoherent ranting in interchangeable speeches from Labour Members. Will the hon. Lady talk about the Bill? What amendments would she like to see to improve the Bill? Where can we achieve cross-party consensus to achieve a powerhouse Bill? What valuable contribution will she make in Committee to improve the Bill?

[Gemma Doyle]

Just before I gave way, I mentioned the hon. Gentleman’s amendment, which I think was very generous of me, given that he did not speak to it at all.

The Calman commission concluded that the real way to strengthen devolution to make a real difference to the everyday lives of Scots is to give the Scottish Parliament some specific additional powers and some more responsibility for tax raising. The test of this Bill is whether it delivers those things effectively. I remain concerned about a few particular aspects of the Bill, but I hope that detailed scrutiny will make it stronger. On the whole, I believe that it will consolidate devolution and build on the transformation of the governance of Scotland delivered by Labour in 1999, and I look forward to supporting its progress through Parliament.

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

On a point of order, Mr Deputy Speaker. Could you clarify the procedural consequences if the House were to vote in favour of the SNP amendment? Would it mean no Second Reading for the Bill and, therefore, no Committee stage?

[Mr Deputy Speaker (Mr Nigel Evans)]

If the amendment were passed, the Bill could go forward—[Interruption.] I know what the hon. Gentleman is saying, but we would still go on to the main motion. He is talking about hypothetical situations. Let us see whether the amendment is pressed to a Division and what then happens.

17:27

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

It is a pleasure to be able to make some remarks following this interesting and wide-ranging debate, which has been sometimes informed and often lively. I am sure that the Minister will wish to respond to specific points raised by hon. Members, so I shall endeavour to be concise.

In the opening speech, the Secretary of State set out the background to this Bill and the Calman commission that preceded it. Some hon. Members, in various capacities, have had some familiarity with the Calman commission over recent years, including the motion in the Scottish Parliament to establish the commission; its interim report; the report of the expert group on finance led by Anton Muscatelli; the final report by the commission; the White Paper before the general election; and the Bill published late last year. I pay tribute to the contribution made by the Secretary of State’s officials in the Scotland Office and the often complex work that they have done to get to where we are today.

As my hon. Friend the Member for Glasgow North (Ann McKechin) made clear, the Labour party here and in the Scottish Parliament supports and welcomes the work of the Calman commission which underpins this Bill. That process was, by and large, an extensive exercise in basing recommendations on evidence, something that is not always apparent in debates on this issue, which understandably arouse passionate views.

In his usual lively and energetic—albeit lengthy—manner, the hon. Member for Perth and North Perthshire (Pete Wishart) spoke of his concerns about the level of scrutiny of the Bill. I hope that he was reassured by contributions from many other Members. The fact that we have made clear our broad support for the Bill does not mean that there are not issues that we wish to press further in Committee and reflect upon. That is a much more mature approach at this stage than a blanket dismissal of the Bill. Points have been made by Members representing all parties that we will look to test in Committee over the next few weeks.

My hon. Friend the Member for Glasgow North West (John Robertson) mentioned similar points, and the hon. Member for Epping Forest (Mrs Laing) reminded us of her memories of the scrutiny of the Scotland Act 1998 as it progressed through the House. I am sure that the Government Front-Bench team will look forward to her continued involvement in Committee over the next few weeks. Importantly, we will also reflect on the scrutiny work being carried out by the Scottish Parliament committee and the report of the Select Committee on Scottish Affairs on the Scotland Bill. My hon. Friends the Members for East Lothian (Fiona O'Donnell) and for Kilmarnock and Loudoun (Cathy Jamieson) are members of that Committee, as is the hon. Member for Banff and Buchan (Dr Whiteford), and no doubt they will provide robust scrutiny of the views and opinions of some of those whose work is prayed in aid by those who are against aspects of the Bill.

I would like to touch on a few of the points made during the debate. The hon. Member for Carlisle (John Stevenson) spoke from the perspective of a Scot who represents an English constituency. As an Englishman with a Scottish family and a Scottish constituency, I share his view that differences arising from devolution are not to be scoffed at, and in fact provide an opportunity for jurisdictions in different parts of the United Kingdom to learn from each other. He mentioned the cross-border issues that will particularly affect his constituents, and I know that they will affect the constituents of both Scotland Office Ministers as well. In particular, he mentioned drink-driving and speed limits. I am concerned that the largely thorough evidence brought to Calman might not have been as comprehensive in that area as in others. I am sure that we will need to consider in Committee the lack of evidence in those areas from key organisations and get some reassurances from Ministers, particularly on how the practical arrangements for cross-border issues will work.

The right hon. Member for Gordon (Malcolm Bruce) and my hon. Friend the Member for Livingston (Graeme Morrice) made the important point that there is not currently—and nor has there ever been—any appetite in Scotland for separating from the rest of the United Kingdom. The Scottish National party might think that there is, but as yet it has failed in every electoral test to convince the public to follow that course. From that perspective, it is therefore important that we use this opportunity to strengthen the Scottish Parliament as a part of the United Kingdom. That is in the interests of our constituents and accords with their views every time it has been tested.

My hon. Friends the Members for Edinburgh North and Leith (Mark Lazarowicz) and for Glasgow North referred to the omission of the Calman commission recommendation on charity regulation. I understand that the Command Paper makes it clear that a review of charity law is being undertaken, but that recommendation was present in the White Paper and is another point that we will wish to consider in Committee. My hon. Friend the Member for Livingston also referred to the omission of the Calman recommendation on food standards. As I am sure that Ministers are aware, the Scottish Retail Consortium has expressed its disappointment on that point. Again, we will look at the outcome of the scrutiny of both the Holyrood committee and the Scottish Affairs Committee to see how that can be rectified in due course.

My right hon. Friend the Member for Stirling (Mrs McGuire) and my hon. Friend the Member for Glasgow East (Margaret Curran) highlighted the concerns that remain about the lack of detail in the definition of firearms. That will also require further work; again, I hope that we will obtain assurances from Ministers in Committee.

The hon. Member for Milton Keynes South (Iain Stewart), who has spent some time in my constituency—he stood there unsuccessfully in the Scottish Parliament elections in 1999—rightly highlighted an important point about how the Barnett formula is used as shorthand for other issues. I am sure that he will spend some time speaking to his hon. Friend the hon. Member for Warrington South (David Mowat) about that. Importantly, those issues arise from a concern about the lack of accountability for the Scottish Parliament, an issue that the Bill seeks to address.

My hon. Friend the Member for Glasgow North East (Mr Bain) referred to the detailed examination that underpins the financial propositions in the Bill. He was right to do so, and I would recommend that those Members who are interested look at the detailed work of the finance group on that issue. Importantly, my hon. Friend also drew the distinction between this constitutional Bill, which has been the subject of lengthy cross-party discussion and a process that translated across from one Government to another, and some of the other constitutional measures that this Government have introduced. I hope that the Government will reflect on that in all seriousness, because the best way of looking at detailed constitutional issues is to seek to take people along, rather than rushing things through quickly and then finding oneself in difficulty elsewhere.

My hon. Friends the Members for Kilmarnock and Loudoun and for Glasgow East spoke reflectively and knowledgeably from their perspective as sitting Members of the Scottish Parliament and former Ministers in previous Administrations in Scotland. They also reflected on the important issue—an issue that, although not in the Bill, is reflected in the Command Paper—of the relationships between the UK Government and the devolved Administration, and between the Parliaments. Those are important issues for us all to reflect on and get right, because at various points in the past there have been some perhaps rather more political interventions in those relationships and how they have worked, which have not always been to the good of the people of Scotland. My hon. Friends also both spoke about issues of key importance to their constituencies, on the basis of a great deal of experience.

The Labour party in Scotland believes in a strong Scottish Parliament and a strong Scotland. I hope that we will have the opportunity in a few short weeks to elect a strong Scottish Administration, but to do so as part of the United Kingdom, sharing risks and resources, as others have said, and because that reflects the views of the vast majority of the people of Scotland. As my right hon. Friend the Member for Stirling and my hon. Friend the Member for Kilmarnock and Loudoun rightly pointed out, that is what the people of Scotland have confirmed at every electoral test, including and since the referendum.

We will support the Bill on Second Reading. We support the process that underpins it and the degree of involvement that led to that, but there are also issues that we wish to test. There are issues that we will wish to reflect on following the scrutiny of the Holyrood committee and the Select Committee on Scottish Affairs. We will look to test those in Committee, perhaps by way of amendments, but we will do so in a serious, reflective and responsible way. We come to this measure as a party that believes in a Scottish Parliament as part of the United Kingdom, seeking not to undermine devolution, but to support and develop it. We look forward to the opportunity of doing so in the weeks to come.

17:38

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

I begin by thanking all right hon. and hon. Members for their contributions to the debate. I shall try to deal with the detail raised in individual contributions as time allows.

Today’s debate is a testament to the significance of the Scotland Bill for the future of Scotland and the United Kingdom. Although the opening of the Scottish Parliament in 1999 was quite rightly greeted with much fanfare—I was pleased to play my part in that day, along with the hon. Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Glasgow East (Margaret Curran)—there was, as has been said, a recognition at that time of the view, which was personified by the then First Minister, Donald Dewar, that devolution was a process rather than an event.

Equally, it must be recognised that this Bill is part of a process within that process of devolution. It is part of the Calman process. The Calman process is one that I have been involved in from the very beginning. It began back in 2007, when I joined the then Scottish Secretary, now Lord Browne of Ladyton and the Government deputy Chief Whip, and the three parties’ leaders at Holyrood, Wendy Alexander, Annabel Goldie and Nicol Stephen—I pay tribute to them, as did the hon. Member for Glasgow North East (Mr Bain)—in seeking to establish an independent review of Scottish devolution, 10 years on. I want to put on record the Government’s thanks not just to them, but to the right hon. Member for East Renfrewshire (Mr Murphy) and all those who worked with him, to Iain Gray MSP and Tavish Scott MSP, who joined us over subsequent months in the cross-party steering group to lay the groundwork on how to implement the recommendations that emerged from the review.

It gives me great personal satisfaction to be part of a new coalition Government who are seeing Calman through. I know that the Opposition remain behind the process, too, and I was pleased to learn that on his visit to the Scottish Parliament on 30 June last year, the current Labour leader said that

“we also recognise the need for Scotland to have an ability to vary its tax rates on the basis of the Calman commission proposals.”

I am glad there is at least one thing on the blank sheet of paper.

I welcome the considered remarks of the hon. Members for Glasgow North (Ann McKechin) and for Rutherglen and Hamilton West (Tom Greatrex). It was clear not just from their remarks but from many Back-Bench contributions from both sides of the House that this Bill will indeed receive due scrutiny in this House. Any suggestion to the contrary would be quite wrong.

Let me pick up on one or two of the points about taxation that the hon. Member for Glasgow North raised. I emphasise particularly that the Government, the Scottish Government and Her Majesty’s Revenue and Customs are working together through the high-level implementation group and other forums to ensure that the tax system works in a way that minimises administration for business and makes it is as easy as possible for Scottish taxpayers to operate.

Our clear view is that the system that allows people resident in Scotland for tax purposes to have a distinct Scottish tax code will deal with many of the issues that have been reported. For example, the notion that everyone in Scotland will be required to fill in an income tax return when they do not do so currently is without foundation. I am sure that we will be able to return to these issues when we get into detailed examination of the Bill and debate the precise definition of “a Scottish taxpayer”. I am sure that hon. Gentlemen and, indeed, my hon. Friends, will come forward with the many and varied occupations that could provide a basis for challenging the definition of being resident in Scotland. I was not expecting to hear a reference to stage hypnotists today, but this shows the variety of issues in respect of which we can debate whether they should be devolved or not.

[Pete Wishart]

Antarctica!

[David Mundell]

Of course, Antarctica is another issue—it became of interest to the Scottish National party only when it discovered that it might no longer be devolved. As became clear in the debate, SNP policy on it is not exactly clear.

The Calman process provides a great example of different political parties working together in the national interest, and I am sure that Opposition Members will in due course come to see the coalition Government in a similar light. If the Bill benefits from being cross-party, it also benefits from being cross-Parliament. I have no doubt that the Bill, and support for it, will be enhanced through being tested by the unique tricameral scrutiny to which it is subject—in this House, in the other place and in the Scottish Parliament.

I was extremely disappointed by the way in which Scottish National party Members derided the Scottish Parliament process of scrutiny, about which the hon. Member for Glasgow East spoke eloquently, and which is accepted as one of the great assets of the Scottish Parliament. As ever with the Scottish National party, however, the issue is not the level of scrutiny but whether the scrutineers agree with it.

[Stewart Hosie]

The Minister is wrong: there was no criticism of the process of Scottish Parliament committee scrutiny, which is a model, an exemplar, a fantastic system. The difficulty was the shameful way in which certain witnesses and potential witnesses were treated. I am happy to defend them against the committee involved, which treated some of them appallingly.

[David Mundell]

Anybody who reads the transcripts will realise that it was the way in which the evidence was given, and its quality, that was the issue in the sessions concerned. I look forward to the evidence of Scotland’s Finance Secretary when he is recalled to that committee. Given some of the comments of the hon. Member for Perth and North Perthshire (Pete Wishart), we will not take too many lessons from his party on respect within the context of a debate.

The commission’s initial task was to review

“the provisions of the Scotland Act 1998 in the light of experience and to recommend any changes to the present constitutional arrangements that would enable the Scottish Parliament to serve the people of Scotland better, that would improve the financial accountability of the Scottish Parliament and that would continue to secure the position of Scotland within the United Kingdom.”

As we have heard today, there is an overwhelming consensus in the House and in Scotland that the Bill lives up to that vision. It builds on the success of the first 11 years of the Scottish Parliament, and addresses Holyrood’s one critical flaw: the lack of revenue-raising power to match its spending power.

On the amendment, I defer to the House and the Speaker, who selected it, but I am not sure how to respond. It clearly states that the Bill, in its present form, is unacceptable, yet when Scottish National party Members are asked whether they support the Bill, and whether they will support it if it emerges from the parliamentary process in broadly the same terms, they are unable to give an answer. I am afraid that the amendment strikes me as no more than a stunt—an opportunity to say, “We opposed it,” while agreeing with it. It is absolutely ludicrous that a party, which has some worthy people in it—the worthiness of the views of many members of the SNP has been acknowledged—should come to the House and say, when additional powers for the Scottish Parliament are proposed, “No, we don’t want them. Because we can’t have our own way, we’re not going to support the Bill.”

[Stewart Hosie]

The Minister has not listened to the debate. We made it extremely clear that we will not stand in the way of any powers being devolved to Scotland. As the Bill stands, however, it has huge flaws and needs to be improved. That is a rather sensible thing to say, one would have thought, on Second Reading.

[David Mundell]

In that regard, the hon. Gentleman’s comments are as incoherent as his comments in relation to the financial provisions. The SNP stands against the Bill, and will divide the House on the basis that the Bill is unacceptable. If the motion is carried, that, as Mr Deputy Speaker has indicated, would be the basis on which the Bill went forward. The position set out by the SNP is incoherent not just financially but constitutionally.

Let me now deal with some other, more sensible contributions. We heard from a number of old hands—old in terms of the devolution process, although not, of course, in terms of years. We heard from my hon. Friend the Member for Epping Forest (Mrs Laing), who described her experience of the scrutiny of the original Scotland Act. We also heard from the hon. Member for Central Ayrshire (Mr Donohoe), who is no longer in the Chamber, but who is a great supporter of devolution whenever the opportunity arises.

The right hon. Member for Gordon (Malcolm Bruce), who has campaigned on these issues for a long time and with some success, made a thoughtful speech. I can inform him that the United Kingdom Government as a whole will review charity law, and that, as we have made clear in the Command Paper, we felt that it would be better to enact the spirit of the Calman recommendations once that review had been completed in the rest of the UK.

A number of Members raised the question of changes in the income tax threshold. The Command Paper makes it clear that the Government would proceed on the basis of no detriment, and that any such changes would be accommodated in the block grant settlement.

I congratulate the hon. Member for East Lothian (Fiona O'Donnell) on the fact that she is celebrating her birthday, although I am slightly concerned that she should enjoy doing so in combat with some members of the SNP. During the course of the debate, I realised that there was an obvious gift for her: the book by my hon. Friend the Member for Milton Keynes South (Iain Stewart). As he revealed that he had a large number of copies, not only the hon. Lady but most of her constituents would be able to receive one.

My hon. Friend the Member for Carlisle (John Stevenson) made some important points about cross-border relations. As both the Secretary of State and I are well aware, people living in the border regions have long been able to cope with the differences on either side of the border. For instance, the well-established difference in the licensing laws that used to prevail did not cause any particular difficulties. The existing devolution settlement does not cause any difficulties, and the revised settlement will not cause any either.

The hon. Member for Livingston (Graeme Morrice) made the important point that strengthening devolution does not undermine the United Kingdom, but strengthens it. As well as giving us a précis of his book, my hon. Friend the Member for Milton Keynes South raised significant points about, for instance, pension plan payments. I can reassure him that the high-level implementation group involving HMRC is examining those issues at this moment.

My hon. Friend the Member for Warrington South (David Mowat) intervened on my hon. Friend the Member for Milton Keynes South on the subject of the Barnett formula, and was subsequently involved in a discussion of the subject. I accept that concern has been expressed about the system of devolution funding, but tackling the deficit is the Government’s top priority, and any changes would await stabilisation of the public finances. The current funding arrangements—in essence, the Barnett formula—are set out in an administrative agreement rather than in statute, but the financing mechanism in the Bill would apply equally well to another way of calculating the block grant. The Bill does not fix the Barnett formula in stone for the future. It neither rules in nor rules out reform of the Barnett formula in the future; indeed, it is designed to be flexible in relation to alternative approaches to funding.

The right hon. Member for Stirling (Mrs McGuire), a seasoned campaigner on these issues, made a number of important points. I can reassure her that the Government are not devolving taxation in relation to savings and unearned income, so most of the things about which she expressed concern will not come to pass. The hon. Member for Glasgow North West (John Robertson), who is no longer in his place, has always been a staunch supporter of the nuclear industry, and he is to be commended for that. However, he will be aware that, after due consideration, the Calman commission concluded that there should be no change to the arrangements for new nuclear power stations in Scotland.

The hon. Member for Glasgow North East made an interesting point about a Scottish office for budget responsibility, and I look forward to hearing more about that in the next stage of the debate. As I have said on previous occasions, I very much welcome the hon. Members for Glasgow East and for Kilmarnock and Loudoun to this House, because they bring a great depth of experience of the Scottish Parliament and of being in government in Scotland—in coalition with the Liberal Democrats, of course. I reassure the hon. Member for Glasgow East, in her absence, that the Government are committed to the Bill’s proposals on airguns and that I listened to the powerful case she made in that regard. Finally, I did welcome the contribution of the hon. Member for West Dunbartonshire (Gemma Doyle). However, although she is one of the younger Members of this House, it appeared that she was somewhat stuck in the 1980s.

My final remarks are for those people who have opposed this process, who have sat on the sidelines every time they have had an opportunity to contribute to this process and who are only able to come forward at the last minute with carping complaints. What I say to them is—

[Mr MacNeil]

rose—

[David Mundell]

I have no time to give way.

I ask those people to reflect, in the few minutes left, on the fact that if they support this process and if their party supports more powers for the Scottish Parliament, they should not press their amendment to a Division. Interestingly, we heard a lot of quotes about academics who support the Calman process but, as Scottish Members will have noted, certain academics were very absent from today’s debate.

I want to finish on a specific financial point. It is absolutely essential that we scotch the idea of an £8 billion deflationary bias that been mentioned repeatedly but has no factual basis. There is no deflationary bias about the financing mechanism that is at the heart of the Scotland Bill. The Scottish Government’s assertions are based on a period when public spending rose faster than tax receipts—the very activity that resulted in record levels of borrowing and debt. That is unsustainable, and it is simply incorrect to infer that the result from that period equates to a deflationary bias. If implemented now, the means of financing would in fact benefit Scotland during the fiscal consolidation. I urge hon. Members to support the Bill.

Question put, That the amendment be made.

17:59

Division 184

Ayes: 5

---

Scottish National Party: 5

Noes: 252

---

Conservative: 191
Labour: 32
Liberal Democrat: 28

Question put forthwith (Standing Order No. 62(2)), That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time.

Scotland Bill (Programme)

Thursday 27th January 2011 Commons Chamber

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

That the following provisions shall apply to the Scotland Bill:

Committal

1. The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee

2. Proceedings in Committee of the whole House shall be completed in three days.

3. The proceedings shall be taken on the days shown in the first column of the following Table and in the order so shown.

4. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

TABLE

Proceedings	Time for conclusion of proceedings
First day
Clauses 1 to 9, Schedule 1, Clauses 10 to 12, Schedule 2, Clauses 13 to 23.	The moment of interruption on the first day.
Second and third days
Clauses 24 to 26, Schedule 3, Clauses 27 to 29, Schedule 4, Clauses 30 and 31, Schedule 5, Clauses 32 to 39, new Clauses, new Schedules, remaining proceedings on the Bill.	The moment of interruption on the third day.

5. Standing Order No. 83B (Programming committees) shall not apply to the proceedings on the Bill in Committee of the whole House.

Consideration and Third Reading

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

7. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on the day on which those proceedings are commenced, or one hour after they are commenced, whichever is the earlier.

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

Other proceedings

9. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Mr Vara.)

Question agreed to.

SCOTLAND BILL (MONEY)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purpose of any Act resulting from the Scotland Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided, and

(2) any increase attributable to the Act in the sums payable under the Scotland Act 1998 out of the National Loans Fund.— (Mr Vara.)

Question agreed to.

SCOTLAND BILL (Ways and means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Scotland Bill, it is expedient to authorise—

(1) the imposition by virtue of a rate-setting resolution of the Scottish Parliament of charges to income tax in relation to the income of Scottish ratepayers,

(2) the making of provision, by Act of the Scottish Parliament, for imposing a tax to be charged on—

(a) the acquisition of an estate, interest, right or power in or over land in Scotland, or

(b) the acquisition of the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power,

(3) the making of provision, by Act of the Scottish Parliament, for imposing a tax to be charged on disposals to landfill made in Scotland,

(4) the amendment of the Scotland Act 1998 by Order in Council so as to—

(a) specify, as an additional tax about which provision may be made by Act of the Scottish Parliament, a tax of any description, or

(b) make any other modifications of the provisions relating to such taxes which Her Majesty considers necessary or expedient, and

(5) the payment of sums into the Consolidated Fund or the National Loans Fund.

In the Resolution, ‘rate-setting resolution’ means a resolution providing for a number which is to be added to the rate which would otherwise be paid by Scottish taxpayers, after the deduction of ten percentage points, to calculate the basic rate, higher rate or additional rate payable by those taxpayers for any tax year on income other than savings income and which is either a whole number or half a whole number.—(Mr Vara.)

Question agreed to.

Western Sahara

Thursday 27th January 2011 Commons Chamber

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

18:14

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I must first declare my interests, which are entered in the overseas visits section of the Register of Members’ Financial Interests. I am also chair of the all-party group on Morocco and the parliamentary link for the British Moroccan Association. I have been in touch with Western Sahara Campaign UK and Polisario and am grateful for their insights. I should make plain at the outset my admiration for Morocco, its history and people, and I am proud to represent the largest Moroccan expatriate community outside London.

I will spare the House the history and background of the Western Sahara dispute, which should be taken as read. I know that my hon. Friend the Member for Monmouth (David T. C. Davies) and the hon. Member for Islington North (Jeremy Corbyn) wish to speak in the debate, and my hon. Friend the Member for Hendon (Mr Offord) would have liked to contribute, as he attended the recent visit to Morocco and Western Sahara, but unfortunately he is unwell.

It seems to me that there are broadly three options for Western Sahara: the status quo, which has been described as “untenable” by the current UN special envoy, Christopher Ross; independence, which is unrealistic, according to Peter Van Walsum, the previous UN special envoy; and autonomy, which is the option we are left with. I will go through those options one by one.

I agree with Christopher Ross that the status quo is not an option. It is not an option for the inhabitants of the Tindouf camps or of the wider Maghreb, who continue to pay the price economically and socially. Violence in and around Laayoune in November, apparently whipped up by grievances over Sahrawi social conditions, left 11 officials and two civilians dead. We are told that the fingerprints of al-Qaeda in the Islamic Maghreb are not on that, just as there is no confirmed evidence of its complicity in the unrest in Tunisia and Algeria. Nevertheless, the status quo in Western Sahara offers an opportunity for fundamentalist terror groups to move out of their operating bases in the vast, barely governed spaces of Mali, Niger and southern Algeria.

There is no firm evidence of links between the Polisario and AQIM. Indeed, it seems unlikely that Algeria would be keen to support an organisation with formal links to AQIM. Nevertheless, the potential for fundamentalist terrorists to feed off poverty and grievance is clear. We simply cannot be complacent. In December, an arms cache attributed to AQIM was discovered by the Moroccan authorities in Western Sahara. It is vital that we shrink the space available to insurgents. We must always be vigilant for the sorts of opportunities that have been offered elsewhere.

I agree with Peter Van Walsum that independence is no option at all. We understand that the American and French Governments are at least sympathetic to Van Walsum’s position, and the UK considers Western Sahara’s status to be undetermined and disputed and has lined up behind the official UN position. Van Walsum was apparently replaced as UN special envoy because he said that independence was not realistic, which rendered him unacceptable to Polisario. Even if we agreed hypothetically with the principle of independence, we must consider whether it is practical or achievable. It would mean a country the size of Britain with a population smaller than that of Bristol. How could its Government guarantee internal and external security in a highly challenging environment without relying indefinitely on benign or malign foreign agencies? Would we be comfortable with such an entity becoming the client state of the People’s Democratic Republic of Algeria, which many human rights campaigners see as militaristic, closed and repressive? We must be careful about supporting the creation of states that are inherently unstable. We must also be cautious because of the security threat highlighted by the terrorism and insurgency centre run by Jane’s. Although it ranks Morocco’s counter-terrorism measures as “moderately effective”, it remains concerned about frontier security and unregulated migration.

In Europe, we are not disinterested bystanders. We have a stake in getting this right. Since the UK’s treaty obligations have rendered our borders porous, for practical purposes the southern Mediterranean coastline is our frontier. The recent trouble in Tunis and Algeria does not read across directly to Morocco, but in the Maghreb and in Egypt we have seen significant civil unrest in recent days, which is a reminder of the fragility of countries with young populations, high youth unemployment and poor living standards.

The third option is autonomy. In April 2007, Morocco unveiled its autonomy plan for Western Sahara. In part, it represented a compromise and, in part, it reflected wider governance changes involving the greater devolution of powers within Morocco itself. The UN Security Council, in its resolution of 30 April 2010, noted the proposal and commended the

“serious and credible Moroccan efforts to move the process forward towards resolution.”

In 2009, that was backed by the majority of US Congressmen and, in 2010, by the majority of the Senate.

America, which prides itself on being Morocco’s oldest ally, has been understandably supportive. It knows very well the benefits of a federal model and has in its history incorporated, annexed and otherwise acquired territory on a grand scale. The plan that remains on the table would establish a Sahara autonomous region within the Kingdom of Morocco. It would have considerable autonomy and certainly move in the direction of the UN’s support for what it calls

“self-determination of the people of the Western Sahara.”

Some have even said that the powers over matters excluding foreign affairs, defence and the national judiciary exceed those devolved to Scotland and Wales. My hon. Friend the Member for Monmouth might wish to comment on that in due course.

There are, however, problems. Enumerating the Sahrawis, the Sahrawi diaspora and the resident Moroccan population is a challenge that seems almost overwhelming. It failed completely in 2000, but the job has to be done under both the independence and autonomy options. The only way we get out of it is if we are prepared to accept the status quo.

The Moroccan Government have said that they will not entertain a referendum with independence as an option, but unless we exclude those people who have migrated since 1975, with the presumption that if we do so they will not enjoy the citizenship of any Western Saharan state, it seems unlikely that such a referendum will result in support for independence. That suggests that for Morocco the question of independence as an option is one mainly of principle, rather than avoidance.

Another sticking point is the extension of the UN mandate to include human rights. I think my Moroccan constituents would concur with the sentiments of two precepts in that respect, one secular, the other divine: “Be sure you’ve sorted the beam in your own eye before the mote in your brother’s”; and “Don’t make the perfect the enemy of the good.”

There was outrage here when the US tried to suggest that there should be UN human rights monitoring in Northern Ireland, so we can begin to see how Morocco, a proud country, should also resist, particularly when it perceives that its eastern neighbour with a more questionable record is left alone. The major human rights movements have a presence in Western Sahara, and both Malcolm Smart of Amnesty and Eric Goldstein of Human Rights Watch say that they have not been restricted in investigating the November violence. Morocco has come a long way, but perhaps the time has come in the interests of facilitating a lasting settlement for it to swallow hard and allow human rights monitors, thus defusing the claims of its opponents.

Morocco has earned much respect for its autonomy plan, and Rabat might do well to accept an extension of the mandate of the United Nations Mission for the Referendum in Western Sahara, or MINURSO, but it would be ludicrous if that happened without including the Tindouf camps in southern Algeria, where light desperately needs to be shone on darkness. The UK has a money interest, as it has contributed to the €165 million in humanitarian aid through the European Community humanitarian aid office, with the promise of more to come. We should worry, in the context of reported hardship in the camps, about aid money that might not end up where it is supposed to, because aid falls into disrepute when that happens—whether it is bilateral or through the fingers of Brussels.

We have a duty to ensure that we know much more about the camps, and who and how many people are in them, if that money is to continue to be spent safely and effectively. The King of Morocco has issued reassurances to the refugees of the camps and undertaken to treat them well, and we understand that there has been a significant trickle back to Western Sahara, a process that is likely to develop as confidence is built up on all sides.

Can the Minister say what actions the UK has taken to ensure the safety of the high-ranking Polisario official, Mustapha Salma? We have only unconfirmed reports that he has taken refuge in Mauritania, and his family are allegedly unable to be united with him, as they are confined to Tindouf. What are we doing to clarify the position with Algeria? Whatever our position on the autonomy plan, we must recognise that Mustapha Salma’s bravery, in defying Mohammed Abdel Aziz in order to support proposals that he believes are in the interests of his people, is admirable. His witness is a substantial contribution to what I believe to be gathering support for the autonomy plan.

So far, the UN special envoy process has presided over the status quo. Christopher Ross convened a meeting in December in New York and another last weekend, the outcome of which was another fixture for Geneva in February. We understand that that will focus on how family visits from the camps can more readily be achieved. What is the Minister’s view on monitoring in the camps? How can the UK help to facilitate the safe passage of refugees who wish to visit family members in Western Sahara?

What have Baroness Ashton and her EU External Action Service been doing to move matters on? If we have to have it, it might as well do something useful. Given that Morocco counts as Europe’s near abroad and that it has an association agreement with the EU, what progress has been made on security, migration and welfare?

Given that MINURSO’s mandate is up for reaffirmation in April, what discussions have the UK Government had with the permanent members of the UN Security Council on the Moroccan Government’s autonomy plan? What is the Minister’s attitude to that plan? I hope that the UK Government can join France and the US in being sympathetic.

18:26

[Jeremy Corbyn (Islington North) (Lab)]

I thank the hon. Member for South West Wiltshire (Dr Murrison) for allowing me three minutes to speak, given that this is a time-limited Adjournment debate.

I am the chair of the all-party parliamentary group on Western Sahara. I first raised what I believe to be the plight of the Sahrawi refugees in the House in 1984, and have raised the matter consistently ever since. This is possibly one of the longest-running sores in the world, although the Palestine situation is even longer running. For a moment, we should spare a thought for the people who have been living in refugee camps in Algeria for this whole time—we are now on the third or fourth generation of such families. We must recognise that they have a functioning elected Government in exile, a functioning parliamentary system, and effective representatives in this country and around the world through their political party, Polisario. Indeed, Lamine Baali is a very effective representative of the Polisario in this country.

When I last raised this matter in the House, I sought a meeting with the Minister. I am grateful to him for replying. I received a letter from him today in which he made one or two important points that I will refer to quickly. First, he said that MINURSO needs to continue. I think I am right in saying that that is the only remaining UN-mandated organisation that does not have a human rights requirement. I think that it must have a human rights agenda that it observes, so that the issues of human rights abuse, at least, can be dealt with.

Secondly, the Minister visited Morocco recently and I believe that he is due to go there again—I am sure he will tell me if I am wrong about that. What is his perception and that of our ambassador on the current position in el-Aaiun, where unfortunately there was a great deal of violence last year? I understand that a number of parliamentarians from Europe and elsewhere were refused access to the city, as were a number of media people. I sought and obtained a meeting with the Moroccan ambassador to discuss those issues, and I was assured that in future, parliamentarians would not be prevented from visiting el-Aaiun.

Thirdly, the EU fisheries agreement with Morocco expires on 27 January. I do not have a problem with the EU having a fisheries agreement with Morocco; I do have a problem with the idea that fish in the waters of Western Sahara should be taken by international fishing vessels, with the money being paid to Morocco and none of the benefits going to the Sahrawi people. That is an untenable position, which is of very questionable legality. I hope that this time, Britain will be prepared to block the EU fisheries agreement until it is recognised that without a resolution to the Western Sahara issue, the international community should not be making arrangements to take away the natural resources of Western Sahara any more than Morocco should be encouraging international companies to take away the mineral-rich resources in Western Sahara.

This is a post-colonial issue. It is the last remaining unresolved issue in Africa. The Government of Western Sahara are supported by Western Sahara Campaign UK and the African Union. By law, there has to be a resolution of the conflict in agreement with the wishes of the people of Western Sahara. There have been delays, obstructions and obfuscation about getting a referendum of the people of Western Sahara to bring about a solution, and I hope that the Minister will say that Britain is going to stand up for the rights of those people so that there can be a resolution based on international law, respect for the rights of the Sahrawi people and a free-standing referendum.

18:30

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

I will, of course, be extremely brief, because I know that the Minister wants to respond.

I should like to declare that I was in Laayoune about two weeks ago as a guest of the Moroccan Government, along with several other parliamentarians. There were no problems at all with getting access and moving around, and in our discussions with MINURSO, it made it clear that at no time had it had any problems in that regard. It made it pretty clear to us that it felt the Moroccan Government had behaved well on human rights issues in the area. That came from a completely independent body, and we should take it seriously.

The dispute is long running, and it is important for all of us that it is settled. I may not be an expert on north Africa, but I know a thing or two about devolution and the need to compromise sometimes. That is why it is important that we look very favourably at the autonomy agreement, which would provide far more autonomy than has been granted to Wales or Scotland. In fact, I would definitely have opposed it had it been offered in Wales or Scotland, because it is a big step on the route to independence. If that is what is required to settle the problems of the region, and to allow the Sahrawi people the access to human rights and growing wealth that we have seen around the rest of Morocco, we should view it favourably.

18:31

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)]

I congratulate my hon. Friend the Member for South West Wiltshire (Dr Murrison) on securing the debate and on allowing the contributions of the hon. Member for Islington North (Jeremy Corbyn) and my hon. Friend the Member for Monmouth (David T. C. Davies). All three contributions indicated the seriousness with which the issue is taken on both sides of the House and the long-standing commitment to it of a number of Members. As the hon. Member for Islington North said, the problem is long running and difficult, and it exercises us all. I appreciate the way in which the House is dealing with it tonight.

The disputed territory of Western Sahara seems, in many ways, an intractable problem. However, the fact that it is difficult does not mean that we should not try to make progress. I share the concern of my hon. Friend the Member for South West Wiltshire about the unresolved status of Western Sahara, because the absence of a settlement prevents regional integration and co-operation on a range of important issues. The Government are committed to the United Nations Security Council position, calling for a just, lasting and mutually acceptable political solution that provides for the self-determination of the people of Western Sahara.

Sovereignty over Western Sahara has been contested between Morocco and the Polisario Front, the Sahrawi movement for independence, since 1975. The UN brokered a ceasefire in 1991 and set up MINURSO, the United Nations Mission for the Referendum in Western Sahara, as a peacekeeping operation with the intention of facilitating a public vote on the future of the territory within six months. Some 20 years later, that referendum is yet to be held and MINURSO’s mandate continues to be renewed on an annual basis by the UN Security Council.

The UK fully supports the right of the Sahrawi people to exercise their right to self-determination and applauds the efforts of the UN Secretary-General’s special envoy, Ambassador Christopher Ross, to encourage the parties to enter dialogue without preconditions. I have followed closely the progress of the negotiations convened by Ambassador Ross and am heartened that the atmosphere between the parties is one of cordiality and respect. However, the fact remains that as yet, neither party is prepared to countenance the proposal of the other as the single basis for any future negotiations. For Morocco, the solution is autonomy; for the Polisario, it is a referendum with independence as a possible outcome.

Where Ambassador Ross has succeeded is in delivering results in the important area of confidence-building measures. We are pleased that on 7 January, the programme of family visits by air between Moroccan administered Western Sahara and the Polisario-controlled refugee camps in Western Sahara was able to resume after a 10-month hiatus.

I would also like to congratulate the parties on their agreement to meet officials from the Office of the High Commissioner for Human Rights in Geneva from 9 to 10 February to discuss further confidence-building measures, such as the construction of a land bridge to facilitate visits by road. We wish these talks, which have the potential significantly to improve the lives of ordinary Sahrawis, every success.

However, those meetings alone are not sufficient to address the myriad voices that are gravely concerned about the accusations of human rights abuses made by both sides. The United Kingdom Government support the idea of independent verification of the human rights situation. The UN currently has no role on the ground in monitoring human rights, nor is human rights monitoring built into the MINURSO mandate. Without an independent monitor, it is rarely possible to follow up allegations of human rights violations.

While remaining neutral on the political outcome of the disputed territory, the UK has played an active role in bringing the humanitarian aspects of the conflict to the forefront of the debate. To that end, we have considered a range of monitoring options, which we have circulated to the parties and the members of the Group of Friends, with the full support of Ambassador Christopher Ross. We have also held detailed talks with other members of the Group of Friends and Morocco on the substance of those proposals. I shall briefly summarise the components, which, we believe, a human rights monitoring mechanism requires to operate effectively and credibly. I note the remarks that my hon. Friend the Member for South West Wiltshire was good enough to make about the human rights mechanism.

It is essential that any human rights monitoring should apply in equal measure to the Moroccan-administered territory of Western Sahara and the Polisario-controlled refugee camps in Tindouf, Algeria. The mechanism must be, and be seen to be, independent. Its aims and objectives should be clearly set out and measurable to ensure that monitoring activities are effective and accountable. It would also be strongly preferable for the monitoring body to report to a body able to act on its findings. That is closely linked to the issue of the mandate, since MINURSO, Ambassador Ross, or the Security Council would be well placed to respond.

We are aware that the human rights situation cannot be discussed in isolation from the political sensitivities of the conflict, and I am genuinely grateful to Morocco for the spirit of engagement in which it has responded to the non-paper, which circulated the proposals. I am particularly grateful to my hon. Friend the Member for South West Wiltshire for his comments. It is sometimes difficult to accept an independent human rights monitoring aspect to any national state’s work, but it can make a significant difference in confidence building, particularly in an area of disputed territory. The United Kingdom will continue to ensure that human rights and the human dimension of the conflict remain at the forefront of the debate, including during discussions on the MINURSO resolution at the UN in April.

That is all the more pressing in the light of recent developments in the disputed territory. As I am sure hon. Members know—it has already been mentioned—in early October, a large number of Sahrawis set up a protest camp just outside Laayoune. Their mass protests appear to have focused on socio-economic problems rather than on the question of Western Sahara’s status. On 8 November, following failed negotiations and warnings to the protestors to disperse, the Moroccan royal gendarmerie and auxiliary forces carried out an operation to dismantle the camps. That resulted in the deaths of 12 security personnel at the camps and two civilians in the subsequent unrest in Laayoune.

We were deeply saddened to hear of those violent events and regret the loss of life. As the hon. Member for Islington North pointed out, we were also concerned to learn that, following those events, Morocco restricted access to the territory to several international observers. However, we were encouraged to learn that a confidence-building meeting between all parties, which was due to be held shortly afterwards in New York, went ahead, despite the difficulties.

It is our hope that the regrettable event—the incident at Laayoune—will underline to the international community the importance of taking a proactive approach to this year’s Security Council negotiations on the renewal of MINURSO’s mandate. Neither party must assume that the mandate will roll over as a matter of course. The UK has been active in calling for greater transparency, and we will continue to pursue this approach.

In answer to a question by my hon. Friend the Member for South West Wiltshire about our activity in relation to that, we used our November presidency of the UN Security Council to chair a Council meeting to gather evidence about the events in Western Sahara from Ambassador Ross and the assistant secretary-general for peacekeeping operations. We were disappointed to learn that, in the immediate aftermath, Morocco denied access to a number of international observers, including journalists, parliamentarians and NGOs, on security grounds. However, having visited Morocco shortly afterwards, I understand why the Moroccans felt that some elements of the international press markedly misrepresented the facts of the situation.

Our understanding now is that there are no restrictions on access to Western Sahara, and that members of civil society and international observers have been able to visit. An official from the British embassy in Rabat visited the territory in December 2010 and met a range of Moroccan officials, international bodies, UN agencies and local non-governmental organisations. I understand that the all-party parliamentary group was granted a similar level of access on its recent visit.

As hon. Members are rightly aware, I too have had the opportunity to travel to the region. During my visit to Morocco in December, I made clear to my interlocutors the benefits of a monitoring presence on the ground as the best way to ensure a balanced picture of events. I appreciate the serious, proper and open manner of our conversation, and that there was much concern about recent events. I also raised the matter during my visit to Algeria in November, where I communicated the UK’s interest in a secure and prosperous region working well together. Again, I appreciated the Algerian Minister’s response and understanding of the seriousness of the situation. As the world is showing us, such long-standing disputes have a habit of popping up at the least expected times, and it as well to continue to pay serious attention to them and try to get things moving.

Until the question of Western Sahara can be resolved, there is little chance of a significant improvement in Morocco-Algeria relations. The Maghreb is an emerging market and of growing strategic importance to the UK. We are also interested in encouraging greater political openness throughout the region, but perhaps that is happening of its own accord.

On the worrying hypothesis put forward by my hon. Friend the Member for South West Wiltshire, he rightly conjects that Western Sahara is potentially vulnerable to exploitation from extremists. The discovery earlier this month of a significant al-Qaeda in the Maghreb arms cache at Amghaha, 220 km from Laayoune, is of particular concern. We share the Moroccan Government’s concerns that AQIM is increasingly becoming involved in criminal activity throughout the region, although we must stress, as my hon. Friend said, that we have no evidence to suggest a link between AQIM and the Polisario. We are carefully monitoring the activities of AQIM and its links with other organisations. As in the case of other terrorist groups, the issue of Western Sahara continues to prevent meaningful co-operation across the Maghreb on combating the shared threat from extremist groups.

The hon. Member for Islington North referred to the fishing agreement. We believe that the EU-Morocco fisheries partnership agreement is consistent with international law, but we are aware of concerns about how the agreement is implemented, particularly in relation to its impact on the people of Western Sahara. The FPA is due to expire in February 2011, and we expect the negotiations on a new agreement to take into account any changes in the situation since it was first agreed.

My hon. Friend the Member for South West Wiltshire mentioned the EU External Action Service. The EU’s partnership with Morocco is based on a commitment by the latter to uphold our common values. Respect for democratic principles, human rights and fundamental freedoms form the cornerstone of relations between the EU and Morocco. The consequences of the Western Sahara situation are discussed at all meetings between the two. The EU has emphasised to Morocco the importance that we attach to improving the human rights situation in the territory of Western Sahara. The matter was discussed at the latest meeting of the EU-Moroccan association committee in Rabat in October 2010, and Baroness Ashton is well sighted on it.

My hon. Friend referred to Mr Mustapha Salma. Officials from the British embassy in Rabat have met his family, and officials in London raised his case with the Polisario representative to the UK, so we are sighted on the issue. This matter will run—

18:44

House adjourned without Question put (Standing Order No. 9(7)).

Ministerial Corrections

Thursday 27th January 2011 Ministerial Corrections

Thursday 27 January 2011

Business, Innovation and Skills

Thursday 27th January 2011 Ministerial Corrections

News International

[Mr Watson]

To ask the Secretary of State for Business, Innovation and Skills pursuant to the answer of 14 October 2010, Official Report, column 367W, on News International, whether (a) he and (b) the Minister for Culture, Communications and Creative Industries discussed with (i) James Murdoch and (ii) Rebekah Brooks (A) the Metropolitan Police's investigation on telephone hacking and blagging and (B) News Corporation's bid for BSkyB; and if he will make a statement.

[Official Report, 16 November 2010, Vol. 518, c. 747W.]

Letter of correction from Mr Edward Vaizey:

An error has been identified in the written answer given to the hon. Member for West Bromwich East (Mr Watson) on 16 November 2010. The short introductory telephone conversation with Mr James Murdoch took place on 15 June, not 15 July as stated in the reply.

The full answer given was as follows:

[Mr Vaizey]

[holding answer 4 November 2010]: The Secretary of State for Business Innovation and Skills had a short introductory telephone conversation with James Murdoch on 15 July during which the News Corporation bid for BSkyB was raised. They did not discuss the Metropolitan police's investigation on telephone hacking.

In my role as a joint BIS/DCMS Minister, I met Rebekah Brooks on 12 July. During this meeting neither News Corporation's bid for BSkyB, nor the Metropolitan police's investigation on telephone hacking were discussed.

The correct answer should have been:

[Mr Vaizey]

[holding answer 4 November 2010]: The Secretary of State for Business Innovation and Skills had a short introductory telephone conversation with James Murdoch on 15 June during which the News Corporation bid for BSkyB was raised. They did not discuss the Metropolitan police's investigation on telephone hacking.

In my role as a joint BIS/DCMS Minister, I met Rebekah Brooks on 12 July. During this meeting neither News Corporation's bid for BSkyB, nor the Metropolitan police's investigation on telephone hacking were discussed.

Communities and Local Government

Thursday 27th January 2011 Ministerial Corrections

Council Tax

The following is an extract of the exchange between the Minister for Housing and Local Government, the right hon. Member for Welwyn Hatfield (Grant Shapps) and the hon. Member for Bolsover (Mr Skinner) during Communities and Local Government Question Time on 17 January 2011.

[Mr Dennis Skinner (Bolsover) (Lab)]

Since Bolsover district council has managed to hold its council tax steady for a few years, and since none of its executives get the kind of sums that have been referred to, will the Minister repay the compliment by allowing it to deal with the 108 prefabricated buildings that have been there since the end of the second world war? The council needs to replace them and pensioners need new accommodation, so will he get the show on the road?

[Official Report, 17 January 2011, Vol. 521, c. 531.]

Letter of correction from Mr Grant Shapps:

An error has been identified in the oral response given to the hon. Member for Bolsover (Mr Skinner) on 17 January 2011. The answer referred to an incorrect funding programme.

The full answer given was as follows:

[Grant Shapps]

The hon. Gentleman knows, because he has raised this issue with me before in the House, that the decent homes programme continues, and last week’s settlement, on top of the spending review, makes it very clear that £2.2 billion is available for decent homes—which, I understand, subsequent to our previous exchange in the House, his council is in line for.

The correct answer should have been:

[Grant Shapps]

The hon. Gentleman knows, because he has raised this issue with me before in the House, that the affordable housing programme continues, and that £4.5 billion is available for new affordable housing provision—from which, I understand, subsequent to our previous exchange in the House, his council is in line for funding.

Anti-Semitism

The following is an extract from the closing speech by the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), in the Adjournment Debate on Anti-Semitism secured by the hon. Member for Bassetlaw (John Mann) on 20 January 2011.

[Andrew Stunell]

…I know from my previous visits to the area that the security required there is a shock to all non-Jewish visitors, who expect a primary school to be a primary school, perhaps not with open access, but certainly with friendly, welcoming access rather than high fences and armed guards.

[Official Report, 20 January 2011, Vol. 521, c. 365WH.]

Letter of correction from Mr Andrew Stunell:

An error has been identified in my closing speech in the Adjournment Debate on Anti-Semitism on 20 January 2011. The revision is required to avoid the impression that there are armed guards at Jewish Faith Schools.

The correct answer should have been:

[Andrew Stunell]

…I know from my previous visits to the area that the security required there is a shock to all non-Jewish visitors, who expect a primary school to be a primary school, perhaps not with open access, but certainly with friendly, welcoming access rather than high fences and armed by guards.

Westminster Hall

Thursday 27th January 2011 Westminster Hall

Thursday 27 January 2011

[Mr Peter Bone in the Chair]

Decent Homes

Thursday 27th January 2011 Westminster Hall

[Relevant documents: Fourth Report from the Communities and Local Government Committee, Session 2009-10, HC 60, and the Government response, Session 2010-11, HC 746.]

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

14:29

[Mr Clive Betts (Sheffield South East) (Lab)]

It is a pleasure to serve under your chairmanship for what I think is the first time, Mr Bone. I will address my comments, as the title of the debate suggests, to the report by the Select Committee on Communities and Local Government in the previous Parliament called “Beyond Decent Homes”. The report built on a previous report by the Committee—its proper title at the time was the Select Committee on the Office of the Deputy Prime Minister—back in 2004. That report examined the decent homes programme, which was then in the fairly early stages of development.

Obviously, the report was written at a certain time, but its analysis of what had happened and its conclusions are relevant today. That said, I do accept—it is a pretty obvious fact—that the political and governmental climate has changed since then, and I shall refer at one or two points to circumstances that have changed since then to bring matters up to date.

It will be appropriate to begin by quoting one or two extracts from the conclusion, because it was a Committee report and I want to reflect fairly what the Committee as a whole believed to be important, rather than what I as a member at the time and now Chair believed to be important. The conclusion began by saying:

“By any standards, the Decent Homes programme can be counted as a very significant public policy success. A substantial backlog of repairs and maintenance in social housing existed thirteen years ago and a significant percentage of council rented properties were of unacceptably poor quality: whilst it has yet to be completely eliminated, huge progress has been made, improving the lives of millions of tenants…The main means by which Government can ensure that standards of decency in social housing are maintained in future will be the regulatory framework designed and implemented by the Tenant Services Authority. That framework sets some important national standards but is not over-prescriptive”.

That sets the context of a very successful programme. It has not been fully implemented—it is not absolutely complete—but it has improved the lives of millions of people.

The report went on to make comments about future regulation, which are probably redundant now, in the light of changes that the present Government have made with regard to the Tenant Services Authority. However, the report also said:

“We have recommended another important extension to the existing decent homes criteria: the addition of a specific minimum standard for energy efficiency…Setting standards is of course no good, however, unless the means are available to achieve them.”

I will try to refer to those issues as I go through my speech. Finally, the report said:

“The decent homes programme in the private sector, meanwhile, has been much less effective.”

Again, I will make comments about that.

Let us consider the overall situation. Back in 2001, there was the challenge of a £17 billion backlog of disrepair and neglect in social housing in this country. That is a salient lesson that we must always hold at the forefront of our minds. It is a stark reminder of what can happen if we put off dealing with maintenance projects and maintenance necessities for too long. A backlog of disrepair builds up and must at some point be addressed. The longer we leave it, the worse the problems are and the more money we have to spend on them.

The reality in 2001 was that, of the just over 4 million homes in the social rented sector, nearly half were not up to the decent standard. By 2010, that figure—there are slight variations on it, depending on the calculations that are done—was down to about 10% of the total. It is probably slightly more—perhaps 12%—but it is somewhere in that region. As the Committee’s report identified, there were problems with counting. To some extent, counting was done by individual authorities, and they had slightly different methods. Sometimes the definition of a decent home varied from authority to authority. For example, authorities sometimes counted as decent those properties whose tenants had refused to have the work done. The programme passed them by and the property was then counted as decent because no work was immediately able to be done on it. That was clearly nonsense, and I hope that it was eventually corrected.

Another issue that comes up is that the standard may be fixed, but homes can fall in and out of decency. They can come into decency through improvement works, but fall out of decency over time. The age requirements of the decency standard come into effect as a property gets older, and then work is required that was not required a year before. As the programme is postponed and work is put off further, more houses can fall within its scope.

About £40 billion of public money—about £12 billion from Government and about £28 billion from local authorities’ own resources—has been spent bringing properties up to a decent standard. If we look at the standards, we can see a number of key factors. Incidentally, I still get great delight from going into the homes of tenants, because in the end these are people’s homes. We can talk about thousands of houses and billions of pounds, but to the individual, it is their new bathroom or new kitchen. They have a sense of pride when they open the door and say, “Mr Betts, come and see my new home. Isn’t it wonderful?” We get that sense of pride and a dream fulfilled with many people as a result of the works being carried out.

The standards for kitchens and bathrooms have been widely welcomed and well implemented. The repair standards, too, seem to have been well implemented. In the middle of the programme, there was a change from the old fitness standards to the new housing health and safety rating system. That is a bit more complicated and perhaps a bit more difficult to understand. I think that there are problems for private landlords in understanding it. It is not as simple as the old system. For social landlords, it should not be as difficult, and I do not think that there has been a real problem with implementing it in the social housing sector. It has been pretty well integrated into the decent homes programme.

When the Select Committee examined the standards in 2004, quite a lot of suggestions were made—such suggestions were made again in our more recent report—about what additional things might be included in the decent homes programme. Noise insulation, particularly in flats, was one. That has never been included, although we can see reasons why it might be. There is always a temptation to go on and on trying to add things to programmes. To have a pretty certain standard from the beginning, in 2001, and continue with it was probably the right thing to do.

[Jeremy Corbyn (Islington North) (Lab)]

Lack of noise insulation is an enormous problem, particularly in London, where there are large numbers of council properties in converted Victorian houses. Often, the conversions were done to a less than acceptable standard, with a total lack of insulation between the properties, and it is very expensive to put in noise insulation at a later stage. Is there any way in which we can ensure that future conversions include a very high standard of noise and energy insulation from the beginning?

[Mr Betts]

I am sure that there are ways to do that. The Committee concluded that, given that the decent homes programme was running to a certain standard from 2001, it was probably not the right thing to do to try to add things halfway through the process. As the Government said at the time, they were basic standards but there was no reason why authorities should not add to them. Indeed, for kitchens and bathrooms, my city had the Sheffield standard, which went beyond the national standard. Perhaps the other way in which the problem can be tackled—I may be corrected—is through building regulations. Perhaps there could be a legal requirement to deal with the issue, rather than adding something to the decent homes programme at this stage, rather late in the day.

Other issues that we considered were the environment, the appearance of an estate as opposed to an individual home, and communal areas, which have caused difficulties under the programme. By and large, where stock transfers took place, housing associations could raise more private finance and were able to cope with those issues. Where work was done within the authority, through the arm’s length management organisations, often, on the environment, they were limited to 5% additional funding in the programme, so all the environmental works and communal area works that were needed were not necessarily tackled. That perhaps needs to be addressed in the future, although in this case it is very difficult to be prescriptive about national standards.

An issue that we considered in some detail in both reports was energy standards. This is not merely a question of comfort for the individual living in their home. It is a question of a national requirement, a public need requirement, because of the need for the country as a whole to meet the climate change challenges of which we are all acutely aware. I shall say a few words about the issue of energy. From the beginning, there was a feeling that the standards in the decent homes programme were set rather low. All right, they are minimum standards and could be added to, but we really need to move on and address those minimum standards.

The previous Government promised, through the household energy management strategy, to deal with that. They promised that, by 2020, 7 million homes that did not have adequate loft or cavity wall insulation would get it. Effectively, there would be a warm homes standard in the social sector that would almost be a decent homes-plus standard. We understand from the current Government’s response—it would be helpful if the Minister could say a bit more about this—that those various initiatives have now been subsumed in the idea of the green deal. It is not quite clear at this stage what that will mean for social housing and private sector tenants and owner-occupiers in terms of bringing their homes up to a standard where they can feel comfortable in them and can afford to heat them—bearing in mind the current and future increase in energy costs—and for us as a nation in meeting the challenge of climate change.

When the National Housing Federation did an estimate of what it would need to do to get the emissions in its homes down to 20% of their current levels and to meet the challenge of bringing down emissions by 80% by 2050, it said that it would need to spend £25,000 on average on each housing association property in the country. It is a long-term challenge, and we need some indication from the Government that they have a strategy for national standards and for targets to be hit. I know that the Government do not like targets very much, but we have overall climate change targets. Perhaps we should find a way forward by improving our energy efficiency standards.

When the Committee considered that, we felt that energy efficiency standards were the right way to go. Certainly, fuel poverty is a real problem, but once we try to link the issue of fuel poverty with the standards in a building, real complications emerge. For example, we could get properties moving in and out of an appropriate standard depending on the incomes of the people who live in the property, and that is an issue of which we must be aware.

As for the methods of achievement so far in the decent homes programme, stock transfer clearly dealt with a lot of properties. Tenants voted to move to housing associations because the associations could raise the money on the private markets and deliver the decent homes programmes that were required. Many other tenants resisted the idea of their homes moving out of council ownership. The Government at the time refused to give funding directly to councils for the decent homes programme; that was a matter of contention and I personally did not agree with that policy at the time. None the less, many tenants agreed to go with a transfer of management, but not ownership, to an arm’s length management organisation.

Social housing in this country has undergone a revolution. There has been an improvement not only in the management of council housing and the delivery of major programmes, but in the management and delivery performance of housing associations. I know that this is sometimes an uncomfortable point for housing associations to address, but the report, on page 45, sets out clearly that, when an assessment was done of the overall performance of ALMOs, 75% had a good or excellent rating. For housing associations, the figure was around 35%. As for major works contributions and oversight, 70% of ALMOs got a good or excellent rating and just over 50% of housing associations did so. ALMOs did very well indeed and some of the best ALMOs are clearly some of the best performing housing organisations in the country.

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

Lewisham Homes, which is the ALMO in my constituency, received a promise of £153 million from the Labour Government for decent homes work if it could reach the two-star rating. It achieved that rating in July, but now, under the Tory-led Government, that money has been withdrawn and the tenants of Lewisham Homes are extremely angry, frustrated and miserable that they cannot enjoy the same benefits of decent homes that other tenants in Lewisham have.

[Mr Betts]

I thank my right hon. Friend for her remarks. Clearly, a number of issues are intertwined in that problem. Under the Labour Government’s policy, if an ALMO reached two stars or better, it would automatically have access to the funding necessary to bring its homes up to a decent standard. In the comprehensive spending review, the money available for decent homes was cut by about 50%. Authorities that have not completed their programmes are entitled to bid for funding, although if less than 10% of their homes are not decent at present, they are not likely to get any funding. If up to 20% of their homes are deemed not to be decent, they are likely to get only half the funding that they previously might have been entitled to.

As I understand it, as Lewisham Homes has not started its decent homes programme, it will still be entitled to bid for the total amount, but as the total is 50% less than it was, how much it will get is still open to question. Perhaps the Minister will be able to address that issue in his summing up.

To be fair to the Government—this is an interesting matter of debate— they have relaxed the rule that only two-star ALMOs can get funding. That means that the previous situation in which a tenant could be penalised and not have the work done on their home because their landlord was not performing properly will be removed. On the other hand, the requirement to have two stars as a basic to obtain the funding has driven up housing management standards as a whole, and therefore has achieved considerable success.

[Kate Hoey (Vauxhall) (Lab)]

I would not want hon. Members to think that all ALMOs have been wonderful successes. The ALMO in Lambeth, Lambeth Living, which narrowly got voted through by a tiny majority after the council spent £1 million on it, has been pretty much a disaster. The chief executive is leaving this weekend and the deputy left just before Christmas. The tenants in Lambeth are in a ridiculous situation. Their ALMO was going to get a two-star rating. That did not happen, and the tenants are now left with huge amounts of very bad housing with no one wanting to do anything about it. The ALMO, therefore, was not the answer; the answer would have been to put the money directly into the estates that really needed it. Lambeth has some desperately bad estates. They need the money and I am not sure that spending money just on ALMOs made any difference.

[Mr Betts]

The evidence suggests that it probably did, but successes in general do not mean successes in every particular case. Clearly, there are some bad examples, and my hon. Friend has highlighted one from her constituency. Tenants should be free to choose their landlord, taking into account their own circumstances. If they want to revert back to council management, I see no reason why they cannot do that. The Minister may say a bit more about the funding possibilities. My understanding is that Government are now prepared to put money directly into councils for the decent homes programme. To be even-handed and balanced, I would suggest that to say that there should be funding irrespective of who manages the houses is a helpful move. Where we would disagree is over the amount of funding; there probably is not enough of it. At least Lambeth tenants now have the option to move back, if that is what they want.

Some authorities have seen ALMOs as a method of getting in the money, making the homes decent and then having the properties transferred back to them. In the end, what matters is not what the landlord or councillors think but what the tenants think. The Government’s attitude so far is that when an authority wants to bring back the management in-house, it should go through the same process that tenants went through to create the ALMO in the first place. However, I would welcome something a bit stronger. The management of people’s homes is almost as important as the ownership, so we should have a ballot to ensure that the proper will of tenants is carried out into practice.

I have Sheffield Homes in my constituency, so I see a different perspective. It is the only ALMO in the country which has had three stars three times running. It has improved the management and maintenance, reduced the costs and got tenants involved. There are still challenges to be faced, such as moving on to a more co-operative style of development in future. Sheffield Homes has been successful; it can be built on for the future and not reversed away from. At the end of the day, however, it is a matter for the tenants. I would like to think that, if there were any possibility of the council changing the management arrangements or the ownership arrangements, it would ballot the tenants, so that it will be the tenants’ views that are taken into account; that is what matters at the end of the day.

I have mentioned the reductions in capital funding as a result of the CSR. Work worth some £3.5 billion is still to be done to bring all social housing up to a decent standard, and there will be about £1.6 billion in the programme for the next four years.

In other words, we are probably talking about 10 years before all homes are brought up to a decent standard. The Minister will, of course, say that councils can use their own resources, and indeed Sheffield Homes and Sheffield city council are planning to do just that. The real problem, however, is that if Sheffield Homes and Sheffield city council use all the funding they currently have to bring the remaining homes up to a decent standard by 2013-14, without additional Government funding they will still be about 7% of homes short, though by and large those will be properties on which people have not wanted the work done and others that have become non-decent since 2010 because of their age. With every bit of Sheffield city council and Sheffield Homes’ capital expenditure being used for that, there will be an end to all heating replacement programmes in other properties that are crying out to have their heating replaced for energy efficiency and other reasons. Therefore, even when other money can be found, it will be at the expense of other important programmes. This is a three-star ALMO that has managed its money very well indeed.

On the decent homes standard, there has been a challenge and, as the report clearly spells out, there is also a challenge for the future. There is no point in bodies getting up to the standard if they then fall away from it. Another thing that we identified was the reform of the housing revenue account. I welcome, in principle, the Government’s proposals to reform that account, to give a say and control back to local authorities. The reform will give some certainty for the future, and is based, with one or two changes, on the proposals that the previous Minister for Housing, my right hon. Friend the Member for Wentworth and Dearne (John Healey), introduced under the Labour Government. One of those changes is that councils will now not be allowed to keep 100% of their right-to-buy receipts. There will also be extra borrowing controls, which are slightly worrying in that they will constrain councils’ ability to expand their resources to maintain homes to a decent standard. On the other hand, the removal of the need for rents to converge might provide a bit more flexibility in rent increases. I am not talking about the rents necessarily increasing to 80% of market rents, but councils that have put in a new heating system or insulation measures that reduce tenants’ heating bills, could put a bit extra on the rent. The tenants would contribute to the cost, but would probably pay less overall under the joint arrangement between landlord and tenant. That bit of flexibility might be welcome.

We have taken expert advice, which has indicated that under the Labour Government’s proposals the major repairs allowance in the housing revenue account was due to rise by about 25%. We understand that this Government also propose that, but we have not yet seen the precise figures. To maintain homes at a decent standard, and in particular to keep repairs up to a proper standard and replace the sanitary and kitchen fittings that were included under the decent homes programme but would have worn out, the figures show that a 40% to 60% increase in the major repairs allowance is needed, not the 25% proposed. It is worrying that there is an inbuilt disrepair element in both the previous Government’s proposal and that of this Government, and that sufficient funding might not be available to maintain the standards. Any future Government will have to address that challenge.

Other Members want to speak, so I shall conclude with some remarks on the private sector. The private sector was added to the decent homes programme as an afterthought, and it is often forgotten that it exists at all. It was not there at the beginning, in 2001, and adding it in has not been a great success. One fundamental problem was that the new fitness standards in the private sector, which came in in the middle of the programme, immediately added about 10% of private sector homes to the number of non-decent homes. The analysis showed that 3 million private homes with vulnerable households were non-decent when the programme began: 40% were homes with private tenants, and 65% were homes with owner-occupiers who were considered vulnerable because of the benefits they received. Those numbers are staggering. There was no general requirement to get all those homes up to a decent standard—only to do something to improve the numbers. While there probably has been some improvement in numbers, there has not been the same drive and the same co-ordinated programme as there has been with social housing tenants. Other problems come from many owner-occupiers of these homes not being able to afford the necessary repairs. They are potentially asset rich but income poor, and that is a real challenge for them.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

My hon. Friend rightly draws attention to the fact that there is a housing standards problem in the private sector as well as in the public sector. I wish him to reflect on the situation facing Wolverhampton Homes, which is an ALMO that is a little more than halfway through its decent homes programme. It was expecting, according to the expenditure trajectory, some £100 million over the next two years. It has been estimated that if that were to fall by 40%, 5,000 non-decent homes would be left in the city in the public sector, let alone in the private sector, and there would have to be hundreds of redundancies. What kind of economic or social sense can that make, halfway through a programme in a city with one of the highest unemployment rates in the country?

[Mr Betts]

To my mind, it makes no sense at all, and it means asking people to remain in non-decent properties for a long time. My right hon. Friend is absolutely right. In many ways it is the tenants who have been waiting the longest for the work who will now have to wait even longer: people at the back of the queue will find the head of the queue disappearing, and that is very worrying. At the rate of spending currently proposed by the Government, it could be 2020 before the backlog is cleared, remembering, of course, that the backlog will be added to because in the meantime more homes will fall into the non-decent category, through age or increasing disrepair. Unless we get increased public spending, the problem will be compounded rather than improved.

Another issue that we need to consider is the very worrying decline in construction activity in the last quarter of last year—the weather might have had a bit to do with it. Cutting back on the decent homes programme, which is more labour intensive than building new homes is, because pro rata more labour than materials goes into refurbishment than into construction, means even more job losses for every £1 million that is cut from the programme.

[Jeremy Corbyn]

On the private sector, 30% of my constituents live in private rented accommodation. I cannot give the figure for properties that do not meet decent homes standards, but I suspect that it is a considerable number. I expect that many landlords are loth to do necessary repairs and maintenance, so the condition of the properties rapidly deteriorates. They know that there will be a market out there in the future. Does the Select Committee see any way in which we can bring in better regulation to ensure both fair rents and decent standards in the private sector?

[Mr Betts]

There are ways, and some of them have been rejected by the Government, but I do not think that the decent homes standard is necessarily one of them because it was not enforceable. That is probably one reason why it did not really succeed. The new fitness standards are an improvement, and are tougher, but the problem is that many authorities do not put the resources into the private sector to ensure that the standards are implemented in a co-ordinated way. There should be a strategy for private housing in every local authority area, but many local authorities do not have one, and co-ordinated enforcement action is rarely taken in many parts of the country.

The Rugg report into the private sector proposed that we should have a register of all private sector landlords, but the Government have said that they are not going to go ahead with that. There were also proposals to have licensing of managing and letting agents, but the Government have said that they are not going to go ahead with that either. The possibility of regulation is, therefore, probably disappearing. The previous Government’s proposal for the household energy management strategy, which was going to cover all sectors, has been taken away and replaced by the green deal.

The Government have said that there will be proposals that reasonable tenant requests for energy efficiency improvements should not be refused, and proposals for minimum benchmarks for energy efficiency in properties, but there were caveats about them being subject to the availability of funding. I do not know how far the Government are prepared to go on that but, along with the repair requirements, it is a starting point for putting some basic energy efficiency requirements into private sector homes, which could be done separately.

By and large, we concluded in our report that it would be difficult simply to take decent homes from the social sector and transfer them to the private sector, but under the new homelessness provisions, landlords will be able to discharge their obligations to homeless families by allocating not social housing but a property in the private rented sector. If homeless families can be allocated such properties by local authorities, are the Government prepared to do something about the standards of those properties? They should not allow any council to put a family in a private rented property unless it meets very high standards indeed. Some form of regulation would be another way we could seek to drive up standards.

I have spoken for a while and taken interventions. As I have explained, the report was generally congratulatory as regards the success of the decent homes programme, but we recognised that this is also about individual tenants. For the many thousands who are satisfied, a substantial number are still waiting for work to be carried out, as my hon. Friends have indicated, and they are now likely to have to wait even longer.

There are challenges, and we need to ensure that standards are maintained—it is a question not just of achieving standards, but of maintaining them. In terms of energy efficiency, it is also about doing something to improve standards. There is still a long way to go in the private sector, because the decent homes programme really has not had a major impact there.

To conclude, the Committee said, “We congratulate the Government”—the last Government, I should add—

“on its achievements so far in the decent homes programme. Notwithstanding the difficulties of the current public sector spending climate and the importance of continuing to make progress towards eliminating the remaining backlog, however, now is the time to build on those achievements, not to sit back on them. The Government needs to look beyond the existing decent homes programme and plan for a future in which social tenants, private tenants and owner-occupiers all have the opportunity of living in a warm, well-maintained and reasonably well-equipped home.”

I think that is a reasonable point on which to finish.

15:01

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

Thank you very much, Mr Bone, for calling me to speak in this important debate. I congratulate the hon. Member for Sheffield South East (Mr Betts), who opened the debate. He is very knowledgeable on this subject, which he has spoken on for many years, and he is clearly a fount of substantial knowledge.

The hon. Gentleman rightly drew attention to a number of matters, such as the respective performance of ALMOS and housing associations. There is an issue for housing associations regarding their performance. Originally, the idea was that local authorities were not particularly responsive, because they were large and managed large numbers of properties. Therefore, people thought that housing associations should take on local authorities’ role as they would be more responsive. Many Members may now feel that many of the problems that were associated with local authorities are associated with housing associations, given their size and the geographic extent of the areas they cover. The hon. Gentleman was right to highlight that. He was also right to highlight the importance of tackling issues in the private sector, where the housing stock is often unacceptable.

Before I focus on what is happening in relation to Sutton and the Sutton Housing Partnership, I want to make one political point. Opposition Members need a reality check, and they should acknowledge that the situation the coalition Government are in is very similar to the one they would have been in had they been elected. It is not, therefore, good enough simply to say that the coalition Government’s proposals for reducing budgets are unacceptable; there must be an alternative proposal. The Labour party would have been in the same place and it would have had to work within the same boundaries—they would perhaps not have been exactly the same—as the coalition Government. It would have faced the same challenges, so simply bemoaning the fact that budget reductions have to happen is not good enough. In seeking to position themselves as a future Government, the Opposition owe it to everyone who reads the report of this debate to come forward with some solutions, rather than simply bemoaning the position we are in.

[Mr McFadden]

It is a matter not just of the total amount of spending, but of the profile of the spending that is being cut. My local ALMO, Wolverhampton Homes, fears that the cuts will be front-loaded and that it will be in the ludicrous position of having to lay off hundreds of people when it might be looking to hire more in a couple of years’ time. It will not be able to do things in a balanced way. That would not have happened under a Labour Government; we would have supported a programme that is providing important employment in my city, as well as improving the homes for tenants, who, as my hon. Friend the Member for Sheffield South East (Mr Betts) said, have been waiting far too long. Yes, this is a matter of public spending levels, but it is also a matter of the profile of the cuts, which is adding to the difficulties of ALMOs that are trying to carry out the decent homes programme.

[Tom Brake]

I thank the right hon. Gentleman for that intervention, but he has simply restated the Opposition’s stance that the profiling is different. That does not really help to define in what way his party would have tackled the issue if it had been in power. Simply saying that this is to do with profiles does not actually help residents in his area to have some clarity.

[The Minister for Housing and Local Government (Grant Shapps)]

Is my hon. Friend aware that there is no profiling or front-loading in respect of the decent homes funding in this spending period?

[Tom Brake]

I thank the Minister for that intervention, and the right hon. Gentleman may want to consider that point.

I want now to focus on the position in the London borough of Sutton and to run briefly through some of the history. Sutton’s ALMO, the Sutton Housing Partnership, was one of the ALMOs that achieved two-star status only very late in the day under the previous Government. It had achieved one-star status and was on track to achieve two-star status when the previous Prime Minister announced that his Government were going to build 20,000 new homes. As Members may recall, it then emerged that that would be achieved by reallocating funds from ALMOs that were about to receive funding for the decent homes programme. When Sutton Housing Partnership achieved two-star status under the previous Government, it found that it would not get decent homes funding because of the previous Prime Minister’s announcement. Let us not say, therefore, that everything that is happening now is wrong, while everything that happened before was acceptable, because it was not. Under the previous Government, some ALMOs did not receive the funding that they had been offered.

[Heidi Alexander (Lewisham East) (Lab)]

A number of London ALMOs were in the same situation as Sutton, including one I know in Redbridge. It is my understanding—I wonder whether the hon. Gentleman accepts this—that certain funds were forthcoming from the previous Government. They may not have been the amounts, or provided as quickly as, the hon. Gentleman would have liked, but funds nevertheless actually made their way to Sutton’s ALMO.

[Tom Brake]

Indeed. I thank the hon. Lady for her intervention, and that was going to be my next sentence. I was going to say that £5 million—a limited amount of funding—was to be made available from April 2010 onwards. However, there was no guarantee about what would happen to the remainder of the £112 million that Sutton Housing Partnership was seeking under the decent homes programme. She is right that limited funding was made available after heavy lobbying, but that was all that was on offer to Sutton Housing Partnership.

I like to think that I am reasonably fair in these debates, and I do not want to give Opposition Members the impression that everything will now proceed apace under the coalition Government. Clearly, we face many of the same funding challenges as the previous Government. Sutton Housing Partnership has had to adjust its bid downwards to £84 million. As the hon. Member for Sheffield South East said, it is a two-star ALMO, and it worked hard with tenants, councillors and Members of Parliament to achieve two-star status. It made the necessary investment, thereby demonstrating that it has the capacity to deliver its programme. It is now bidding with ALMOs that do not have two-star status, and its tenants and I feel uncomfortable about that, given that it put so much effort in over so many years to achieve two-star status.

[Joan Ruddock]

Obviously, the hon. Gentleman’s ALMO and mine are in a similar position. Mine has just put in a bid for £128 million. However, is he aware that, although the national pot of money is £1.6 billion—the Minister may wish to confirm that—London alone needs £2.5 billion? What hope does the hon. Gentleman’s ALMO or mine have in the present situation? He is wrong to say that the Labour Government would have done the same thing. We said we wanted to halve the deficit in the period in which the coalition want to clear it.

[Tom Brake]

I know that the right hon. Lady’s Government would apparently have halved the deficit in the same time frame in which we are getting rid of it. That, of course, would have had interesting consequences in relation to the level of interest that the nation would continue to pay in the second Parliament, beyond 2015.

To return to the issue of Sutton Housing Partnership, I agree that our ALMOs are in the same position, which is a difficult one. I hope that the Minister will this afternoon deal with some of the issues that the ALMO faces. First, there is the question of getting everyone together, reforming the ALMO and getting the buy-in of tenants to achieve that two-star status, and then finding that they are competing with everyone else for the available funding. Also important in Sutton is negative subsidy. We have always argued—and I welcome the reform of the housing revenue account—that if Sutton’s tenants were allowed simply to have the money that they pay in rents reinvested in the housing stock, there would not be a need for Government funding. With the £10 million of tenants’ money that is exported to other parts of the country, if I may put it that way, resulting, as my ALMO would say, in a situation in which the nearly poor subsidise the really poor, and the money that could be borrowed against that revenue stream, the ALMO could address the issues about decent homes with its own resources, without falling back on Government funding. I hope that that will happen and that tenants will be able to benefit—and that they will not be penalised in a different way, by having to pick up a proportion of the debt, which would mean that even if they kept the revenue they would still not benefit from it.

Sutton Housing Partnership is looking to adjust its programme to try to maximise the chance of getting access to the funding. One specific issue that affects a large number of homes— something like 750—is the box bathrooms on the St. Helier estate. The estate was built in the 1930s and box bathrooms were subsequently built on to the back of the properties. Many are now completely inadequate. They contain asbestos and they are falling away from the properties, so that gaps are developing between the property and the box bathrooms. They are poorly insulated and need to be replaced. In many cases, given that the houses are terraced, they can be replaced only by using a large crane to move the old box bathrooms out over the properties and new ones to the back of them. Sutton Housing Partnership is trying to split off that matter so that it can get access to the decent homes funding for the other works and perhaps find a separate way to fund the box bathrooms.

We would all accept that our housing stock is in need of substantial investment. It is fair to say that all Governments have neglected that in recent decades. We need collectively to find a way to raise the required investment. In 2011 everyone should be able to live in a property of a decent standard. I should like to think that at the end of this Parliament, and the end of the first term of the coalition Government, that will be achievable for us.

15:14

[Ann Coffey (Stockport) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bone. I welcome the report of the Select Committee on Communities and Local Government, “Beyond Decent Homes”, which was published in March 2010 under the chairmanship of Dr Phyllis Starkey.

There is no doubt that the decent homes programme introduced under the Labour Government in 2002 was successful in bringing many improvements to the homes of social tenants. Stockport Homes, my local ALMO, has been one of the trailblazers in delivering the decent homes programme. Indeed, members of the Select Committee visited properties managed by Stockport Homes in my constituency as part of their inquiry. They also held an evidence session in Stockport town hall. Stockport Homes was chosen for a visit because Dr Starkey said it was

“a successful, high performing ALMO pioneering a range of innovative strategies to upgrade their social housing stock”.

In my constituency at the time of the 2001 census, which is somewhat out of date, 21% of households were in housing with social landlords. Social housing is therefore an important provision for my constituents. Stockport Homes currently manages 11,478 properties for Stockport council and has now reached the decent homes standard on 100% of its homes. In fact, it has consistently gone further than the basic decent homes standards. It has included showers as a standard bathroom improvement, floor and wall tiling, full redecoration, smoke alarms, double-glazed windows and extra electrical sockets. I visited one of my constituents, Mr Alfred Heathcote from Brinnington, last year after he had his bathroom and kitchen replaced. He was clearly delighted, especially as his wife is disabled, and he showed us the special walk-in shower that had been provided.

Prior to the general election I conducted extensive surveys asking my constituents for their views on the modernisations and improvements carried out to their homes, including bathrooms and kitchens. The overwhelming majority were happy with the improvements. They also welcomed being given a choice of fittings and design. That is a far cry from my days as a councillor in the early ‘80s as a member of the housing committee on Stockport metropolitan borough council. I well remember a long discussion in one committee about the policy on pot sinks. It appeared that tenants had been deliberately damaging the sinks in order to get modern stainless steel replacements. The council’s view was that that bad behaviour should not be rewarded, and damaged sinks should be replaced with pot sinks to discourage such behaviour, albeit at greater expense. Things are very different now from those days.

In its comments to me about the Select Committee’s report, Stockport Homes has drawn attention to the importance of improving communal areas. It has done a lot to improve communal areas around its properties, on top of the decent homes standard. The work has included hard and soft landscaping schemes, fencing and seating, installing CCTVs, painting, floor covering and lighting in communal areas and replacing lifts. Those programmes of work, which fell outside the minimum standard, were in response to consultations with local people. I agree with the local people and Stockport Homes that the improvement of the communal areas, whether that is landscaping, car parking, security measures or creating community meeting places around people’s homes, is very important in creating a feel-good factor for people about where they live. It is also important, of course, to keep local people and tenants groups engaged, so that the tenants can feel that such improvements are delivered in the agreed time scale and there is good communication between tenants groups and Stockport Homes.

In Stockport we used to have an estate called Gorsey Bank, which failed and has since been bulldozed in spite of an extensive modernisation programme. The reason for the failure was the lack of provision of a supportive environment, such as good landscaping, adequate security and, especially, community space to deliver services to disadvantaged families, as well as local provision to deal with antisocial behaviour. In the 1990s, Lancashire Hill, which is now in my constituency, was extensively modernised and at that time there was a huge improvement for tenants in their living conditions. However, inadequate communal space was provided as part of that modernisation and it is now difficult to provide support to families on the estate for activities that would make a difference to children’s lives. The experiences on those two estates underline the importance of communal improvements in any decent homes programme.

I also want to draw the attention of the House to the Stockport Homes family intervention project. [Interruption.]

[Mr Peter Bone (in the Chair)]

Order. I am sorry to interrupt the hon. Lady. The danger with electronic devices in the Chamber is that they interfere with the microphones. Perhaps right hon. and hon. Members could make sure they do not have an electronic device too near the microphone.

[Ann Coffey]

That project is for families with complex needs who risk being evicted for antisocial behaviour or other reasons. Often, a family evicted from one property simply moves to a property in another area, usually taking their problems with them and disturbing another community.

Since the project started, it has had 34 referrals, 15 of which have met the criteria and been taken on. Eight families have signed up to a full contract, a behaviour support agreement signed by the agencies and each family member. The Stockport Homes intervention project works with other agencies to provide families with support such as parenting classes, help finding training or work, drugs and alcohol help, domestic violence help, social care referral and support for teenage parents. The project has successfully closed two contracts after achieving excellent results: reduced antisocial behaviour, better integration into the community, better parenting skills, reduced domestic violence and increased school attendance. For families needing a fresh start away from the area, the project can set up a family intervention tenancy somewhere else. It provides intense support, including daily visits for the first month and strict rules about complying with advice and assistance. The overall results include quieter, safer communities and a new chance for families to thrive in a different area.

I draw the project to the House’s attention because it is an example of an innovative approach to housing management that recognises that dealing with the behaviour of a minority of tenants and the consequences for the wider community will be effective only if the underlying causes of that behaviour are addressed. Housing management can never involve merely repairing properties and collecting rent. Achieving decent living standards for tenants and the wider community goes much further.

In its comments on the Select Committee report, Stockport Homes said:

“Although we acknowledge the conclusion of the report that there was a need to keep the Decent Homes standard narrow, it could be argued that the emphasis on the fabric of the housing stock and internal components is too narrow. The lack of a standard for communal areas, estate improvements and energy efficiency measures could be seen as missed opportunities which now need to be addressed.”

I agree totally, and welcome the Minister’s comments on the importance of communal areas and energy efficiency measures to the decent homes standard.

I also agree with the Select Committee report about the importance of the green agenda and the call for the decent homes standard for energy efficiency to be updated. The Government’s carbon emissions reduction targets mean that the entire UK housing stock must be made more energy efficient. The decent homes standards have an important part to play and should be updated to enable that.

Stockport Homes has been proactive in its green agenda. As a result of substantial investment in energy efficiency measures, the ALMO is in the top 1% of the standard assessment procedure ratings, which calculate the energy performance of individual dwellings. That is especially important for social housing, as most tenants are on low incomes, meaning that their heating bills form a large proportion of their income. They also face increases in their energy bills.

I am sure that we all agree that the decent homes programme has improved the quality of life of many families in this country. I am keen for it to be maintained and strengthened by ongoing funding. People on low incomes have little choice in their housing, so it is important that the homes that they are offered are of a decent standard, have sustainable energy costs and are situated in a decent environment. Sadly, Stockport has a shortage of social housing, particularly family housing; 7,626 people are on the waiting list. It also has a shortage of affordable homes to buy, creating more reliance on privately rented accommodation. Such housing is overwhelmingly provided by landlords who own a few properties. Indeed, in my constituency, some of those properties are former council houses bought under the right to buy scheme and then sold on.

I understand that we do not want to increase costs to private landlords, due to concerns that if regulations make rented property too expensive for landlords to provide at a reasonable profit, such accommodation will dry up. However, there must be a proper balance between decent standards and profits. It cannot be right that, due to a lack of social housing and affordable homes to buy, families should be forced to live in rented homes in the private sector, some of which do not reach decent standards. I welcome the Minister’s comments on that.

Where we live is important to us all. Some of us have more choice in deciding than others. It is only right that we should support the efforts of ALMOs such as Stockport Homes to provide the best possible environments for those who have little or no choice in their housing. I look forward to such a commitment from the Minister.

[Mr Peter Bone (in the Chair)]

Before I call the next speaker, it might be helpful for me to tell Members that I will call them in the order in which they notified the Chair that they wish to speak. Members who have not notified the Chair will be called at the end. It is normal practice to notify the Chair in advance.

15:25

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

I want to speak primarily from my experiences as a new MP for Wolverhampton. I dare say that some of my sentiments may be echoed by the right hon. Member for Wolverhampton South East (Mr McFadden), who mentioned the Wolverhampton arm’s length management organisation that we both know. Right hon. and hon. Members will be pleased to know that I intend to make my speech brief, as I am sure that others have contributions to make.

One of our primary goals as a Government is to move power away from Whitehall, out across the country to individual councils and cities and to the people who know what is best for their own communities. That is why it is so hard to speak about widespread national programmes such as decent homes. Different local factors—local economies, local councils and local needs—always play a part. I cannot comment on the programme as a whole, but I know that Wolverhampton needs decent homes.

The decent homes programme in Wolverhampton is carried out by Wolverhampton Homes, an ALMO doing good work in our community. I have had the opportunity to meet its representatives and see some of its programmes at first hand. Removing the ALMO’s ability to complete the job that it has started would create a great deal of difficulty for Wolverhampton. Not only is Wolverhampton Homes updating houses in need of repair, it is providing jobs in a city with a high unemployment rate. It has also started an apprenticeship programme that has been training more than 60 apprentices a year.

One of the main factors driving me to contribute to this debate is that I have met many of those apprentices and had conversations with them. Since the new year, many young people have told me their personal stories of being involved in apprenticeships. I have been deeply touched by those experiences; they are similar to my own. It is often that first spark that sets somebody on a path by encouraging them and giving them the opportunity to pursue a career. Whatever way they take, that first step is the most difficult and important.

Wolverhampton Homes has also given the tenants whom it is helping a way to be involved with the decisions that will affect them. Several of the tenants of affected homes serve on the board of Wolverhampton Homes.

Wolverhampton has undeniably been through tough times, and it is struggling. We appreciate that that is not specific to Wolverhampton; the country as a whole is facing a financial problem. However, will the Minister think carefully? Having met the apprentices and seen the good work being done by Wolverhampton Homes, I ask him to take time to look at the issue holistically. As a Conservative Government in coalition, we want people to have dignity and pride in their communities and work together to make that happen and make the nation a better place to live. What better place to begin than in their own homes?

15:29

[Heidi Alexander (Lewisham East) (Lab)]

I am pleased to follow the thoughtful speech of the hon. Member for Wolverhampton South West (Paul Uppal). It is probably one of the most thoughtful contributions that I have heard from a Government Member in my time here. I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts) on his thoughtful and knowledgeable opening remarks. I have the pleasure of serving under his chairmanship on the Communities and Local Government Committee, and I am pleased to be able to make a contribution to the debate on “Beyond Decent Homes”, which was published before I joined the Committee.

I am also pleased to be taking part in today’s debate because, precisely eight months ago today, when I spoke for the first time in the House of Commons as the newly elected MP for Lewisham East, I pressed the Government on when we would have the chance to debate the future funding of the decent homes programme. I did not think that it would take eight months to get to this stage, but I hope that it will be worth the wait.

For many of my constituents, having a decent place to call home is still more of an aspiration than a reality. Many people in my constituency—in places such as Catford, Downham, Grove Park and Blackheath—live in homes that do not meet the decent homes standard.

Thanks to the previous Labour Government, thousands of properties in my constituency are in the process of being upgraded by housing associations, such as London and Quadrant, and Affinity Sutton, and thousands more are benefiting from improvement works being carried out by Phoenix, a new community-led housing association.

However, many of my constituents, particularly those who have remained local authority tenants, are still waiting in the hope that, at some point, it will be their turn to see their flats, houses and estates turned into places where they feel proud to live, and where decades of under-investment can be put right. I want to focus on how we can achieve a decent place to live for those who are still waiting, not just in my constituency, but in the borough of Lewisham as a whole and in London more generally.

Having a decent home is something that many of us take for granted. It was rightly the ambition of the previous Government to ensure that everyone had a decent home and that those organisations delivering huge housing investment programmes were fit for purpose— efficient, well-run and well-managed organisations that could cope with the complexities of multi-million pound capital projects.

When I first became a councillor in 2004, Lewisham’s housing service, as it was then, could not be described in that way. I represented a ward in which 70% of the population rented their homes from either the council or a housing association, and day in, day out, I came across an attitude that can only be described as, “The computer says no.” I sat in evening after evening of tenant and resident association meetings, being told by people that they were ashamed to invite friends round to their flat, not because they did not have a reasonably modern kitchen or bathroom, but because they were embarrassed to ask their friends to walk up eight flights of foul-smelling stairs when the lift had broken down. They were embarrassed by the broken communal doorways, the peeling paint in the corridor, the broken windows and the leaking roof.

Although Lewisham’s new ALMO has got to grips with the culture of the old housing services and, indeed, with some of the housing management challenges, I am ashamed to say that some of the conditions on estates in my constituency resemble what I have just described. It is not right that people in the 21st century have to live this way. Sometimes, a new kitchen, a new bathroom or new windows are not going to make the sort of changes that are needed. Heathside and Lethbridge is a ’60s estate of nearly 600 properties on the edge of Lewisham town centre, and the only real answer is to knock it down and start again. However, Government cuts to the Homes and Communities Agency budget put the future phases of that redevelopment in doubt. The council has been working hard with its development partner to get the regeneration programme started, and the new Government must step up to the plate and find the funds to ensure that future phases can be built out. If they do not, they will condemn hundreds of residents to a life in completely substandard accommodation. The situation is the same with Milford Towers and Excalibur, which are smaller estates in my constituency, but whose needs are no less pressing or complicated.

Although regeneration funding is incredibly important for many areas of Lewisham, so too is the amount of money that the Government will make available to local authority landlords to carry out decent homes works. That was an issue that my right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) raised earlier, and it is the issue to which I will now turn.

I have already touched on the transformation that has taken place in our local ALMO. It has been a long, hard slog for the board, and I pay tribute to the resident chair, Julia Cotton, and the chief executive, Andrew Potter, for bringing about that change. However, as a result of the Government’s announcement in the comprehensive spending review, Lewisham Homes finds itself facing increasing uncertainty about the amount of money that it will receive to carry out desperately needed works. Of the ALMO’s 13,000 tenanted homes, 7,300 do not meet the decency standard.

In March 2010, the previous Government indicated that £154 million would be made available to Lewisham Homes to carry out the decent homes programme if it met the two-star rating, which, I should say, it achieved last summer. However, last October, as part of the CSR, this Government insisted that local authority landlords would have to fund 10% of all outstanding improvement works themselves. Lewisham’s bid has therefore been reduced to £126 million, to be spread over four years from April this year. Like many other ALMOs and local authorities throughout the country, we are waiting to hear the outcome of our bid.

My biggest fear—my right hon. Friend touched upon this—is that Lewisham Homes will not get anywhere near the amount of money that it needs. In the CSR, the Government announced £1.6 billion to meet the outstanding decent homes requirements of local authority landlords. London local authorities alone estimate that their outstanding investment need is £2.5 billion. London has 46% of the 150,000 homes identified by the Government last year as eligible for that funding. Therefore, even if London gets 46% of the overall sum, £736 million is a long way off £2.5 billion. I must therefore question whether Lewisham will get £126 million of that money.

Lewisham Homes has also received scant recognition for its work in achieving a two-star rating from the Audit Commission. As the hon. Member for Carshalton and Wallington (Tom Brake) has said, the Government’s current approach does not seem to take account of all the hard work put in by ALMOs that have achieved the two-star status. I think that that says to those people, “Tough luck—you’re now lumped back into the mix, just like everyone else.”

[Nicky Morgan (Loughborough) (Con)]

I understand what the hon. Lady is saying about the two-star rating and, listening to this debate, I can see both sides of the argument on the two stars. However, I represent part of the borough of Charnwood, in which Charnwood Neighbourhood Housing is the ALMO. It has struggled for a long time to get to its two-star rating. Under the previous Labour-controlled local administration, it had no stars. We are now up to one star, and are trying very hard to get to two. The difficulty with the hon. Lady’s argument is that the tenants, through no fault of their own—the problems with management are not their fault—have lost out on any investment over the past 13 years in relation to decent homes. Now they are in round six and still face receiving less money. Does she appreciate that point?

[Heidi Alexander]

I do appreciate the hon. Lady’s well-made point. The ability of organisations to deliver complex capital projects is an issue. Although the assessment process for two stars may not be perfect and although the hon. Lady’s ALMO may be completely capable of delivering such a programme, we have to be careful about where money goes. I appreciate that times are difficult for her tenants and that she would like to see investment in their homes as much as I would like to see it in those of my constituents.

[Kate Hoey]

On the question of cost and complex projects, one of the things that residents on many of our estates continually comment upon when they see the capital projects is the number of hugely expensive consultants that seem to be employed on ridiculous salaries. On the cost of doing some of these quite small projects on small estates, does my hon. Friend think that the new coalition Government should look at new ways of getting the money to get the windows on an estate done in a way that does not involve these grotesque salaries that seem to go to everyone?

[Heidi Alexander]

I completely share my hon. Friend’s concerns about that and I press the Government to look at new ways of making sure that public money is used in the best way possible. My experience on Lewisham council—indeed, I was also a member of the Lewisham Homes board for a year—showed me that the right skills need to be in place to make sure that programmes are delivered effectively and efficiently. I am not saying that things cannot change in that respect and that money cannot be saved, but clearly people need to have the right clienting skills to get the most out of the contract.

[Jeremy Corbyn]

I understand the point that my hon. Friend is making, and I pay tribute to those ALMOs and councils that are well run, deliver good programmes, have got their two-star rating and are obviously improving things. The point made by the hon. Member for Loughborough (Nicky Morgan) is, nevertheless, important: by restricting ourselves to investing where there is a two-star rating, we are actually punishing the tenants and the residents. There needs to be some thought about how one can still deliver a programme either by some other means or by forcing the authorities to be more efficiently run and so on. I am not advocating throwing money away or bad management; I am advocating recognising that our duty as public servants is to the tenants and to the residents. We need to ensure that public money is invested in them and think carefully about the matter.

[Heidi Alexander]

My hon. Friend makes some good points, and I am sure that he will appreciate my role as a representative of Lewisham. I know what effort has been put in by my local residents, by the members of the board and by the staff who have worked incredibly hard. They feel very disappointed by the fact that although they have put in a huge amount of effort, that will not necessarily give them a greater chance of accessing funds.

If I can move on, I shall say something about the particular situation that we face in London. In the capital, we have the potential problem of higher unit costs—by that, I mean that it would perhaps cost more to bring an individual property up to standard in London than it would elsewhere in the country. That is because of the cost of construction labour in the capital and the fact that a number of homes are of a non-standard construction type. Anyone who looks at the skyline in London will see a large number of high-rises. Such buildings can cost a lot of money to bring up to the decent homes standard. I am hoping that the Minister appreciates those regional subtleties and that he will give me some assurance that such issues will be taken into account when the applications are considered.

Before I finish, I shall touch on the importance of the proposed reform of the housing revenue account annual subsidy system. The way in which historic debt is allocated to local authorities is very important and must be addressed as part of the reform. The ability of ALMOs and councils to meet the decent homes standard and to continue to meet those standards as some homes fall out of decency—as mentioned earlier—will be determined by how we allocate that debt and resolve the issue of HRA reform. I do not claim to be an expert on the matter and I can only begin to imagine how incredibly complex it must be to try to reform it but, for areas such as mine that have significant investment needs and a large amount of housing stock, it is too important to get wrong.

I could say much more on the matter—not least about standards in the private rented sector, which now accounts for a third of all households, as it does in the constituency of my hon. Friend the Member for Islington North (Jeremy Corbyn)—but I am conscious of the time and the fact that other hon. Members want to speak. In conclusion, I urge Ministers to reconsider the amount of money that has been allocated to the future programme. I ask them not to forget the importance of comprehensive estate regeneration schemes—new kitchens and bathrooms are all well and good, but sometimes the problems of an area cannot be solved by such things alone. Finally, in moving beyond decent homes, my plea is this: do not walk on by areas such as mine, where significant need so blatantly exists and where investment can really change people’s lives.

15:44

[Jeremy Corbyn (Islington North) (Lab)]

I thank the Select Committee for the report and pay tribute to Dr Phyllis Starkey, who unfortunately is no longer a Member of the House, for the work she put into chairing the Select Committee in the last Parliament, the quality of the report and the information in it.

Hon. Members will have heard what I said about the way in which the decent homes standard was brought in under conditionality of local authorities. We need to think about that process a bit more for the future because it seems grossly unfair that those authorities, such as Camden, that did not agree to establishing an ALMO or to stop transfers were punished as a result, with the necessary resources coming in much later. I absolutely endorse what my hon. Friend the Member for Lewisham East (Heidi Alexander) has said about how Lewisham appears to have been punished because it essentially achieved the right stars on the wrong date. The process is as arbitrary as that. The issue of the date and so on does not make a blind bit of difference. The reality is that somebody living in Islington in a two-bedroom high-rise flat will have achieved decent homes standard, but somebody living in the equivalent in Lewisham probably will not have done. Why not? It is simply unfair. The Labour Government put the money in for both those tenants to achieve the necessary standard. We need to think about that.

Having said that, the Government should think carefully about the long-term implications of the comprehensive spending review, the cuts that have been imposed and the problems that that will build up for future. I was a councillor in Haringey before I became a Member of Parliament. During the 1980s, we started the process of a post-1948 programme and improved properties considerably in both Haringey and Islington, where I became the MP. Gradually, central Government money dried up, and the repairs and capital improvements budgets were cut back and back. We reached a situation where the only repairs being done were in cases where the tenant threatened legal action or took the council to court to require repairs to be done. It was essentially a solicitor’s process. If someone could convince a court or a solicitor somewhere that their case was strong enough, the repairs would be done. It was a ludicrous way of doing things. By the mid-1990s, the repair backlog was absolutely massive, as my hon. Friend the Member for Sheffield South East (Mr Betts) pointed out in introducing the report.

The decent homes standard is, by and large, a very big success story in that it has meant that millions of people have now got decent kitchens and bathrooms, roofs that do not leak, new windows that are energy efficient and often new heating systems and many other things. Again, on the point that my hon. Friend the Member for Lewisham East made, the specific inclusion of communal areas and common parts in the decent homes standard programme has meant that whole estates have improved a great deal. The Andover estate in my constituency was not terribly well designed in the first place—as, indeed, many estates all around the country were not—but with intelligence and sympathetic ideas and investment in the common areas, that estate is now far better than it ever was. It has a decent open square area in the middle, better play facilities and good quality security. In return, levels of vandalism and socially divisive issues are much reduced. Investment does pay off.

If a huge backlog of repairs will be building up during the next five years or so, I dread to think what that will do to the self-perception of people living in those areas or, indeed, to the condition of the flats they are living in. Cutting housing repairs and housing capital improvement budgets is a self-defeating prospect. At the lowest level, if one does not clean out the gutters, eventually the roof gets rotten, starts to leak and so it goes on. Money spent on maintenance and repairs is money well spent.

I obviously represent an inner urban area. The make-up of my constituency is the mirror opposite to that of most of the rest of the country—the same would apply to the constituency of my hon. Friend the Member for Lewisham East—in that about 40% of the stock is council or housing association, about 30% is private rented and about 30% is owner-occupied. The fastest fall is in owner occupations and the fastest rise is in private rented. Within the private rented sector, there are the most incredible levels of demand.

There are also issues with leaseholders, from both housing associations and local authorities—I take the point that my hon. Friend the Member for Vauxhall (Kate Hoey) was making—who sometimes feel quite justified in their grievance that the amount of money spent on capital works on a block seems wholly disproportionate to the benefit achieved from it. I never expected to become such an expert on the cost of renting cherry pickers, scaffolding and skips, and on the cost of sink units, windows and all that kind of thing. I do not mind that I am; I am quite happy to develop a knowledge and expertise in that area, but an awful lot of leaseholders have an incredibly close knowledge of such matters and they feel that they are being ripped off. There are all kinds of appeal procedures that cost everyone a great deal of money. Sometimes there needs to be much tighter monitoring of these contracts to ensure that everyone is getting value for money—both the tenants who will not necessarily be intimately aware of the intricate costs and the leaseholders who clearly are aware of the costs because they have a direct interest in them.

[Tom Brake]

I draw the hon. Gentleman’s attention to the fact that there are many organisations that contract in that way and that should be put under a degree of scrutiny. For example, the Peabody Trust is in a protracted argument with the residents of BedZED, which it manages. The residents, who are a mix of owners, social tenants and part-rent, part-buy tenants and key workers, have obtained a quote for redecorating the residential block that is a fraction of the amount that Peabody is proposing to pay its contractors, which it will of course pass on to its residents.

[Jeremy Corbyn]

That sounds like a depressingly familiar story. Indeed I have had similar relationships with a number of housing associations, including the Peabody Trust, in my own area. There needs to be a Select Committee investigation into the governance, accountability and democracy of housing associations. That would be a very good area to discuss. Having said that, I pay tribute to Islington council for setting up a well-run ALMO and for its attempts to co-ordinate the work of housing associations, the council, building programmes and the community to ensure that we get family-sized housing, which is in the greatest demand.

We also need to consider the standards of management and, where possible, amalgamate the management of housing associations and the council in particular areas. There can be six or eight housing associations operating on one estate, which is not a sensible way in which to run things. Tenants will have six or eight caretakers, six or eight managers and six or eight cleaning contracts. How about just having one? Clearly, there is a need for us to investigate that area as well.

I also want to thank the people who work in housing in my own borough—the caretakers, the cleaners, the repair people and so on. They are not often thanked; they are usually criticised and blamed. The majority of people who work in the public sector do so because they want to. They want to do a good job and to co-ordinate well with the tenants and the local communities. I want to praise them for what they do and the way in which they try to respond to people’s needs.

The Select Committee report says quite a lot about the private rented sector. The history of that sector in this country is a particularly chequered one. The Labour Governments of the ’60s and ’70s sought registration, rent control and a degree of national standards in the private rented sector. The tenor of the Conservative Government of 1979 was against any kind of intervention in anything. The results included a property boom, privatisation, the sale of a lot of council properties and landlords’ freedom to charge whatever they wished. Now, in order to adhere to national law on housing homeless families, local authorities have absolutely no choice but to place those families in the private rented sector. They have a legal obligation to house people. No London council still puts people in bed and breakfasts—as far as I know, anyway. Instead, they put them in the private rented sector, which is expensive, often inadequate and sometimes nowhere near the community from which those families come. The bill is usually paid by housing benefit.

The Government’s solution is to cap housing benefit, which will mean in turn the removal of large numbers of people from central London. That is not a solution. The solution must be to support housing benefit, but it must also involve considering the impact and costs of the private rented sector on our society. Paragraph 162 of the report points out how many private rented properties the UK had in 2007. The number has increased a great deal since then, and I observe that it is increasing even faster at present.

Paragraph 173 is interesting. The Committee took evidence from Professor Tony Crook, professor of housing studies at the university of Sheffield, who discussed the influx of small-scale landlords, the number of buy-to-let mortgages that were granted and the resulting boom in the private rented sector. Shelter wants good-quality conditions in the private sector and is chary of introducing rent controls, as it thinks that that might reduce the number of places available.

I can see Shelter’s point, but it seems to me that we in this country have built in an enormous problem for ourselves. People in my constituency who live in the private rented sector, unless they receive housing benefit, spend the highest proportion of their disposable income on housing—far more than any mortgage payer or social tenant—for the worst conditions and, generally speaking, the worst services and repair levels. The issue is not going to go away, and if my constituency is anything to go by, private tenants will increasingly start to come together and be much more vocal about it.

I support close examination and inspection and the use of building control and legal proceedings to ensure decent homes, decent repairs and decent quality, but we cannot escape considering rent levels in the private sector. It is done to some extent in the United States and to a great extent in Germany and many European countries. I do not see why we should not start considering a similar process in this country. With the best will in the world, even if a Labour Government were spending billions of pounds of capital investment on new housing at present, there would still be a housing problem in five or 10 years’ time, particularly in London. It is an issue whose time has more than come, and a serious examination of it is needed. I hope that the Select Committee is prepared to undertake it.

The Shelter document that I obtained in advance of today’s debate made this point:

“More than £4 billion of taxpayers’ money is spent annually on housing benefit for private renters and this is set to rise to nearly £6.7 billion by 2010/11.”

We do not yet know what the effect of the cap will be, but that is what we are paying at present. It goes on to make a good point:

“The sector doesn’t function well enough. Too many tenants live in terrible conditions…Too many responsible landlords and professional property managers are undercut in the market by slum landlords”.

I understand that point. There are good landlords out there who try to manage things properly, charge reasonable rents and be reasonable people, but then a cut-throat arrives next door and undercuts them or gets rid of them by other means. It is not a nice business in some areas. Shelter says:

“Too many landlords are confused about, or are unaware of, what their obligations are.”

Taxpayers lose a great deal of money every year as a result, so tackling rogue landlords is very important and another issue to which I hope that the Government and the Select Committee will pay attention.

In areas such as mine, housing is the absolute, No. 1, top-of-the-list, key issue. If someone is a council tenant, they have security of tenure—unless the Government’s new proposals under the Localism Bill come in and that security of tenure is under threat.

[Grant Shapps]

Is the hon. Gentleman aware that there is no proposal whatever to remove security of tenure from any existing tenant?

[Jeremy Corbyn]

That was a very good use of words by the Minister, and I compliment him on it—Sir Humphrey would be proud. But, for new tenants, there is a proposal whereby it will be permissible for local authorities to limit the term of tenure or to review it. Given the divisive nature of the plan, if we take that five, 10, 15 or 20 years down the road, the public sector will mirror the private sector as it is today. A tiny proportion of private sector tenants have the 1960s and 1970s rent protection—there are just a few left. I want security of tenure for all council and all housing association tenants, with no time limit placed on it.

The need for investment in good-quality housing could never be greater. Children growing up in overcrowded accommodation under-achieve in school and suffer more illness. Families break up. It costs us all a lot of money. There are an awful lot of broken lives and broken ambitions because of people living in poor-quality, overcrowded accommodation, some of which is in the public sector. People living in private rented accommodation may be forced to move every few months because the landlord decides that they can get more money from someone else, or decides to sell the property and move on, or whatever else. People have to cope with disruption to schooling and endless moves around the place. A tenant on housing benefit in the private rented sector has no negotiating power vis-à-vis a private sector landlord.

It is up to us and the public sector as a whole to ensure protection, regulation and security, so that children know where they are going to stay, families know where they are going to stay and the communities benefit from that as a whole. My ambition is to see far more council housing built, purchased and managed, with the good quality that is possible within it, and to see a degree of regulation in the private sector that will give people the security of tenure that is so desperately needed. Otherwise, we are just failing in our duty.

I compliment the Select Committee on the report that it produced and the debate that it has encouraged today. I urge it to do further investigation work, particularly on the role of the private sector in housing supply in this country.

[Mr Peter Bone (in the Chair)]

Order. Before I call the next speaker, it might be helpful for hon. Members to know that I intend to start the winding-up speeches at 5 o’clock. It is just after 4 o’clock now and there are four speakers to go. I call Nicky Morgan.

16:03

[Nicky Morgan (Loughborough) (Con)]

Thank you for allowing me to make a contribution, Mr Bone. My maths is not great, but I have just worked out how long I have to speak, and I assure hon. Members that I will not take up all that time. I want to speak briefly about Charnwood Neighbourhood Housing, which is the ALMO in my part of the borough—my Loughborough constituency is part of the borough of Charnwood.

I entirely agree with the comments of the hon. Member for Islington North (Jeremy Corbyn) about the work done by the staff in these organisations. I recognised the “Computer says no” attitude, which sometimes prevails when I ask for help with a query, but overall the housing staff at Charnwood borough council offices and at Charnwood Neighbourhood Housing have always been helpful and responsive in doing whatever they can to assist tenants and respond to my queries, which I have raised both before and since my election to the House.

Charnwood borough council has a retained housing stock of just under 6,000 units. The council bid for funding in round 6 of the ALMO programme and was awarded a minimum of £36 million to invest in stock improvements, subject to receiving a two-star rating from the Audit Commission. At the last inspection in February 2010, Charnwood achieved a one-star rating—previously it was a zero-star organisation—with uncertain prospects for improvement, despite an awful lot of work having been done. Clearly, something was not working and the management was not as it should have been. It has carried on working hard on the improvement programme, and a new chief executive is in place. I have met her, and she is working extremely hard.

I have heard both sides of the debate this afternoon, and I am sure that lots of lessons can be learned from organisations that have two stars. I entirely agree with the Minister’s statement in November, in which he said that where organisations do not have a two-star rating, it is the tenants who lose out, because although they have little control over the star rating of their landlord, their not getting decent homes is a result of that. The two-star rating is not in itself a guarantee of ability to run a capital programme or to offer good value for money. There are no easy answers, but what I hear from both sides of the Chamber this afternoon is that we all believe in the importance of housing, in terms of what it means for quality of life, and that, if at all possible, people cannot be allowed to continue to live in non-decent houses. In April last year, 34.7% of Charnwood’s stock was non-decent and, as has already been said, the longer the debate goes on the more housing slips back into non-decency.

The report is extremely valuable. I want to bring to the Minister’s attention two issues that were raised with me by my ALMO. These issues have not been mentioned so far, although I might be wrong and not have been concentrating properly. Additional investment might be required in particular types of stock. For example, Charnwood has non-traditional, precast reinforced concrete housing, which requires greater investment levels, and a large number of sheltered housing schemes which are no longer fit for purpose but which house some of our most vulnerable tenants.

Charnwood is also a rural community. Having been a candidate in Islington South and Finsbury back in the 2001 general election, I know the problems of London, although I now represent a semi-rural constituency. We have a growing elderly population and demand for adaptations is consistently high. That might not fall within decent homes funding, but it still needs to be paid for, particularly if we are asking people to live in their houses for longer and to remain independent for as long as possible. As has been said, funding does not appear to be available for state upgrades or environmental improvements, which would create opportunities for designing out crime and supporting reductions in antisocial behaviour.

In the borough council and the ALMO’s joint response to the backlog funding proposals, the spending review and the difficulty with public finances are noted, and both chief executives say that they

“will respond positively to any changes that are thought necessary by central government to assist in the recovery of the economy.”

They say that they appreciate the impact that less money being available will have on local authorities, but they want to rise to the challenge in a “constructive and creative way”, and I pay tribute to them for that entrepreneurial spirit. The chief executives believe that they can still deliver a decent homes investment programme that achieves value for money.

We have all discussed the importance of decent homes and of funding, and we need money to improve the quality of life for tenants across the borough of Charnwood and to assist the Government in delivering their strategic and financial objectives in doing that. I welcome the Government’s commitment to funding and to addressing the backlog of homes that have not yet reached the decent standard and those organisations that have not reached two-star status yet. I understand that it is important that we end up with organisations that have sustainable, self-financing business plans. I shall make the same point in my conclusion as I made in my intervention: because of having to wait for two-star status, my ALMO has not been able to submit a bid. We are now in round 6, and less money is available due to the state of the economy and public finances that we were left. I know that the ALMO would appreciate a decision sooner rather than later, so that it can get on with raising standards for tenants in the borough of Charnwood. I look forward to hearing the Minister’s response.

16:10

[Kate Hoey (Vauxhall) (Lab)]

It is a pleasure to follow the hon. Member for Loughborough (Nicky Morgan). This debate has demonstrated how much every speaker cares about housing in their own area and on how much we agree, although we will always disagree about how much money is spent by whichever Government are in power. Many Labour Members were cross during the first four years of the Labour Government, way back in 1997, when we felt that housing was being given the least priority. That changed, but if we had given housing a great deal more priority from day one, we would be in a much better position today.

I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts), who introduced this debate, on his commitment to housing over a long period. He has always ensured that the matter is raised in Parliament. I say to the Minister that his job is probably one of the most difficult in the Government, because housing affects every MP from the inner city to rural areas, as my hon. Friend the Member for Islington North (Jeremy Corbyn) has said. It is the most important issue that I encounter at my constituency surgeries. For many of us, it is there all the time, and we get more and more frustrated and depressed, because we know that we can do little to help people who are desperately overcrowded and want to move or who are homeless.

On cost, there is no point arguing about how another Government would have spent more or done things differently. Undoubtedly, cuts would have had to come. We all want to support the Minister in arguing his case with the Treasury in terms of the cost-benefit analysis of spending and investment in housing. My hon. Friend the Member for Islington North has discussed the cost of people living in bad housing. The cost to our national health service of the people affected by bad housing conditions and overcrowding is huge, as it is more likely that they will need treatment, which costs money. Although we have our differences in terms of specific party politics, we must do everything that we can collectively to say to Governments of all parties that investment in housing saves money in the long term.

I will make one or two quick points. The reason why I did not put in my name, Mr Bone, is that I was not sure how long the introduction to a new report on a ban on Heathrow night flights would take. It did not take as long as I thought it would, so I am able to be here.

Many of the Adjournment debates that I have secured concerned housing in Lambeth. Lambeth is one of those boroughs in which politics change, council leadership changes and coalitions form—we have had it all during my time as a Member of Parliament—but one thing that does not seem to change is the culture and how it is run, particularly in terms of housing. I opposed the ALMO in Lambeth, as I thought that it would end up simply as a change of function from the local authority, and that the same kind of people would run the ALMO. I have been proved more or less right. The ALMO was approved by a tiny majority—3,518 to 3,362—so I appreciate that it did not start with a mountain of support. Some good people have been involved, and some have worked hard.

I add my thanks to the people at the bottom of the structure—those who do the cleaning on the estates, particularly those who are in-house. Despite all the changes at the top, in which they never seem to be involved, and despite all the factors against them, they try to deliver good services, where they can. They are at the sharp end where the cuts will come, which will not affect the people on £250,000 a year—the directors and assistant directors of when we seem to have so many, who get huge amounts of money that never seems to be cut. I would love the Select Committee to investigate the costs of how we deliver services. Any tenant or resident leader who has been involved in their tenants or residents association for a long time could simply come in and say how much things could be changed and made different.

We did not get a two-star rating in my constituency. When the ALMO was set up, most people moved to it. We got a few changes, but we are no nearer to getting a two-star rating now than we were when we started. The tenants and I have always said, “What happens when there is a change of Government? Is there a plan B? Will ALMOs still be supported? Will a two-star rating mean anything?” I am quite pleased that we have got rid of this whole two-star thing, because in the end, it is not the tenants’ fault that the ALMO does not have a two-star rating. The tenants worked so hard to make it happen. Now we are in a situation in which we do not have a two-star rating, and we have a huge number of homes that are not up to the decent homes standard. We have put in a bid for £217 million, but we are unlikely to get it, and we should be coming to the Minister now with our priorities.

One or two estates are real priorities. I could take hon. Members to an estate, which is a 10-minute walk from the House of Commons, where the windows are falling out, which is something that people have been living with for a long time. I cannot understand why we do not have a system where we look at the estate and assess how much it would cost to get the windows in. We will spend more money—just like we spent more than £1 million on getting an ALMO—on preparing the costs and the analyses, and companies will come back time after time. It is usually the same old companies that get the jobs anyway. All those people go around tendering against one another and operating cosy little cartels. It often ends up with someone getting a lot of money, and sometimes the standard of the work is not adequate.

Decent homes standards cover more than just the home itself. Some of my older residents do not want a new kitchen and like their sinks or whatever. In fact, some of the sinks that were taken out were sold to rich people who wanted to install an old-fashioned sink. A decent homes standard is different for everybody.

It upsets me that we have many empty flats and homes in Lambeth. When a tenant moves out or dies, their home is empty. Suddenly, that home cannot be let, because it is not up to decent homes standards, even though someone was living there two or three weeks ago, which is absolutely ridiculous. We should be able to allow people with a bit of nous who are on the housing waiting list to go in and do their work, like the old Greater London Council used to do. As long as the electrics and the health and safety are right, I do not see why anyone should not be allowed to go in and take the flat. Instead, we have flats sitting empty for months and even years. Then the council says, “We had better sell them off now because we cannot afford to make them good.” It is absolutely scandalous, and I hope that the Minister will say that he will encourage such a route.

[Mr Betts]

Where councils let a property which is not decent and the tenant moves in, there is a guarantee that once they have been in for a short period of time, it will be brought up to a decent standard, which is a condition of the letting being accepted. In such a case, the money might be taken away and the council might not honour its promise, which would be a real problem for a tenant who had moved in under such circumstances.

[Kate Hoey]

I want to go further. If a person is handy and can do a bit of plumbing, why can we not let them move in and fix things up themselves? For the first six months, they could live rent-free or pay a reduced rent, which is what the GLC used to do. If the flats are used, more rent comes into the borough thereby giving councils more money. If we leave the homes empty, no one is paying rent. I feel strongly about that.

Finally, housing associations have become more and more like the old style, one-size-fits-all council, which we have tried to get away from. I was very supportive of the tenants who wanted Hyde Housing to take over a great deal of the housing stock in Stockwell, but we have recently experienced the most appalling problems with that organisation. When it finally realised that things were going wrong, representatives came down and were responsive to the tenants. The chief executive has now gone, which may be why things have changed.

[Jeremy Corbyn]

Does my hon. Friend not think that there is an issue surrounding the governance, accountability and democracy of housing associations? They started out as smallish local, social organisations, but they have become very large housing companies that often seem more interested in private development than in their primary function.

[Kate Hoey]

I agree. There have been so many mergers that I give up on the names and what they call themselves now. They have definitely moved away from being small and really local—they try to close their local housing offices as soon as possible once they have taken over.

On my hon. Friend’s point about leaseholder charges, some people have been ripped off for years by housing associations. In the case of Hyde Housing, it was only because a group of residents got together and spent hours and hours looking at the issue in detail in order to prove their case that it accepted that case, apologised and will pay the money back. In my area, the most success, in terms of the management and the residents’ enjoyment of it, has come from successful, small TMOs. They have really worked. They have been given the power and more control. One of them, Holland Rise and Whitebeam Close, has taken over the concierge system and is running it brilliantly. The staff like being there now—they feel that they are involved in the estate and know the residents. In the past, Lambeth council ran the concierge system for all the blocks, and the TMO had to put up with its management and style.

I will probably get into trouble with my councillors for what I have said, but some good things are happening in Lambeth. The issue is about investment and money, but it is also about more than that. I support the Government’s proposed changes in relation to rents and councils being able to control that money. However, we must make sure that there is a mechanism that ensures that that money is spent properly. Local is best, but local councils do not always do the right thing with the money.

16:22

[Lilian Greenwood (Nottingham South) (Lab)]

I apologise, Mr Bone, for not writing to you beforehand to indicate that I wished to speak in today’s debate.

The Communities and Local Government Committee’s report begins its key conclusions with the statement:

“The decent homes programme has had a dramatic, positive effect on the living conditions of almost all social housing tenants by putting very significant resources into tangible improvements to social housing.”

There is no doubt that the Committee’s report is comprehensive and far-reaching, and I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts) on his chairmanship of the Committee. I am unsure, however, that such an analysis can ever adequately express the importance and impact that such schemes have on local communities and local people. That is why I would like to share Nottingham’s experience of the decent homes programme as implemented by our ALMO, Nottingham City Homes. I also want to take this opportunity to raise concerns about the future, particularly since funding for the completion of the programme has been cut by 40%. We in Nottingham are only part way through the scheduled works to bring all council housing up to the required standard.

In Nottingham, the Government have decided to withdraw £200 million of funding for a major private finance initiative project for the regeneration of the Meadows neighbourhood in my constituency. As a result, council homes that would have been demolished and rebuilt or substantially improved under the PFI scheme, and that were therefore not included in the city’s decent homes programme, are now in need of substantial improvements to bring them up to standard.

Nottingham’s decent homes programme is known locally as Secure Warm Modern, which reflects the priorities set by tenants, for whom security was and is a key concern. Nottingham City Homes had to work very hard to reach the two-star rating required to access capital funding and, having done so, expected to bring all its housing up to and beyond the national standard by 2013. I was interested in the comments of a number of hon. Members on the two-star rating and, while I agree that tenants should not be penalised for the failings of the management company, I think it would be hard on an ALMO that has worked very hard to reach that standard to be penalised.

The programme is mid-way through and in a period of intense activity. I understand from Nottingham City Homes that a new window or door is fitted every two minutes, a new heating system is installed every 20 minutes, and an internal package—a kitchen, bathroom or both—is completed every 20 minutes. By April 2011, Nottingham City Homes will have upgraded windows in 13,700 properties, replaced 3,300 doors, upgraded 10,600 heating systems, and replaced 7,300 kitchens and 6,000 bathrooms. That is a total investment of £74 million.

In carrying out that work, our ALMO is already achieving good value for money and efficiency savings. For example, £7 million of savings were achieved by using innovative e-auction tenders and £8.4 million was saved by adopting a streaming rather than a whole house approach—in other words, a specialist contractor completes all the windows required on a street-by-street basis and then a separate contractor undertakes work on boilers, insulation and so on. Although that might seem to be disruptive to tenants, it has been a much more popular and efficient way of doing things.

Tenants tell me that they feel safer, warmer and, indeed, happier as a result of the works undertaken and investment in their homes. They often mention the reduction in damp and condensation, the benefit of having lower heating bills and, importantly, the feeling of pride they have in the improved look of not just their home, but the neighbourhood. In going out to talk to tenants, I also talk to the people who live next door who are owner-occupiers or other social tenants. They say the same thing: they really appreciate the difference that the decent homes programme has made to our city.

The view that the decent homes programme has had benefits is based not only on tenants’ comments—vital though those are—but on hard evidence. Nottingham City Homes is undertaking research projects in partnership with Nottingham Trent university to measure the wider social impact of the decent homes programme in Nottingham. The first research project was based on areas where the secure work to install new windows has been carried out. The report is quite substantial, but one of the statistics I picked out from it indicates that there has been a 41% reduction in burglaries in areas where the secure work has been completed in homes, compared with a 21% reduction in burglaries across Nottingham. That demonstrates the real difference to the lives of local people that just one element of the programme has had.

One of the other most valuable impacts has been the creation of more than 600 new jobs in the city and 80 new apprenticeships as a result of the award-winning “One in a Million” scheme, under which the contractors agree to take on a new apprentice for every million pounds of expenditure. However, much of the work is still to be completed under the remaining programme and is planned for completion by 2013. Nottingham City Homes was due to receive a further £91 million of funding from the Department for Communities and Local Government for the remaining programme in the coming two years. As a result of the reallocations process, Nottingham City Homes has bid for £67 million to bring 90%—the maximum allowed—of the stock to decency by 2013. It has made an additional bid for £26 million between 2011 to 2015 to cover exceptional stock. The bid now includes an additional £9.7 million for the Meadows estate, after the announcement that the planned regeneration project had been cut from the private finance initiative programme. That is a disastrous decision for my constituents and for the achievement of good-quality housing in the Meadows. I am grateful that the Minister has agreed to meet me to discuss that decision and the impact it is having.

The properties covered by the proposed PFI project in the Meadows were previously excluded from the decent homes programme because they were going to be rebuilt and refurbished. Local residents are extremely disappointed that the transformation of their estate will not go ahead. It would be deeply unfair and a real kick in the teeth for them if they also missed out on the improvements that other tenants across the city have enjoyed. Let me give hon. Members an idea of the scale of the situation. A further 1,240 properties require decent homes work, including 820 windows, 620 doors, 1,000 heating upgrades, 840 kitchens, 920 bathrooms, plus electrical rewires and insulation upgrades. There is a substantial impact on demand.

The exceptional stock part of the bid also includes five high-rise blocks in Lenton in my constituency, which require additional funds to fit external structural wall insulation to bring the properties to the required standard for thermal comfort. Nottingham City Homes has bid for the majority of funding in 2011 to 2013, in line with original plans and contractual agreements to complete the programme by 2013. It tells me that any delay or change to the contracts will result in increased costs, as the favourable terms will not be achievable at a lower volume or with a delay to the contract, and additional costs will be incurred as a result of the re-procurement process. The results of the bidding process will be announced next month. This is clearly a period of great anxiety for both the ALMO and, more importantly, tenants.

Tenants are rightly angry that the promised refurbishments might not go ahead. There has been huge support for the Nott Decent campaign that they launched to raise their concerns with Government. I was proud to welcome local tenants’ representatives Jean England, Alison Thorpe and Ennis Peck when they came to Westminster last year to present a petition to No. 10 on behalf of all those local people who are waiting for their homes to be improved. If the bid is not fully funded, that will severely damage Nottingham’s programme, with less value for money, higher costs, hundreds of job losses at a difficult time and, worst of all, thousands of tenants who are expecting their homes to be improved being let down.

I welcome the recommendations in the report by the Select Committee and its wish both to learn from the decent homes programme and to establish priorities for the years ahead, but it seems to me that the priority must be to deliver what was first promised—a decent home for all.

16:31

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

Thank you for accommodating me, Mr Bone. I apologise to you, to the Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), and to my right hon. Friend the Minister for not being present at the start of the debate. I was chairing a meeting elsewhere in the House on education matters of general interest, which overran. I came here as quickly as I could and am pleased to be here.

I am very grateful for the Select Committee’s report. I note that the Committee had the benefit of the contribution from my friend and colleague, Councillor Nick Stanton, who was then leader of Southwark council. He came and gave evidence, together with Councillor Kim Humphreys. That shows that in Southwark, as in Lambeth, Islington and elsewhere, as my friend the hon. Member for Vauxhall (Kate Hoey) said, housing remains an absolutely central political issue today. I know that the Minister knows that, because for a brief period he had political aspirations in Southwark, which I was able to redirect elsewhere. I am sincerely grateful for his interest in and robust engagement with housing issues, and for his willingness not just to listen, but to try to work with colleagues imaginatively to find solutions in difficult financial times.

I had the last Adjournment debate in Westminster Hall in the last Parliament. It was on housing in Southwark. Barbara Follett replied on behalf of the then Government and was positive, constructive and helpful. The debate was on general issues in relation to housing in Southwark, but it allowed me to say then, as I shall say now, that I come to the debate as the person who is privileged to be the Member of Parliament in England with the largest proportion of constituents who live in local authority housing. That has been the case ever since I was first elected. I am privileged to be the Member of Parliament for the borough with the largest local authority social housing stock in London and, I think, the third largest in England. We are absolutely clear that council homes make a hugely important contribution to social cohesion in Britain. In the old borough of Bermondsey, we had the first council homes ever in England. That was the result of a far-sighted, progressive Labour council in the 1920s. We have retained that real commitment to decent homes in public ownership, as well as decent homes in any other form of social ownership.

It is notable—this was part of the evidence given by my friend, Councillor Stanton—that whenever Southwark, under whatever colour of political leadership, has discussed what should happen, we have taken a different view from the one taken in Lambeth and have retained local authority housing in direct ownership and management. In my judgment, we have taken the right view on that. I think that it is important. It provides accountability and is the best solution. I was very glad that at the end of a long struggle with the Labour Government, we were able to win the argument that we should not be penalised. My friends the hon. Members for Vauxhall and for Islington North (Jeremy Corbyn) will remember that, all the time, the Labour Government were trying to incentivise people to become ALMOs and so on, saying that that would provide a better deal. That should be a local decision.

The really good news about the Minister’s announcements in November is that, in finding some money for the decent homes programme to continue, which is very welcome, he made the right decision in saying that we are not going to go back to using the old-style rating method. The council’s ability to deliver would have been reflected on to the tenants, who would have paid the price. The tenants would have been penalised. I am very grateful that councils are basically starting from a blank sheet, have been able to put in their bids and are awaiting the outcome.

I also think that it was a wise move, although obviously slightly more controversial, to say that in general, and normally, if less than 10% of the stock were still to be brought up to decent homes standards, we would not expect the Government to be able to assist, but that exceptional cases would be looked at. That seems sensible.

I also want to pick up on the point wisely and readily made by my colleague the hon. Member for Islington North, who, like me, has been in debates on housing in this place pretty much for half his life.

[Jeremy Corbyn]

Longer than you think.

[Simon Hughes]

Not that much.

Colleagues will not be surprised by the figures in the written answer on 12 January 2011 to a question about the percentage of homes of different tenure in England that are decent homes. The figures are, however, worth putting on the record. Of all private sector homes, just less than two thirds—65.6%—are regarded as decent homes. Of all social property, the figure is higher at 72.8%. That makes the first absolutely fundamental and obvious point: the social sector—council housing predominantly, and more latterly housing association property—has been much better than the private sector at providing decent homes.

Breaking down those figures, it is absolutely not surprising, but absolutely worth putting on the record, that 67.7% of owner-occupied homes are decent homes compared with only 56% of private rented homes. In all our constituencies, the sector with the lowest-quality accommodation is that of privately rented homes, as the Chairman of the Select Committee well knows. That is not as directly the responsibility of the public service as other sectors are, but it is indirectly related, and I remind the Minister to keep that on his agenda. A perfectly good relationship can be built up between central Government, local government and the private sector, which is not over-demanding or over-regulatory, but ensures, to put it bluntly, that landlords and owners are not allowed to get away with letting out rubbish housing. We need to ensure that people are not penalised by being left in such accommodation.

Lastly—again, this is obviously not surprising—in recent years housing associations have gone past councils in the percentage of their stock that is decent housing. The figures are 77.2% of housing association property conforming to the decent housing standard, and 68.5% of local authority property.

Linked to that point, I support the call by the hon. Member for Islington North to have an inquiry, if the Select Committee can find the time, into the housing association sector’s accountability to its residents. Housing associations are of very variable quality. There are many in my constituency and although they always engage well with me, they do not always deliver. The other day I spent the day with Peabody, which is based in my constituency. It has improved again; it was very good and then slipped. Other associations also go up and down, but the problem is that there is no democratic system, whereas at least with local authorities, managers can be thrown out, or housing can be made the big issue of the election campaign. That is an issue with which I hope the Government are willing to engage.

[Jeremy Corbyn]

I absolutely endorse what the right hon. Gentleman is saying. Does he agree that there is huge inefficiency where there are small housing associations running a few properties over a large and scattered area, or on an estate where there are five or six associations? That is an enormous waste of resources, and there ought to be some rationalisation and greater efficiency.

[Simon Hughes]

That is a real issue. When the London Docklands Development Corporation was developing Rotherhithe and Surrey docks, it contracted with a consortium of six housing associations to develop the place at the end of the Rotherhithe peninsula. That was fine in practice, and all the housing associations were very interested, but when it came to delivering the management of that bit of the borough, it was hopeless because problems arose over the common parts and the public roads. In the end, the housing associations had to agree that one of them would take over the management of all the areas owned by the other five.

My friend, the hon. Member for Vauxhall, argued strongly in favour of tenant-management organisations, which I support and which are often small, bottom-up organisations. Ways must be found of allowing such organisations to retain that degree of autonomy, but within a federation of local housing associations. That may be the way in which we can bring together the small specific housing associations without being draconian and say that they must pass a specific threshold.

It was good that the Labour Government set up the decent homes programme in 2000. For the record, it was sad that they fell short. I understand all the constraints that existed, but in the end the programme did not deliver on its aspiration. It was a judgment call. The result was that the new build of housing under Labour was dreadful—in fact it was more dreadful than under a previous Tory Government. Labour will have to defend that judgment call. The present Government are right in saying—the Minister and I were talking about this only recently—that they have to encourage both new build and the renovation of existing stock. We must do both in parallel; we cannot put all our eggs in one basket.

All local authorities that have social housing—apart from areas in the north-west, such as Burnley, where there is a surplus of housing and where the issues are entirely different—need both new build and renovation. I am talking about all the London boroughs and most of the rest of the country, both rural and urban.

There also needs to be flexibility in the decent homes standard. As Nick Stanton says, there are different criteria for someone on the seventh floor of Lupin Point in my constituency in Bermondsey and for someone in a cottage in a tin-mining village in Cornwall, which may still be local authority-owned. There needs to be the flexibility for that to be defined locally.

When my colleagues were leading the administration in Southwark, they always said that they wanted to apply their own standards rather than the off-the-shelf Government standards. There is also a very different view from the residents. I visited the famous prefab estate in Lewisham—I do not know whether it is in the constituency of the hon. Member for Lewisham East (Heidi Alexander)—which is a wonderful place to go. I have not followed every twist and turn of the saga, but I think that I am right in saying that the council has decided to have it demolished. I regret that because, bizarrely, prefabs that have existed since the war were very popular homes for the people who lived in them. They will not conform to all the decent homes standards, but they were warm and had gardens. Therefore, we should be careful about not being over-prescriptive from the centre.

[Heidi Alexander]

Given that the right hon. Gentleman raised the subject of the Excalibur estate, I cannot resist making a comment. He is right to say that the council has decided to demolish and rebuild the estate, but it made that decision after conducting a ballot of all tenants on the estate. The ballot was incredibly close, with more than 50% voting for the demolition and just under 50% voting against it. The costs of renovating the properties and bringing them up to a decent standard were considered. Indeed that was something that many families who live on that estate very dearly wanted. None the less, the difficult decision has been taken.

[Simon Hughes]

I appreciate how difficult the decision was. Prefab homes are often really popular—they were in Southwark—and there are not many left. That prefab estate was the iconic last redoubt of the post-war London prefab.

I make a plea to the Minister and, through him and his colleagues, to local councils. The decent homes programme must always be re-evaluated on the basis of an up-to-date stock condition survey, but other flexibilities are needed as well. The first is the flexibility to which my friend the hon. Member for Vauxhall referred; I heard the exchange between her and the Chair of the Select Committee. It is nonsense that Lambeth has 600 empty council properties—that is the figure that I was given—because they are allegedly not decent homes, so after tenants leave, the council cannot put another tenant in. There must be a non-bureaucratic, non-municipalist way to engage people from the voluntary sector and community groups to make those homes liveable. There are always people willing to do so. We cannot allow only builders and plumbers in; there are lots of people. I can think of a mate of mine who has just retired—he worked in the bus garage in Catford, as it happens—who is a really good handyman. He is looking for things to do in his early retirement, and he has fantastic construction skills. Lots of people are willing to do it. We must engage the community and ensure that homes do not sit empty just because they are not in the council’s programme for 2011.

The other thing that is needed is decent common spaces such as entrance halls, lift lobbies and landings. It makes all the difference. Like my colleagues, whether in Nottingham or London, I can go to two tower blocks in the same borough of identical build and identical height, one of which is clean and pleasant, smells nice, looks nice and has had a touch of paint, the other of which, of the same age, is dreadful and unkempt with peeling paint. We must ensure that councils understand that they should be able to get on with the quick and easy bits of work that can improve people’s quality of life hugely for five years without massive spend: it is not about putting in new lifts or redoing the whole building; it is not about having scaffolding up to the 20th floor for half a year; it is about little things.

Much more inventiveness is needed to make homes in the public and socially rented sector the same quality as we would want our places to be. For me, the test is always, “Would I want to live here and invite my family to come into this flat?” If the flat is great but getting there is like going through a sewer, to be blunt, that is not acceptable.

[Jeremy Corbyn]

On one side of the question of the waste of resources is the ridiculous situation in Lambeth in which homes are kept empty. On the other are places where the council has the money for the decent homes standard but where, when somebody dies or the flat becomes empty, the council rips out perfectly good, serviceable fixtures due to an obsession with uniformity. If a previous tenant who was good at home improvement did some nice work in the place, the next tenant might like to keep it and should be given the choice. Instead, the council rips it all out, wasting time, money and resources to undo what is probably good-quality work.

[Simon Hughes]

A fantastic unity is developing: I see the Minister nodding; the hon. Member for Islington North, who is not regarded as a right-wing socialist, is making the point; and I agree with the hon. Member for Islington North, so we are all in it together. That is absolutely the point. Many people improve their council properties and make them really nice. If they move, there is absolutely no reason why the new tenants should not be offered the option to keep the property as it is. It might need a bit of a tweak, but the tenants should be offered the chance to find somebody to help them make whatever small changes they need before they move in. Let us be intelligent about such things rather than monolithic, prescriptive and centralised. That approach is frustrating; it wastes time and money; and it keeps people out of housing at a time when we are desperately short of it.

I want to finish in good time—we might even finish the debate early. I have argued for a flexible decent homes standard that is agreed locally, and it should be for local authorities to negotiate that. Possibly such a standard would need Government clearance, but I am relaxed about that. If the local authority is happy, provided that the minimum health and safety standards are met, that is fine.

I know that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell), has made this point, and I, too, am keen to have a modern, green homes standards. If we refurbish, let us make the homes energy-efficient at the same time and save on bills, as well as just making them look nice with new windows and so on. Let us try to minimise the short turnaround.

This is not special pleading, because I have a reason for making this plea. When money is being allocated to local authorities, sometimes there are high expenditure issues that should be factored in so that councils are not disadvantaged as a result. We had a huge fire in Camberwell. It was not in my constituency but in the neighbouring constituency of the right hon. and learned Member for Camberwell and Peckham (Ms Harman). It was just a couple of years ago and there were six fatalities. It was in Lakanal house on the Sceaux Gardens estate.

We had a fire in my constituency two weeks ago. It was in a tower block—Brawne house—on the Brandon estate. Mercifully, there were no fatalities and no serious injuries. I visited the 12th floor with the local councillor and secretary of the local tenants and residents association. Sometimes there are unexpected bills, because a terrible event has occurred, and I hope that councils will not be not penalised when such disasters strike, because they need to ensure that the properties are put back into decent nick. The matter concerns not only the homes affected but the block, and the council might need to repaint or deal with fire damage or whatever. It is not right to tell a local authority that there are no circumstances in which it cannot be regarded as a special case for extra help. I am not suggesting that there should be a differential formula for special help, but occasionally there has to be special help for those who have such problems.

Decent homes work is a fantastic opportunity for enhancing local apprenticeships and skills in the local community. There should not be any local authority or local housing association-owned property where decent homes work is going on that does not engage people from the local community in apprenticeships, skills enhancement and training. I hope that that can be encouraged and that the experience is positive. I know that Southwark does it, and we could do more of it.

Colleagues have made the point that leaseholders have a huge interest in what is being done. We need a better system for consulting about works. I have twice tried to get a Bill through to improve the rights of leaseholders, otherwise the leaseholders get ridiculously high bills. Pensioners with no savings can get a bill for £27,000 for works that they never assented to. The work may include replacing windows after people have already replaced them themselves, which is nonsense. I am not aiming that point at one particular council. The City of London corporation owns estates in my constituency and has been guilty of that in the past, when I had to struggle to get the bills down.

We need to ensure that there is fairness across communities and estates as part of the decent homes programme. That is a matter for the local authority to lead. Nothing is more frustrating for tenants who have been on an estate for 30 years than seeing that blocks one, two, three and four have had all the work done and look like new builds, and then somebody says, “You can’t have anything in block five for the next five years.” Those are all matters for local management. There needs to be sensitivity about how we roll out the decent homes programme. We are at the beginning of a new Government and the decent homes programme will continue for the next four years, which is welcome.

[Mr Betts]

The right hon. Gentleman is right that these are matters for local decisions, but they are also a matter for central Government if the first group of houses—blocks or individual houses—have been done under the first part of the programme, and suddenly central Government funding is cut, as some of my colleagues discussed earlier, perhaps before the right hon. Gentleman came in. Therefore, half the houses in the ALMO have been done, and the other half remain to be done, but then money is cut off as a result of the CSR, so it is surely a central Government rather than local government decision whether the programme continues.

[Simon Hughes]

I hope that we can finish the debate without falling out with the hon. Gentleman on fairly obvious political ground. The reality is that Governments allocate money for periods of years—years rather than one year—which is a good thing, because it gives certainty. The Government have chosen, as they were entitled to do, to have a four-year plan, but it has been broken down into two periods of two years each, which is the right sort of balance. I hope that Ministers will be able to show flexibility at the end of two years. That is my wish, but it will be their call.

Obviously, when we change Government, or when we have a new CSR, we will have to reassess what the public finances can afford. I have not met a single person in England who does not understand that we have to tighten our belts collectively—Government, local government and everybody else. Nobody fails to understand that point. The question is how we continue the programme that the Minister has announced and deliver it fairly. As councils make decisions about what they will do, I hope that they will seek to have fairness in their community, so that everybody feels part of the improvement programme not only for their own home, but for that community as a whole.

16:54

[Chris Williamson (Derby North) (Lab)]

It is a great pleasure to serve under your chairmanship for the first time, Mr Bone. I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts) on his excellent opening speech, which set the scene for today’s excellent debate.

The hon. Member for Carshalton and Wallington (Tom Brake) referred to ALMOs, almost as a default position, as being better than local authorities. That is slightly unfair—probably very unfair—on the many local authorities that do an excellent job.

[Tom Brake]

For the record, I made a comparison between ALMOs and housing associations, and not between ALMOs and local authorities.

[Chris Williamson]

I thank the hon. Gentleman for that clarification, which I welcome, and I apologise for misunderstanding him. I was making the point that many local authorities do an excellent job and do not necessarily need an ALMO to improve the housing stock for which they are responsible.

The hon. Gentleman also pointed out that successive Governments have neglected council housing. That was probably true of the previous Administration during their first four years, but the biggest problems built up over the 18 years of the previous Conservative Administration, and the decent homes programme went a long way towards addressing the backlog of dilapidation that was created by the under-investment from 1979 to 1997. He was hopeful that all the homes that are not currently decent will be brought up to standard by the end of this Parliament. I share his hope, but it is unlikely to be fulfilled.

My hon. Friend the Member for Stockport (Ann Coffey) stressed the importance of good housing management. From my own experience of representing Derby North and as a councillor on Derby city council, I know that that is key to ensuring that people enjoy a good quality of life on their housing estate. Poor housing management can lead to a whole range of problems, and I am sure that there is cross-party agreement on that issue. My hon. Friend’s concern that the shortage of housing should be a key priority, if not the top priority, is again one that I share. However, the decision made by the Government to remove housing targets by getting rid of the regional spatial strategies will make it a more significant problem in years to come. Forcing people into the private sector is not a good way of proceeding, as my hon. Friend pointed out.

The hon. Member for Wolverhampton South West (Paul Uppal) referred to apprenticeships and to how it is a good thing to use the decent homes programme to build up jobs by offering training and opportunities through apprenticeships for people to take advantage of the investment in construction. That is another important angle, but to some extent it will be undermined by the cuts made to the decent homes programme.

My hon. Friend the Member for Lewisham East (Heidi Alexander) said that too many people still live in substandard accommodation. She spoke eloquently about the impact that that has on people’s lives, and she referred to the embarrassment and shame that people feel, because they live in substandard accommodation. It is not their fault, and we have an obligation to people to ensure that they can enjoy their home. Nobody should be forced to endure that feeling of embarrassment and shame, because of inadequate investment by their local authority and central Government. I share her belief that, in certain circumstances, demolition is the only option. In numerous examples around the country, we have seen that selective demolition has had a significant impact and improved the overall standard of the housing estate, where it has taken place. She concluded by discussing the uncertainty about whether Lewisham will be able to deliver its decent homes standard.

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) referred to authorities having to have a two-star rating. In a letter to the Chair of the Communities and Local Government Committee, the Minister said:

“To improve fairness in allocating local authority decent homes funding, we will no longer require ALMOs to have passed a housing inspection with a 2* rating”.

Hopefully the Minister will confirm that that is the case and that consequently Lewisham will be able to access the funding that it needs and deserves.

My hon. Friend the Member for Islington North (Jeremy Corbyn) made a number of important points and referred to the cuts building up problems for the future. I share my hon. Friend’s concern that it is short-sighted to make deep cuts now, because, in the long term, everyone pays a bigger price, both in human and financial terms. My hon. Friend also congratulated—I want to share in offering those congratulations—people such as caretakers, street cleaners and other public sector workers on doing an excellent job. They are all too often castigated, and they are not celebrated enough. I welcome his comments in that regard.

My hon. Friend also made an important point about high rents in the private sector, people being forced into the private sector and the problems associated with the quality of private-rented accommodation, because of inadequate regulation. The decision of the Government to impose restrictions on housing benefit is a blunt instrument, which penalises people who have, through no fault of their own, been forced to live in the private-rented sector. A better route may have been to restrict the level of rents that landlords can charge, as well as looking at restricting housing benefit. Perhaps the Minister will comment on that. It is wrong to penalise people because they are poor. This impacts not only on poorer people, but on people on middle incomes as well. He rightly pointed out the impact that poor quality housing has on health, education and general quality of life. He referred to the need for greater protection, regulation and security for people living in the rented sector.

The hon. Member for Loughborough (Nicky Morgan) referred to the danger—she repeated the point that other hon. Members have made—of the housing stock deteriorating if we do not invest appropriately. She is right to worry, and she is right to be more worried by the cuts being pushed through, ironically enough, by her own Government. Interestingly, she made the point about the need for adaptations as well. That is another area for disabled people that is extremely important. More people are living longer now, and there is a greater need for disabled facilities grants. It is another area where local authorities will struggle to meet the demand. They are already struggling, but the problem will become even more acute, because of the cuts that are being pushed through.

My hon. Friend the Member for Vauxhall (Kate Hoey) referred to the first four years of the Labour Government—I have already touched on this point—where housing was not given sufficient priority. She said that housing is the most important issue in her constituency, and she also repeated the impact of poor housing on health. She also stressed the importance of insuring that in any investment programme we secure value for money. She said that if we are not careful, there is a danger of cartels being created and the public sector not getting good value for money. We could actually get more bang for our buck, as it were, if we were to bear down more severely on that. My hon. Friend also made a good point about the use of empty homes and being more flexible, and she referred to the GLC. That is a good example to cite, and I am interested in the Minister’s remarks about it.

My hon. Friend the Member for Nottingham South (Lilian Greenwood) referred to the withdrawal of a huge PFI scheme that would have dealt with the problems in the Meadows estate. I know that area well, given that it is close to my constituency. Indeed, I had a job with Henry Boot plc as a bricklayer on the Meadows estate when it was being built, but I must say that I am not responsible for it, as I took a job on another building site.

My hon. Friend eloquently outlined the impact of the decent homes programme on her constituents. She discussed not only bricks and mortar, important though they are, but how such matters impact on the lives of ordinary people and improve the quality of their life. Indeed, she said that 80 apprenticeships have been created, and as a result of the cuts to the programme in Nottingham, fewer apprenticeships will be taken on now than would have otherwise been the case.

The right hon. Member for Bermondsey and Old Southwark said that the largest proportion of council tenants is located in his constituency. He also had the good grace to refer to the legacy of previous, progressive Labour councils going back as far as the 1920s. Those councils set an excellent standard. I share his view about ALMOs being down to a local decision. When that is appropriate and tenants want it, that is fine, but it should not be forced on them. He, too, made the point about the private rented sector and the fact that most of the overall housing stock in the country that is not up to a decent standard is in the private rented sector. Only 56% of privately rented accommodation comes up to the decent homes threshold. That matter needs urgent attention, and I hope that the Minister will deal with it in his concluding remarks.

[Simon Hughes]

I wonder whether the Minister will at least lodge the Select Committee’s recommendation, which the previous Government did not pick up—it might not be possible to do so immediately—that VAT changes to allow renovation and new build should be treated similarly. That could be a Government policy, because it would address the renovation backlog, including that in the private sector.

[Chris Williamson]

The right hon. Gentleman makes a pertinent point with which I entirely concur. Earlier, he reiterated comments made by other hon. Members about the important of flexibility to deal with empty homes. It is important that we put on the record what a wonderful scheme the decent homes project was and note the £40 billion investment. The decent homes programme has delivered more than 700,000 new kitchens and 525,000 new bathrooms for tenants throughout the country. One million people have received new central heating systems and 750,000 people have had their homes rewired. It has certainly gone a long way to address the legacy of dilapidation that the Labour Government inherited from the previous Conservative Administration, which was in power from 1979 to 1997, and 92% of the country’s social housing stock meets the decent homes standard. It has helped to regenerate local areas, and it has particularly helped to address the problem of low demand.

The Chartered Institute of Housing has said:

“The setting of the standard, the ten-year target, the allocation of the resources and the near achievement of the target can be regarded as a major success story”.

The National Housing Federation has said that the programme has

“undoubtedly helped to raise the quality of homes benefiting millions of tenants.”

However, as hon. Members have said today and, indeed, as the recommendations from the Committee’s report point out, there is still more to do. The standard should include a minimum energy efficiency rating, which is clearly important. The backlog needs to be cleared, and there should be funding to deliver both new homes and the maintenance of and improvements to existing stock.

The think-tank for London Councils has pointed out that London Councils remains concerned about the funding shortfall to deliver the decent homes programme. As my right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) pointed out, London alone needs £2.5 billion to complete the programme, and about 10% of London’s stock is below the standard, which represents 46% of the national total. That is a major issue that clearly needs to be addressed.

In a series of letters to the Chair of the Committee, the Minister stated that

“the Government is constrained in its ability to commit to specific housing policies, including the way forward for tackling poor housing and energy efficiency.”

He went on to state in that letter, which he sent in July:

“The Government’s key priority is to devolve power from Whitehall to people, neighbourhoods, communities and…institutions”.

He also stated:

“Councils need the freedom to make the best long term decision for their housing, and it is critical that reform is able to deliver that.”

Of course, that has been done in the context of unprecedented cuts in funding for local authorities. I would be interested to hear from the Minister how he thinks councils will be able to deliver the ambition that he set out in his letter, when he is responsible for imposing huge cuts. In the letter, he also referred to the green deal. Although the green deal is welcome, it is inadequate for addressing the need for energy efficiency in people’s homes.

In a second letter, the Minister stated:

“Throughout the spending review the Government has been guided by a commitment to fairness, protecting the most vulnerable people in our society and as far as possible protecting frontline services.”

However, the reality is that the cuts are impacting disproportionately on the poorest people in society. Local authorities with the greatest needs are bearing the biggest cuts, so I wonder how the Minister can square that statement with the reality of their funding decisions.

I am running short of time, so I will conclude simply by saying that if we compare the policies being pursued by the present Government with those of my right hon. Friend the Member for Wentworth and Dearne (John Healey), when he was the Minister with responsibility for housing, hon. Members will see that he published a paper that would have enabled the decent homes programme to have been completed. His proposal would have ensured that local authorities could keep 100% of the capital receipts and would have seen an expectation that at least 75% of those receipts were reinvested in housing. That would have been a boost not only for the people living in those areas, but for the construction sector and jobs. It would have helped to deliver the Government’s stated intention of a private sector-led recovery. There are many questions that the Minister needs to answer in relation to this whole agenda because, if the ambition of a private sector-led recovery is to be realised and if the interests of tenants are to be met, the Government need to consider a significant change in direction.

17:14

[The Minister for Housing and Local Government (Grant Shapps)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Bone. I congratulate the hon. Member for Sheffield South East (Mr Betts) on securing the debate—or, rather, the Backbench Committee on nominating it and the Chairman of the Select Committee on securing it. It has been a high-quality debate and, after listening to it for the past three hours, I know why. It started with a political back and forth in the opening few minutes, but it then settled down to be a most intelligent and well-argued debate, with people who are passionate about social housing. It has been very good. In that spirit, I will follow the same path.

Let us get the politics out of the way. We know that the money had run out and that it was no longer possible to continue borrowing money we did not have to build a greater deficit that our children and their kids would carry on paying for the rest of their lives. Something had to change. When the hon. Member for Sheffield South East spoke about “our cuts,” I had to resist shouting back, “But they are not ‘our’ cuts!”; they are the cuts that the previous Administration were not prepared to make.

I am delighted that that is out of the way, because I can now start to address, in as much detail as possible, the excellent comments that have been made this afternoon. I shall preface my comments by saying that, despite the economic environment in which we find ourselves, the decent homes programme has not been cut by anywhere near as much as the Chair of the Select Committee suggested. I want to pick him up on his twice-repeated claim that there has been a 50% reduction to the programme. That is untrue. A reduction was made to the programme under the previous Administration. My predecessor, the right hon. Member for Wentworth and Dearne (John Healey), raided the programme for £150 million in—I speak from memory—July 2009 to pay something towards the so-called housing pledge, which is the new build programme. That was the first cut to the decent homes programme.

I think I am right in saying that some £319 million was indicatively signalled to have been spent on the programme, but, despite these economic times and some tough decisions, we are still spending just over £2 billion on decent homes, which, thinking back to the spending review, is more than most commentators thought likely. It is divided into about £1.6 billion to local authorities and £500 million to help some of the organisations that are in transition having left local authorities. I just wanted to put that on record. It could be argued that the reduction is 15% or 20%, but not 50%.

[Mr Betts]

I have a note based on information from the scrutiny unit of the House, which indicated that the reduction was from £2.6 billion over three years to £2 billion over four. It said that that was a cut of 42% without taking account of inflation, so I think that my figure of a 50% cut is about right.

[Grant Shapps]

We could knock these figures back and forth, but I reject the idea that the cut is about 50%. I accept, however, that more money needs to be spent on decent homes.

[Chris Williamson]

Will the Minister give way?

[Grant Shapps]

I hope that the hon. Gentleman will not mind my making a little progress. Others have spoken for a lot longer than I will get to respond to the many points that have been raised.

We are putting in £2.1 billion, but I would estimate that we need about £3.5 billion to truly finish the programme. I expect that, by April, about 210,000 homes will still be in need of decent homes funding, and the programme throughout this Parliament may cover about 150,000 of them.

The Chair of the Select Committee also asked for greater flexibility for local authorities to, for example, put in a boiler but charge 0.5% more rent. That is a very sensible suggestion and it requires no intervention from me. Local authorities are absolutely within their rights to do that. The guideline rents that we currently provide mean that they already have flexibility, and the direction of policy in the Localism Bill, which is at Committee stage, is to do precisely what he says. It is an excellent idea and one of the very good suggestions that have been made.

My hon. Friend the Member for Carshalton and Wallington (Tom Brake) raised the issue—perhaps he did this inadvertently, but it also came up in a later exchange—of the value of ALMOs versus housing associations versus local authorities. I do not particularly want to enter into this debate, other than to say that, from a Government perspective, I have a completely neutral view on whether an ALMO is better than a local authority or a housing association. Indeed, there have been some very interesting exchanges throughout the afternoon, and they have all been argued from the individual perspectives of constituency MPs. We know that, at certain times, an ALMO can be very good or very bad, and the same can be said about a local authority or a housing association.

There are even arguments about the size of housing associations, from vast conglomerates—I have a great deal of sympathy with some of the comments about the distances sometimes involved—to some small ones. In my experience, having travelled around the country a lot, looking at different types of housing, there is no single prescription for the right size or shape of organisation to run housing.

The hon. Member for Stockport (Ann Coffey) made a number of interesting points. I was impressed in particular by her comments on the quality of the environment and on how important design is to the way people feel, which was picked up again by my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), when he talked about walking into a block of flats and how the entranceway can make all the difference.

The hon. Member for Stockport also made the point about walking into the home of someone who has had the decent homes work done—the delighted tenant—and sharing in that delight. I am sure that, as constituency MPs, we have all been in that position. I put it on record that, in the previous Parliament, I was the Conservative Opposition Member who represented the most council tenants in the country—I have not checked for this Parliament. On many occasions, however, I have walked into a kitchen or bathroom and been greeted by the delighted tenant. It is an absolute pleasure.

I also put it on record that I believe in the decent homes programme. It was an achievement of the previous Government. I accept the comments of the hon. Member for Vauxhall (Kate Hoey) and others, including the hon. Member for Derby North (Chris Williamson), that it probably started four years too late, but it did a lot of good work. I also accept the arguments of the hon. Member for Islington North (Jeremy Corbyn) and others, that it sometimes carries on doing work where it is not quite required to do so, or doing it in a uniform or almost machine-like fashion, at times unnecessarily ripping out perfectly good accommodation or facilities, as mentioned by other Members.

My hon. Friend the Member for Wolverhampton South West (Paul Uppal) talked about the importance of apprenticeships. I absolutely agree with what I thought was a thoughtful contribution from him. We have a great opportunity, with today’s economic backdrop, to ensure that local skills are being used or upgraded to provide improvements for people’s homes. It is the perfect mix and combination, given the opportunity of the £2 billion-plus to ensure that it happens in the future.

The hon. Member for Lewisham East (Heidi Alexander) made a number of interesting points about estates still requiring regeneration. I offer to engage with the hon. Lady to listen to the problems and to be of as much assistance as possible. It is not easy, the money does not exist and we have had to make difficult decisions, as she and everyone else appreciates.

However, I wanted to correct one point in the hon. Lady’s speech, when she seemed to suggest she believed that the local authority would have to contribute 10% towards the costs of decent homes. That is not what the Government said. I said that if more than 10% of repairs were needed in order to reach decent homes standard—if there were more than 10% non-decent stock, in other words, which I believe would be the case in Lewisham—authorities can apply for decent homes funding. It is not that they are then expected to pitch in 10%, although in fact it might be a good idea for them to do so. I just wanted to ensure that that got on the record.

[Tom Brake]

The Minister mentioned estates that still need renovation. Can he confirm that it would be strange if ALMOs with two stars, which put a programme to Government that demonstrated their capacity to deliver and carry out that estate renovation, were not given some priority in the bids?

[Grant Shapps]

My hon. Friend is right to point out that what should count is the quality of the organisation, its ability to deliver and the need on the ground. I feel strongly that it is wrong to penalise tenants for whom it is almost impossible to do anything about the lousy management of their property, because they happen to have a useless landlord, and then penalise them again for that very fact.

My hon. Friend’s wish will come through in the work that will be done by the Homes and Communities Agency in assessing those bids, which will be taken further next month. It seems natural that those organisations that are well run and have a good plan will be more successful within the limited resources. If they are good, they are good. I do not think that two stars necessarily means that an organisation is good; it can all too often mean that it is good at ticking the right boxes, and employing too many consultants on too high a salary to jump through hoops, which is irrelevant to the lives of people on the ground. I am sure, however, that there will be a correlation.

In response to the hon. Member for Lewisham East, and to the many Members who raised this issue, the revenue account will be a vital part of the reform package. We have established that in our view the country does not have the money to completely finish the decent homes programmes—to make significant further progress during this Parliament—but we can carry out housing revenue account reform, and we are legislating for that right now in the Localism Bill, building on the work undertaken in the consultation by my predecessor, the right hon. Member for Wentworth and Dearne. One upshot of that will be an ability to plan for the renovation, repair and renewal of local authority stock for the next 30 years. I am very keen, as the hon. Member for Lewisham East pointed out, to get that provision through, and I look forward to support from right across the House in securing the progress of that part of the Bill. I do say to the hon. Lady that Lewisham’s chief executive could perhaps make a personal contribution by reducing his £192,000 salary. Times are tough, and I would have thought, as other Members have pointed out, that that would be a very good place to start.

The hon. Member for Islington North raised the point about two-star ALMOs. I have talked about how the system was unfair, and I am pleased to sweep it aside. In addition, I really do not mind if local authorities want to continue to manage their stock for ever. That is entirely their business, and this Government will cease the tricks of pushing local authority stocks into different forms of management. I sense from this debate that there is cross-party agreement on that matter, on the part of many MPs. The hon. Gentleman also mentioned the subject of ending lifetime tenure, and affordable rent, which he and I have discussed previously. The most important thing that we can do is to provide more homes and upgrade the homes that we have.

I have judged that, given that the previous Government put £17 billion into building more homes, after 13 years they ended up with a net loss of 45,000 homes. Yes, there was the right to buy and yes, pathfinder knocked down homes, but if we tried to use that maths again, we would discover that we needed £50 billion to £100 billion from the Treasury simply to build more homes in that way. In other words, something was not working, and we needed to find a different solution. Affordable rent is my version of that solution. We can now use the additional money, in the way that the Chairman of the Select Committee suggested we do for renovation, for building more homes, and that will be a sensible step forward.

My hon. Friend the Member for Loughborough (Nicky Morgan) made a number of important points, about the additional amounts of money sometimes required for homes built in different types of fabric—I know that the Homes and Communities Agency will take that issue on board—and, in common with several other Members, about round 6 bidding. Round 6 was never approved, so no one on the ground should have ever thought it was definitely going ahead. I will be meeting the hon. Member for Nottingham South (Lilian Greenwood), and I make the same offer to my hon. Friend and to Members across the House, to meet to talk about the issues and the possible ways forward.

I thought that one of the best speeches of the afternoon was made by the hon. Member for Vauxhall, who rightly pointed out so many of the common-sense realities of housing, and whose speech was devoid of any political back and forth. Many of the same issues were raised by other Members, but I thought that hers was a great contribution.

In response to the hon. Member for Nottingham South, I can say that I have visited Nottingham City Homes and have even had its chief executive, Chris Langstaff, to my office here in Parliament. I know the great work that the organisation does, and I know that that work will be able to continue. With the flexibility that we are now providing through localism, with money going locally rather than through larger regional organisations, and through the housing revenue account reform, organisations such as Nottingham City Homes will be able to continue to upgrade homes, albeit at perhaps a slightly different pace.

My right hon. Friend the Member for Bermondsey and Old Southwark made a great contribution. He and I have discussed housing on many occasions.

17:30

Sitting adjourned without Question put (Standing Order No. 10(11)).

Written Ministerial Statements

Thursday 27th January 2011 Written Statements

Thursday 27 January 2011

Workplace Disputes Reforms

Thursday 27th January 2011 Written Statements

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

Today the Government have announced the next steps in our comprehensive review of employment laws. We have launched a consultation on proposals to improve the way workplace disputes are resolved and published an “Employer’s Charter” to give employers more confidence to take on workers and support growth.

In the consultation we are seeking views on measures to achieve more early resolution of workplace disputes so that parties can resolve their own problems, in a way that is fair and equitable for both sides, without having to go to an employment tribunal; ensure that, where parties do need to come to an employment tribunal, the process is as swift, user friendly and effective as possible; and help business feel more confident about hiring people (by increasing the qualifying period for employees to be able to bring a claim for unfair dismissal from one to two years).

The Employer’s Charter tackles the myth that employment protections are all one-way—towards the employee. It clearly sets out the most important rights that employers already have in the workplace.

The consultation will close after 12 weeks on 20 April 2011. During the consultation period we will seek views from a range of interested parties. Following consideration of the responses to the consultation, we will publish a Government response, setting out what we intend to take forward.

Copies of the consultation document have been placed in the Libraries of both Houses.

Economic and Financial Affairs Council

Thursday 27th January 2011 Written Statements

[The Chancellor of the Exchequer (Mr George Osborne)]

The Economic and Financial Affairs Council was held in Brussels on 18 January 2011. The following items were discussed:

Presentation of the Presidency Work Programme

Hungarian Finance Minister Matolcsy presented the presidency work programme for ECOFIN for the first half of 2011. He identified his main priorities as the European semester, economic governance, financial services and the creation of the European stability mechanism.

Communication from the Commission: towards a Single Market Act

The Council held an exchange of views on the Single Market Act which was published on 27 October 2010 and is out for consultation until 28 February 2011. Ministers had a positive discussion and agreed that it would be important for ECOFIN to continue to engage on those issues that are led by Finance Ministers. The Government support the single market and believe that future reforms should be strongly focused on measures that encourage growth. The Council agreed to re-examine the issue in due course.

Follow-up to the December European Council meeting

The Council took note of the presidency’s plans for the follow-up to the European Council’s meeting on 16 and 17 December which called for work on legislative proposals aimed at strengthening EU economic governance to be accelerated, so that they can be adopted by June this year.

Annual Growth Survey

The Council held an exchange of views on a presentation by the Commission, which covered the main elements of its annual growth survey published on 12 January. The adoption by the European Commission of the annual growth survey will mark the beginning of the first cycle of the European semester. The Government are content with the Commission’s focus on growth, in line with objectives for the single market. ECOFIN will agree Council conclusions on this in February.

Review of draft National Reform Programmes (NRPs)

Ministers discussed a review of member states’ draft national reform programmes (NRPs) which set out member states’ reform priorities and plans. The Government are content with the Commission’s positive assessment of the UK draft NRPs and believe that the focus of all member states NRPs should be on tackling bottlenecks to growth. In March the spring European Council will provide guidance to member states for finalisation of their stability and convergence programmes (budgetary policies) and national reform programmes (structural reforms). Full NRPs are due in April.

Implementation of the Stability and Growth Pact

The Council concluded that action by Malta to reduce its excessive deficit represented adequate progress.

Introduction of the euro in Estonia: Practical experience

The presidency noted that the introduction of the euro in Estonia had gone very smoothly, and warm congratulations were extended.

Public Forest Estate

Thursday 27th January 2011 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

I have today published a public consultation on the future of the public forest estate in England. A copy of the consultation document is available through the DEFRA website (www.defra.gov.uk/corporate/consult/index.htm) and the Forestry Commission website (www.forestry.gov.uk/england-pfe-consultation) and I have placed copies in the Libraries of both Houses.

The public forest estate in England is around 258,000 hectares of Government-owned land managed by the Forestry Commission. It represents less than one fifth of the woodlands of England, with the majority of the remainder in private and voluntary sector ownership. The estate was started at a time of national crisis after the first world war, with severe shortages of timber and a woodland resource depleted to less than 5% of the land area in Great Britain.

In line with the Government’s broad policy to effect a shift from big Government to big society, the consultation sets out the rationale for reducing state ownership and management of forest resources. The status quo is not an option. There is a fundamental conflict of interest in the Forestry Commission’s role. It is the largest player in the commercial forestry sector, a sector it also regulates.

The Government’s approach to looking at new models of ownership and management of the public forest estate in England will be underpinned by a set of key principles that are designed to protect public access and other public benefits that so many enjoy. The Government’s proposals, on which the consultation seeks views, are for a mixed approach which includes:

recognising that there is no one-size-fits-all approach to the different types of woodland and forestry;

inviting new or existing charitable organisations to take on ownership or management of the heritage forests in order to secure their public benefits future generations to enjoy;

creating opportunities for community and civil society groups to buy or lease forests that they wish to own or manage; and

issuing long-term leases on the large-scale commercially valuable forests. By leasing rather than selling, it will be possible to ensure that the public can continue to enjoy their benefits.

The Government are committed to the ongoing provision and protection of the public benefits provided by the public forest estate. The policy we are consulting on shows how we intend to achieve this. We will ensure that the powers in the Public Bodies Bill reflect our policy objectives, so that the powers and duties within it are strengthened to safeguard the natural and social capital our forests provide now and for future generations. This would apply to the powers of sale, lease and management of the public forest estate. The consultation proposes that conditions will be attached to leases so that access and other public benefits are protected. We will consider:

introducing a general duty on the Government to have regard to the maintenance of public benefits when exercising the powers under the Bill;

exempting the most iconic heritage forests from the full range of options so that for example, the Forest of Dean or the New Forest could only be transferred to a charitable organisation or remain in public ownership, in line with the policy as set out in the consultation.

The Forestry Commission will play an important role in supporting the wider forestry sector—through its regulatory, grant-giving, research and expert advisory roles—to provide a wide range of public benefits.

The consultation relates to 85% of the public forest estate. The remaining 15% is covered by the spending review settlement, announced in October 2010.

I am today publishing tightened criteria for those sales under the Forestry Commission’s programme to deliver £100 million in gross receipts during 2011-15. During 2010, the Forestry Commission’s asset disposal programme continued under criteria established by the previous Administration. At the end of 2010, pending review of the sales criteria, Ministers withdrew some sites from sale. The new criteria have been amended to strengthen the protection of public benefits through the withdrawal from sale of woodlands with significant areas of unrestored plantations on ancient woodland sites.

General Affairs Council/Foreign Affairs Council

Thursday 27th January 2011 Written Statements

[The Minister for Europe (Mr David Lidington)]

The Foreign Affairs Council and General Affairs Council will meet in Brussels on 31 January. My Right hon. Friend the Foreign Secretary will attend the Foreign Affairs Council. I will attend the General Affairs Council.

general affairs council (gac)

Hungarian Presidency

The Hungarian Foreign Minister will formally introduce Hungary’s presidency priorities (see link below). Hungary intends to focus on three economic issues: the need to conclude discussions regarding the design of the new “European Stability Mechanism”; the need to reach a general approach on the economic governance package; and to reach final agreement on EU 2020. Other topics expected to be highlighted include pushing for a Commission strategy on Roma; beginning discussions on the Danube strategy; working towards entry into Schengen by Bulgaria and Romania; enlargement; and creating concrete projects to promote the eastern partnership.

http://www.eu2011.hu/priorities-hungarian-presidency

Follow-up to the December European Council and preparations for the February European Council

The presidency has invited the President of the Council, Herman Van Rompuy, to discuss preparations for the European Council of 4 February. The February European Council agenda covers energy and innovation. Discussions should focus on the “Energy 2020” strategy (further detail below) and how to increase levels of innovation in the private sector. There may also be some discussion of economic governance and the European stabilisation mechanism, although they are not officially on the February European Council agenda.

More information on this meeting, and other EU meetings this month, can be found at:

http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/fc/118910.pdf



Details about the “Energy 2020” strategy can be found at:

http://ec.europa.eu/energy/publications/doc/2011_energy2020_en.pdf

European Semester: Annual Growth Survey

Ministers will consider the European semester. The European semester will put EU and member state discussions of economic priorities and structural reforms on a common timetable. There will also be a presentation by the presidency of the Annual Growth Survey (AGS) which covers key economic themes for the EU and national action over 2011, and identifies priorities to tackle. There will not be conclusions on the AGS, as the main work will be carried out by other Council formations: namely ECOFIN and EPSCO. We broadly support the focus on growth. Alongside fiscal consolidation and a more competitive financial sector, a comprehensive structural reform programme will be essential to improving competitiveness.

Roma

The presidency is expected to initiate a procedural discussion on future work on the Roma ahead of an April Commission presentation of a framework strategy on Roma inclusion. The Government support this discussion and work in the EU to share best practice and assist member states in promoting Roma inclusion. However, we are also clear that primary responsibility for the Roma lies with member states and that there cannot be a one-size-fits-all approach.

Danube Region Strategy

The Danube region strategy is a complex sustainable development strategy for the regions in the catchment area of the Danube river. It covers: transport/economic/industrial issues; environmental/food supply; and cultural/heritage/education. The UK broadly welcomes the strategy, although a full evaluation of the projects is needed.

foreign affairs council (fac)

Sudan

We expect conclusions welcoming the timely, credible and peaceful conduct of the southern Sudan referendum as a crucial step in implementing the Comprehensive Peace Agreement (CPA). The conclusions should also look forward to the publication of the results of the referendum, and emphasise the need for resolution of the remaining CPA issues.

On Darfur. we believe that the conclusions should express concern about the increasing violence and poor security situation in Darfur, and the need for genuine engagement by all parties in the peace process. We support proposals for a Darfur-based political process when the conditions are right, and which complement the ongoing Doha process.

Lebanon

Ministers will discuss latest developments in Lebanon following the collapse of the Lebanese Government. The EU’s support for the special tribunal in Lebanon was most recently expressed in the November 2010 conclusions (see link below). At this stage, new conclusions are not expected, though the position could change depending on events on the ground.

http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/117948.pdf

Côte d’Ivoire

We expect conclusions expressing concern over the situation in Côte d’Ivoire. We would like the conclusions to call for the peaceful and swift transfer of power from the former President Gbagbo to the elected President Ouattara and to reiterate our support for the robust stance taken by ECOWAS (the Economic Community of West African States) and the African Union in upholding democracy in the region and throughout the continent. Ministers may also discuss EU support to UNOCI (United Nations Operation in Côte d’Ivoire) and African initiatives to facilitate reconciliation.

Sahel

The EU Sahel strategy is currently being developed by the European External Action Service in conjunction with the EU Commission. We are supportive of this strategy in principle; a comprehensive EU approach on security and development strands in the Sahel is worthwhile, as underlined by the kidnap and murder of two French nationals in Niamey on 7/8 January. However, any UK final support would depend on a detailed analysis of the strategy—which we have not yet seen in full—and its resource implications.

Freedom of Religion

In response to the recent attacks against religious communities in a number of countries, we expect conclusions to be adopted on the issue of “Intolerance, discrimination and violence on the basis of religion or belief”. We believe these conclusions should send a strong statement of the Council’s condemnation of these events and its commitment to upholding the right to freedom of religion or belief. We also believe that the conclusions should signal the European Union’s determination to promote freedom of religious belief through a clear commitment to undertake further practical measures in this area.

Belarus

We expect conclusions to: reiterate EU statements to date on the flawed December elections; to announce the FAC’s decision to impose travel restrictions and asset freezes on those responsible for the fraudulent elections and for the subsequent violent crackdown on the opposition, civil society and representatives of the independent media; and to set out the EU’s intention to support the Belarusian people and civil society. The Government’s aim is to focus the discussion on the need to develop a coherent, long-term strategy for Belarus. Baroness Ashton made a statement on Belarus to the European Parliament on 19 January:

http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/11/34&format=HTML&aged=0&language=en&guiLanguage=en

Strategic Partners

Baroness Ashton is expected to provide a short debrief on her presentation to the December European Council on the EU’s relations with its strategic partners, setting out next steps in this work programme.

Russia

We expect Ministers to discuss the formation of a more balanced partnership between the EU and Russia; one which promotes and strengthens mutual prosperity and is underpinned by a legally-binding, ambitious new EU-Russia agreement. It is likely that frozen conflicts in the former Soviet Union will be discussed, including the need for pressure on Russia to deliver on Transnistria. Climate change and energy, and rule of law and modernisation in Russia are also likely to be raised. Ministers will address the human rights situation in Russia, following a number of recent, well-publicised cases of concern. There will also be discussion of how to deliver progress on the EU-Russia agreement, improve the architecture of EU-Russia co-operation, and improve internal EU working methods on Russia policies.

Additionally, Ministers may reflect on the shocking act of terrorism at Moscow’s Domodedovo airport on 24 January. The Foreign Secretary’s statement on this can be seen at the link below.

http://www.fco.gov.uk/en/news/latest-news/?view=News&id=539155782

Iran

Baroness Ashton is likely to provide an update on the E3 plus 3 talks with Iran in Istanbul on 21-22 January. Due to Iran’s insistence on unacceptable pre-conditions, no further talks are scheduled. Following the talks in Istanbul, Baroness Ashton released a statement on behalf of the E3 plus 3 on 21 January:

http://www.consilium.europa.eu./uedocs/cms_Data/docs/pressdata/EN/foraff/118915.pdf

We are also hope there will be a discussion of proposed EU measures to tackle Iran’s poor human rights record.

Tunisia

Ministers will discuss EU support for Tunisia following recent events. We expect conclusions to be adopted which call for a stable and inclusive transition to elections as soon as practicable, and restate the EU’s support for political and economic reform in Tunisia. The Government consider that free and fair elections, as promised by Tunisia’s interim Government, are essential for Tunisia’s stability; and we firmly support EU assistance in this area.

Middle East Peace Process

Baroness Ashton will report back from her recent trip to the middle east (see link), and outline preparations for the 5 February Quartet meeting in Munich. We also expect her to update Ministers on progress for proposals to improve the humanitarian situation in Gaza that were agreed at the FAC in December 2010.

http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/118717.pdf

Forensic Science Research and Development

Thursday 27th January 2011 Written Statements

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

I am today announcing a review, led by the Home Office chief scientific adviser, Professor Bernard Silverman, of research and development in forensic science.

Research and development in forensic science is essential to ensure the continued availability of a high-quality, efficient, forensic science capability for the criminal justice system.

The purpose of the review is to consider the current and likely future status of research and development relevant to forensic services for the criminal justice system within England and Wales. The scope will include, but not be limited to, fingerprints, DNA profiling, digital forensics (e-forensics) and more specialist aspects of forensic science.

The review will consult widely with forensic service providers and related organisations in the public and private sectors, academia and research funders, as well as issuing an open call for submissions of evidence. The review will also work closely with the National Policing Improvement Agency and police service customers. It is expected that the review will conclude in April 2011.

The full terms of reference for the review will be published on the Home Office website today and a copy will be placed in the Library.

Justice and Home Affairs Council

Thursday 27th January 2011 Written Statements

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

My right hon. and learned Friend the Lord Chancellor and Secretary of State for Justice and I attended the informal Justice and Home Affairs Council on 20 and 21 January in Gödöllo.

Discussions on the Interior day centred on two themes: “Internal Security: combining efforts in combating organised crime” and “comprehensive security through integrated border management”.

The Commission opened the item on organised crime by highlighting cybercrime and asset recovery; they felt there was a need to focus on the exchange of best practice. The Chair of the European Parliament LIBE Committee suggested that proving the effectiveness of the EU in the security field was one of the biggest challenges for the EU. The Europol director gave a preview of their organised crime threat assessment noting an increasing risk in particular in relation to the infiltration of the legal economy and facilitation of illegal activity by the internet. There was an increasing use of aircraft and helicopters for smuggling of goods, use of minors for petty crime and sexual exploitation, an upsurge in counterfeiting and a largely unnoticed trade in endangered species. Interpol highlighted the ability of organised crime to destabilise whole countries and gave the example of cocaine trafficking via West Africa.

The UK said that it recognised organised crime as a real threat alongside counter-terrorism and would be developing a new strategy. In particular the UK acknowledged cybercrime as requiring particular attention, although it was often old crimes committed by new methods. The UK welcomed practical co-operation, rather than legislation, and agreed with the presidency that we needed to look imaginatively at ways of tackling crime, including seizure of assets. Most member states thought further work on asset-freezing, confiscation and sharing was a priority and welcomed the Commission’s commitment to bring forward a report on the issues in the second half of 2011.

The Commission opened the second session by highlighting action they were taking. They would forward a border package over the next year, including looking at an EU electronic system for travel authorisation (ESTA) and a proposal on a European border surveillance system (EUROSUR). They also saw a need to finalise discussion on the new Frontex regulation and to reform the Schengen evaluation mechanism. Frontex, the EU’s External Borders Agency, felt that priorities were better inter-agency co-operation, situational awareness and targeted co-operation at the border. Frontex also needed to be able to do more on capacity building and returns with third countries.

The UK stated that it was correct to focus on integrated management of the border and supported the Greek action plan, which was critical to the EU’s collective success. For the UK modern technologies were a key part of a 21st century response to maintain border security while facilitating legitimate travel. For that reason the UK supported the philosophy behind EU proposals for registered travellers and an entry-exit scheme and, given our experience, the introduction of biometric visas. We were concerned about the UK’s exclusion from the proposal for the Schengen evaluation mechanism. The e-borders system allowed the UK to focus resources and evidence suggested that intra-EU flights were important and hoped that would be covered by the new EU passenger name records measure. In subsequent discussion many member states highlighted the use of technology as important and in particular interoperability of technologies. Many welcomed the Commission proposals for amendment to the Schengen evaluation mechanism and thought that greater use needed to be made of Frontex.

The Justice day began with a discussion on a Communication published by the Commission entitled “EU Citizenship: how to dismantle the obstacles to EU citizens’ rights?” This sets out what the Commission considers to be the obstacles EU citizens face when trying to exercise their rights across national borders and suggests actions to tackle them. Among other things, the presidency invited discussion about whether the Justice and Home Affairs Council should adopt an oversight role over the actions suggested in the report, but this gained little support. The UK welcomed the overview the Commission report provided and highlighted criminal justice as an area where we needed absolute confidence in others’ systems. The UK suggested that the Commission should also focus on making it easier for individuals and businesses to enforce civil debts across borders.

Ministers were also asked what they considered to be the key elements of the proposal on Succession and Wills in simplifying citizens’ rights. This gave rise to a substantial debate. The UK reiterated its concerns with this proposal.

Over lunch, the presidency held a discussion on the role of the Council in ensuring the effective implementation of the charter of fundamental rights in the legislative process. Their paper raised the question whether there was a need for further Council processes to verify member states’ compliance with the charter. The UK, together with a number of other member states, questioned whether there was sufficient support for the presidency’s proposal to be taken forward.

Next, there was a discussion on “Judicial training: how to improve training of legal professionals in the EU”. The Stockholm programme stressed the importance of judicial training and the Commission has committed to producing a communication on training of legal practitioners in September 2011. The majority of member states, including the UK, did not favour creation of a new training institution, preferring to build on existing structures including the European Judicial Training Network. The UK welcomed the intention of improving judges’ knowledge of EU law and each others’ systems and particularly the Commission’s recognition that it would have to accommodate very different systems.

Data Protection Legislative Framework

Thursday 27th January 2011 Written Statements

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

My right hon. Friend the Minister of State, Ministry of Justice, Lord McNally, has made the following written ministerial statement:

Tomorrow, I will publish the Government’s response to the Call for Evidence on current data protection law which was held between July and October 2010.

The Call for Evidence sought evidence about areas of the European Data Protection Directive 95/46/EC and the Data Protection Act 1998 that may be out of date or could be improved, and also those areas that are working well and should be retained. Over 160 responses were received from across the public, private and third sectors, consumer groups and members of the public. The evidence received will help to inform the UK’s position for the forthcoming negotiations on a new comprehensive EU instrument for data protection. A proposal for this instrument is expected from the European Commission in mid-2011.

At the same time as publishing this response, the Government will publish a post-implementation review impact assessment of the Data Protection Act 1998, having received comments on the provisional document published alongside the Call for Evidence. The post-implementation review primarily aimed to assess the costs and benefits the Act has generated, but findings from the review will also contribute to the UK’s evidence base for negotiations on a revised EU legal instrument.

Copies of the response to the Call for Evidence paper and the post-implementation review impact assessment will be placed in the Libraries of both Houses and on the Department’s website at: www.justice.gov.uk.

House of Lords

Thursday 27th January 2011 Lords Chamber

Thursday, 27 January 2011.

10:45

Prayers—read by the Lord Bishop of Hereford.

Introduction: Lord Magan of Castletown

Thursday 27th January 2011 Lords Chamber

10:55

George Morgan Magan, Esquire, having been created Baron Magan of Castletown, of Kensington in the Royal Borough of Kensington and Chelsea, was introduced and took the oath, supported by Lord Northbrook and Lord Howard of Rising, and signed an undertaking to abide by the Code of Conduct.

Introduction: Lord Grade of Yarmouth

Thursday 27th January 2011 Lords Chamber

11:00

Michael Ian Grade, Esquire, CBE, having been created Baron Grade of Yarmouth, of Yarmouth in the County of Isle of Wight, was introduced and took the oath, supported by Baroness Sharples and Baroness Buscombe, and signed an undertaking to abide by the Code of Conduct.

Introduction: Baroness Jenkin of Kennington

Thursday 27th January 2011 Lords Chamber

11:05

Anne Caroline Jenkin, having been created Baroness Jenkin of Kennington, of Hatfield Peverel in the County of Essex, was introduced and took the oath, supported by Lord Jenkin of Roding and Baroness Shephard of Northwold, and signed an undertaking to abide by the Code of Conduct.

Defra: Disease Outbreaks

Thursday 27th January 2011 Lords Chamber

Question

11:11

Asked By

[The Countess of Mar]

To ask Her Majesty’s Government what contingency funding the Department for Environment, Food and Rural Affairs has for disease outbreaks.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)]

My Lords, no specific funding is set aside for disease outbreaks. However, we do a great deal of work preparing for disease outbreaks to prevent incursions and to minimise impact in the event of an outbreak.

[The Countess of Mar]

My Lords, I thank the Minister for that reply. Does he appreciate that this is the 10th year since the foot and mouth epidemic in 2001 and that Exercise Silver Birch seemed to demonstrate that we have not progressed much further with, for example, the validation of field gate tests and the acceptance of vaccination by abattoirs? The excuse given by the trade is, apparently, that the public do not like vaccination, but the public eat vaccinated meat all the time. What is being done to improve the validation of field-side tests, blood tests that distinguish between vaccinated and non-vaccinated animals and farm gate tests?

[Lord Henley]

My Lords, I am grateful to the noble Countess for reminding us that it is only 10 years since the last major outbreak of foot and mouth, which she, I and many others remember well. I am also grateful to her for mentioning Exercise Silver Birch, which has recently concluded. It was a fairly major exercise organised by Defra, the devolved Administrations and many others, in which more than 600 people took part to look at how a foot and mouth outbreak might affect England, Scotland and Wales. The important thing to remember about it is that it will report in due course. I hope that lessons can be learnt from the report when it is published in, we hope, March of this year. That will probably be when I can comment in more detail on the further points that the noble Countess made, which are very valid at this stage.

[Lord Plumb]

Does the Minister agree that contingency planning and funding are becoming more important, as exotic diseases will probably come into this country through greater globalisation and climate change? Does he accept that, in the ongoing situation, there should be more contingency planning to deal with outbreaks of TB? We are still losing something like 100 cattle a day through tuberculosis. I accept that much is being done, but is Defra satisfied with the efficacy of the vaccine for badgers?

[Lord Henley]

My Lords, my noble friend is right to point to the importance of contingency planning, rather than contingency funding. The important thing is that we plan for these situations. I can give an assurance that Defra has planned and will continue to plan and test for all diseases. I also underline his point about the increasing risk of exotic diseases, which is one possible consequence of climate change. As regards his specific question about the efficacy of the badger vaccine, I can give an assurance that laboratory studies have demonstrated that the vaccination of badgers by injection with BCG significantly reduces the progression, severity and excretion of TB infection after experimental challenge. However, we still have a little way to go on these matters before we can make such vaccines more widely available.

[Lord Pearson of Rannoch]

My Lords, is it not true that our reaction to the last foot and mouth outbreak was almost entirely dictated by Brussels? If the common agricultural policy still controls such matters, how can we make independent plans for any contingency funding?

[Lord Henley]

My Lords, I am talking about contingency planning, rather than contingency funding. However, I give an assurance that Defra will continue to make the appropriate plans in these matters, on which we are not totally dictated to by the European Union, despite what the noble Lord says.

[The Lord Bishop of Hereford]

My Lords, I am pleased to hear the Minister speak about contingency planning, but clearly different diseases need different kinds of plans. I would like some assurance that the different plans for the different diseases will be sufficiently straightforward and easily implemented if they should be needed. Secondly, will there be sufficient funding to maintain UK-based food production, which is so vital, should there unfortunately be a disease outbreak disaster again in the future?

[Lord Henley]

I thank the right reverend Prelate for his question. I remind him that planning is the most important thing, rather than funding. If funding is a problem, that would be an occasion, as I think all noble Lords know, when it might be appropriate to go to the Treasury to ask for more funds. I will not comment on that in advance. As regards his question about the possibility of food shortages, I do not think that that is a problem at this stage but, again, it is something that Defra will take into account.

[Lord Soulsby of Swaffham Prior]

My Lords, what arrangements have the Government made to recruit veterinary surgeons from private veterinary practice to undertake inspection and control work in the event of a major disease outbreak in this country? Would the Government offer contracts to those people who are willing to undertake such work?

[Lord Henley]

My Lords, I cannot give a specific answer on the last point made by my noble friend, but I can assure him that we will use private vets where necessary in the event of a major outbreak.

[Lord Grantchester]

To build on the question asked by the noble Lord, Lord Soulsby, I should like to continue with the issue of the everyday challenge of TB in cattle. I declare my interest, having sold my dairy herd last year. From the recent business review within the noble Lord’s department, the decision was taken to bring veterinary services back in house, rather than contract out to local vets. The lack of commercial flexibility in these new arrangements and a lack of local knowledge of farming clients have disrupted the concerted and co-ordinated efforts to minimise disease risk and to avoid disruption to trade from pre-movement testing and the six-day rule, to say nothing of the everyday challenges and redundancies brought to independent veterinary practices. Will the Minister ask his department to assess whether this policy is working effectively for disease control and livelihoods in the countryside?

[Lord Henley]

My Lords, the noble Lord will be aware that our consultation on bovine TB concluded recently. We will make an announcement shortly.

Zimbabwe

Thursday 27th January 2011 Lords Chamber

Question

11:19

Asked By

[Lord St John of Bletso]

To ask Her Majesty’s Government what measures they are taking to assist the Government of Zimbabwe to expedite the processes enabling free and fair elections under the new constitution.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, the United Kingdom has contributed to UN funding of the constitutional review process, with a referendum due to be held in the summer of this year. We are also working with international partners, particularly the Southern African Development Community, on a process to seek to ensure that elections, when held, will not see a repeat of the violence of 2008. The prospects for credible elections will be greater if sufficient time is allowed for important reforms to be implemented.

[Lord St John of Bletso]

My Lords, I am grateful to the Minister for his reply. Does he agree that, while there have been considerable advances in the revival of the economy in Zimbabwe, it is vital that there is, for the future sustainability of the country, a clearer political road map? In this regard, while I appreciate that there should be African solutions for African problems, does the Minister not agree that it is highly unlikely that there will be free and fair elections in the country until such time as the new constitution is agreed by referendum by the peoples of Zimbabwe, with a complete overhaul of the rigged voters’ roll and, finally, a cessation of the ongoing intimidation tactics of the hard-line ZANU-PF supporters?

[Lord Howell of Guildford]

Yes, I agree with the noble Lord’s assessment. On the economic side, things are looking much better. There was 8 per cent growth last year, with a similar rate of growth or even higher this year, albeit from a very low base. On the political side, however, the progress has not been so good. Mr Mugabe seems to be pressing for early elections, but at the same time there is very clear evidence of intimidation and violence rising again. We strongly believe that, as the noble Lord has said, the constitutional process must be carried right through, with the support of SADC, with the new commissions being formed and a system being created in which elections can take place. Those, more properly, should be later on.

[Lord Avebury]

My Lords, what action is being taken by the AU, SADC or Mr Jacob Zuma about the growing violence and intimidation? Also, what action is SADC taking against the illegal diamond smuggling by the army into Mozambique, which is being carried out to fund the ZANU-PF campaign of violence?

[Lord Howell of Guildford]

Mr Jacob Zuma has said, while leading SADC’s support programme, that he will take personal responsibility to see that the constitutional process goes forward and that the country is properly prepared for elections. We support him in those aims; that must be the right way forward. As to the diamond smuggling and the influence of diamond sales on the whole scene, we have continued to push for compliance with the Kimberley process standards, which include the continued supervision of exports. Frankly, our European Union colleagues have not been so helpful lately in upholding the supervision of exports, which is needed to check the kind of smuggling to which my noble friend refers. Obviously, as far as this country is concerned, we have our smuggling controls at our ports, but the overall supervision of smuggling needs to be strengthened. We are continuing to push for that to happen in the Kimberley process.

[Lord Hughes of Woodside]

My Lords, I accept that the problems of Zimbabwe have to be solved within Africa itself, but is the noble Lord aware of the reports of violence and intimidation growing day by day? While it is right that President Zuma has accepted responsibility, does the Minister agree that there is an important role for the Commonwealth in this? What is he doing to pursue that?

[Lord Howell of Guildford]

I am indeed aware of the reports that there is, once again, growing violence. That is very disturbing indeed. Like the noble Lord, I am constantly raising the role of the Commonwealth. At the moment, SADC is leading in these matters but there is considerable Commonwealth interest and, if we are able to get some improvement not only on the economic side but on the political side, the Commonwealth could collectively play a much more forward role in the recovery of that great and potentially prosperous but sadly depleted country.

[Lord Elystan-Morgan]

Can the Minister kindly tell the House what technical assistance Her Majesty’s Government are giving to the Electoral Commission, the Human Rights Commission and the Media Commission in Zimbabwe?

[Lord Howell of Guildford]

There is a lot of assistance, although it is not, of course, to the Government of Zimbabwe—no assistance goes to them. However, considerable assistance goes through the UN and the non-governmental organisations. Indeed, our programme of aid for the kind of developments that the noble Lord has described is substantial; I think that it is in the region of £66 million in the past year. While I cannot go into the precise technical details of that now—I will certainly write to him with more information—the overall thrust of our aid is considerable and rightly focused on those kinds of improvements.

[Baroness Kinnock of Holyhead]

My Lords, does the noble Lord agree that it is highly unlikely that Zimbabwe or, indeed, President Mugabe will issue an invitation to the European Union to observe any future election and that any such election, if and when it occurs, will be credible only if it involves having that EU observation mission there? Also, is the noble Lord aware that, in the forward planning that the EU has already done for 2011, Zimbabwe appears only as a country to follow?

[Lord Howell of Guildford]

I most certainly agree with the noble Baroness that there must be proper monitoring by the EU, and perhaps by other organisations as well, when these elections take place. The issue at present is when that will be. The sensible view, from the point of view of all the reformers and those who want to see Zimbabwe prosper, must of course be that that comes after the constitutional process has been completed. We are all entitled to be worried at the suggestions that Mr Mugabe may try to push for much earlier elections, particularly in the light of all the violence. However, EU monitoring must play a part. The noble Baroness is absolutely correct on that and, when the elections come in sight, that is something that we will certainly be urging.

Airlines: Snow and Ice

Thursday 27th January 2011 Lords Chamber

Question

11:26

Asked By

[Lord Dubs]

To ask Her Majesty’s Government what plans they have to ensure that airport authorities will be able to deal adequately with snow and ice in the future.

[Earl Attlee]

My Lords, the Government have invited the South East Airports Taskforce to consider airports’ contingency responses to last December’s severe weather. The Government are also considering proposals, under a Bill to reform economic regulation of airports, for new licensing provisions to give the aviation regulator more flexibility, where appropriate, to strengthen airports’ resilience to severe weather.

[Lord Dubs]

My Lords, I thank the Minister for that. Does he agree that what happened at Heathrow last month represented a national humiliation, given that Heathrow was closed for far longer than other airports in other countries that suffered? Is not the problem that the British Airports Authority failed to learn the lessons of last winter and to invest in proper snow-clearing measures, with the result that the airlines, particularly British Airways, were out of pocket many times more than the cost of providing those measures?

[Earl Attlee]

My Lords, I share the noble Lord’s concern. It is important that we look at what happened, avoid a witch-hunt and make sure that BAA takes appropriate steps to avoid a repeat. It is important to remember that it cost BAA £24 million in lost revenue. It is also important to understand that, because of the situation that arose, there were 24 aircraft stands with an aircraft stuck on them and that it takes a very long time to clear a stand when the aircraft is standing on it.

[Lord Lawson of Blaby]

My Lords, can my noble friend inform the House of the statistical and scientific evidence for the Met Office’s estimate that there was only a one in 20 chance of a severe winter in 2010-11, an estimate on which the airports relied?

[Earl Attlee]

My Lords, my right honourable friend the Secretary of State has asked Sir John Beddington to give him scientific advice on the likelihood of future severe winters. On 25 October 2010, the Met Office provided the Cabinet Office with an updated three-monthly forecast, which suggested a 40 per cent chance of cold conditions, a 30 per cent chance of near average conditions and a 30 per cent chance of mild conditions over northern Europe.

[Lord McKenzie of Luton]

Does the Minister think that BAA and other airports might benefit from the experience of London Luton Airport, which this winter has lost just five hours of operations—that was due to closure of airspace by NATS—despite the fact that Luton experienced greater snowfall than Heathrow? Does he agree that this was down to good management and planning, involving investment in equipment and consumables, early rehearsals of runway closure procedures and co-ordination across the airport, particularly with handling agents?

[Earl Attlee]

My Lords, the noble Lord makes the important point that good planning can mitigate the effect, but Heathrow Airport experienced 16 centimetres of snow in one hour, which was far more than was reasonable to plan for.

[Baroness Butler-Sloss]

I am one of those who suffered and waited at Gatwick Airport. Is the Minister aware that Gatwick managed to get all its passengers off at least two or three days ahead of Heathrow, I think, despite the fact that it suffered a great deal more snow? Gatwick set an example in that respect. I gather that it is not owned by BAA.

[Earl Attlee]

My Lords, most of what the noble and learned Baroness said is entirely correct. I am sure that the south-east airport review will take that matter into consideration.

[Lord Mawhinney]

My Lords, given that the Government understand the economic and social benefits attached to Heathrow and Gatwick, will they commission an independent investigation into the resources and procedures at those two airports to deal with snow and ice, compare those with what happens at New York and Boston Airports, and then publish the consequent report?

[Earl Attlee]

My Lords, I am sure that the output from the two reviews will achieve the effect that my noble friend desires.

[Lord Davies of Oldham]

My Lords, the House will be reassured that the Government are taking some action in this area, because action is certainly needed. We are all aware of the great significance of Heathrow in terms of passenger and freight traffic and its importance to tourism in this country. When the reputation of Heathrow suffers, so does the whole country. Will the Minister take particular interest in the level of communication with passengers when there are difficulties because there is no doubt that people suffered unduly at Heathrow as they had no idea what was going on day after day after day? It is important that the airport addresses this.

[Earl Attlee]

My Lords, the noble Lord makes an extremely important point. The point is applicable not just to Heathrow but to all transport modes. Noble Lords will remember the problems that we had with the railway industry, which struggled to cope with very difficult conditions but found it difficult to meet passengers’ expectations about information.

[Baroness O'Loan]

My Lords, will the Minister ensure that BAA is required to explain why those whose flights did not depart within four hours were not permitted access to terminal 1 on 22 December but were left outside in subzero temperatures, despite the fact that the terminal was half empty?

[Earl Attlee]

My Lords, I do not have precise details on that, but I will write to the noble Baroness.

[The Earl of Mar and Kellie]

My Lords, does my noble friend agree that those airport managers who do not maintain sufficient snow and ice-clearing equipment should be forced to describe their airports as being only seasonal?

[Earl Attlee]

My Lords, when BAA makes its winter resilience plan, the plan is agreed with the airlines. However, what we experienced at Heathrow was far in excess of what was agreed on in the plan.

[Baroness Walmsley]

Does the Minister agree that lessons should be learnt from other countries? Is the noble Lord aware—

[Noble Lords]

Order!

[Lord Browne of Ladyton]

My Lords, the Minister will recollect that on the previous occasion that he answered questions on this issue in this House he made the very important point that part of the problem at Heathrow Airport, as we all know, is that it has no room for resilience because it operates at 98 per cent of its capacity day in and day out. When the weather changes or dramatic circumstances affect it, the airport has no flexibility. The answer to that lies either in increasing capacity or in reducing usage. Will this issue be addressed when resilience is being considered?

[Earl Attlee]

My Lords, I am sure that people will consider that, but it is important to remember that Charles de Gaulle Airport has four runways running at 75 per cent capacity but still experienced severe difficulties.

Telephone Hacking

Thursday 27th January 2011 Lords Chamber

Question

11:35

Asked By

[Lord Fowler]

To ask Her Majesty’s Government what action they are taking to prevent telephone hacking.

[Lord Wallace of Saltaire]

My Lords, the intentional, unauthorised interception of communications in the course of their transmission is illegal under the Regulation of Investigatory Powers Act 2000. The police are responsible for the investigation of unlawful interception, including telephone hacking, and the Crown Prosecution Service is responsible for the prosecution of such cases.

[Lord Fowler]

My Lords, I thank my noble friend for that reply. Does he remember the Watergate scandal, in which one brave newspaper protected the public interest? Has not exactly the opposite happened in the phone hacking scandal, in which one newspaper—and possibly others—has not exposed injustice but instead directly conspired against the public? Does he agree that after any further criminal proceedings there will be a need for a full-scale inquiry to ascertain what happened and how the public can be protected?

[Lord Wallace of Saltaire]

My Lords, the House will appreciate that this is a topical Question that is almost too topical for me to be able to answer—I am up to date with the “Today” programme but not entirely up to date with what may or may not have happened since. Noble Lords will be aware that the Metropolitan Police announced yesterday that, in light of the fresh information supplied by the News of the World, the police will conduct a new investigation into phone hacking allegations. The investigation will be led by the specialist crime directorate, which is a different unit within the Metropolitan Police from that which carried out the original investigation. The investigation will be led by Deputy Assistant Commissioner Sue Akers. In addition, the Director of Public Prosecutions announced earlier this month that a comprehensive assessment of all the material in the possession of the police in relation to phone hacking would be carried out by an independent reviewer, Alison Levitt QC.

[Lord Soley]

Given that, as the Minister says, telephone hacking is unlawful and always has been, does he accept that there is an underlying problem here within the culture of journalism? This started with fishing expeditions to see whether any interesting stories could be pulled up, but these expeditions are also carried out in other ways, as was the case in the incident concerning Vince Cable MP. Bizarrely, the editor of that newspaper then tried to hush up the story because it was not its policy to draw attention to Rupert Murdoch’s takeover of BSkyB. Will a major effort be made at some stage to get journalism to recognise that it has a cultural problem here, which the PCC is not addressing in the way that it should?

[Lord Wallace of Saltaire]

My Lords, I think that we all understand that the press as a whole now faces a crisis of trust that is at least as great as the crisis of trust in politics, which we need to address. We look to the press to act up to its own responsibilities, which it is very clear many of its members have failed to do.

[Lord Dholakia]

My Lords, will the Minister have a word with the chairman of the Press Complaints Commission on how it has addressed this issue? Will he further inquire how it intends to deal with such matters so that in future people’s privacy is not breached?

[Lord Wallace of Saltaire]

My Lords, it is evident that the role of the Press Complaints Commission and the extent to which its code of practice is observed and enforced are questions that we will have to address. While the Government believe that a press free of state intervention is fundamental to our democracy, there is no place for illegal activity.

[Lord Hunt of Kings Heath]

My Lords, it has taken the police five years to take this matter seriously. Is the noble Lord aware of the comments today from the former assistant commissioner Brian Paddick, who said that the reason for police inaction was fear of upsetting newspaper editors? Does that not argue for greater media plurality in this country? Why are the Government so reluctant to refer the proposed takeover by News Corporation of BSkyB to the Competition Commission?

[Lord Wallace of Saltaire]

My Lords, we are all aware that this raises large questions about the future of the press, the relationship between the press and the police and the role of a plural press in our democracy. We will return to these issues on a number of occasions. We will certainly return to the question of police accountability when we debate the Police Reform and Social Responsibility Bill.

[Lord Prescott]

My Lords, now that the Government accept that this was a criminal act, do they also accept the excuse that was given that it was the work of a single rogue operator? That proposal was put forward by the Metropolitan Police, the newspaper editors, the Press Complaints Commission and the Crown Prosecution Service. After a number of inquiries, they still came to that conclusion. That is unacceptable. I ask the honourable, I mean noble, Lord—I knew that I would fall over—whether he accepts that these acts were commissioned to undermine the human rights of the individuals? In a debate in this House in July last year on the Defamation Bill introduced by the noble Lord, Lord Lester, the Government promised that they would investigate and bring in legislation to deal with defamation. Are they now prepared to consider how the conflict between Article 8 and Article 10 of the European Convention on Human Rights works against the individual's rights? Will the Government put that in their promised consultation document or in a future Bill?

[Lord Wallace of Saltaire]

My Lords, we all recognise that this goes very wide. I say to noble Lords opposite who tend to slip into saying “honourable Member” that one member of staff said to me the other day that they feared that the Benches in this Chamber were about to be reupholstered in green rather than red. We all understand why that is being said.

The serious questions of defamation and who should have been informed are very important. My understanding is that the police have informed all those about whom they have evidence that their phones were hacked. In addition, they have found a great many other names of people who were clearly targets of inquiry, but they do not have information on whether their phones were hacked. This is part of the ongoing and widening inquiry in which the police now have to be engaged.

Business of the House

Thursday 27th January 2011 Lords Chamber

Timing of Debates

11:42

Moved by

[Lord Strathclyde]

That the debate on the motion in the name of Lord King of Bridgwater set down for today shall be limited to two hours and that in the name of Viscount Younger of Leckie to three hours.

Motion agreed.

Business of the House

Thursday 27th January 2011 Lords Chamber

Motion to Agree

11:42

Moved by

[Lord Strathclyde]

That leave be given to advance the Report stage of the Budget Responsibility and National Audit Bill [HL] from Tuesday 1 February to Monday 31 January.

[Lord Myners]

My Lords, as the economy is pushed back in the direction of recession, inflation surges and every day we read about more job losses, the House can only welcome the earliest possible opportunity to discuss the architecture of economic management.

Motion agreed.

[Earl Attlee]

My Lords, I ask that noble Lords leaving the Chamber do so quietly.

Armed Forces: Post-service Welfare

Thursday 27th January 2011 Lords Chamber

Debate

11:44

Moved by

[Lord King of Bridgwater]

To call attention to the physical and mental rehabilitation of military veterans and their post-service welfare; and to move for papers.

[Lord King of Bridgwater]

My Lords, I rise to call attention to the physical and mental rehabilitation of military veterans, and to issues of post-service welfare. I welcome this opportunity to bring before the House an issue on which I think every Member will share the wide public concern at the present time. I am grateful for the number of noble Lords who are determined to speak in the debate. I know that the noble and gallant Lord, Lord Boyce, who takes a keen interest in these matters and speaks with great authority, cannot unfortunately be here. He has a cast-iron excuse; he has to appear before the Iraq inquiry today, so the House will realise why he cannot here. I have also received an apology from the noble Viscount, Lord Brookeborough, who takes a keen interest in these matters because of his military background. He has duties to Her Majesty as a Lord in Waiting at an investiture, so he, too, cannot be here.

It is no secret that the issues that we discuss today are in the public mind overwhelmingly because of the consequences of Operations Telic and Herrick. These were the names given to the campaigns in Iraq and Afghanistan. However, I make clear that my observations relate not just to the casualties of those conflicts. I include those who served in Korea in what was a particularly nasty war for many. Some of my contemporaries, and some who I expected to see at university, did not come back from that bloody encounter. The mass Chinese attacks in some ways resembled World War I. As a national serviceman, I saw active service at the time, and some of my colleagues still bear the scars. I include also the veterans of the Falklands. I have seen many who faced the consequences of the Troubles in Northern Ireland, and of the brave work of our forces during that time. I include members of the security forces and of the RUC. Many noble Lords will recall that we are also approaching the 20th anniversary of the ending of the first Gulf War and the liberation of Kuwait. Many casualties occurred in that conflict.

I note one thing from recent discussion of these issues. I do not recall any discussion during my time as Secretary of State of the military covenant. It was taken for granted, it was implicit and, if pressed, people recognised that of course there were obligations. However, as the casualties and the challenges that we now face have grown, the importance of that implicit covenant being respected is now being put into written and public form. We now even have the niceties of deciding whether we have a no-disadvantage covenant or a citizen-plus covenant. These are the two alternatives: whether the objective should be that no one should suffer any disadvantage from their service, or whether the nation recognises that in some ways they should have enhanced recognition—citizen plus—for the service that they have given.

It is no secret that the pressure that we feel on this has to do with the length of the campaigns. I was involved in the first Gulf War, which was over almost in the twinkling of an eye. The build-up took months, but the whole campaign to liberate Kuwait took barely two months, with an air campaign and what was almost a five-day land campaign to free Kuwait from the Iraq invasion. Now we see that we have spent nearly 10 years in Afghanistan. We have been in Iraq for eight years. Will the Minister confirm the figure I heard that 180,000 service people are now veterans of either Iraq or Afghanistan? That is the scale of the challenge that we face. There is no question that while we very properly pay our respects, and the Prime Minister, the Leader of the Opposition and we in this House express our condolences to those who lose their lives, many of us recognise that the real and lasting tragedy is the scale of the appalling injuries that many come back with.

That is of course a consequence of the triumph of medical progress. I saw that in Northern Ireland; if we could get someone to hospital when they were still breathing, there was every chance that their lives could be saved. Many people who previously would never have survived are now coming back with appalling injuries, but medical triumphs ensure their survival. That places heavy obligations and liabilities on their families, and on society as a whole, which has asked them to embark on those dangerous challenges.

After the scratchiness of this House too often in recent days, I pay tribute to what the previous Government did. I do not admire the campaigns in which they got us involved, but I recognise that they introduced a number of helpful measures, and I am very pleased that the present coalition Government recognise the importance of carrying on that work. I pay tribute to the incredible skill and wonderful competence of the medical profession, all the way from the combat medics on every patrol to the helicopter that may convey them back to Camp Bastion, to Camp Bastion itself, and to the outstanding treatment that they receive on transfer by air transport back to this country, into Queen Elizabeth Hospital Birmingham and then on to Headley Court. This is a service and a quality. Someone can go out on patrol, and the next thing they know they are waking up 24 hours later in a hospital in Britain, getting the best medical attention that anyone could wish for.

Of course, that is when the challenge really develops. In this connection, there is no question that this is not just a job for the Government or the public services. One of the most moving things about recent events is the way in which charities have become such a key part of that activity. I doubt whether there is a single Member of your Lordships' House who has not had some contact with Help for Heroes, Combat Stress, ABF The Soldiers’ Charity or the Royal British Legion. The Royal British Legion has just given its biggest donation in its history, £50 million over the next 10 years, to help some of those centres. Help for Heroes has made huge investments because of the response to its fundraising, which is recognition of public concern. I should declare an interest, because I am an ambassador for Alabaré Christian Care & Support, which has now established five homes for veterans. My sister happens to be the chairman of an organisation called the Community Self Build Agency. As part of a very enterprising idea, it is now getting self-build schemes going to help ex-servicemen veterans with housing, in which they do the building themselves and rebuild their life, their competence and confidence.

I am delighted to see the noble Lord, Lord Glenarthur, here. As we recognise the role of full-time servicemen, there is a particular challenge in this situation for reservists. They often come straight out of civilian life, they do not have the comfort and surroundings of the regimental family, and they are often scattered in different parts of the country. They come back from some of the most challenging combat situations and find themselves immediately back on civvie street among colleagues who do not understand anything of what they have been doing. We need to recognise their particular challenges.

We need to provide in so many ways, including financially. It is interesting that SSAFA and the Royal British Legion said that 60 per cent of the cases that they deal with are problems with debt management. In this connection, the noble and gallant Lord, Lord Boyce, conducted an important review. I hope the Minister can confirm that the Government are carrying forward the Armed Forces compensation scheme review, because finance is obviously important. Far too many of our servicemen coming home are homeless. We need to give them proper access to social housing and advice as to how to access it. There needs to be proper recognition by local authorities of the priority that they should give to returning servicemen to ensure that they do not get left out.

The mental challenge will be with us for a long time. Although some physical injuries are all too apparent, the mental injuries may not be. We know that it may be 14 or 15 years before people become aware of them. The new provisions, which mean, as I understand them, that everyone is assessed on leaving the services for their mental health condition, are very important. We also need an outreach programme to check up on people. I commend Dr Liam Fox and Andrew Murrison, who both have the advantage of being doctors. They have for some time, when in opposition and now in government, taken a particular interest in mental stress. The point that Dr Liam Fox made in an article which some might have read in the Sun today is that people with mental health difficulties are the least likely to go to their doctors. We need to ensure that the Defence Medical Services give the NHS access to the records of patients who become patients of NHS doctors, so that they can be aware of some of the background. I pay tribute to the reservists who are doctors and who have already served in Afghanistan and Iraq, but doctors who have not served need help. I recognise the interest that the BMA is taking in that area to see how we can get more advice to doctors who have to deal with situations with which they have never previously had to deal with their civilian patients.

The issue is the strain that people face and the linkage between the Defence Medical Services and the health service, as the health service is now, impressively, gearing up to handle these situations. It is a matter of experience. It stretches all the way to the tragic shooting of the congressman in Tucson, Arizona. People said that her luck—and I hope that that luck will continue—was that one of the surgeons who treated her had experience of serious injuries in Afghanistan and knew the instant action that was needed. That has undoubtedly given her the chance that she has now, which she would not otherwise have enjoyed.

Yesterday we had a further reminder of the tragedy with the 350th fatality in Afghanistan and the name of the serviceman who had lost his life being announced. We do not publish in any great detail the number of those who are wounded, and do not draw attention to the severity of some of those injuries. The Ministry of Defence has invented the phrase “life-changing injuries”, which, as we know, covers some very serious injuries indeed. Through-life support—not just support when there is public interest, as now, when we are very aware and when Wootton Bassett brings to people's attention so frequently the challenges that we face—is critical.

Our duty in this is to recognise the words of the Army Doctrine Publication:

“Soldiers will be called upon to make personal sacrifices—including the ultimate sacrifice—in the service of the Nation. In putting the needs of the Nation and the Army before their own, they forego some of the rights enjoyed by those outside the Armed Forces. In return, British soldiers must always be able to expect fair treatment, to be valued and respected as individuals, and that they (and their families) will be sustained and rewarded by commensurate terms and conditions of service … the system’s loyalty to the individual—its obligation in the Military Covenant—is manifested in justice, fair rewards and life-long support to all who have soldiered”.

Many have stood on Remembrance Day, as I have on many occasions, saying, “We will remember them”. That, I think, should be our motto as we look at the through-life support that we owe those who have bravely served our country in appallingly difficult circumstances and who deserve nothing but our fullest support in the years ahead.

11:59

[Baroness Warwick of Undercliffe]

My Lords, I thank the noble Lord, Lord King, for introducing this timely and very important debate. I do not pretend to speak from any great knowledge of the military. Although my uncle and grandfather were military men, they died when I was a child, and national service, which meant that most families knew someone close who was in the services, ended when I was a teenager. In other words, I am one of that greater part of British society who have had no exposure to, and little understanding of, military life or the commitment, loyalty and sacrifices that, today, our young women and men who join the armed services make on our behalf.

I have one redeeming feature that makes me want to take part today. I have a beloved god-daughter who chose the Navy as her career. Her experiences, commitment and enjoyment of the service, as well as the maturity and wisdom she has gained, made me realise how much I needed to learn. I have also had the great advantage of taking part in the Armed Forces Parliamentary Scheme, which aims to give parliamentarians such as me who have had little exposure to our armed services the chance to get some hands-on experience. I cannot commend the scheme too highly. It is run by the redoubtable Sir Neil Thorne, and it is a no-holds-barred opportunity to get under the skin of one of the services, as well as to gain an understanding of the generic issues that affect the Ministry of Defence and the services as a whole. I spent 22 days, over a year, with personnel at all levels and in a range of locations, including on board HMS “Liverpool” in the Falklands, listening and learning. I was impressed with the leadership, professionalism and care for the “Navy family” that I witnessed.

However, particular issues came to my attention that I feel are relevant to this debate. During that year, I was able to see for myself the reciprocal relationship that lies at the heart of the military covenant, which was referred to by the noble Lord, Lord King, and which I have no doubt will be explored in greater detail in a debate later today in your Lordships’ House. Under the military covenant, the Government expect the Armed Forces to carry out their duties in defence of the state to the best of their ability, up to and including the possibility of death in action. In return, the Armed Forces expect that they and their immediate dependants will be cared for and supported both during and after service, and it is the importance of that two-way expectation and understanding which prompts my remarks today.

Given our country’s continuing role in the military campaigns in Iraq and Afghanistan, it is right that there should be a high level of public, media and political interest in the welfare of both serving members and veterans of the Armed Forces. That interest is frequently focused on the level of support that many veterans receive for physical and mental health problems once they have left the services. While focusing in this debate on veterans, I pay tribute to those currently in the service who give so much of themselves on our behalf. Too often, we, the public, realise only in times of conflict what they do for us, yet I know from my talks with serving men and women how much they feel that out of sight means out of mind.

There are currently some 5 million veterans in the UK with 8 million dependants. Of the 24,000 servicemen who leave the Armed Forces each year, most transfer seamlessly to civilian life, but a significant minority do not. Common mental health problems affect about one in four service personnel and veterans; alcohol abuse affects about one in five; and post-traumatic stress disorder one in 20. Other problems follow from this. Estimates suggest that around one in 10 homeless people in the UK are former members of the Armed Forces. A 2008 Prison Officers’ Association survey found that 8,500 veterans were in custody at any one time in the UK following conviction of a criminal offence. A further survey in 2009 found that 12,000 former armed services personnel were under the supervision of the probation service in England and Wales on either community sentences or parole. At that time, therefore, twice as many veterans—some 20,000—were in the criminal justice system as were serving in military operations in Afghanistan.

Noble Lords will be aware that many initiatives have been instigated to address these issues and to improve mental health services for our veterans. As the noble Lord, Lord King, affirmed, the previous Government had a strong track record, with the Armed Forces Bill in 2006, ensuring forces’ pay increases and investing in rehabilitation facilities. There was the £2 million package of measures, announced in April last year, which included the employment of 15 community psychiatric nurses to work in mental health trusts alongside existing specialist teams, the creation of a 24-hour helpline, and improved education and training of GPs to help them to identify veterans suffering mental health problems.

These initiatives will involve the veterans’ mental health charity, Combat Stress, and the Royal British Legion. I welcome these moves, which are clearly very much needed, and I express my admiration and support for the work already being done by these and other bodies, such as the Mental Health Foundation. I also warmly welcome the MoD’s excellent 2010 Fighting Fit report on the provision of mental health services for veterans and service personnel. I welcome, too, the endorsement in the other place by the Secretary of State for Defence, Dr Liam Fox, of the report’s key recommendations, including the creation of a Veterans Information Service to ensure follow-up of veterans after 12 months.

I refer also to the December 2010 report of the Taskforce on the Military Covenant. This comprehensive and eloquently argued document also supports the Fighting Fit report, and I hope that, in his response, the Minister will be able to indicate the Government’s response to the report’s recommendations. Clearly, much is now being done to improve access for veterans to support, but much more needs to be done both to understand the origins and range of mental health problems that veterans may have and to provide accessible and appropriate services.

It is that last point that greatly concerns me. On leaving the services, the healthcare of veterans moves from being the responsibility of the MoD to that of the NHS, where they are treated alongside the rest of the UK population. However, many reports cite a lack of knowledge among GPs about the particular needs—especially the mental health needs—of our veterans, leading to a lack of referral to such specialist mental health services as are available. Can the Minister confirm to the House that the reorganisation plans for the NHS, which rely on GP decisions, will take this into account, as they must if veterans are to get proper treatment?

There is currently tremendous public sympathy for veterans who find themselves in difficulties in civilian life. As the Report of the Taskforce on the Military Covenant report suggests, it is vital that we turn that sympathy into empathy. Our service men and women have given their all for our country; it is only right that we should reciprocate that support and provide the services that they need. We must play our part to ensure that they do not fall between the gaps.

[Lord Wallace of Saltaire]

My Lords, I apologise that this debate has been cut to two hours. Perhaps I may encourage all other Members to emulate the excellent example just set and sit down when the Clock is still saying seven minutes.

12:07

[Lord Addington]

My Lords, I shall bear that in mind. This is one of those debates in which everyone will have said everything about the subject before, but we need to say it again and again to remind people of the problems. It is also a debate in which, fortunately, we are able to have a degree of political unity.

The problems facing our military existed before the two most recent conflicts, but they had not forced their way into our attention in the same way. When they did surface, the previous Government reacted with surprising speed, considering the political process. They took the matter seriously and started to address it, and for that I thank them. However, the fact that they had to do so indicates that we had not addressed the problems correctly beforehand. Smaller conflicts involving less immediately politically sensitive issues and smaller numbers of people meant that the problems relating to the armed services had been ignored for a very long time, as had the need to prepare our personnel for life after the armed services. We must all take a degree of blame for that.

Basically, we take very young people and put them into the military preferably for fairly long periods—the British Army likes long-service troops. They are told what to do and we do not prepare them for life outside. That is becoming increasingly apparent. I do not doubt that steps have been taken to improve that, but that was not done before. The fact that you are trained to be an excellent infantryman is apparently not the best preparation in a flexible job market, where IT skills are increasingly required and accuracy in handwriting is more valued in the workforce than ever before. The two are not compatible.

What can the military do? Its primary objective is to produce good service men and women and to make sure that they are ready to do that job. It is understandable that this issue has not been addressed properly. Taking on the idea of the military covenant, which has always been there, although I became aware of it only about a decade ago, we have to try to get involved in how we prepare people for life outside. Let us say that we have an 18 year-old young man, or possibly younger, almost fresh from school, who is placed in an environment where there is a structure. He is not expected to fill out forms or to decide things for himself and he is taken away from parents who could show him how to do that. He is trained for 12, 15 or whatever large number of years and we then we place him outside. Making sure that that transition is well managed will make everything else easier.

I come to the more obvious questions about those who have been severely injured and the more process-driven points, which I hope my noble friend will be able to answer fully, such as making sure that medical records are transferred more frequently and that doctors are more aware of mental health problems. I believe that doctors are now much more aware that there are different types of stress, but it is important to make sure that they can get to the expertise. We cannot expect the GP to do it all himself. If greater emphasis needs to be placed on different types of treatment, we must make sure that patients can be transferred quickly. Somebody who is not used to dealing with the outside world and whose treatment is delayed can be lost. It happens. If the transition is swifter and smoother, without form-filling or dozens of interviews, people will get to the right help quickly. I could carry on for a great deal of time on the transition phase, but I will just say that preparation for that transition will allow us to get the best out of what we are doing. That is surely the first step.

I ask my noble friend whether we have been able to identify the major bumps in the process. Where does the process break down when people do not get the best health and support? Have ways to avoid those problems been identified? Greater awareness is one and greater intervention would be another. Have we found out where they are most needed? We talked about pinch-points in defence recruitment and retention. Where are the pinch-points for services afterwards?

I shall curtail my remarks. I could have talked at considerable length about those who have lost limbs and the ongoing processes. Possibly, they will get a slightly better deal as they are more visible, because of their injuries, than those who have minor problems that manifest themselves later on. Can we have an assurance that we will keep this under review and that the Government will encourage all those who are involved in the political class to ensure regular reviews? This will go on beyond the life of this Parliament, and possibly the next two or three.

12:14

[Baroness O’Loan]

My Lords, I thank the noble Lord, Lord King, for tabling today’s debate and for giving us the opportunity to discuss the serious issues involved.

First, I declare an interest. I am the aunt of a young TA soldier who was 18 years old when he was seriously injured in Iraq in 2007. I know that it was the treatment that he received in the American military hospital in Basra, in Selly Oak Hospital in Birmingham and in the rehabilitation offered at Headley Court that gave him the life that he has today, as is the case for many others. I pay tribute to those working so valiantly to help the wounded and disabled, including the British Limbless Ex-Service Men’s Association, Help for Heroes and the British Legion.

The Report of the Task Force on the Military Covenant states that there needs to be a coherent national approach to trauma research to develop new technologies, particularly in,

“acute trauma, repair, reconstruction and long-term rehabilitation”.

That is important, but equally important is the issue of mental health, on which all previous speakers have focused. I am talking about the mental health of veterans returning from conflict zones, whether or not they have been injured.

Provision for the care of veterans with mental health problems is fragmented and patchy. There have been various initiatives. In November 2006, the MoD launched the reserves mental health programme, but by 2008 84 per cent of GPs were unaware of its existence. It is of limited application and does not address all the needs. There are particular problems for the early service leavers who are discharged, for whatever reason, and who may carry the mental scars consequential on or consequent to their military experience into their civilian life. Those scars may have catastrophic consequences.

The Murrison report recommends an increase in the number of mental health professionals to one per two mental health trusts. Their role is only to identify cases and to refer them to veterans’ organisations and other professionals. There is no evidence that such identification has been carried out effectively and we do not know the extent to which veterans who are identified as suffering from mental health problems actually receive the care that they need. They are a forgotten and, possibly in some people’s minds, less important group. They do not carry the scars in the same way as those young men and women like my nephew, but the consequences can be equally life-limiting.

The maximum level of compensation for mental health disorders appears to be fixed under the review of Armed Forces compensation at £2,888. That is not a large sum for someone who may be incapable of permanent employment for the rest of their live. The report acknowledges the fact that mental health services do not always fully address the needs of veterans. Pilot schemes have been established, but there is simply neither the level nor the quality of mental health provision that is needed.

These issues have been thought about at length. There is clearly some recognition of the problems faced by veterans with mental health needs, but they come low down the list of priorities in general health service delivery. Of course, there may be a reluctance among veterans, particularly men, to identify themselves as suffering from service-related mental health problems. The DoH’s New Horizons mental health strategy states that the prevalence of mental disorders in serving personnel and veterans is broadly similar to that of the general population, yet the research done by the Mental Health Foundation found that the risk of suicide in men aged 24 years and younger who had left the Armed Forces was approximately two to three times higher than the risk for the same age group in the general and serving populations—and the risk for this age group is high. Research also shows that reservists who served in Iraq were almost twice as likely to have mental health problems as those who have not served in Iraq—26 per cent compared to 16 per cent. Reservists who served in Iraq are twice as likely to have PTSD as those who have not served in Iraq. I am sure that there will be similar figures for Afghanistan.

We know that there are high levels of alcoholism, suicide and mental health problems. This is not unique to the UK, but it is a fact of military life. Post-traumatic stress disorder is not uncommon among those who have been affected in any way by conflict. The triggers can vary and the symptoms are now well identified. The triggers can be very simple. I think of the young man I know who was part of a patrol sent to search a village. Passing children playing on the road, they threw a bottle of water to a little girl of five who was waving to them. They accomplished their task and were driving home when they saw her little body hanging from a tree, her throat cut, a warning to others not to collaborate with the troops. I think of others who have seen their colleagues blown to bits or who have tried to carry out immediate first aid on colleagues who are suffering from major traumatic injuries and who have died. I think of those who should have been in the patrol that never came back but for some reason were not and who suffer survivors’ guilt. I think of those who survived explosions, only to face the flashbacks, night terrors, sleeplessness and fear of crowds et cetera that are so symptomatic of trauma. Research also shows that subsequent traumatic experiences can cause flashbacks to the original experience, thus compounding the suffering.

PTSD and the various mental illnesses consequential on involvement in armed conflict are well identified. However, the reality on the ground is that people are naturally reluctant to present with mental health problems and may well delay until the condition becomes too serious. When they do present, the services are not as accessible or as available as they should be. It is not enough in many cases to take people in for a week’s group and individual therapy and send them home. There is a well identified and serious risk that exposure to brief therapy can retraumatise the traumatised, leaving them to face their terrors alone.

What happens in reality is that people go into a lottery of available mental health care. People can often end up in psychiatric hospitals, heavily medicated to keep them compliant and hence unable to make any journey towards recovery from their trauma. There are limited services offering cognitive behavioural therapy or therapy for PTSD and they are often located at too great a distance for those incapable of individual travel. I think of one young man I know who cannot travel alone but faces a four-hour journey for one hour’s therapy and a four-hour journey back.

My questions for the Government are: can we find out the extent and geographical incidence of mental ill health consequential on armed service? Can some more attention be paid to the difficulties faced by those with serious mental health problems in accessing treatment and to the fact that such treatment is so scarce?

One of the things about trauma is that it can lie dormant for 25 or 30 years and then manifest itself suddenly. As the noble Lord, Lord King, said, we are talking not just about Iraq and Afghanistan, but about Korea, Northern Ireland and all the other conflicts. The reality is that many of these people end up in prison. Veterans are disproportionately represented in the prison population. We do not need more research to tell us that there is a problem; we need more planning for a future in which those who are currently struggling can keep going. Many of those who will be afflicted by PTSD in the future will need care. Those who have served in locations as diverse as Northern Ireland, Iraq, Afghanistan and Korea and who subsequently suffer the trauma of mental ill health in its various manifestations deserve our care.

12:22

[Lord Kakkar]

My Lords, I, too, thank the noble Lord, Lord King of Bridgwater, for having secured this important debate. I reiterate the important points that he made about the success that is currently achieved in the acute management of injured service personnel in the battlefield and their successful early rehabilitation, which has resulted in saving these complex-injured casualties.

I shall focus on two issues. The first is how we should go about commissioning the longer-term care of injured service personnel once they are discharged from the services and the second is how we can organise long-term prospective research cohorts for research studies to allow us to understand the long-term physical and mental health needs of these veterans.

Veterans leaving the services represent a broad spectrum of complexity in their healthcare needs, from the complex-injured multiple amputee, where some of the early needs after discharge are very obvious, to those with more subtle injuries and the very large number of veterans who are apparently healthy at the time that they are discharged from the services but who are at risk of deteriorating health in the years and decades that follow their discharge.

The provision of medical care for veterans after discharge is, at best, haphazard. The majority of NHS civilian personnel have no military experience. As the noble Lord identified, some NHS personnel have military experience, but they are quite few. Therefore, the majority of doctors and clinical staff who will take responsibility for the care of discharged veterans will have little insight into the experience of that patient population. Under those circumstances, they may not always be in the best position to understand these specific patients or to provide the care that is necessary.

There are also important concerns about the transfer of medical information from Defence Medical Services to the NHS. This is a serious problem. At the moment, a final medical examination occurs prior to discharge and an FMed 133 form, which provides, at best, rudimentary medical information, is completed to provide civilian medical practitioners in the NHS with any pertinent medical history during service in the armed services. At best, this information is rudimentary and very frequently it does not reach the NHS general practitioner. In these circumstances, early arrangements for medical care are going to be poor and, importantly, as time progresses, whatever information was available that might be pertinent to the long-term healthcare needs will be lost. Service personnel may not be able to recall all that information, putting themselves at a great disadvantage in their longer-term medical care. Is any work taking place on trying to understand how better the transfer of medical information can occur between Defence Medical Services and the NHS, with particular reference to the establishment of the electronic patient record to transfer as much information as possible to ensure that the medium-term and long-term care of veterans after discharge from the services can be best secured?

There is an important opportunity to improve the training for civilian NHS staff on some of the information skills and knowledge that they will need to deal with quite important numbers of veterans who will present with physical or mental health needs. At the moment, some 24,000 military personnel leave the services every year, and 10,000 of them have recent combat experience. There are about 32,000 GPs, which means that on average a general practitioner will see one new veteran every 16 months. GPs are not going to have a large volume of patients, so the training and experience that they need to develop have to be specifically tailored.

I turn to how we should commission services in future. The Health and Social Care Bill was presented last week and will begin its passage through the other place shortly. It recognises the need to change all commissioning services, with greater emphasis on primary care commissioning of the majority of services by general practitioners. It also recognises that there are certain patient populations with very complex needs, for which there should be more central commissioning of services—so-called specialist commissioning. Does the Minister agree that complex-injured veterans discharged from the services represent a population of patients with complex, long-term, ongoing healthcare needs that could be considered to fall into a specialist commissioning group where either the NHS board commissions services specifically for this population of veterans, based on advice that it receives from Defence Medical Services, or commissioning responsibility is transferred to Defence Medical Services so that the services can be provided in centres that have the opportunity to provide all the specialist requirements in a holistic fashion to achieve the best possible clinical outcomes?

I believe that there is also a need to initiate a programme of research to address four important questions with regard to the health of veterans. The first is to look at what the long-term, ongoing physical and mental health needs are. As has been identified in this debate, our ability to provide acute medical care ensures that many more service personnel are surviving horrific injuries, but we have little knowledge about what the long-term needs will be in the years and decades hence. This research needs to be conducted on a prospective basis. Secondly, we need to understand how to provide rehabilitation to achieve the best healthcare outcomes for these personnel. Thirdly, we need to understand how to adopt new technology and innovation that will be available in the years to come to achieve the best quality of life. Fourthly, we need to be certain that we can assess what resources need to be provided over time to ensure that some of the potentially most vulnerable of our citizens, who are those to whom we owe the greatest debt, have healthcare services provided for them that they justifiably have a right to expect.

12:30

[Lord Glenarthur]

My Lords, I, too, am most grateful to my noble friend Lord King for raising this important issue. I certainly join with all those who pay tribute not only to the fortitude of those who are so grievously injured on operations but to their families, friends and the professionals who have the difficult task of supporting them on their return. I have various interests to declare. I was a member of the National Employer Advisory Board for the reserves of Britain’s Armed Forces for 14 years, for seven of which I was its chairman. I have been honorary colonel of a Territorial Army hospital support medical regiment for 10 years and for six years, concurrently, I have been honorary air commodore of a Royal Auxiliary Air Force medical unit. These specialist medical units regularly provide individuals—or even many individuals—to reinforce, and to provide specialists for, both regular and reserve medical units that are deployed.

As I have had substantial contact with many doctors, nurses and others, such as from the professions allied to medicine, who have the initial and subsequent care of servicemen with profound physical and mental trauma as a result of operations, I should like to concentrate my remarks on the reserves, particularly the medical reserves. From what I know, it is clear that many people deployed on operations in the medical field are seeing the most dreadful trauma that only a couple of years ago would not have been survivable. They often witness what was described to me yesterday as the “ultimate” in terms of trauma that they will ever see. They see perhaps the most awful experiences of their professional lives. The degree of preparation that the United Kingdom armed services gives all those who are due to deploy might be a major factor in helping the rate of post-traumatic stress disorder remain at a low level. However, we cannot afford to be complacent and we cannot be sure when repeated deployments will begin to take their toll and very real long-term issues of mental illness, requiring long-term rehabilitation, will become evident.

So far as the Defence Medical Services are concerned, a large number of their strength is made up of reservists. Some of these reservists, largely from the TA, deploy as formed units—perhaps as a field hospital taking over the manning and the operation of the medical facilities at Kandahar, Camp Bastion or in forward locations. These medical staff are almost the only formed reserve units to be deployed nowadays on operations. However, they also rely heavily on the additional expertise of specialists from national units, such as my own represents.

Many of these staff, with wide experience in the NHS and the private health sector, are used to dealing with fairly horrific scenes—whether in an A&E department of a hospital or in the subsequent treatment of the sort of trauma that I described earlier—but, however professional or inured to witnessing the most distressing scenes these people are, there must be a real risk that the effect on the individual clinician might become cumulative. These clinicians are supremely professional, but they are human beings who are prone to the same emotions as any of us. One has to wonder whether there will come a time when continued regular exposure to the extreme horrors of war could lead to a substantial cumulative effect on the individuals, with worrying consequences for the future. Even the most experienced, hardened doctors who have been deployed many times often say that it takes a good three months to recover and to come to terms with what they have seen, and it takes much longer for those who are not so experienced. Can my noble friend say what steps are being taken within the MoD to be alert to this possibility? What steps might be taken to deal with that outcome should it occur?

The trauma facilities in Camp Bastion are absolutely first class—I saw them two years ago and I should like to see them again—and they have probably improved hugely since I last saw them. As the noble Lord, Lord Kakkar, said, what is being achieved there in terms of the ability to treat trauma is quite astounding and, indeed, humbling. However, one cannot ignore the fact that, although the need to preserve life is a pre-eminent role of clinicians, there are huge, complex ethical issues involved, which can take their toll on even the most stoical and professional of clinicians. While our doctors and nurses are treating our own injured servicemen whom they know will have the very best clinical attention on their repatriation to the United Kingdom, they are also treating very seriously injured Afghan civilians and Afghan servicemen. In treating those people and saving their lives—however horrific their injuries and however limited might be their subsequent quality of life—one can all too readily understand that the clinicians face awful ethical and moral dilemma, because those people will not go back to the same sort of facilities that we have.

The British serviceman—man or woman—is an extraordinarily resilient being. One hears amazing stories of their sense of humour, their determination to overcome quite shocking injuries and their success in doing so. For those who can remain within the services while fulfilling other tasks, all is made easier by the sense of camaraderie that always prevails within the unit. I hope that the Government will accept that those who treat our servicemen may at some point also need special care and attention because of the effect of what they have had to deal with.

As my noble friend Lord King clearly stated, for reserve medical staff returning to their civilian places of work, however supportive and understanding senior management may be of their experience on operational tours, that is not always the case with junior civilian colleagues. The latter may not easily have the same depth of understanding of what clinicians have gone through and have witnessed in the theatre of war. Those clinicians, however robust and resilient, can talk among themselves as a sort of safety valve when they are with their military unit colleagues. I urge my noble friend the Minister to impress upon his Ministry of Defence colleagues that they should be alert to the possibility of traumatic reaction requiring a degree of mental rehabilitation over time for these individuals in the future.

The reserves of all three services make up a crucial element of the deployable Defence Medical Services. I would go so far as to say that operational deployment of any sort would be impossible without them. We must be alert to the risks of continued deployment which these very well meaning and extraordinarily professional clinicians face.

12:38

[Lord Craig of Radley]

My Lords, I congratulate the noble Lord, Lord King, on his choice of this topic. Much has changed and is still changing in the support and needs of military veterans. As I will describe, their expectations of support have changed greatly over the years. When I was commissioned into the Royal Air Force 60 years ago, the strength of the three Armed Forces was approaching 700,000—almost 10 times what we shall have as a result of the recent defence review—and the medical and dental services were scaled to match those numbers. In the 1950s, with many service hospitals in this country and overseas, it was normal for most of the clinical needs of veterans and their families to be met by the medical branches of the services. The NHS was in its infancy. The veterans—largely from the First and Second World Wars—would on average have been in their fifties or in their thirties, so few of that large number of veterans were yet senior citizens, with the illnesses and disabilities more associated with old age.

By the 1970s, with the end of national service and the much reduced size of the three services, a major review of the clinical support required for the Armed Forces led to the closure of a number of service hospitals and much reduced staffing of the medical branches. It was no longer feasible, except in overseas locations, to provide medical and dental care for families or any veterans, many of whom felt very let down as a result. However, the National Health Service, by then well established, was there to provide medical care to veterans and their families, so it was wrong for the Armed Forces medical branches, at a cost to the defence vote, to double up on what could be provided by the NHS.

By the 1990s, most of the veterans of World War One had died and the age of the majority of veterans had risen to the sixties and seventies. Life expectancy was greater than before, with more likelihood of illness due to increasing years. To the World War Two number could be added those who had done national service or who had been involved in the many insurgencies and other conflicts of the latter half of that century. More recently, we have had the casualties and veterans of conflicts in the Falklands, the Gulf, Iraq and Afghanistan. Advances in medical care have seen the lives of many casualties of these most recent conflicts saved, but many will need continuous support for the rest of their lives.

A number of government responses have been made to these developments, such as: numerous ministerial Statements about the need to do more; the previous Government’s Command Paper The National Commitment: Cross-Government Support to our Armed Forces, their Families and Veterans; the introduction of a Minister in the MoD with specific responsibility for veterans; the setting up of a dedicated veterans agency; and improvements in the immediate medical support and care of veterans who had been injured and have not yet left their service at Birmingham Queen Elizabeth Hospital near Selly Oak, Headley Court and elsewhere.

Backing up these efforts have been the activities and commitment of the service charities—I declare an interest as an officeholder in a number of these charities, as in my declaration of interests—which have, as always, been very proactive in the interests of veterans. Noble Lords should be aware of the Confederation of British Service and Ex-Service Organisations, whose membership consists of about 180 service and ex-service organisations, including 65 regimental associations. I should like to pay tribute to the able leadership of COBSEO’s current chairman, Air Vice-Marshal Tony Stables, who has done much to motivate and co-ordinate the work of the organisation’s membership in their help and support for veterans. He has been instrumental in winning lottery funding support for the Forces in Mind programme.

However, healthcare provision is but one of the potential needs of veterans, and poor psychiatric health is often associated with other problems of housing, welfare and finance. Important though the support and generosity of the service charities is, it is wrong for the Government to be overreliant on this sector. All should agree that the support of veterans—particularly those who have been injured physically or mentally in the course of their service for the Crown—is primarily the duty of Government. The current arrangements, while an improvement on what went before, still need further restructuring. The MoD, of course, has responsibility for the care and support of servicemen and women who are still on the active list, but with their transition to retired veterans, the link between them and the MoD is weakened and, with the passage of time, can be broken.

In the United States—admittedly with a much larger corps of veterans—a distinct and separate state department bears responsibility for veterans’ affairs and is not an adjunct of the Department of Defense. Inevitably, inside our MoD there are bound to be conflicting pressures for resources and the needs of veterans, whether in pensions, compensation, health or other support, cannot be given the priority that is necessary to care for them properly. Building on the structure of Cm 7424 and its external reference group chaired by the Cabinet Office, could we not have a Minister for Senior Veterans, with the appropriate support and budget within the Cabinet Office? I fear that it is all too clear that the present MoD’s Minister with responsibility for veterans—this is not a personal criticism—is dismissive and given to writing bleak letters of blank refusal to any and every suggestion from members of COBSEO. Of course the financial situation does not make matters easy, but surely this is a transitory problem so far as veterans and their interests are concerned. Some indication that, as the economy recovers, there will be a proactive approach by Government to meeting the long-term support requirements of veterans would be welcome.

With the average length of life increasing, the skills of modern medicine and surgery and the recognition that there will be some without physical signs of disablement who are nevertheless afflicted with mental illness arising from their experiences in operations, there are going to be veterans spread across the length and breadth of the country who will need ongoing medical and other attention. If the Government are serious in their stated intention to do better for veterans—the ones who fought at risk to their lives, but lived through the conflicts—a new approach at senior ministerial level with the right proactive support for veterans’ needs should be found.

12:46

[Lord Ramsbotham]

My Lords, I, too, congratulate the noble Lord, Lord King, on obtaining this important debate. I agree with a great deal of what he said, including his mention of Alabaré and other organisations, his question about the implementation of the Armed Forces compensation scheme and his mention of homelessness. He will remember that during the Options for Change exercise—when he was the Secretary of State and I was the Adjutant-General for the Army, responsible for planning and conducting the reduction in its size by a third over three years—the issue of homelessness came up. Looking back, I think we can say that we did better for families than for single people, and we would not be the only ones who would have to admit that. He will also remember the discussions on resettlement, which the noble Lord, Lord Addington, mentioned.

I declare two interests, one as the vice-president of the Centre for Mental Health, which in October last year produced a document entitled Across the Wire: Veterans, Mental Health and Vulnerability. I commend it to all those who have not seen it because it reflects a wealth of experience in the professional mental health community. I am also president of the Veterans in Prison Association, which I will come to in a moment.

I fully accept that later today we are to have a debate, sponsored by the right reverend Prelate the Bishop of Wakefield, on the Armed Forces covenant, but I make no apology for starting from the covenant, particularly from the point made by my noble and gallant friend Lord Craig about the post and position of a Minister for Veterans’ Affairs. I have mentioned several times in this House that I do not think that the MoD is the right place for a Minister for Veterans’ Affairs because all the veteran affairs with which he is meant to be dealing are conducted not by the MoD but by the other Ministries involved, such as the Department for Work and Pensions, the Department of Health, local government and so on. Unless he or she has outreach to those, the ministerial diktat will not reach to them. Bearing in mind how this Government approach the issues of the big society, I believe that veterans’ affairs ought to be lifted firmly into the big society agenda.

I therefore recommend most strongly that the responsible Minister should not be a separate Minister in the Cabinet Office but that the veterans’ portfolio should be added to that of the Minister for Civil Society, who already has cross-government responsibilities in this area. He or she would be supported by civil servants in the department. However, as has been recommended on more than one occasion, there should be a commissioner for veterans’ affairs who is an independent, active participant in what is going on—an observer or ombudsman, if you like—and who has responsibility for overseeing the 24/7 operations in support of veterans and their families throughout the country. That job cannot be done by civil servants or by ministerial diktat. Unless someone is responsible and accountable for doing it, nothing will happen.

Other noble Lords have mentioned that many good things are happening. I have just seen a marvellous report, produced by the North East Joint Health Overview and Scrutiny Committee, which has conducted a regional review in the north-east of the health of the ex-service community. Fourteen local councils came together to produce 47 recommendations. When you look through a list of those people who are involved in implementing those recommendations, you find local authorities, housing federations, homes and communities agencies, social landlords, Jobcentre Plus, career transition partnerships, masses of voluntary sector organisations—both military and otherwise, NHS commissioning boards, public health observatories, mental health bodies, primary care organisations, GP consortia and so on. The fact that these things are being thought about, with it being realised how many people must be brought together, is very useful for government, provided that they can pick it up and run with it. For example, the Avon and Wiltshire Mental Health Partnership has drawn up very sensible recommendations for the implementation of the findings of the Murrison report, mention of which has been made today. If you go into that, you will find an enormous number of organisations that are required to do work.

Good things are happening—we have mentioned the physical and mental health problems that are being dealt with on the battlefield and immediately afterwards—but it is long-term, lifelong support that is needed. I am very glad that 12 mobile personal recovery units are now going round and helping to supervise people’s recovery. There will be four personnel recovery centres—one in Edinburgh, one in Catterick, one in Colchester and one in Tidworth—which will provide one-stop welfare shops for ex-service people and their families. There will be welfare support, a prosthetic support clinic—which I mentioned in the House the other day—physical and psychological support and family support. That is fine; this is being funded by organisations such as Help for Heroes as well as by government, but if these things, which provide an admirable framework for all that we recognise is needed, are really to happen, they must by driven by someone who sees that they are done.

I mentioned my involvement with prison. It is sad to find the increasing number of ex-military personnel who end up in the hands of the criminal justice system. When you go into the reasons for that, you see that they are complex. Many of the people concerned have unwillingly returned to their original background, yet the support mechanism is not in place to help them. Much mention has been made of PTSD, but if you look at their problems, you see that three things stand out: alcohol, depression and anxiety. The anxiety is linked with an inability to cope. All this says to me that not only must treatment for post-traumatic stress and post-battle disorders be provided but treatment must be provided that is provided normally throughout the community, with the supplements that form the Armed Forces covenant and are given because the individuals concerned have been members of the services.

12:53

[Lord Sheikh]

My Lords, I thank my noble friend Lord King of Bridgwater for securing this important debate. The state in which a number of our veterans find themselves on leaving service should fill us all with concern. These men and women demonstrate unparalleled bravery in their defence of our country. We should therefore put provisions in place that give our veterans who suffer from a physical injury or a mental health illness all the support that they require for their rehabilitation.

My contribution will focus mainly on the mental health challenges facing a number of our veterans. A recent report by the King's Centre for Military Health Research reveals that almost 25 per cent of Iraq war veterans are suffering from mental health-related illnesses. The King's Centre is of the view that of the 180,000 service men and women who have served or are serving in Iraq and Afghanistan, 48,000 veterans may suffer from an illness of this nature. The research states that 9,000 service personnel are at risk of developing post-traumatic stress disorder. This condition can lie dormant for a long period, yet its effects are terrible for those who suffer it. I welcome the Government's announcement to improve mental health services for veterans through the provision of 24-hour counselling, a support helpline and the introduction of 30 mental health nurses. Greater resources might be needed in areas that have a moderate-to-high percentage of veterans, as failure to do so might place a strain on local services. The coalition Government have doubled the operational service allowance, while amending the policy on rest and recuperation for service personnel deployed on operations. This, too, is welcome, as it will go towards addressing the impact of combat-related stress on our Armed Forces.

I fully support the provisions in the Armed Forces Bill that pertain to ensuring that the military covenant is honoured by government as a statutory duty. The Bill will also make it incumbent on the Secretary of State for Defence to report every year on steps that the Government are taking to support servicemen, veterans and their families. I look forward to debating the Bill when it reaches this House.

A more common mental health complaint among those who have served in the Armed Forces is depression. It has been found that those diagnosed with depression are more likely to be of lower rank or persons who are divorced or separated. One reason given for the prevalence of depression among veterans is a fear of not being able to secure a job on returning to civilian life, which in turn leads to a sense of despair. An unfortunate stigma is attached to mental health issues in our society. Regrettably, this is even worse among the Armed Forces.

It has been widely reported that many veterans who are suffering from mental health difficulties tend to hide their suffering. A number of service men and women have attributed this to the fact that they view acknowledgment of a mental health illness as a sign of weakness. In making the noble commitment to defend our nation, many of these brave men and women perhaps feel as though they are burdening their families and friends by sharing their mental trauma. I would be grateful if the Minister could inform your Lordships' House about any plans or campaigns that the Government will embark on to address this issue. Perhaps I may add that alcohol abuse among ex-members of the Armed Forces is double that among the British civilian population.

I was particularly heartened by the pledge in the SDSR to support ex-service personnel to enter tertiary education. This will provide those who have contributed so much to our national security with greater career choices on leaving the Army. I also take the opportunity to praise the decision to award scholarships to the children of service personnel who have lost their lives in active service since 1990. It will go towards expressing our gratitude to the children whose parents have made the ultimate sacrifice when defending our country.

I pay tribute to the excellent work undertaken by Combat Stress, the veterans’ mental health charity, which provides veterans suffering from a mental health illness such as post-traumatic stress disorder with specialist care.

I praise the Big Lottery Fund for launching the Forces in Mind programme. This laudable initiative is aimed at supporting the psychological welfare of service personnel and ensuring that veterans are given all the required assistance in making the transition to civilian life.

I refer to a report produced by Dr Andrew Murrison MP, a man with strong credentials in medicine and in the Armed Forces. His report is entitled Fighting Fit, and has generated four principal recommendations. I ask the Minister to update your Lordships' House on the implementation of the recommendations suggested in that report. I understand that Dr Murrison is undertaking a review of prosthetic limbs, as it is important that a supply of limbs for those who need them is often inadequate in quantity and quality.

Our Armed Forces have played an important role in bringing stability to many regions around the world. Our servicemen perform a unique, challenging and selfless duty in protecting the civilians and citizens of this country who are supporting the Government’s wider foreign policy objectives. The sacrifices of our Armed Forces, which are made to provide us with safety, entitle them to specialist treatment. We have a moral and civil duty to ensure that we make necessary provision so that our veterans return to civilian life in good mental health.

Finally, I take this opportunity to thank the Ministry of Defence for establishing the Armed Forces Muslim Association. General Sir David Richards is the patron of the association, and I have rendered support to the association.

13:01

[Viscount Slim]

My Lords, I thank the noble Lord, Lord King of Bridgwater, for a timely and pertinent debate. I am pleased to follow the noble Lord, Lord Sheikh, who does much for recruiting what we call the ethnic minorities. As I move among them myself a lot, I tell a British Muslim, a British Hindu or a British Sikh that it is payback time—and that it is time that more of them joined the Reserve Forces and the Regular Forces.

I worked almost monthly with at least four Ministers for Veterans from the previous Administration, and I pay tribute to them because they did a tremendous job. They woke up, as the noble Lord, Lord Addington, said, rather late—but when they woke up, great work was done. I particularly commend the veterans’ badge which they instituted. I agree with the two noble and gallant Lords that the Minister for Veterans is in the wrong place; I have always felt this. I have also found that the weakness is in local government. I suggested to the previous Administration—and I nudge the Minister now—that although Governments do not like interfering with local government, one councillor should be deputised in each local government to take on veterans’ affairs, particularly care of the wounded, both physically and mentally.

The Government talk about injury all the time, but when an overpaid soccer player gets a hack on the shins and rolls around as if he is in his last throes, he is injured. A serviceman is wounded. That word should be used more in the statistics and outpourings that our Government give. To be wounded is not much fun. However, it is a very proud thing for the individual to be wounded for his country. He is not given enough recognition today, as the noble Lord, Lord King, said, in our thinking and our daily workings. For those who are wounded, whether mentally or physically, a man or woman who takes a couple of bullets and a bunch of shrapnel or is blown up by an IED or wounded by a bit of cold steel when the fighting gets close, that is the most patriotic thing. I know that the word patriotism has not been a happy word lately in British jargon, but short of giving your life it is the next most patriotic action that you can take. We should look after these men and women.

I so agree with the two noble and gallant Lords that we need an organisation and a system—a fast track—to look after our veterans, and our wounded veterans in particular, as well as our widows. No one has mentioned widows today. I have 18,000 widows in the Burma Star Association, some of whom do not need any help but some of whom need a great deal. I understand—if I am wrong the Minister can put me right—that the Prime Minister said that he wants to look at the whole business of the military covenant and maybe write a new one or add to the one that is already there. The covenant must encapsulate the fact that we should look after a soldier, a sailor or an airman from the day he joins to the day he dies. The covenant should show an enduring responsibility for looking after the veteran.

Overall, I agree with the noble and gallant Lords that great work is being done, but we need a system and an organisation. The two words are communication—because we must be able to order and run it—and organisation. We could go on talking, but I feel that enough has been said. I do not think that we give our wounded service men and women the honour that they deserve, and I believe that something should be done about it. I am rather encouraged by what has been said today.

13:07

[Lord Tunnicliffe]

My Lords, I, too, thank the noble Lord, Lord King of Bridgwater, for securing this debate. I particularly thank him for his opening tribute to the previous Labour Government, which set the right tone for the debate. He had some thoughtful words about the covenant, particularly on mental health. While we have known about the problems of mental health in combat for many years, only now do we understand the depths of the problem.

The previous Government had a good record on the military covenant. We published the service personnel command paper—a first in government strategy—and made substantial investment in facilities such as Headley Court, including a new cognitive and mental health unit. We started community-based mental health pilots to provide veterans with expert assessment led by a community veterans’ mental health therapist. We started a number of initiatives on mental health, particularly with New Horizons: A Shared Vision for Mental Health, published at the end of 2009, which contained seven action points for the MoD and the Department of Health, particularly to look after support for veterans.

We also made commitments during our election campaign to continue with those strategies, particularly on developing pilots to deal with combat stress, which we signed up to in January 2010. They would improve veterans’ access to mental health facilities. If successful—and I hope they will be—we would have carried them forward. I hope that this Government will do so.

I move now to what the present Government are doing. There was an important commitment in the SDSR to:

“A dedicated 24-hour support line for veterans … and … 30 additional mental health nurses in Mental Health Trusts”.

That commitment was made as a result of the Fighting Fit report by Andrew Murrison. I should like to know from the Minister just how much progress has been made in securing those resources.

The interesting Fighting Fit report built upon New Horizons in its opening section and made 13 recommendations, of which only a couple have been clearly signposted and committed to. Perhaps we saw some progress today from Dr Liam Fox when writing in the Sun. He said he would be,

“working to implement them to provide much better and wider mental health support”.

That is good news. I hope that the Minister can report on progress. The Secretary of State also committed to changes in compensation. He said:

“Changes will be put into law next month to increase payment. They will nearly treble the maximum compensation for those suffering the severest mental health problems, and increase the amounts they are paid for life on leaving the forces”.

I hope that the Minister can give us more detail on what that commitment in the Sun from Dr Liam Fox actually means and to whom it will apply. Can the noble Lord confirm that the provisions will be introduced next month, how much it will cost the MoD, how many people will receive these higher payments, and what the exact scheme payments are that are being increased?

Looking further into the report, there are two particular recommendations on which, so far, there seems to have been no progress. They are a,

“Trial of an online early intervention service for serving personnel and veterans”,

and,

“Incorporation of a structured mental health system inquiry into existing medical examinations performed while serving”.

I hope that we can have some indication that these recommendations, together with the other recommendations in the report, are about to be implemented.

This has been an important debate and the areas in which improvement is necessary are understood. The Government have made some commitments to make these improvements, but I really need to know what the pace and future commitments are. My knowledge might have been illuminated by an article in the News of the World, which I would like the Minister to confirm or not. Not everyone will have reached as far as page 36 of last Sunday’s edition, but there was an interview with Mr Nicholas Clegg, the Deputy Prime Minister, by the paper’s chief political editor. He reported:

“Nick Clegg is to spearhead a huge drive to give better care for troops traumatised by war. The Deputy PM will soon unveil a ‘health for heroes’ service … Under the scheme, millions of pounds of extra money will be pumped into the NHS to fight battlefield stress. A new screening programme will identify victims … family doctors will get special training while an army of therapists will be drafted into hospitals to spot post-traumatic stress disorders”.

If all this is true, it is to be welcomed. However, it does not seem to relate to the more incremental and steady progress reported elsewhere. It has not been mentioned in Parliament and does not seem to accord with the plan in Fighting Fit. It is news to us and to the forces’ charities. If the Minister is aware of the details of this programme, perhaps he could give us some indication of what extra money there is, where the millions of pounds will be spent, the timescale for implementation, and why it is to be announced by the Deputy Prime Minister, not the Secretary of State for Defence.

13:15

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, we have had a very good debate and I thank my noble friend Lord King of Bridgwater for raising the important subject of the physical and mental rehabilitation of military veterans.

I always listen to and greatly value my noble friend’s informed views on all aspects of defence policy. While he was Northern Ireland Secretary and then Defence Secretary, our Armed Forces were deployed in Northern Ireland and the Gulf where, as my noble friend said, combat operations to liberate Kuwait from occupation by the forces of Saddam Hussein began 20 years ago last week. Then, as today in Afghanistan, we witnessed the professionalism, dedication and courage of our servicemen and women. We should be justifiably proud of what they do on our behalf.

During these past two decades, our Armed Forces have been deployed in the most demanding areas of conflict. They have always risen to the challenges they faced, and done their duty unflinchingly. For those who have made the ultimate sacrifice, our condolences and sympathies are with those families and friends left behind. However, as my noble friends Lord King and Lord Glenarthur, and the noble Lord, Lord Kakkar, said, injuries that were once fatal can now be survived, which is testament to the skill of our medical services. Indeed, the expertise honed on the battlefield is now subject to research at Queen Elizabeth Hospital Birmingham to determine how best that expertise can be used in the healthcare of civilian society. Just last week, we opened a brand new, ground-breaking surgical reconstruction and microbiology research centre in Birmingham.

However, today’s soldiers, sailors, airmen and women will one day become veterans. They will look at how the previous generation is being cared for and supported. If we are found to be wanting, it will be a question not only of moral failure, but of paying the price in recruitment and retention in our future Armed Forces. For some personnel who have been injured, a lifetime of care and treatment will be needed. As the noble and gallant Lord, Lord Craig, pointed out, as a nation and a Government we have a moral responsibility to ensure that such injured personnel receive the care they deserve. As a Government we are committed to ensuring that they do. I reassure the noble Viscount, Lord Slim, that we will be honouring the covenant between the Armed Forces and the nation.

The Government share the concerns that have been expressed regarding the mental well-being of our former service personnel. We acknowledge that it can take many years for a psychological problem to manifest itself. In the most serious cases—and these are the minority—experiences on operations can result in post-traumatic stress disorder. We continue to work with Combat Stress in the fight against that most debilitating condition.

For other veterans, their mental health needs will continue to be met by the National Health Service, which should remain the main provider of healthcare for former service personnel. The NHS is working hard to develop the best models of care and support for the few with mental health problems. The MoD has contributed £500,000 towards six community-based NHS mental health pilot schemes for veterans in Stafford, Camden and Islington, Cardiff, Bishop Auckland, Plymouth and Edinburgh. They aim to make it easier for former service personnel to access help. I hope that that addresses the question asked by the noble Lord, Lord Kakkar.

On 20 December, my right honourable friend, the Minister for Defence Personnel, Welfare and Veterans, announced the publication of an independent evaluation into these pilot schemes, conducted by the University of Sheffield's Centre for Psychological Services Research. The report identifies key components of successful services and makes a number of recommendations about the future planning of NHS mental healthcare services for veterans. I would also like to highlight the Medical Assessment Programme at St Thomas's Hospital, which continues to provide specialist mental health assessment of former service men and women with mental health problems who have undertaken operational service since 1982.

The coalition agreement set out our intention to provide extra support for former members of the Armed Forces with mental health needs, including PTSD. As part of that undertaking, Dr Andrew Murrison MP, who served as a medical doctor in the Royal Navy, was asked by the Prime Minister to conduct a study into the health of both serving and ex-service personnel to see what more can be done to assess and meet these needs. In the light of that work, on 6 October, the Defence Secretary announced that there would be funding for a 24-hour helpline for veterans and for 30 extra mental health nurses in mental health trusts. To answer the question asked by the noble Baroness, Lady Warwick, my noble friend Lord Sheikh and the noble Lord, Lord Tunnicliffe, we will continue to work closely with the Department of Health and others to work towards implementing all Dr Murrison's recommendations, as well as those produced in the evaluation of the pilot schemes, to consider how they can be taken forward to provide the best possible mental healthcare for former service personnel.

In terms of general welfare provision, there is a range of services that former Armed Forces personnel may need to call on during the course of their lives, provided by many different agencies. I assure my noble friend Lord Addington that these will be constantly reviewed. Some have argued that it would be more cost effective to provide services for veterans if these were brought together in a single administration. We do not agree. Where a service is already provided by one department for the majority of the population, there needs to be a very strong case to set up a separate organisation to do the same thing for any special interest group—even one held in such high regard as veterans who have served the nation so well. Former service personnel live among us; they are not separate from the community that they have served to protect. For the most part, their needs—whether healthcare, housing or benefits—are the same as those of their fellow citizens.

We must also recognise that some of the support for veterans comes not from government, but from the voluntary and community sector. I mentioned Combat Stress earlier and the noble Baroness, Lady O’Loan, in a well-researched speech, mentioned Help for Heroes. Sometimes, the service charities are described as filling in for what the Government should be doing. That does them a great disservice. It is not the place of the state to do everything. All of us have social responsibilities. The service charities are one of the best examples of the big society in action and I pay tribute to the vital role that they play in our national life.

The noble Lord, Lord Ramsbotham, and the noble Viscount, Lord Slim, made important points about the position of the Minister for Veterans. Several formulae have been suggested over the years to strengthen the focus on veterans' issues. They range from the full-blown, US-style, Veterans Department, to more modest changes to government machinery. Some give a greater role to the Ministry of Defence, others look to central government departments to take on that responsibility. The creation of a Minister for Veterans was partly a response to that desire. The MoD's responsibility is finite. It can act as an advocate, or as an interlocutor, for ex-service personnel. But we do not want to tell the Department of Health and its devolved equivalents how best to deliver healthcare. Rather we want to see ex-service men and women treated correctly across government.

I want to mention briefly the role of the Medical Assessment Programme at St Thomas's Hospital. This is part of the MoD and provides free and confidential advice on a wide range of issues. This can be provided in the home of a veteran, or by telephone, and is given by trained welfare managers. The Veterans Welfare service undertakes some 12,000 visits to former service personnel each year and 95 per cent declare themselves to be very satisfied. The welfare managers work closely with service charities and other voluntary organisations, local authorities and the Department for Work and Pensions.

I will try to answer as many questions as possible. If I do not answer them all, I assure noble Lords that I will write. My noble friend Lord King mentioned a possible figure of 180,000 veterans of Iraq and Afghanistan campaigns. That is an old figure. The most recent figure, as at April 2010, is 236,000 service personnel who have served in Iraq, Afghanistan or both at least once.

The noble Baroness, Lady Warwick, paid tribute to the Armed Forces parliamentary scheme and I also admire enormously the excellent work that Sir Neil Thorne and that organisation carries out. The noble Baroness and my noble friend Lord Addington made some important points about the reorganisation of the National Health Service. We continue to work closely with the NHS. As for the transfer of medical records from the MoD to the NHS, a summary of each medical history while in the Armed Forces, including the results of the discharge medical, is recorded and given to the individual to pass on to their GP. The form also includes information on how the GP can gain access to the individual’s complete service medical records if required. We are working to simplify the process and, where it is possible to do so, to enable medical records to be available to GPs electronically.

My noble friend Lord Glenarthur made some very important points about medical reserves. He raised concerns about the cumulative effects of continual exposure to really stressful situations. We are very alert to this, and the cutting-edge medical care that our service men and women receive in the front line is constantly being upgraded.

To answer my noble friend’s question, in November 2006 the MoD launched a new initiative, the Reserves Mental Health Programme. Under the programme, we liaise with the individual’s GP and offer a mental health assessment. If they are diagnosed to have a combat-related condition, we offer the out-patient treatment via one of the MoD’s 15 departments of community and mental health. The reserve forces continue to make a vital contribution to the ongoing success of military operations. In return, we have a duty of care to them, and this programme is an important enhancement of the medical services that we provide.

My noble friend Lord King asked about the review of the AFCS every five years. At this time we do not feel it necessary to conduct further reviews, but future changes will be considered by the Central Advisory Committee on Pensions and Compensation if the need arises.

I opened my speech by paying tribute to our Armed Forces. We ask them to do things on our behalf, and they do that willingly. We have a responsibility, not only as a Government but as a nation, to look after them. I hope that, by our explaining the Government’s position on the important subjects of welfare and physical and mental care, noble Lords will accept that we take this responsibility very seriously.

13:30

[Lord King of Bridgwater]

My Lords, I thank all noble Lords who have taken part in this debate. I thank the Minister for, as ever, his most conscientious and scrupulous attention to the debate and for his reply. This debate has been of real quality. People who are really interested in the subject have contributed to it from their different backgrounds and experience. In our present difficult times, this is the sort of the debate that this House can do extremely well and which makes a valuable contribution.

Without wishing to single anyone out, I thought that the speech of the noble Lord, Lord Kakkar, was impressive, drawing on his wide medical experience that is of such great interest. The speech of the noble Lord, Lord Glenarthur, drew attention to the debt that we owe to the clinicians themselves who are facing appalling trauma situations and are willing to serve. Against that background, I am most grateful to all those who have taken part.

If there was one slightly contentious note that emerged among Members here today, it was this: we have made some progress in having a Veterans Minister, which we never had before, but now the issue is whether he is in the right place. I see the arguments about whether the Ministry of Defence is absolutely the right place. The only thing that I want to say is that plenty of people have got lost in the Cabinet Office before now, and putting a Minister of perhaps not the most senior rank in there might mean that they were never seen again. Whoever he is, and unless he is of Cabinet rank, he will need a sponsoring Cabinet Minister of some authority, and until someone can think of a better one, this is the answer. We have a Veterans Minister who has been a serving officer, which is a good start. I think that Andrew Robathan has plenty of energy, and now we must make sure that that energy is applied with plenty of forcefulness. He knows his way around. He is a Deputy Chief Whip so he knows where some of the bodies are buried. That was an unfortunate phrase to use and I withdraw it, but that is a phrase often applied to Whips. He has considerable influence, and I hope that he will use it.

I shall add one point. Not every aspect has been covered, obviously, because of time reasons. There was one thing that did not come out in any speech. We use the word “veterans” as though they are all old men or women. A lot of so-called veterans now are extremely young, and one of the things that worries me, and I know that it worries the whole House, is the difficulty of employment opportunities for young people at this time. I know that my noble friend the Minister was not able to cover this in his speech, but I know the initiatives that are being made. I emphasise that giving these people self-respect is the best chance to recover from the difficulties and challenges that they may have faced, and opportunities of worthwhile employment are very high on that list.

I ended my earlier contribution by saying that many of us stand on Remembrance Day at war memorials up and down the country, and we say, “We will remember them”. We say that we will remember the dead. The purpose of this debate was that we will remember the living as well, along with our duties and obligations to them. I am most grateful to all who have taken part. I beg leave to withdraw the Motion.

Motion withdrawn.

Tourism

Thursday 27th January 2011 Lords Chamber

Debate

13:35

Moved By

[The Viscount Younger of Leckie]

To call attention to the value of tourism to the United Kingdom economy; and to move for papers.

[Viscount Younger of Leckie]

My Lords, I am pleased to have the opportunity to open this debate on the subject of tourism in the UK and its value and importance to the UK economy. The debate has attracted no fewer than six maiden speakers and I look forward in anticipation to hearing the contributions from the noble Lord, Lord Wigley, my noble friend Lady Wheatcroft, my noble friend Lord Palmer of Childs Hill, the noble Lord, Lord Stoneham of Droxford, and my noble friends Lord Marks of Henley-on-Thames and Lord Risby. I am delighted also to note the names of several distinguished Members of your Lordships’ House down to speak. It is clearly a good day for Palmers and I look forward with interest to hearing from the other noble Lord, Lord Palmer, and from my noble friend Lord Lee of Trafford, a former Minister for Tourism.

Why do I think that this debate on tourism is important at this time? First, we in the United Kingdom are entering a busy and exciting period over the next two years when we will be welcoming many foreign visitors to our shores as a result of the Queen’s Diamond Jubilee, the royal wedding and, of course, the Olympics in 2012. It is essential that we maximise this opportunity and make it an exceptionally fruitful period for the country, both in increasing our invisible earnings and in ensuring that visitors enjoy the best possible experience with us. We must ensure that they return as so-called repeat business. This is particularly important for capturing a greater share of the Far East business.

Secondly, we must always remember that many UK nationals choose to holiday in this country. It is vital that people are encouraged to stay in the UK and made more aware of the benefits and pleasures of holidaying in England, Northern Ireland, Scotland and Wales. Of the total UK average household expenditure on holidays, only 36 per cent is spent in the UK. Yet the amount is not insignificant in monetary terms; in 2009, UK nationals spent 126 million nights away from home, which represented some £22 billion to the economy, primarily to the hotel and restaurant trade. There is clearly an opportunity to increase on this percentage expenditure.

Tourism is important at this time for a further reason. Your Lordships will hardly need reminding that we are enduring an unprecedented period of severe public sector cuts, as a result of having the largest deficit in the G20. This week’s economic figures of near-zero growth for the final three months of last year confirm that our recovery is precarious, while the prospects for growth in early 2011 look less than encouraging. There are the added concerns of increasing energy costs and rising inflation.

Tourism provides an excellent opportunity to boost the economy. It is the third highest export earner for the UK, behind only the pharmaceuticals industry and the financial services sector. It generates £115 billion per year for the UK economy, which is equivalent to 8.9 per cent of UK gross domestic product, according to a recent Deloitte study. That breaks down between the UK’s four countries as follows: England generates £96.7 billion, 8.6 per cent of GDP; Scotland £11.1 billion, 10.4 per cent; Wales £6.2 billion, 13.3 per cent; and Northern Ireland £1.5 billion, 4.9 per cent. Inbound tourists spend about £16 billion per year, thereby contributing £3 billion to the Exchequer.

Looking ahead, over the period 2010-20, the increased growth rate of visitors to the UK is expected to rise by 3.5 per cent per annum, which is ahead of the 2.9 per cent per annum on average forecast for the economy as a whole. Most importantly, there are some encouraging forecasts for employment. More than 250,000 jobs are expected to be created during this same period, to rise from 2.64 million to 2.89 million. Currently, one in 12 jobs in the UK is directly or indirectly supported by tourism. We can begin to see how tourism can play a vital role in rebalancing the economy. We cannot afford to miss that opportunity.

The tourism industry is often described in terms of the services and attractions offered to visitors—the product side. We know that there is great variety and that there are many exceptional, high-quality destinations in the UK, of which more later. However, are we doing enough as a kingdom to ask what the customer wants? The customer is, of course, the tourist—a generic term that describes anyone of any age, gender or nationality who is away from home or his native country, at leisure and willing to spend money. For example, I heard recently of an Asian delegation booked into a UK hotel. Nobody had thought to check whether there was internet access there—an essential requirement for Asians—and there was a hasty rebooking. It is perhaps rather archaic, prosaic or both that many Asians perceive the UK as being the country of the high tea. Should we be encouraging a high tea start-up programme? Those are small examples but they matter at the coal face in understanding our customer.

The tourist always has a choice. Competition is fierce, notably for those travelling to Europe, with a rich choice of countries. According to the latest figures, from 2009, the UK is the sixth most-visited destination by international tourists, with 28 million staying visits. France is number two with 74.2 million and Germany number eight with 24.2 million. Between 2000 and 2010, the UK’s international visitors increased by 37.4 per cent but France and Germany are still ahead of us, at 49.7 per cent and 85.6 per cent respectively. Crucially, we are falling behind in attracting visitors from the key emerging markets. France attracted eight times more visitors from China last year than did the UK, and Germany six times more. Nearly four times more visitors from Brazil went to France than to the UK and about 30 per cent more Brazilians visited Germany than the UK. France attracted visitors from India at a factor of more than 50 per cent more than the UK.

In briefly outlining an audit of UK competitiveness, let me start with the challenges. Britain ranks 133rd out of 133 nations on the specific issue of the cost of travel to a holiday destination. For example, a UK short stay visa costs £70. If you are a visitor travelling to other European countries at the same time, where you can obtain a multi-country Schengen visa at £50, the bill rises to £120. Add on to that the increase in the air passenger duty and the costs are considerable before you have even booked your flight, accommodation and transport. On the ease of booking flights, although airline seat capacity for internationals visiting this country has increased by 2.9 per cent, it increased more for France at 6.3 per cent and Germany at 5.5 per cent. A comparative reduction of our inbound route capacity pushes up prices for the tourist choosing to come to the UK.

There are other challenges. The VAT increase to 20 per cent is a necessary move by this coalition Government, but it inevitably decreases the spending power of all tourists in the UK. By contrast, Germany and France have reduced VAT rates for the hotel and restaurant sector. Although the exchange rate remains in our favour for encouraging foreign visitors, excessive volatility means instability. At present, that is providing a brake for those UK nationals seeking holidays abroad, which is in our favour. Overall, it remains expensive to holiday in Britain in comparative terms.

A further challenge is to encourage tourists to go further than their single-destination city. I accept London’s primacy as one of the key holiday destinations in the world, but as many as 48 per cent of all UK visitors spend time in London and do not go further afield, whereas only 12 per cent visit Paris without enjoying thereafter the pleasures of France. The same applies to 14 per cent of visitors to New York and 10 per cent of those to Berlin. London enjoyed 11 times more visitors than Edinburgh, 18 times more than Manchester and 23 times more than Glasgow. I will be interested to hear the thoughts of my noble friend Lord Gardiner of Kimble on encouraging more visitors to the countryside.

Finally, I feel sure that the Government are reviewing our so-called welcome pack. For example, the average queue time for exiting customs at Heathrow remains at 45 minutes for foreign visitors.

On the positive side, what does the UK have to offer? Putting aside the small question of our weather, we are best placed, above all other countries, to offer a unique, varied and exciting opportunity that can be tailored for all visitors, with all vacation tastes, coming to the UK. There are quintessentially British festivals and events, from the highland games and county shows to cheese rolling and river dragon racing. There are theme parks and music festivals for the young. There is outstanding architecture, steeped in history, stretching back many centuries, from cathedrals to country churches. All these are accessible and appreciated over a particularly fertile landscape, from the north-west of Scotland—perhaps the last great wilderness in Europe—to Cornwall with its coves and beaches, Norfolk with its fascinating network of broads, the canals of Shropshire and Warwickshire, so enjoyed by American tourists, and, of course, Liverpool and Tyneside.

There are also many unseen treasures in the UK that can be exploited. For example, because of our geophysical make-up and our presence in the Gulf Stream, we have come to do gardens rather well, from Kent to Inverewe in Scotland and Cornwall. Even before the Eden Project, gardens in Cornwall alone generated more than a million visitors per year. I recently met a gentleman who had set up the Welsh Historic Gardens Trust. From initially identifying six gardens for development, within the first year of research he had identified a further 306, all for eventual public viewing.

We have our priceless museums, notably in London but also in such places as Portsmouth, which represents our colourful maritime history with the “Mary Rose” and HMS “Victory”. There is also the Burrell Collection in Glasgow. It is, above all, through culture that the UK is perceived particularly to draw visitors and this gives us a competitive edge. The Nation Brands Index has indicated that Britain is ranked fourth out of 50 nations for having a vibrant and exciting contemporary culture; seventh as a nation with a rich cultural heritage; and eighth as a nation excelling in sport, with many foreign visitors coming to the UK for football alone. VisitBritain concludes that inbound tourist spending on our culture and heritage subsector is £4.5 billion. This alone supports more than 100,000 jobs in the UK. Overall, Britain is ranked fifth in terms of tourism. It must be perfectly possible to rise further in these rankings.

No stall for Britain can be set out without confidence in and scrutiny of the structure of tourism management in the UK, including Scotland, Wales and Northern Ireland. In the Department for Culture, Media and Sport there is a Tourism Minister. VisitBritain, which was the British Tourist Authority, is now responsible for marketing Britain abroad, with a fund-matched £100 million partnership marketing fund earmarked specifically for the emerging markets. The quid pro quo is that cost reductions in administration of 50 per cent over four years must be made. The question that we must ask is whether the funding and the structure in place are correct.

It is as well to remember that the engine room of tourism works as a result of more than 125,000 privately owned businesses, 80 per cent of which have a turnover of less than £250,000 per year. The question that we have to ask is how best to help these local businesses, starting with more bank lending and greater tax incentives. I am sure that the Minister will refer to the imminent release of the Government’s tourism strategy document. In the mean time, I trust that there is enough stimulus for debate.

Finally, I leave your Lordships with a creative idea, which is that if we were to switch to SDST—for the uninitiated, that is the single/double summer time, with its lighter evenings—it is estimated that we could create tourism growth of between £2.5 billion and £3.5 billion and between 60,000 and 80,000 extra jobs. I beg to move.

13:49

[Lord Christopher]

My Lords, first, I thank the noble Viscount and congratulate him on getting this debate on to the Order Paper. Unbeknown to him, it has provided me with an opportunity to raise the matter which was burning in my soul. He mentioned Cornwall, and Cornwall is part of it. I should also say that as it is a discrete matter, I thought it sensible to have a word with the noble Baroness, Lady Garden, yesterday to ensure that she, at least, was certainly not caught unawares on an apolitical matter.

It concerns the Isles of Scilly, which are a string of islands 37 miles by sea south-west of Penzance, five of which are inhabited. The population is around 2,000—it is probably on the low side rather than the higher—and tourism is the principal source of income. Almost all other sources have disappeared. The flowers have gone, either abroad or to Lincolnshire, and are a minimum part of their livelihood. The majority of the visitors go by sea. You can go by air and when I go, I usually try to do that, although you can be diverted to the ferry if it is too bad for planes to fly. However, the planes have to be small because the runway is short. There are also helicopters.

Two vessels ply between Penzance and Scilly, a passenger vessel and a freight vessel. They are owned by the Isles of Scilly Steamship Company, which was set up in 1920. Prior to that, since 1859, all transport to the islands was undertaken by the Ministry of Shipping, which must have disappeared at some time in the past. The passenger ferry is the custom-built “Scillonian III”, which will be 35 years old next year. The freighter, the “Gry Maritha”, is over 30 years old and takes 95 per cent of the freight. As with many islands around our coast, the only way of getting anything from nails to door knockers is by sea. That freight vessel was in fact a Norwegian freighter. I will come back to that issue after getting around to the matter of the “Scillonian”.

The “Scillonian” takes 90,000 passengers a year. It had a refit in 1999 but, despite that, it will not get a maritime coastguard certificate after 2012. In other words, it will go out of service. Since 2002—over eight years ago—there have been discussions and explorations of what to do about that risk of losing the passenger vessel. The conclusions have been twofold: that there should be a new, dual-purpose ferry ordered and built and that there would have to be some harbour improvements, both in Scilly and in Penzance. The market for a second-hand vessel has been thoroughly researched but nothing that is likely to be suitable has been found. The harbour improvements have now been agreed but why is there not a vessel somewhere around the world at a time when, on the whole, sea transport is being either limited or transferred to a very large vessel?

Essentially, there are two factors. The vessel has to have a draught of only three metres and it must be able to sit on the seabed, because the high tides literally leave little or no water in the harbour area. There have been consultations with the Department for Transport and with Cornwall Council, which led to revised plans that saved a good deal of money. For example, they changed the specification of the vessel, reducing its potential speed from 20 knots to 15, and they retendered. We are now left with a total cost, excluding the harbour works, of £62 million. Under the outcome of the discussions this is to be shared, with £10 million coming from Cornwall Council, £11.75 million from a European grant and £40.3 million from the Department for Transport. We expected an answer from the Department for Transport by the end of this month but it is clearly not going to come. I understand that it is not now likely to arrive before the end of February. I do not know the reasons for that. On 16 February, a finance meeting of Cornwall Council will take place. There is a very real risk that it will decide that, given present circumstances, it cannot come up with this money. If that happens, the vessel will not be ordered.

There is also a risk with the European grant which has gone on for so long. There is an end-date, of which I am not aware, but there is a risk that the money will go elsewhere. Many projects around the country are looking for money from Europe, so this service could end in 2012. If that happens, there will be a direct loss of 79 jobs on the ferry service itself. There are only 1,272 full-time jobs throughout these islands, 30 per cent of which are related to hotels and restaurants, so there is a total potential job loss of around 380. That is not the national figure of one in 12 which the noble Viscount mentioned but represents something like four in 12 of all the work opportunities on these islands. Seventy per cent of the 380 jobs are related to tourism. Therefore, we have a potential job loss approaching a third, plus, of course, marginal losses relating to tourist spending, which would substantially disappear. It would be a major tragedy if these islands were effectively lost to tourism.

I hope that the points I have raised will find support around the Chamber and that we can look to accelerate a positive decision on this matter. Delay is no longer a wise or safe option. I will seek to follow this up as the days go by.

13:56

[Lord Wigley]

My Lords, I hope that I am not being precocious in making my maiden speech so soon after being introduced to your Lordships' House. I am grateful for the opportunity to do so as I felt immensely frustrated yesterday in the debate on the parliamentary seats in Wales as I could not even thank noble Lords who were being kind to me. Today’s Motion relating to tourism is important to Wales and is close to my heart.

Before addressing this subject, I thank colleagues and officers of your Lordships' House for the kindness that has been shown to me. I particularly thank my supporters on Monday, my noble friends Lord Elis-Thomas and Lord Faulkner of Worcester, who I am glad to see are both present, for all their help and encouragement over a protracted period. I also thank the Cross-Benchers for allowing me to join their ranks and for the help given by their staff. It has been a very great pleasure to meet so many former colleagues. The warmth of their welcome has been a moving experience.

When we were elected MPs in 1974, my noble friend Lord Elis-Thomas and I were among the youngest Members of Parliament. It was once suggested that the two of us entered the place as revolutionaries and departed as mere reformers. But if the objectives which we then had, and to which I still aspire, of a new relationship between the nations of these islands can be achieved by reforming the structures of government, that is all to the good. Revolutions can be messy and painful. If the process of devolution allows Wales on matters such as tourism to take appropriate decisions on an-all Wales level, and to have its voice heard when other decisions are taken on a wider basis, that is also to the good.

I also thank those of all parties, and those of no party allegiance, who, while not necessarily agreeing with our politics, have supported Plaid Cymru’s bid to have a formal presence in this Chamber. For many years my party did not seek a voice in your Lordships' House. It reconsidered its position after the Government of Wales Act 2006, which stipulated that our National Assembly could legislate in devolved matters such as tourism only with the agreement of both Chambers at Westminster. Many in my party felt that we should make our views known whenever and wherever the interests of Wales were at stake, on the basis of our country's long-standing commitment to social justice and our wish to shoulder our responsibilities towards a wider world.

We see Wales in an international context. That is relevant to today's debate. Tourism is a major industry in Wales. As we heard from the noble Viscount, it is worth £6 billion a year and generates almost 10 per cent of our jobs. My former constituency of Caernarfon contained the summit of Snowdon, the Menai Straits, the glorious Llyn peninsula, a phalanx of castles and several of the spectacular little trains of Wales. It is a Mecca for tourists. Wales’s major events programme has succeeded in promoting Wales as an international tourism destination. We hosted the highly successful Ryder Cup last autumn, and an Ashes test the previous year. When people attend such events, they come not only to Wales but to other parts of Britain. International visitors to Wales may fly in via Manchester or London as well as Cardiff. The benefits will be felt all around these islands, and I hope that those who are primarily attracted to Scotland, Ireland or England will also visit Wales.

I imagine that public policy is geared to spreading the economic benefits of tourism around these islands. However, there is scope for improved signposting of such opportunities, so that visitors to Britain are aware of the wide variety of attractions across these islands. There is a huge opportunity to do this in the context of the forthcoming Olympic Games, and there is an onus on public bodies to co-operate. There is a need to use technology creatively to engage with potential visitors, providing reliable advance information online, not just about places but about activities.

We in Wales are particularly conscious of the contribution that cultural tourism can make to the economy. Music is a big attraction for overseas visitors. It is not just renowned institutions like the Llangollen International Music Eisteddfod that attract people from around the globe. A valuable role is played by local festivals such as the Brecon jazz festival and the Green Man festival. I declare an interest in this context because my wife, son and daughter are all involved in such cultural events.

In 2011, Visit Wales will also support events such as the Glanusk international horse trials, the Heineken Cup final and the rugby league Millennium Magic weekend. Visit Wales has three EU tourism projects on stream with an investment of £53 million, together with a £19 million heritage tourism project, also supported by the EU. A VisitBritain survey of 10,000 potential overseas visitors identified Wales's historic castles as the top UK attraction, beating Buckingham Palace into second place.

Co-operation with UK agencies can maximise the benefit that we get from such visitors. One good example of co-operation between public bodies on an all-Wales and a UK level is that which has enabled sculptures from the Dazu world heritage site in China to feature in an exhibition that opened in Cardiff this week. It will only be seen in Wales and it is the first time that the exhibits have left China. This exciting development has been made possible by the co-operation between the Government of Wales, our National Museum and the Chongqing Culture Bureau through the British Council's Connections through Culture programme in China. In mentioning China, we must be aware of how the demographics of tourism are changing, with an increasing number of potential visitors with disposable income coming from China and other developing countries.

There are other opportunities to work together to attract major events to the UK, such as the WOMEX world music showcase. This exciting project will bring together to the UK, for three to five days, 2,700 delegates from 92 countries, mainly programmers of international festivals and venues worldwide, some 450 world music artists and crew and 400 journalists. Cardiff is one of the cities shortlisted for the next WOMEX in 2013, and there is already positive co-operation between various key bodies in Wales and on a UK level to turn this into reality.

In regarding tourism as a major plank of economic policy, we certainly have the enthusiastic support of the Welsh Government. It is worth noting that the Minister, Alun Ffred Jones AM, has responsibility for heritage, culture and sport and tourism. However, he will be able to play that much greater a role in developing international tourism if he can work hand in glove with the UK Minister in proposing or supporting initiatives.

I hope that in attacking the international markets, the diversity of the tourism product within the UK can be used as a positive feature on which to build. I was glad to note a key recommendation of the recent report of the British Hospitality Association entitled Creating Jobs in Britain, which many of your Lordships will have received. It stated:

“Joining up—to a greater degree—with colleagues in Scotland, Wales and Northern Ireland to enhance the visibility and reach of Britain as an international tourism destination across the world”,

should be a key objective. I am certain that the Welsh Minister for Tourism would endorse that; I have discussed the matter with him. He would welcome the chance to develop his ideas on a partnership basis.

I am delighted that my first contribution to your Lordships’ Chamber should be on this subject, and I am grateful for the generous hearing that has been afforded to me today.

14:05

[Lord Lee of Trafford]

My Lords, first, I declare an interest as the chairman of the Association of Leading Visitor Attractions—40 of our major attractions, all of which get more than 1 million visitors a year. I am delighted to say that National Museum Wales is one of our members. I am also absolutely delighted that 17 Members of your Lordships' House are speaking today, including six who are delivering their maiden speech. I must say that this is far more than we normally get in a tourism debate; nor do we normally have the same number of Peers speaking as there are piers in the Weston-super-Mare constituency of our present Tourism Minister.

I pay particular tribute to the noble Lord, Lord Wigley, for his maiden speech, which we all found fascinating. He and I spent many years together in the other place. He was hugely respected. He is a magnificent ambassador for Wales, and has done a huge amount for the disadvantaged and the disabled. We look forward to many excellent contributions from him over the years; from all sides of the House, we welcome him.

I also congratulate the noble Viscount on moving the debate. I had the privilege of serving under his father as a junior Minister in the Ministry of Defence. As a Minister, he commanded huge respect and was a gentleman in the very finest sense. I am delighted that his son is moving our debate today.

Tourism is probably the number one industry in more parliamentary constituencies than any other industry, yet previous Governments have paid little regard to it. It has hardly featured in party election manifestos. Over the years, there has been a steady reduction in the funding of our national tourist boards. Past Prime Ministers have not taken a great deal of interest. Gordon Brown could hardly be described as the happy holidaymaker. Tony Blair tended to prefer warmer climes in Tuscany. At least the present Prime Minister is spending a little more time in this country.

The Government regard the chair of our national tourist board, VisitBritain, as only a six-day-a-month job, which is frankly ridiculous given the scale of the industry, as we heard earlier. Of course, tourism is not in the title of its sponsoring Ministry, the DCMS. As we have heard, it is a huge wealth creator and, potentially, a huge jobs creator. We must all be conscious of the number of overseas people who provide most of the workforce in so many of our major hotels and restaurants. There surely must be great opportunities for many of those in the UK who are at present, sadly, unemployed.

Many people tend to denigrate tourism as a service industry, but of course there is a relationship between service and manufacture. When I was Tourism Minister in the 1980s, the largest steel contract at that time was placed by the Blackpool Pleasure Beach for one of its big new rides. A big hotel development programme is currently under way in London, as we will no doubt shortly hear from the noble Baroness, Lady Valentine. Eighty per cent of the content of a new hotel used to be of UK-manufactured origin. As for our civil airline industry, we should think about how many of the aircraft carry tourists. Therefore, there is a relationship between service and manufacture.

Our domestic tourism industry is relatively buoyant at present. One has only to look at the number of people who increasingly caravan. The figures from the Caravan Club show an amazing growth in recent years. Of course, as was said a little earlier, we have a tremendous national heritage with our great museums and galleries, but they need extra resources. I ask the Minister whether the Treasury is making any progress in encouraging lifetime giving by those who are willing and have the resources to support many of our great heritage institutions.

As for the regions, there is considerable concern at the phasing out of the RDAs, which used to provide most of the funding for the destination management organisations. It is of considerable concern to read today that Visit Lincolnshire, the county council body that promotes Lincolnshire and tourism in that county, has been forced into administration after apparently losing £670,000 of funding.

However, the biggest single boost that the Government could give our tourism industry would be to support the Lighter Later campaign by altering the clocks and extending the useful hours of daylight. I was absolutely delighted that this was referred to by the noble Viscount, Lord Younger, who is a Scot, as it is of course from Scotland that historically the criticism of a possible change has come, so I am delighted to hear his support for this proposal.

There is huge potential in overseas markets; China has already been referred to by other speakers. The visa situation is particularly unsatisfactory, and I end by reading an e-mail that I received yesterday from the managing editor of China Ethos:

“The UK is a very attractive tourist destination to the Chinese people. However, their enthusiasm to holiday in the UK is dampened down by the inconvenience encountered in obtaining a separate UK tourism visa in addition to a Schengen visa which allows entry to most European countries. Unless visitors have specific reason to come to the UK on their European trip, most will not bother applying for a UK visa due to the elaborate and time-consuming procedures. It clearly seems that the UK is losing out by keeping its door shut to the wealthy Chinese tourist on a shopping spree in Europe. In 2010, Chinese shoppers alone contributed to nearly a third of the UK post Xmas sales in luxury goods”.

14:12

[The Lord Bishop of Hereford]

My Lords, together with the noble Lord, Lord Lee, I am delighted to be able to pay tribute to the noble Lord, Lord Wigley, for his excellent maiden speech. I look forward not only to further speeches from him but to the other maiden speeches that follow. Perhaps none of us can compete with the beauty of the area in which the noble Lord had the privilege of representing the constituency.

The diocese of Hereford covers not only Herefordshire but south Shropshire, and I am told that the border country of the Wye Valley claims to have been the place where tourism began. Other noble Lords might wish to contest that, but that is what the people there say, and they do so on the basis that the Wye Valley attracted artists to the area in the 19th century.

I pick up the theme with which the noble Viscount began and others have continued: the opportunities for development and growth in tourism throughout the United Kingdom. Reference has already been made to the number of jobs that could be added—more than 200,000 are anticipated—and to the research; the noble Lord, Lord Wigley, referred to this. It will not surprise your Lordships that I want to connect it to visits to churches.

Forty-five per cent of grade 1 listed buildings in England are churches. That is a staggering number. If any other organisation or institution, apart from the church, was responsible for quite that number, I have no doubt that it would receive more attention. It means, therefore, that we are in the unique position of being able to welcome, as we do, visitors to our churches throughout the country. In our diocese, 71 per cent of the churches I know stay open all the time. They are there to welcome visitors and, indeed, do so free of charge. I am told that more than 70 per cent of the population have visited churches during the past year. Obviously, many have done so for the primary reason of our existence, for worship, but not exclusively or only for that.

Visitors are welcome for all the different reasons why they come. Some come for the architecture, history, beauty and heritage that churches have; and an increasing number, which again will be no surprise, come to explore family history, which has become such an interest for so many. As the noble Lord, Lord Wigley, said, we can host concerts and other cultural activities in our churches and church buildings in Wales. There is also nature and wildlife in our churchyards, and the opportunity that the undisturbed ground provides. The charity, Caring for God’s Acre, which began in our area, stresses that and wants to encourage other churchyards to connect with the work that it does. Churches also provide a place for quiet or silent reflection, spirituality, sacred space, and so on.

In England there are 43 Anglican cathedrals, which between them attract nearly 10 million visitors a year. Again, that is a vast contribution. There are 16,000 Anglican churches in England and the welcome that they give. We do not have the particular statistics, but they are there to encourage visitors and connect with local communities. Again, in our own diocese we are privileged to have so many architectural gems, such as Kilpeck, Abbey Dore, Ludlow and, of course, our own cathedral, which has 200,000 visitors a year. It is more visited than anywhere else in Herefordshire, which in itself emphasises the importance of our churches and cathedrals within the realm of tourism. Perhaps the scope to develop and extend that work is neglected. A cathedral close project in Hereford is the biggest current tourism investment in the county; more than £5 million goes into that. Only last week the Department for Culture, Media and Sport, working with Durham diocese, put forward the twin monastery of Wearmouth-Jarrow as the latest UK nomination for World Heritage status. There are nearly 30 World Heritage sites in the UK, four of which involve church buildings. That is yet another way of stressing the importance and contribution that they make.

As I conclude, I wish to emphasise not only the churches’ potential for growth in this regard, as in so many other aspects of tourism in our nation. I imagine I was not alone in being concerned to hear from the noble Viscount how much we have fallen behind France and Germany in the development of tourism in the past few years. I shall therefore end with a question for Her Majesty's Government. How are we to see funding support for tourism in the future, particularly in the post-regional development agency era and without the contributions that it was able to make more locally? Partnership funding for a Herefordshire churches tourism project in my area, sadly, had to stop. That weakens the way in which we can work together so that an area such as this can grow. I would love those aspects to be reversed so that instead of getting weaker, we can not only get stronger but can work more fully in partnership and perhaps speed up the development and rate of growth of tourism in our own United Kingdom.

14:19

[Baroness Wheatcroft]

My Lords, I rise to make my maiden speech with some nervousness, particularly after hearing the eloquence of another newcomer, the noble Lord, Lord Wigley, but that nervousness would be much worse had it not been for the extraordinarily generous welcome I have received from all sides of this House. Having been introduced almost three weeks ago, many noble Lords have been at pains and pained to say that it is not always like this here. Nevertheless, the warm reception for this one of very many newcomers has been hugely appreciated. I am delighted and honoured to be among you. I will always be grateful to my noble friends Lord Moynihan and Lord Oakeshott of Seagrove Bay, two genuine friends of very long standing, who introduced me in keeping with the coalition spirit. I add my tribute to the tolerance, good humour and unstinting helpfulness of the staff here. As we debate the importance of the tourism industry, I reflect on how some corners of that industry might benefit from emulating the behaviour of those who look after us here. It would be wonderful work experience for anyone contemplating going into tourism.

I am grateful to my noble friend Lord Younger of Leckie for initiating this important debate. My experience of working in the hospitality industry is limited to student spells behind a bar. Most of my career has been in journalism. It started when I replied to an advertisement in a daily newspaper, which stated: “Backdoor to Fleet Street”. It was so far back that it was in Woolwich, but it fulfilled its promise and enabled me to build a long and highly enjoyable career in national newspapers, where I concentrated on business and finance. I spent nine years as business editor of the Times and left there to edit the Sunday Telegraph. I take this opportunity to apologise humbly to any of your Lordships to whom in that capacity I might have caused any offence. It was never personal. Most recently, I was editor in chief of the Wall Street Journal Europe, but before joining that paper I took the opportunity to see business from the inside and joined the boards of a property company and a bank, Barclays. As noble Lords will know, journalists vie only with MPs for rank in the public’s estimation. My husband hoped that my standing might improve when I ventured into business, but unfortunately becoming a bank director did not provide that uplift. He is delighted with my new role and, in a brief Oscar moment, I thank him and our family for their support.

Over the years, I have chronicled the successes and failures of businesses and economic policies. I do not underestimate the difficulties of getting either right. However, as the UK seeks to regenerate its economy, I have no doubt that tourism has a vital role to play. This country has unique attractions. They draw visitors from around the globe, as we have heard, but they could, and should, draw more. I declare an interest here as I am lucky enough to be a trustee of the British Museum and the Royal Albert Hall, two very special—indeed, unique—institutions that both play almost to capacity, and on their behalf I join my noble friend Lord Lee in pleading for more help in encouraging philanthropy in this country.

If our tourism industry is to thrive, we need to nurture it. Noble Lords might not be surprised to hear that I believe that this is predominantly a job for the private sector and not for government. I fear that tourism, like so much of British business, might suffer from the short-termism that afflicts private sector investment today.

Tourism in this country is served by many small, striving businesses. Although it already accounts, as we have heard, for 8 per cent of total employment in the country, it has the scope to generate many more much needed new jobs. The development of a Disneyland, an Alton Towers or a major hotel complex requires long-term investment, not just in the physical structure but in seeing it through the planning process, the brand building and the employee training that tourist attractions need if they are to thrive. That is miles away from the short-term horizons that dominate much of today’s investment industry.

Too much of the financial world has moved a long way from the concept of money being invested to build businesses and create jobs. The financial crisis had many causes, but at least some of the blame must lie with investors. Many of them had not the faintest idea of what was going on in the banks that they owned. They were there as traders who watched symbols on a screen, anxious to make a quick buck. They were not interested in the concept of long-term ownership in building a business. That attitude, I am afraid, characterises much of what now masquerades under the label of investment.

We need to rekindle the appetite among investors for backing real businesses, not merely trading in stocks. A first step would be to encourage those whose money is in pension funds and savings plans to take a real interest in the way in which their cash is employed. Building successful businesses with long-term futures in many sectors, including the tourism sector, is in their best interests.

Finally, I echo the plea of my noble friend Lord Younger of Leckie in asking that we consider resetting our clocks. Putting Britain’s clocks on the same time as most of Europe could, so we are told, bolster spending by another £3.5 billion a year. Holidaymakers tend not to be early risers. Delaying dusk by an hour will apparently coax the pounds from their pockets. I trust that this is a topic to which this House will return, because as we strive to rebuild our economy, the potential return from just turning back the clocks looks like a sound investment.

14:27

[Lord Gardiner of Kimble]

My Lords, it is a great privilege to congratulate, on behalf of the whole House, my noble friend Lady Wheatcroft on her excellent and delightful maiden speech, which she made with such humour and style. She has given us an insight into the qualities and experience that she brings to your Lordships' House. In testing times, her distinction and reputation in the front rank of journalism and her knowledge of the City and the financial sector will be invaluable. Her public service commitment as a trustee of the British Museum and the Royal Albert Hall could not be more appropriate for today’s debate. We look forward to hearing from her often.

I also thank my noble friend Lord Younger for initiating this important debate and I very much look forward to the maiden speeches of my noble friends and other noble Lords. We have already heard two exceptional speeches. It is also a great pleasure to see the noble Lord, Lord Stevenson of Balmacara, in his place on the Front Bench for the first time. As a Buckinghamshire man, I am delighted to see another.

Tourism is a big business in this country. The United Kingdom is the sixth most visited country in the world, with people coming to experience our culture and heritage and to visit locations that inspire democracy, industry and the arts. London is the number one most visited city in the world and is rightly famous for its museums, theatres and galleries. Indeed, in 2009 this Palace had nearly 1 million visitors. However, in 2006 only 20 per cent of visitors left London and the major cities. Therefore, many tourists are missing out on the British countryside, its county towns and villages, and the rural tourism industry is losing out on potential income.

Your Lordships would expect me, as a board member of the Countryside Alliance, to say that we should be encouraging more people to visit our most precious natural asset, which is our magnificent countryside, but Britain is ranked only 24th in the world in terms of natural beauty, behind countries such as Finland and Japan, and 12 places behind Ireland. As I reflect on that, are not all too many of our arterial routes strewn with litter, which is a disgrace to our country? I doubt that I am alone in expressing great embarrassment over just how filthy many of our roadsides currently are.

There are many beautiful parts of the world, but do they have the range—I emphasise that word—of landscapes that our comparatively small islands have to offer? The Lake District, Exmoor, the Chilterns, the Cotswolds, the Highlands, the Brecon Beacons, Snowdonia and the Giant’s Causeway—to name but a few—provide astonishingly beautiful landscapes. It is encouraging that VisitEngland has identified that, in 2008-09, rural attractions reported a strong increase in visits, which were up by 7 per cent on the previous year, and we must build on this. I welcome the proposals that the Prime Minister laid out in his speech in August last year with the aim of invigorating tourism in the UK. The royal wedding, Her Majesty’s diamond jubilee and the Olympics and Paralympics will put the international spotlight firmly on London. There are great opportunities to promote visiting beyond the boundaries of the M25.

The good news is that the UK domestic tourism market has increased over the past few years. Last year, visitors from within the UK made 126 million overnight trips and spent £22 billion in the process—much of that in rural areas. In total, rural tourism in England and Wales generates at least £16 billion a year, which makes up a substantial part of the overall total of £73 billion. Tourism makes a significant contribution to the rural economy, supports village shops and services, jobs and businesses and is crucial to ensuring the long-term sustainability of our countryside. The jobs that are supported by rural tourism—380,000 in England alone—encourage people to live, work and bring up their families in rural communities.

Turning from the general to the particular, I want to focus on one part of the country, West Somerset, where a quarter of all jobs are in tourism. This is due in part to the good relationship between the private and public sectors and to the fact that the national parks work well with local hostelries and activity enterprises. A further reason behind the area’s success is the draw of country sports enthusiasts from here and abroad to participate in hunting, shooting and fishing in the counties of Devon and Somerset. These pastimes are not only part of Exmoor’s heritage but, as the Countryside Alliance has pointed out, account for 90 per cent of winter tourism in the area. They maintain employment in otherwise challenging circumstances and provide vital income in the winter months. Indeed, many would not survive without this trade.

Rural tourism playing its fullest part in the international market is a huge economic opportunity. Currently, we have 3.5 per cent of the world market in the international tourism sector. It is estimated that each half a percentage point increase would add £2.7 billion of spending to the economy and more than 50,000 jobs. Therefore, we should work hard to promote the UK in emerging economies such as India, China and Latin America. My noble friend Lady Wheatcroft’s membership of the UK-India Round Table will, I have no doubt, be most helpful in that regard.

The noble Lord, Lord Lee, mentioned China. We must become a destination for more Chinese tourists. The UK has recently fallen from sixth to eleventh place in the World Economic Forum’s travel and tourism competitive ratings. We are rated 14th out of 50 countries for the quality of our welcome. According to VisitBritain, foreigners view us as honest, funny, kind and efficient, but,

“in some cases they wish we offered a more exuberant welcome”,

so we have some challenges ahead.

The Department for Culture, Media and Sport has put aside £50 million to market Britain across the world, and the tourism industry has responded well to the challenge to match this with the same amount of private investment. These are exciting opportunities for us to grasp firmly. In the current economic climate, tourism is an area in which Britain could succeed. I hope that my noble friend the Minister will explore further the many areas in which Her Majesty's Government can assist in this partnership for success.

14:35

[Lord Palmer of Childs Hill]

My Lords, I thank the noble Viscount, Lord Younger of Leckie, for initiating this debate. I also thank the many noble Lords and officers and staff of the House who have befriended me since my introduction and made my first weeks in this illustrious House far less unnerving than they might have been. I thank particularly my two sponsors, my noble friends Lord Dholakia and Lord Carlile, for all their help and encouragement.

Nevertheless, it is with some trepidation—your Lordships can hear this from all the maiden speakers today—that I stand to speak before you today for my maiden speech. Could it be that Oscar Wilde was wrong when he said that politicians address all subjects with an open mouth? Even more difficult is the requirement to be uncontroversial—particularly for me—but I will do my best to be both uncontroversial and to the point.

When I stood as a Liberal candidate in school elections way back in the dark ages—it was a long time ago—I had no idea that I would one day be addressing this august body. My family background is a cocktail of nationalities. My late mother was Polish, and in the context of today being national Holocaust Memorial Day, I remember her mother and sister, my grandmother and aunt, who stayed in Poland and were never heard of again at the end of the Second World War. Today, we remember all those, not only in that Holocaust but everywhere else, who were not so lucky as my mother and sadly perished in those dreadful times.

My father also came from far away—Newcastle. My Uncle Isaac was killed in service in the Middlesex Regiment in the First World War, while my father served in the British Army in the Second World War.

By profession, I am a chartered accountant and spent my professional life as a partner and senior partner in firms of London-based chartered accountants. As an adult with a young family—I thank my wife Susette and my children for their wonderful support—I wanted to play my part in making my London borough a good place to live and work. As a borough councillor for the best part of 25 years, both in government and in opposition, that has been my aim.

As a councillor, one of my concerns was that of promoting the London Borough of Barnet. However, my interest in urban tourism was generated by chance. I was invited by a senior politician to hear a speech that he would be making at the English Tourist Board. As I had at that time no practical interest in tourism, he had to persuade me that I would enjoy his speech and, incidentally, the copious food and drink that would follow. He was right. As I walked, somewhat erratically, down Lower Regent Street following the event, I started to think about what I described as urban tourism. I realised that my borough, Barnet, like many towns and cities, had much to offer visitors. Lots of famous personalities lived or worked there—for example, Amy Johnson—and there were many places of real interest, one being the exceptional Royal Air Force Museum at Colindale, which has fascinating displays including a hands-on section for children.

Then there is the green belt surrounding Barnet with its rural parks and open spaces. We have heard about rural England from other speakers. Consulting with Barnet's local studies historian and archivist, I ascertained that there were many notable people and places of pilgrimage in our borough. William Wilberforce—he of the abolition of slavery—prayed at St Paul's church, while his friend Sir Stamford Raffles has a tomb at St Mary's Hendon. For those interested in church monuments, there are monumental brasses to be rubbed, notably at Finchley and Hadley. I am very grateful to the right reverend Prelate for talking about the place that churches can play both in religion and in tourism. We are also in close proximity to the great estate of Kenwood, with its historic house and grounds.

I am sure that Barnet is not alone in having more to offer tourists than at first meets the eye. This situation probably applies to many towns and boroughs throughout Britain, which, if they look, will find sights and facilities to promote tourism. I was shocked when I was a council cabinet member I found find that managers of local hotels had little idea of the wealth of interest in the local area. However, once apprised of the possibilities, they were interested in taking them up.

In these difficult times, more conferences will be held outside central London, and our urban conurbations need to develop positive facilities for these and to promote places of interest for the non-attending partners of delegates.

What about the bikes for hire in London? Surely there is scope for rides through the Royal Parks, or guided bicycle tours of London's historic centre. More people are getting on their bikes, even without the prompt of the noble Lord, Lord Tebbit, and this should be encouraged as an environmentally sound way of exploring our country for citizens and visitors alike.

I have concentrated on London, but the same rationale can be applied to many places in Britain. For example, my children were at university in Manchester, which is another example of a large town with an industrial background where many visitors interested in industrial history, manufacturing and the growth of urban life will find sites of interest.

With the rise in the use of the internet and mobile phone apps, particularly among the young, promoting one's area on these media is essential for successful tourism. My plea is that tourism is not only for the headline-catching events, but these certainly have their place. We are starting a decade of major international sporting events hosted across Britain, with the Olympic Games. Our travel, hospitality and tourism industries have a wonderful opportunity to boost tourism, show the country's great attractions and increase and enhance Britain's popularity and reputation as a five-star tourist destination. We need to encourage everyone to enjoy seeing as much of our country as possible and to travel widely throughout our urban and rural landscapes, across the great diversity of interest and enjoyment that our country can provide.

Government can help. The noble Lord, Lord Gardiner of Kimble, referred to a speech on tourism last year by the Prime Minister, David Cameron. I shall quote from that, because there was not a lot of quote in what the noble Lord said. The Prime Minister said that,

“the current business rates system … fails to support the development of tourism. If a local council does more to attract tourists to its area they know they’ll be picking up costs but they’ll get none of the additional business rate revenue. Central government sucks in 100 per cent of this revenue generated by all local economic growth. This is just mad”.

We are known as a country with a temperate climate—and reference has been made to our weather in this debate. It is interesting, at least. Our countryside ranges from pleasant to magnificent, but we should not forget our towns and suburbs, both ancient and modern, with much to offer the tourist. We had a lot of statistics from the noble Viscount, but I shall quote just one. Cultural tourism is Britain's fifth largest industry, our third largest export earner and worth about £115 billion a year. This is good, but it could be made even better and more versatile, and I welcome this debate.

In conclusion, I thank you all for your kindness in this my first—some would say unusual—week in your Lordships' House, and I hope to contribute to the civilised debate, for which this House is famous, for many useful years to come.

14:45

[Lord Palmer]

My Lords, I still find it a little strange no longer to be the only Lord Palmer in this House. I have never before received so many Christmas cards, but it gives me enormous pleasure to congratulate the noble Lord on his thought-provoking maiden speech, which was delivered with distinction and fluency. He has long been a prominent member of his party and I am sure that we will all benefit from his interventions in the years to come. On behalf of the whole House, I congratulate him on a truly splendid performance.

I, too, congratulate the noble Viscount on introducing his first debate and for his comprehensive view of the United Kingdom’s tourism industry. I concur with everything that he said. I also congratulate him on attracting a record number of maiden speakers, pro rata, in this debate, which only goes to show how strongly Members of this House feel about this subject. Back in 1995, I had the privilege to lead a debate on the arts and heritage, which then attracted a record number of maiden speakers, who included an Earl, a Viscount and a noble Lord from these Benches. Sadly, such an occasion is no longer possible.

I must declare an interest, because I open my home and gardens to the visiting public. As such, I am very dependent on a vibrant tourism industry. Sadly, our income from tourism has recently fallen drastically—20 years ago, I used to be relatively content with 12,000 visitors a year; last year we were lucky to attract a little more than 5,000. It does not take a financial genius to work out what a sizeable drop of income that represents. This affects not only our income but that of the local economy in the sparsely populated area of the Scottish borders, which during the summer and indeed the winter months—with shooting, for example—is so dependent on tourism. The noble Lord, Lord Gardiner of Kimble, made that very point, particularly with regard to the West Country.

In my small capacity as a tourist attraction operator, I employ five full-time people and a further 15 part time. I believe that due to our repeat business which we are fortunate to experience, we have a product worth selling, but we are up against all the odds, not least of all the price of petrol, the increase in VAT and fierce competition from overseas. If one looks at the travel pages in the daily press, in theory—I emphasise, in theory—one can go to Malta, for example, for £299 per person, all inclusive. I repeat, all inclusive. That includes flights, board, lodging and all drinks for seven nights. A first-class open rail ticket from King’s Cross to Edinburgh now costs nearly £400. That is simply for one journey.

I know of one noble Lord who visited my home, among others in the Scottish borders, whose total bill for the week was well over £2,000. I confirmed this with him only last night. How can visitor attractions in this country possibly compete with what is on offer overseas?

I wish to concentrate on the grotesquely unfair tax—air passenger duty or APD. It is an utter myth that this is an environmental tax, given that private planes and cargo planes are exempt. The one group of people who really could afford APD are those with the luxury of owning a private plane or a part-share in one. Holland and Belgium have recently abandoned their equivalent, realising the damage that APD has done to their economies. Meanwhile, in the past six years, APD in this country has risen by a staggering 325 per cent. London is far more of an expensive destination than all our rival European cities, especially for those coming from China, India, Australasia and Russia. Ireland has just announced that its levy will be cut from €10 to just €3. When you compare that with a levy of £85 for someone travelling in economy class to Ireland from the United Kingdom, it makes a complete mockery.

Not unnaturally, more and more travellers living in the regions are increasingly choosing to fly long haul via Amsterdam, Paris or Frankfurt rather than Heathrow, in order to avoid this tax. Her Majesty's Government have announced that they are looking at APD and I sincerely believe that all these points must be taken on board and action must be taken as soon as possible.

One of my pet hates about tourism in the United Kingdom is the lengthy queues at immigration desks on entering this country, especially early in the morning when only a small number of desks appear open and a vast number of passengers are arriving after a long and exhausting overnight flight. That is so unwelcoming and surely it is a problem that could be so easily rectified. I urge the Minister to take this on board. The noble Viscount and others mentioned the forthcoming Royal wedding and next year's Olympic Games. The results of the review of the APD must be in place well before the first of those two important events.

This country has so much to offer and this is such a wonderful opportunity. It must be grasped now—I emphasise now—before, indeed, it is too late.

14:51

[Lord Stoneham of Droxford]

My Lords, it is an honour and a privilege to speak to the House for the first time. I would like to thank the House and especially its staff for the welcome and support that I have experienced during my introduction and induction. It has been very much appreciated. Coming in as a long-time supporter of reform of this House, the warmth of my welcome has made me recall the advice of my former mentor, friend and colleague Roy Jenkins—a most distinguished past Member of this House—who, echoing the words of Adlai Stevenson, always advised us to be cautious. He said, “Enjoy the House of Lords, but don't inhale”.

Like Roy Jenkins, I have been a long-standing European. I am a little sad that it was in my home village of Droxford in Hampshire, now associated with me in this House, that Churchill made his intemperate response to General de Gaulle that when it came to the point, he would always side with the USA against France. The fierce arguments two days before D-Day in June 1944 took place on a train on the sidings of Droxford station, now sadly closed. I like to think that the intemperate atmosphere that day was not helped by the tactless choice of Churchill to meet a French statesman in a railway carriage so soon after the French surrender at Compiègne. Anthony Eden and Ernest Bevin did their best to contradict the views of Churchill that day but Harold Macmillan sadly felt the consequences of this conversation 18 years later.

I have spent most of my business career in the newspaper industry, both in regional and national newspapers. For 10 years, I was based just over the downs from Droxford in Portsmouth. There I became firmly committed to the view that successful businessmen should contribute more to society than they take out—a sentiment that I fear has weakened in recent years but needs much more emphasis in a period of austerity.

When I went to work in Portsmouth 21 years ago, it had unemployment of over 10 per cent. The naval dockyard was in severe decline. The community simply had to diversify from its overdependence on the Navy. Fortunately, Portsmouth had a vision of what needed to be done, and developing tourism lay at the heart of it. The Renaissance of Portsmouth Harbour partnership was formed, which I chaired. It involved the private, public and voluntary sectors to regenerate and restructure the whole Portsmouth harbour frontage into the world asset that it deserves to be. Funds came from private developers and were combined with lottery funding and other funds to link existing and new attractions on the harbour-side. Two million people have visited the Spinnaker Tower since it was built five years ago, and the city region now benefits from over £400 million in spending by 7.2 million visitors a year. As important as the new jobs and revenues, tourism has helped shape a new perception of Portsmouth so that it can attract new business and investment.

I like to think that the Portsmouth partnership will be seen as a forerunner of the local enterprise partnerships. They will have a major role to play in developing tourism. Portsmouth has joined the new Solent Partnership with its great rival Southampton and the Isle of Wight. There remain great opportunities for other regeneration work in the old dockyard. There is a new museum for the “Mary Rose” and the Royal Navy to come. Tourism will continue to be a strong source of jobs and economic growth. Portsmouth will not stand still. I am also glad that the Navy, despite its cutbacks, has found funds to keep HMS “Victory”, the flagship of the Second Sea Lord, in her prime.

Tourism is one of our biggest business sectors in the UK and has great economic potential for the country. However, we cannot be complacent and just rely on our innate heritage, culture and countryside. In a very competitive global market, tourism needs renewal and investment. It will be an important outlet of jobs over the coming decade. It is a fact that the largest proportion of our young people get their first experience of work in the tourism and hospitality sectors. In terms of skill enhancement, the experience of work and confidence-building among young people, tourism has an important role to play. The Government can help with initiatives for employment training and work experience for those finding it difficult to enter the labour market.

It is essential that the Government set a stable and encouraging environment for tourism to develop. At a time when funds will be short, though, we should be looking again at a costless initiative to boost the tourism industry. I support the view expressed today by my noble friend Lady Wheatcroft, who I worked with at the Times, that the Government, in their forthcoming review of tourism, should put the extension of British Summer Time back on the political agenda. That would directly benefit tourism in this country. I thank the House for listening to my views today.

14:57

[The Earl of Caithness]

My Lords, it is a great pleasure to be able to congratulate my noble friend Lord Stoneham on an excellent maiden speech. He brings to this House a great deal of talent and a huge amount of experience. He told us some of the things that he has done in Portsmouth, and we all congratulate him on them, but he has done all sorts of other things too. He might well have enjoyed his time in the Labour Party but it could not have been a bundle of fun to be treasurer during the 1979 election for the campaign for Labour victory. He moved from there, however—he obviously did not inhale the Labour Party enough to satisfy himself—and, in a way, he became a maternity nurse because he oversaw the beginning of the Alliance. More recently, he was on the Alliance’s merger committee, so he has had a wealth of experience in politics. He has stood for Parliament four times, and the other place’s loss is our gain because it is a delight to welcome him here. I am also pleased that one of his interests is housing because the noble Baroness, Lady Valentine, and I have taken part in debates on that and welcome a new face in them. We look forward to hearing my noble friend a great deal more in future. I thank him for a very good speech.

I thank my noble friend Lord Younger of Leckie, a fellow Scot, whose father was my first Secretary of State when I was a Whip for Scotland many blue moons ago. There is no doubt that my noble friend’s late father would be immensely proud of what his son is doing in the House and of his introducing the debate today.

I declare my interest. I run a heritage visitor attraction in the north of Scotland, am a trustee and have involvement with other visitor attractions. I also take an active part in ancestral tourism. When I discussed this debate with a friend yesterday, he said, “Goodness, tourism is going so well that I would not spend any money on it”. At first blush, he might be right. As my noble friend Lord Younger said, the picture is good. Tourism is Britain’s fifth largest industry, its third largest export turnout and worth about £115 billion a year. Overseas visitors contribute some £3 billion to the Treasury every year. Tourism supports over 200,000 small and medium-sized enterprises and, according to the Nation Brands Index, in terms of culture the UK is fourth out of 50.

In Scotland—I will, not surprisingly, speak mostly about Scotland—tourism accounted for £11.1 billion of GDP, which is over 10 per cent, and over a quarter of a million jobs, again over 10 per cent of the total. A disproportionate number of those jobs are in the Highlands. Recently, the National Geographic Traveler included the Scottish Highlands as one of its 20 best trips of 2011. We welcome that greatly. I look forward to more visitors to the Highlands but it must be remembered that those visitors will also go through London and probably Edinburgh—or one of the two. Those cities will benefit and we in the Highlands tend not to get much back from them. Recent reports predict growth throughout the United Kingdom including the north of Scotland, so perhaps when I discussed that with my friend yesterday he was right.

Yet it is clear from the debate that not everything is rosy in the garden. We need to protect and enhance the jewel that we have in tourism. The Government need to recognise what it contributes to the country. I was interested by what my noble friend Lord Lee said on that, having been a Minister for Tourism. I know that it is not given the recognition that it deserves by government. We have no divine right to expect tourists to come here. We are losing our share of international tourism. In competitive terms, in 2009 the UK was down five places from where it was in 2008. It looks as if the goose that lays the golden eggs is being slowly strangled. There are warnings here for the national Government in Westminster and the regional Governments in Scotland, Wales and Northern Ireland.

On the national Government, the noble Lord, Lord Palmer, mentioned inbound immigration costs. He will be horrified to know that the UK Border Agency aims for a 45-minute wait for those coming from outside Europe but fails to achieve this 30 per cent of the time. The cost of coming to the UK is horrific. It is ranked 133 out of 133 nations on price competitiveness. The ease of access of coming to the UK between 2006 and 2012, so far as airline seat capacity is concerned, has increased by only 2.9 per cent whereas the capacity of France is up 6.3 per cent while Germany has risen to 5 per cent. Those are not good trends. The red lights are flashing.

While on the cost of travel, I pick up again what the noble Lord, Lord Palmer, said on airport duty. Would the Minister spare time after this debate to look at the cost of booking a flight to Wick in July? She will find that the airport duty—tax and fees—alone is more than the entire cost of a flight, including taxes and fees, to either Milan or Malta on the same date. That is stupid. It is cutting our own throats and stops people wanting to come here.

As the noble Lord, Lord Wigley, said in his excellent speech, tourism is a devolved matter. In Scotland we are lucky to have an agency such as VisitScotland that has such a good brand to sell. I said I was interested in ancestral tourism. In 2009 in Scotland we had the Homecoming, which was a major attraction throughout Scotland. The prime event was the Gathering in Edinburgh, which was organised by the private sector. My noble friend Lady Wheatcroft is absolutely right to say that the private sector should drive such things. Although it is disappointing that it lost money, it is worth reflecting on the figures. In the end, when all the costs were in, about 20 per cent of the budget came from public funding but the return on public funding as a result of the Gathering was 20:1. It produced something like £10.4 million for the Scottish economy and £8.8 million for Edinburgh. The projected rate of investment return was 8:1 but, as I said, it was 20:1. The Scottish Government are planning another Homecoming in 2014, when I hope there will be another Gathering. We have the blueprint and have learnt some lessons but there needs to be much better co-ordination and help across all sectors, including the Government and all agencies. However, it must be run by the private sector because it is the private sector that brings ancestral tourism back to this country.

That working relationship needs to be addressed in another area, too. It was quite right that the tourist boards were abolished; they were bureaucratic and not doing their job. The destination marketing organisations are a much better way forward. They need to be mean and lean and private sector-driven, but they do need the support of local government and its agencies. Local government and the agencies often think that they can do things better than the private sector, when they should be working in partnership.

I mention one thing that has not been mentioned so far: signage on roads. We have a five-star tourist attraction called Caithness Horizons in Thurso. It has been open for two and a half years but there is still no agreement between TranServ and Travel Scotland about signing it on the main trunk road to Thurso. It is ludicrous. How can visitors to the country begin to realise what we have and come to appreciate it?

I have mentioned what the Government should be doing and what the agencies should be doing but the private sector also needs to get its act together. We are not working in as united a way as possible. There are huge challenges ahead. We are subject to vast international competition. Visitors are even more demanding than they have been in the past. Unless we produce the right quality of visitor attraction and service in the hotel they will not come again. That is, without doubt, a very clear message. We have problems with the quality of staff. Getting the right quality of staff and retaining them when you have such a short tourist season as we have in the north of Scotland is a major problem. The private sector needs help on that.

One of the reasons that National Geographic Traveler mentioned in its support for the Highlands as a destination was the countryside and the,

“stunning quality of light on the moors”.

One of my major concerns is the plethora of windmills that have appeared on skylines, and which are edging the beautiful light that we have in the countryside into a flickering light that will put off every tourist who comes near the place.

I will close on one thing that I was not going to mention but has been mentioned—that is, daylight saving. I know that all your Lordships would expect me, coming from the far north of Scotland, to be against daylight saving. I have not come across anybody in Caithness who does not want the change. We realise that farming methods have changed considerably. It was quite right that 20 years ago daylight saving would have been a huge disbenefit to us. Now it would be a benefit and I hope it is one of the things that the Government will introduce.

15:09

[Lord Marks of Henley-on-Thames]

My Lords, as I rise to speak here for the first time, I am deeply conscious of the privilege and honour of joining your Lordships’ House. For me, as a lawyer, it is a particular privilege—and a daunting one—to be joining the substantial cohort of distinguished lawyers who sit on these Benches and across the whole House.

I start by thanking my two supporters. My noble friend Lord Goodhart is one of the most distinguished of those lawyers whom I mentioned and has been a friend and mentor to me throughout my 30 years of involvement in politics. Indeed, it was his wife Celia, herself a well known and widely loved Liberal Democrat, who first signed me up as a member of the SDP in those heady days following the Limehouse declaration in early 1981. My junior supporter, my noble friend Lady Falkner of Margravine, has also been a very good friend to me and a source of advice, information and good ideas over a number of years. I am very grateful to them both.

I am also hugely grateful for the generosity of my welcome here across the House, both from my own party and from Peers of all parties and none. Before arriving here, I used to think that I had a good sense of direction—so good, in fact, that in common, I am told, with many of my gender I never needed to seek directions when lost. Here, however, I have been completely humbled by the layout of this Palace and, had it not been for the enormous help of the Doorkeepers and all the other staff, I would never have found my way anywhere at all. I thank all the amazing staff of this House for their constant help and kindness over the two weeks—two rather full weeks, I might add—since I arrived here.

As a barrister, I have practised in recent years mostly in the largely unrelated fields of commercial and family law, but for much of my career I have had a far wider general practice. I hope to put my experience at the Bar to good use in your Lordships’ House. Politically, I chaired the Liberal Democrat Lawyers Association for six years and served, also for six years, on the party’s federal policy committee. However, I come to this House with no previous parliamentary experience and was never a Member of the other place. That was not for want of trying, as in the 1980s I stood twice as a candidate for the House of Commons, first in Weston-super-Mare and then in Falmouth and Camborne. I also stood as a candidate for the European Parliament for Cornwall and Plymouth.

It was in connection with Cornwall in particular that I became interested in both the opportunities and the challenges offered by tourism, which was then and is now even more so Cornwall’s principal industry. It is for that reason that I have chosen to speak in this debate. I am grateful to my noble friend Lord Younger of Leckie for bringing it to this House. For Cornwall, the challenge has been and remains to attract high-quality tourism that is not unduly dependent on the weather and that extends over a season beyond the traditional tourist summer months—and to do so in a sustainable way, where the demands of high tourist numbers do not damage the quality of the very environment that makes Cornwall unique.

Cornwall is of course blessed with a natural landscape of remarkable beauty, but it has also had great successes achieved by the imagination of a large number of people. They include, to name but a few, the development of the Eden Project, the Lost Gardens of Heligan and a great many wonderful smaller private gardens, and the Tate at St Ives and the revival of interest in the Newlyn school of painting. However, one step that would, in my view, further assist Cornwall in particular and the tourist industry generally in Britain—this has been mentioned in a swelling chorus in this debate by the noble Viscount, in his opening speech, and by my noble friends Lord Lee of Trafford, Lady Wheatcroft, Lord Stoneham and Lord Caithness—would be for the Government to give their backing to the Daylight Saving Bill. The one-hour move proposed would have profound economic and environmental benefits at virtually no financial cost.

I would also like to say a word or two about the Olympics and Paralympics in the context of tourism. My wife—I thank her and my family for their wonderful help and support—is Greek. We visit Athens regularly. In 2004, we attended a large number of events at the Athens Olympics. I think that there are lessons that we can learn. On the positive side, the organisers had recruited a veritable army of young people, who were there to give advice and help to visitors to the Games not only at the stadia but at metro, bus and tram stations across the city. For those young people, as well as for those whom they helped, this made a profound difference. There are no doubt many whose experience of the Games has built up their confidence and helped them in later life at a difficult time for Greece.

On the negative side, however, while the transport infrastructure built for the Games in Athens has survived and has given a substantial boost to the city’s economy, the wonderful sports venues now lie forlorn and derelict, covered in graffiti and strewn with rubbish, maintained, or rather undermaintained, at a public cost of tens of millions of euros annually. It is vital that, following the 2012 Olympics, we ensure that the promise of a long-term legacy that we made in our bid for the Games is kept, so I hope that when the Olympic Park Legacy Company meets again to consider the rival bids for the Olympic stadium early next month it will look to enhance the future of athletics in this country and to take advantage of the regeneration in east London that the Olympics will bring about. That will be good both for the future of sport and for the future of tourism in Britain.

Finally, on the importance of sport to tourism, I mention my own home town, Henley-on-Thames, where I was brought up and where I live now. It has, since 1839, and without any commercial sponsorship or outside subsidy, hosted the Henley Royal Regatta, probably the world’s greatest rowing event, which attracts teams and their supporters every year and in increasing numbers from all over the world, to the immeasurable benefit of the local economy of the town and of the wider area. It is a great example of what tourism already does for our economy locally and nationally, but there is a great deal more that we could do to foster and encourage the tourist industry to achieve its full potential. I hope that this debate plays some part in that endeavour and I am grateful for the part that I have been able to play in it.

15:18

[Lord Selsdon]

My Lords, after nearly 48 years in this House, I wonder why I feel rather nervous today. I think that it is something to do with the word “maiden” or the fact that there are six maiden speakers in a small debate. When you come to this place, often you have many friends who try to advise you. One of these was the ninth Baron Hawke, who came from a great cricketing family and was very kind to me. He was a Lord in Waiting and told me where to sit. To begin with, I did not know where to sit; I sat on the Barons’ Bench, which is the Back Bench over there, because that is what it said in the book. I did not know that when the Government changed you sat on the opposite side of the Chamber. I was only 25. I had no concept that the Liberals would so change sides. This idea of maidens made me think, because when you hear six really good maiden speeches you realise that adding to this House provides quality from time to time. Lord Hawke had six daughters and then, being descended from a great cricketing family, he had a seventh. When asked how he felt, he said, “At least I’ve got a maiden over”. Sandwiched between these maiden speakers, I feel rather like some sort of worn-out grilse with two fresh run salmon on either side.

I should declare an interest in that I have spent much of my life as a business tourist. I like to go to places that I want to go to. I have spoken before on the subject of tourism. I declare first and foremost that I worked for a while with the Midland Bank group. We owned Thomas Cook, the first tour operator. I hate “ism” words. I do not like tourism, fundamentalism or any form of “ism”. The tour was the original thing that Thomas Cook did. He set up a train that went from Leicester to Loughborough. Then another member of the family, Miss Jemima, set up the river boats on the Nile.

I will concentrate today on infrastructure. I went out to see why Thomas Cook was not doing very well on the Nile. I came back to my hotel one night and felt really ill. I realised that I had that classic disease known as gippy tummy, a cousin of Delhi belly. I wondered what the problem was and was told that it was the sewers. I went off and asked if we could rebuild the sewers. The noble Lord, Lord Marks of Henley-on-Thames, will understand this, because he is a specialist in the doubtful underground tunnelling machinery that I have used in my life. I came back and suggested that we should redo the sewers of Cairo. Before long, I was rather proud to tell my colleagues that I had won a contract to rebuild the sewers, because tourism was fading and it was disease that was killing it. Then in the Times—this was nothing to do with my noble friend Lady Wheatcroft, whom I had not met at the time—I saw the headline, “UK Cashes in on His Lordship’s Stomach”. I was caught. What happened was that if you get the infrastructure right, suddenly things change. I use Egypt as a simple example. Its tourism industry is booming because there is no disease.

One of our problems in the United Kingdom may well be the lack of necessary infrastructure. I declare another interest. For six years I chaired the Greater London and South East Council for Sport and Recreation, responsible for planning sport and recreation in Greater London, Surrey, Sussex and Kent, so help me God. We had a team of 152. The Government thought that the more people one brought together to do things, the better. We had quite a lot of money to spend. However, I realised that we had something like 85 active sports. Now, if you want the British to do something, the best thing that you can do is to get them to enjoy it. We did not worry about trying to stop ILEA closing down playing fields for children. We set out to create fun. We thought that it might be a good idea to create enjoyment on the Thames. To us, it seemed a place that you could attract people to. It was slightly polluted. Noble Lords may remember Tufton Beamish, the great Member of the other place, who offered a 100 guinea prize for the first person to catch a salmon in the Thames. All of us tried. We bought salmon in shops and tied them to a bit of string to see if we could win the prize. Now, suddenly, the Thames is beginning to clean up. Docklands was a dead place. Those of us who went down to help to regenerate Docklands would go past Limehouse Cut every day. We knew that little planning shop in Limehouse, where suddenly politics was going to change.

I turn now to the infrastructure of tourism and the points that have been made so far. In order to attract people to the United Kingdom, we have to make it easy and economic to get here. However, we must not look solely at tourism, because we are looking to attract people to invest and build businesses here. I remember working with Peter Walker and the Welsh Development Agency. We created a wonderful network of new technology that went all the way down to Hereford, the Wye valley and beyond. It was the same with Silicon Glen in Glasgow and Scotland.

Attracting people here is important. It is an attractive place to be. When we were trying to get the Japanese firm Nissan to come here, the most important thing was whether they could be members of a golf club. We even put in a proposal for the creation of a new golf club. If one wants to attract tourists, one should think about the facilities and the infrastructure.

It is pretty pathetic that we had to shut our airports, that we could not keep them open this winter and that we were putting people off coming here. It is also disturbing that, as has been pointed out, the costs of coming to the United Kingdom from parts far away are so high. We have forgotten that there is in this world a kind of heritage. Every Commonwealth country has a heritage relationship with us. We know that when the Australians come they flood into Earls Court, kangaroo country. Others will go to different parts of England. It is those relationships that we need to build on, to make this place an attractive place to come to, a place where people want to work. We can look at the tourism—if we could use that word without the “ism”, I would prefer it—of teaching people the language; we could look at schools, games and sports. There is the boom that may take place as we look towards not only the Olympics but Her Majesty’s Jubilee year. Few of us will forget the time of the last Jubilee, when the whole of the Mall was crowded with the most amazingly mixed-culture group of people that you have ever seen, or the spirit of good will that was in the air.

I have envied the noble Lord, Lord Marks, for a long time. I had to take professional risks in the construction industry when we did not have the benefit of his advice. As he knows, he is in one of the oldest buildings in the world, which may well not conform to some of the high standards that he has been used to in his professional career. I regret that we have lost the Law Lords. We had 107 people to whom we could turn for free advice, but the addition of the noble Lord, Lord Marks, leads me to believe that, as money may not change hands in your Lordships’ House, he will be freely available to be consulted by your Lordships on everything that we can think of. I am grateful to him for what he said today. I am really impressed by my noble friend, whose father I knew well, for having assembled such a remarkable team.

15:26

[Lord Risby]

My Lords, I add my appreciation, as have so many who have made their maiden speeches this afternoon, for the real kindness and friendliness which has been shown to me. It is deeply appreciated and sincerely expressed. I also express my appreciation for the helpfulness and encouragement of the staff of the House of Lords. I congratulate my noble friend Lord Younger on introducing this debate in such a comprehensive way and putting it into such a good context.

I also take this opportunity to express my appreciation of my two supporters: first, my noble and learned friend Lord Mayhew of Twysden, whose work in Northern Ireland was hugely successful and greatly beneficial, as I saw for myself, and characterised by his immense modesty; and, secondly, my noble friend Lord Astor of Hever, whose good sense, wisdom and judgment I heard on many occasions in many meetings over the years.

In 1997, I became a shadow Minister for culture, media and sport, and enjoyed the tourism brief. I am pleased to say that today there is a dedicated tourism Minister. In those days of a somewhat passionate honeymoon for the incoming Government, it was not particularly easy to be an opposition spokesman, but it gave me a wonderful opportunity to travel to many parts of the country to meet people engaged in the tourism industry. I visited Cornwall and the Isles of Scilly, where I had the opportunity to stay with the local Member of Parliament—a Liberal Democrat. At the time, one or two eyebrows were raised by local Conservatives at that act of minor political ecumenism, but I like to think that it was an act of prescience, even if it took 12 years to come to proper fruition.

Of course, we cannot account for our weather. It is eccentric and not predictable. People will travel abroad in their droves to go to sunnier climes where the weather is more predictable. However, the point about our tourist offer is that we have an astonishing variety of places to visit and activities in which to share.

There is something of the Heineken effect with the tourism industry, in that it spreads to all parts of the United Kingdom, but I want to talk about London for a moment. We have an incomparable cultural life in this city with our opera, ballet, music and galleries and, perhaps above all, our theatre, which really is the jewel in the crown. Year after year and decade after decade, we have playwrights, producers, directors, actors and actresses of the highest possible quality, and they thrill us with their performances. Of course, we are blessed to have the English language, which draws many people to this city. As one goes down the Thames, it is wonderful to see the juxtaposition of an ancient building such as the Tower of London set against the Gherkin. We are comfortable with all the architectural styles that mark our long and extraordinary history. Within 100 yards of where I live in central London, there are blue plaques in memory of Laura Ashley, Jomo Kenyatta and Aubrey Beardsley. They are an unlikely trio but that is London and that is its massive tourist appeal.

There has been a lot of discussion about the branding of tourism. I think that the Prime Minister got it right when he talked about there being a spectrum from Glyndebourne to Glastonbury. I know something about rock concerts and music festivals because my daughter would disappear for days on end and be totally incommunicado at such events. However, they are certainly a great draw for young people, particularly from China and south-east Asia. We also outclass other places in our exhibitions of fashion and design. Modernity and creativity are very much part of our national offering.

We ourselves are in an iconic building. Big Ben is something of a national symbol, and opposite is the London Eye—again, a perfect example of the juxtapositions that I am talking about. Of course, we are served very well in this country because there is nothing in the world comparable with the National Trust, English Heritage and the Historic Houses Association. What is so marvellous is that the people of this country really cherish the built architectural heritage and want to share it with others.

We have heard about some of the events that lie before us in tourist terms: the royal wedding, the Diamond Jubilee, the Olympics and the Commonwealth Games. Following their hosting of the Olympics, Barcelona and Sydney experienced an enormous increase in visitor numbers. I very much welcome the £100 million overseas marketing fund, which aims to deliver an additional 1 million visitors and £2 billion in extra revenues. Tourism contributes 8.7 per cent of our GDP, and that will undoubtedly be boosted by those events.

I live in a part of England which does not have hosts of golden daffodils by lakes—we do not have very much water in Suffolk. We have not mountains or soaring cliffs but a gentle landscape. However, we do have the music by people such as Benjamin Britten and the paintings of Constable which were inspired by that landscape. For 18 years, I represented a part of Suffolk in another place. I lived just outside a village called Risby, which was the epicentre of the area, and I saw the importance of the local attractions, whether it was the racecourse at Newmarket, Thetford Forest or the abbey at Bury St Edmunds. As our regional structures of governance are being changed, it is very important that the focus on the local market, and making people aware of that local market, is maintained. Today, we have country houses offering health hydros and wonderful restaurants. The standard of our food has increased enormously and, of course, the multi-ethnic nature of our population means that we have a huge variety on offer.

There has been a lively debate about the structures of tourism in this country, with VisitBritain promoting our country abroad. Of course, the economics are good and bad: we have a substantial trade imbalance for the reasons that I have talked about. Nevertheless it is the fifth largest industry in this country and employs 1.5 million people. What is really significant is that it cannot be out-sourced or offshored. It is ours. What we are seeing is a better level of co-operation between government, tourist boards and the private sector. The real importance of tourism is understood for all its difficulties and challenges.

I conclude by saying that what we offer is unique. It is vital that more people know about it. It is in our national economic interest that that should be the case. It is true that perhaps journalists, real estate agents and politicians may rank low in the esteem of the public. It was perhaps ever thus, but it may be worse than ever now. For myself, I consider it to be a great honour to be here and to be able to continue to play some small part in the public life of our wonderful country.

15:35

[Baroness Valentine]

I congratulate the noble Viscount, Lord Younger, on securing this important debate. I also congratulate all those who have given their maiden speeches today, which have variously been insightful and humorous. In passing, I point out that London’s innovative bike scheme, to which the noble Lord, Lord Palmer of Childs Hill, referred, has been provided by a fellow maiden speaker, the noble Baroness, Lady Wheatcroft, through her position on the board of Barclays.

I also extend a personal welcome to the noble Lord, Lord Stoneham, whom I have known and respected for many years. In particular, I extend a welcome to the noble Lord, Lord Risby, whose maiden contribution has demonstrated his grasp of the importance of tourism and culture to the UK. I note that he was born in South Africa, which, taken with his chairmanship of the British Ukrainian Society and involvement in the British Syrian Society, will provide a valuable international perspective to your Lordships’ debates. His long experience in the other place will add further insight to your Lordships’ scrutiny of legislation.

I declare that I am chief executive of London First, which is a not-for-profit business membership organisation that includes QEII, ExCeL, Tottenham Hotspur, AEG and Westfield among its many tourism-relevant members. Think London—London’s inward investment agency—is also a separately managed subsidiary of London First. I have much to declare, but also, I hope, some insight to share.

I join the choir of honourable members singing the praises of our cherished heritage and outstanding arts and culture sectors. Annual tourism revenue is more than £100 billion, with some 2.5 million jobs in hospitality alone. The sector contributes more than £34 billion in gross tax revenue. On this scale, tourism can make a significant contribution to desperately sought economic growth. What is more, with our currently competitive exchange rate and with a bit of investment, it can make that contribution now.

The UK offers a tremendous package—Bath’s Georgian delights, Shakespeare’s Stratford, Edinburgh’s Royal Mile, and the Brecon Beacons’ natural splendour— but London is the gateway to the UK. Three-quarters of overseas visitors arrive via the capital and around half of all visitors stay overnight in London. Hotels and restaurants are the sixth largest employer in the capital. Business leaders seek a cultural weekend before a Monday meeting and leisure travellers explore the West End.

As for the promotion of London, the deckchairs are moving. The mayor is bringing together Visit London, Think London and potentially Study London into a new, merged promotional agency. I look forward to that agency building on the Think London staff team’s business ethos, which has ensured that London has remained the top destination for inward investment in Europe for many years. However, I regret that the funding for this agency was temporarily mislaid before Christmas. That seems extraordinary at a time when we are building up to the Olympics and suggests that somebody somewhere is not taking the role of promotion and tourism seriously, despite its—and London’s—manifest contribution to economic growth and, indeed, the sector’s tax contribution.

The new agency has an opportunity to address one of London's shortcomings. Business tourism already makes a contribution of over £24 billion each year to Britain's economy and accounts for about one in five overseas visitors, but it is unacceptable that London languishes at 16th place in the International Congress and Convention Association rankings. We need to co-ordinate, celebrate and sell London as a world business destination. Decades of debate about the merits of an international convention centre have been overtaken by events—if noble Lords will excuse the pun—as ExCeL now has 100,000 square metres of event space and is a world-class venue. However, the future of the Queen Elizabeth II Conference Centre remains in question. With its unique Westminster location and some imaginative thinking from government, the QEII conference centre could also play its part in London's broad visitor offer.

The Olympics are an obvious opportunity to champion London and the UK to the world. Summer 2012 represents merely the tip of the iceberg. I would not dare opine on the merits of football versus athletics as a future use for the stadium. My plea to the Olympic Park Legacy Company is to dare to dream of a new visitor destination in east London—including the Olympic park itself and the area south to the O2, east to ExCeL and London City Airport and west to Canary Wharf—to create something fabulous for visitors, businesses and residents alike. The Mittal Orbit tower will be iconic, Westfield Stratford will be Europe's largest urban shopping centre and there will even be a river crossing—which the Mayor quips will be a tribute to the Business Secretary—by cable car. Most vital is the stadium's role in securing the overall vision of a dynamic east London. Alongside the iconic, we need the prosaic—business investment and jobs for local people.

Finally, may I nudge the Minister on two issues? First, as other noble Lords have suggested, will she consider making tourist visas less restrictive, time-consuming and expensive? Of the 2 million increasingly spendthrift Chinese visitors to Europe each year, only 5 per cent visit London. Taiwanese visitor numbers soared by 40 per cent when similar restrictions were relaxed. The second, which has also been mentioned, is the queues at Heathrow, on which we must do more. I hope that UK Border Agency staff at Heathrow terminal 4 have learned to sing, dance or at least smile; how else can they welcome and entertain arrivals when one in five non-EU passengers waited for longer than the 45 minute immigration queuing target in the first two weeks of September 2010?

I conclude by wishing all power to the Tourism Minister's elbow. She has a superministry wrapped up in a microministry—a big unpolished diamond that just needs a bit of burnishing to demonstrate its true value. For growth, balance of trade and jobs, tourism is the gift that keeps on giving.

15:41

[Lord Stevenson of Balmacara]

My Lords, I add my thanks to the noble Viscount, Lord Younger of Leckie, for securing this debate and for introducing it in such an interesting and informative way. He was able to draw out key points about the importance of tourism to our economy and illustrated them with some detailed factual information. A lot of the points that many other noble Lords picked up in their speeches make it clear that this is a vital part of our economy. He also pointed out the risks if we do not improve our offer. I cannot really agree with him about the clocks, although I know that that is not a very popular view, given that so many people have suggested that we should revisit this issue, because I come from Scotland, I lived through the earlier experiments and I did not like them. I encourage everyone to join the new campaign to bring back high tea, which is clearly the answer to a lot of our problems. The noble Viscount and I are on opposite sides of the debate today although, in truth, we are not really very far apart in what we say. We share other interests in Scotland and in Buckinghamshire and agree about the need to preserve the Chilterns, which I regard as a beautiful area of the country that currently has much to offer foreign and domestic tourists.

It speaks volumes for the topic selected by the noble Viscount for our short debate today that it has attracted a very high number of speakers, including an amazing six maiden speeches, and has prompted the addition of half an hour to the debate, something that I have not seen since I joined the House. I join other noble Lords in congratulating those who have made excellent maiden speeches today. Having only recently given my own maiden speech, I know all too well the heady mixture of exhilaration and sheer terror that accompanies that event. However, as the noble Lord, Lord Wigley, said, it is a necessary part of the process. Indeed, once their maiden speech has been completed, noble Lords have access to all the important activities in the House in which they will play their part.

I enjoyed the use that the noble Baroness, Lady Wheatcroft, made of her journalistic background to inform the debate. Her experience of working in a pub will obviously play on some of the points made about employment and other things. The noble Lord, Lord Palmer of Childs Hill, opened our eyes to urban tourism, of which I had not heard. It is certainly interesting and, as he said, once one begins to dig into areas that might on the surface seem a little unlikely, they reveal riches of which we should all take advantage.

The noble Lord, Lord Stoneham, warned us not to inhale, but he also gave us important information about the new LEPs and their contribution to tourism. The noble Lord, Lord Marks of Henley-on-Thames, drew on his experience in Henley and Cornwall to bring out points about tourism. He made a valuable point about the dangers that will accompany the expenditure and support of the Olympic Games if the site is not maintained and carried forward. Those words were wisely made. The noble Lord, Lord Risby, told us—I think it was tongue in cheek, but we may never know—that as a result of a visit to the Isles of Scilly he might claim credit for starting the coalition, so we know who to blame.

In no sense do I want to diminish the debate for other noble Lords, but there were so many detailed points that I hope that the House will forgive me if I do not go through them one by one, but I will refer to them as I make the remainder of my remarks. The test of whether any debate in the Lords is a success is that, having read it, you feel that you have been informed and are up to date on every point that should bear on the issue in question. Today, we have amply exemplified that.

This has been a high-level debate with practitioners and two former Ministers, many of whom have direct experience of operating visitor attractions. It was good natured, good humoured, informative and competitive. I now have a long list of places that I really have to visit all around the United Kingdom, which have been compellingly argued for by noble Lords who have spoken. The debate was also celebratory of the best of Britain, which is what it should be.

Many noble Lords set out the key facts affecting the current economic contribution of tourism to the UK economy. I will not repeat them, but they are impressive. I should like to make two points about the way in which they have been brought out. First, on direct tourism, it is very interesting to reflect that the proportion of jobs in tourism varies across the United Kingdom. We find a far higher proportion of tourism-related jobs in Scotland, Wales, Northern Ireland and the periphery of England than we do in the centre.

Looking at the wider contribution that tourism makes to our economy, which many people have said is probably 8.9 per cent or 9 per cent of GDP, it is interesting that most of that seems to happen primarily, and has most effect, in rural areas. It employs a large number of part-time staff. Sometimes it is very difficult to find part-time work, which is often female dominated. It is often difficult for females to find jobs outside the city centres. It is also important that we should recognise that it encourages entrepreneurship through some 200,000 SMEs, although most of them have a very small turnover.

It is clearly an important industry with interesting characteristics. It has been described as invisible, which I hope will change now that the department has a Tourism Minister who clearly has the support of the Prime Minister and the Secretary of State. However, as several noble Lords have said, our tourism on offer suffers from the perception that it is not very well co-ordinated, is possibly not good value for money, has a variable quality—and it does not offer enough high teas, and is not responsive to our clients.

Because international tourism is a very competitive business these days, we are not doing so well in overseas markets, particularly in Asia. European competitors seem to do much better, and we must get to the bottom of why that is. However, as I have said before and as many noble Lords have said, we have a great deal to offer. We should not be shy in that and should not pretend that we have any difficulty in what we offer to people when they come.

However, there are barriers and problems. The industry is fragmented and there might be some significant market failures in information flows, marketing spend and co-ordination. There is a honey-pot effect in that 20 per cent of attractions appear to receive about 80 per cent of visits. I think that that might have been one of the points made by the noble Lord, Lord Palmer, whose wonderful house I have visited and who said that he had seen a decline in numbers over time. However, other visitor attractions seem to be doing well. Tourism is an industry with low wages, particularly because of part-time jobs. It certainly has poor training, partly because of short-termism, partly because there are no major players and partly because of poor industrial co-ordination.

As has been mentioned, there have been substantial grant support cuts amounting to 15 per cent over four years in the arts and heritage sectors, which of course drive tourism. There are sharp cuts in funding for VisitBritain and VisitEngland; I think the figure is 34 per cent by 2014-15. As the noble Lord, Lord Lee of Trafford, and the right reverend Prelate the Bishop of Hereford, said, the RDAs are being abolished, although there will be a regional growth fund worth £1.4 billion, which does have space for tourism and which the new local enterprise partnerships have to bid for.

In answer to a Question last year in this House, we were told that the Government estimated that the total spend on marketing in the tourism sector, both public and private, was around £240 million, although I expect it will be a lot less this year. Of course, this is an industry that has what is called the free rider effect. You cannot really expect so many local small businesses to do what is best funded and led by national or regional bodies.

There are opportunities. We have heard about the royal wedding, the Olympics and the Commonwealth Games as part of the decade of sport, and they must offer a ray of hope. As a British tourism study says, all these events provide a global opportunity to invite the world to visit Britain, and the Olympic Games alone have a potential tourism benefit of around £2.1 billion between now and 2017. Clearly, all of us want to ensure that that is realised.

Currently, the Government say that they are formulating their tourism policy. When she responds, perhaps the Minister will give us at least a trailer about what is in store. Let me end by posing her some questions about that in the hope that they might draw her out. Can she share with us when we are likely to see the tourism strategy? I read in the Prime Minister’s speech in August last year that it would be presented in October, but we have not seen it yet. Can she let us know what progress is being made in generating the fund for marketing and PR, a joint fund between the Government and the industry? Can she tell us whether any of the local enterprise partnerships have made significant bids for tourism projects to the regional growth fund? I gather that the closing date was 21 January, so perhaps we will be told about that. Has her department looked at VAT in the tourism sector and whether it will have an impact on the targets that have been set for the industry? Can she let us know a bit about the pressing need for fast internet access, which was referred to in a number of speeches? It is obviously necessary in rural areas if businesses are to get on to the internet and market their wares, but how will they do that without the infrastructure? Lastly, can she confirm that the necessary funding and organisational structures will be in place to ensure that the expected £2.1 billion of tourism benefits actually arise from the Olympic, Paralympic and Commonwealth Games?

To finish, VisitBritain said in its April report that:

“With right support tourism can be a growth industry for Britain”.

It sounds like a good idea, and if they are talking about £188 billion by 2020 and 250,000 new jobs, surely we want a share of that. It occurs to me that if there has to be a plan B for the economy, maybe the Minister and her department should make the case to the Chancellor that a slice of the £3 billion in tax receipts should be returned to her department as an investment fund that could then be deployed to support the tourism sector, something I am sure we would all support.

15:51

[Baroness Garden of Frognal]

My Lords, I begin by thanking my noble friend Lord Younger for bringing this issue before the House. He spoke eloquently and gave a comprehensive overview of the value of tourism to the UK economy, its many possibilities and the challenges. I also take the opportunity to welcome the noble Lord, Lord Stevenson, to his new role. I am grateful to all noble Lords who have spoken, and in particular add my congratulations to the six new Members who have made outstanding maiden speeches which have added to the quality of this debate and ensured that we will look forward to their future contributions in your Lordships’ House.

We have heard today about the real contribution that tourism makes to our national and local economies. It can be an underestimated industry, but not for this Government; for us it is a priority. We heard the concerns from my noble friends Lord Lee, Lord Caithness and Lord Risby that it may not be given due regard, but the appointment of a designated tourism Minister is one of the aspects which shows our seriousness. Further, in his third month in office, the Prime Minister gave a keynote speech on tourism and spoke again in its support at the launch of the Government’s major new marketing campaign for tourism, to which the noble Lord, Lord Stevenson, referred.

Tourism is our third highest export earner. It generates around £90 billion of direct business for the economy and more than £115 billion in indirect business, as well as being one of our largest employers. Of the 200,000 plus businesses, many are small and medium-sized, providing more than 1.5 million jobs and 5 per cent of all employment. Tourism is therefore vital. It is fundamental to the rebuilding and rebalancing of our economy, to generating employment and to inspiring enterprise. It provides opportunities to drive growth and regeneration in all parts of the country, in our rural areas as well as in our major cities.

However, tourism has the capacity to achieve more and grow more, and the Government will help it to do so. It has been projected that tourism could generate 150,000 new jobs and an extra £34.5 billion for the economy by 2020 alone. We need to make sure that that potential becomes reality.

Let us just think of what this country has to offer—we have heard so many aspects today. We have breathtaking scenery—we heard from the noble Lord, Lord Gardiner, about the importance of rural tourism and from the noble Lord, Lord Marks, about Cornwall and Henley. The noble Baroness, Lady Valentine, spoke about the glories of the urban scene, which I shall mention again shortly. We offer a range of hospitality, from bed-and-breakfast to internationally renowned hotels. We have great regional, national and international food and drink, and incomparable history and heritage—we heard from the right reverend Prelate the Bishop of Hereford about the magnificent churches and cathedrals in our country, with which go the wonderful musical and other traditions associated with the church. We can boast culture, sport and forthcoming major events, including, as has been indicated, the royal wedding, Her Majesty’s Diamond Jubilee, the London Olympic Games and the Cultural Olympiad. The noble Lord, Lord Risby, mentioned the glories of our theatres and our buildings, and the treasures of the National Trust.

However, we need a new approach to maximise the industry’s potential, to move Britain up the rankings as an international destination and to provide a real boost for domestic tourism. The Government aim to help the industry in three ways: by creating a sustained legacy from the 2012 Olympics and other major events that the UK is due to host over the next few years—we heard from the noble Baroness, Lady Valentine, and others of the importance of that Olympic legacy; by supporting and promoting domestic tourism and therefore boosting domestic visitor expenditure; and by helping to raise the sector’s productivity and performance so that UK tourism can compete more effectively in an increasingly crowded international market. I shall say a little more about that later.

Over the next four years, the Government will invest nearly £130 million in VisitBritain and VisitEngland. The very necessary public sector savings that we are making must apply to tourism funding as well as to other areas, but we aim to protect our priority programmes and focus the cuts on administration. We recognise that it is vital that government and industry work more closely together to develop a robust and rational investment model for tourism. As has already been mentioned, we have challenged British business to come together with government to create the best-ever overseas tourism marketing campaign for Britain. I am pleased to say that a number of major companies have already pledged their support to help match the £50 million of public money that the Government have committed specifically for this campaign through VisitBritain. I say in response to the noble Lord, Lord Stevenson, that we are well advanced towards meeting the £100 million target for the marketing fund. It was encouraging to hear from the noble Baroness, Lady Wheatcroft, the noble Lord, Lord Stoneham, and others of the importance of the private sector to those money-raising campaigns. Arts & Business announced today that, in 2009-10, the culture sector received private sector donations of £658 million, of which £359 million was individual giving. That gives an indication of the support that is coming from private investors, whether as individuals or business.

Through this campaign, we are aiming to deliver 1 million additional overseas visitors to the UK in each of the next four years and £2 billion in extra visitor spend. We can and will create a real legacy for tourism—more visitors, more income, more jobs. We want to attract a larger number of international visitors and we need to do more to encourage UK residents to spend more of their leisure time in this country. I was interested to hear my noble friend Lord Palmer of Childs Hill talk of urban tourism. If he will forgive me, I recall a wonderful sketch many years ago by Peter Sellers entitled “Balham, Gateway to the South”. Although it was a spoof, there were grains of truth in its drawing attention to lesser-known attractions in our urban and suburban districts. My noble friend has made a much better fist of promoting Barnet as gateway to the north. As he said, it has a very wide range of history, buildings, culture, sports and parks, as have all the areas of London and further in the regions, to attract local residents as well as people from further afield.

The Government are also addressing the volume and complexity of regulation and the need to encourage tourist businesses through fiscal incentives by tackling that regulation and looking to simplify visa procedures. A number of contributions from your Lordships addressed that theme. We are currently looking at the customer experience at and through airports, and how that might be improved. It is evident from the contributions today that there is certainly room for improvement as part of an evolving strategy.

We have also been looking at visa procedures to try to simplify them and to see how far there is a deterrent effect in the complexity and the cost of having to apply in English, whereas other countries will often accept applications in other languages. Of course, we have to balance that with the elements of the security that our visa system gives us. The benefits, initiatives and marketing campaigns will be felt across all parts of the country, not just in London and other major cities but applied to our rural areas as well.

I turn to particular issues that arose. Noble Lords mentioned that we were not doing very well with India and China. We have recent news that applications for visitor visas from Chinese tourists rose by 40 per cent in the first six months of 2010, compared to last year, and more than 100,000 visa applications were received between January and July 2010—more than 50 per cent more than in the same period last year and way above what was expected. The noble Lords, Lord Wigley, Lord Lee and Lord Gardiner, and the noble Baroness, Lady Valentine, all referred to the importance of extending our visitor attractions to the emerging economies and the great nations such as China and India to ensure that the visitors see the UK as a prime tourist location.

The question of daylight saving cropped up. The noble Viscount, Lord Younger, introduced it but then the noble Baroness, Lady Wheatcroft, the noble Lord, Lord Stoneham, the noble Earl, Lord Caithness, and the noble Lord, Lord Marks, have all mentioned the issue. Last week there was a half-hour television programme on this. Having been in this House morning, noon and night, I have not had the opportunity to see television for a while, but I have been told that it is still going on out there and that there was a programme on daylight saving that raised the profile of this issue.

The Prime Minister has made it clear that it would be inappropriate to consider making changes in daylight saving unless there was consensus among the four nations of the United Kingdom. We are all agreed that the issue deserves more discussion. My right honourable friend the Minister for Employment Relations made the offer during the Private Member’s Bill currently going through the other place to publish a review of the evidence and to start a dialogue with the devolved Administrations, because there appears to be a growing body of opinion about daylight saving.

The noble Lord, Lord Christopher, mentioned the specific issue about the Scilly Isles. I looked into that and I understand that the Department for Transport is in receipt of a funding bid from Cornwall Council and will make a decision very soon. We appreciate how fundamentally important tourism is to the economy of the Scilly Isles and the importance of maintaining a ferry link, but I understand that there are also strong feelings about the terminal building and the harbour works, which also need to be resolved or taken into account by Ministers. But it is an ongoing consideration.

The noble Lord, Lord Palmer, and my noble friend Lord Caithness, mentioned the air passenger duty per plane. Of course, tax is a matter for the Chancellor and announcements are generally made on these issues at Budget times. The Government are exploring changes to the aviation tax system, which will be subject to consultation, but I certainly hear what noble Lords say about the costs of travel in this country. They gave some startling comparisons between costs—and the fact that you can take a package holiday abroad for the cost of a train fare within the UK.

My noble friends Lord Stoneham and Lord Marks commented on the opportunities for work experience of one sort or another provided by the Olympics. My noble friend Lord Stoneham mentioned particularly that the tourism and hospitality sectors were very often a source of first employment for young people. Those are areas that we will be taking forward in conjunction with the Department for Education and the Department for Business Innovation and Skills, to ensure that there is a package of opportunities for work experience which will be afforded by the upcoming major events in this country.

My noble friend Lord Caithness mentioned the lack of signs on motorways and elsewhere to venues and places of interest around the country. I understand that the Department for Transport is currently undertaking a review of road traffic signs, so there may be light at the end of that tunnel. We hope so.

My noble friend Lord Selsdon mentioned the importance of fun in all these areas. It would be a mistake in any debate on tourism not to say how much sheer enjoyment is generated by this sector of industry.

The lack of internet connections and lack of technology in tourism cropped up in one or two speeches. Noble Lords may be interested to hear about one aspect of that; last year VisitBritain entered into a memorandum of understanding with Samsung, and there are other ongoing dialogues with the internet industry to try to ensure that we are fully covered for visitors who expect internet provision.

I am aware that I probably have not answered all the questions asked. This has been an extraordinarily rich and varied debate, with contributions from all around the House. I agree with the noble Lord, Lord Stevenson, that we have so many opportunities to visit interesting and exciting places in this wonderful country of ours. I very much welcome all the contributions that have been made.

The tourism strategy is waiting to be revealed. My understanding is that it should be published next month. There are a great many strands to it, which my colleagues in DCMS have been trying to tie together. They are hoping for a comprehensive strategy to help move forward in all the ways that have been highlighted in this debate, and to show how our tourism sector deserves maximum support if it is to fulfil the great ambitions we have for it. As I have mentioned, the marketing and public relations campaign is well on target and the Government have been absolutely delighted with the response from a number of major industries on contributing to that campaign. The response from private individuals is also highly necessary if we are to make the most of all the treasures we have to offer in this country and attract people from overseas as well as domestic tourism.

In conclusion, tourism is a priority for government. This has, I hope, been demonstrated by the Prime Minister’s public support for tourism, which has not always been the case in previous Administrations. This encouragement has come from the top, and repeatedly. We have secured public funding for tourism for the next four years, in spite of the fact that we live in hard times and there will inevitably be reductions in some areas. The Secretary of State has given backing for a sustainable tourism legacy. A number of noble Lords, including my noble friend Lord Marks, referred to this important aspect, as did the noble Baroness, Lady Valentine, who is very much involved in this issue, and whose expertise we so much value, given all her dealings with London’s involvement in the Olympics.

The forthcoming tourism strategy, which is confidently and breathlessly expected, will, I am sure, pull together a number of these issues. With constructive partnership between the industry and government, tourism will continue to play a key part in the UK’s economic and fiscal recovery. We face an exciting decade for this vibrant industry. We have already heard the list of one-off events that are coming to this country in the next few years, in addition to the major sporting, cultural and other events which take place from year to year.

If I have not answered any questions, I shall certainly attempt to write to noble Lords with answers. Finally, I thank all noble Lords for their creative and stimulating contributions. In particular, I thank my noble friend Lord Younger for securing the debate. I again congratulate noble Lords who made their maiden speeches.

16:08

[Viscount Younger of Leckie]

My Lords, I also thank all those who contributed to today's debate. I am particularly pleased that it struck a chord as being an important debate for the tourism sector and the country as a whole at this particular time.

I pay tribute to the six outstanding, different and thought-provoking maiden speeches. The other contributions were wide ranging and in some cases rather direct, which is no bad thing. I particularly point out the views that came from my noble friends Lord Caithness and Lord Palmer who highlighted the cost of travel within the UK. To conclude, I want to pick out three key themes that the debate brought out. I hope not to take too much of your Lordships’ time.

The first theme, which may not surprise noble Lords, is funding. There is no doubt that there is a shortage and that funding is fragmented. I will pick up on a minor point made by the noble Lord, Lord Christopher, when he spoke about his project in Cornwall, which is that Europe is certainly not always forthcoming in producing funds. More importantly, my noble friend Lady Wheatcroft correctly pointed out that there was far too much short-termism in investment. That was echoed by my noble friend Lord Stoneham of Droxford who said that there should be much more long-term investment in tourism and from the private sector.

Secondly, it is important that tourism is pushed up the political agenda. In the past, all Governments have not promoted tourism enough. That was pointed out eloquently by my noble friends Lord Lee of Trafford and Lord Caithness. Tourism needs to be in the manifestos of Governments. That is particularly important as there is such a strong link between tourism and job creation, especially at this time.

Thirdly, it is clear that there is a great need to market tourism within all areas of the UK. That was highlighted initially by the noble Lord, Lord Wigley, when he spoke about Welsh castles. I think I am right in saying that Asian visitors like them the best. Also, my noble friend Lord Palmer of Childs Hill created an interesting and different angle to the debate when he focused on urban tourism speaking about Barnet and industrial Manchester, and it is right that we should focus on that.

I conclude by highlighting a degree of caution when we look at tourism statistics, because in undertaking research I discovered that there was certainly a need for a degree of consistency and simplification. That is a point for the industry and Government to note for the future. With that, I beg leave to withdraw the Motion.

Motion withdrawn.

Defence: Military Covenant

Thursday 27th January 2011 Lords Chamber

Question for Short Debate

16:12

Asked By

[The Lord Bishop of Wakefield]

To ask Her Majesty’s Government how the military covenant will be covered by the strategic defence and security review.

[The Lord Bishop of Wakefield]

My Lords, I am grateful to have the opportunity to introduce this Question for Short Debate. Well before the strategic defence and security review, Securing Britain in an Age of Uncertainty, was published, the Church of England already wanted to contribute to the wider debate on our national concern for global security. That was when I was asked, as someone with a background in foreign affairs—albeit mainly in ecclesiastical settings—to be a spokesperson for the church on defence and global security issues. We are also keen to reflect on the nature of the military covenant, whereby we underpin our commitment as a nation to those who risk their lives on our behalf. The impetus for this debate predates both the review and the Strachan report on the military covenant.

The response to the SDSR, when it was published, produced at least as much heat as it did light and, if it is not mixing metaphors too much, it was easy for that to cloud serious reflections on the issues at hand. In my own contribution to the debate on the review, I drew attention to what I believed to be a lack of any full narrative about the global role that we might expect Britain to play and the corresponding resources that might be needed to sustain this. I remain convinced that we should urgently return to that. Of course, the national security strategy has provided some of that narrative in terms of what we ought to be doing as a nation. It is still not clear, however, whether that yet dovetails with the answers that the SDSR gave about what is possible for us to do as a nation, given our finite resources.

We are all sharply aware of the financial restraints placed upon us following a serious global recession. That made the publication of the review a matter of urgency. Indeed, I noted in my reflections that the review had an interim feel to it. There is no time to be lost in making a realistic assessment of the resources available in this next decade and deciding how we might most profitably deploy them so as to make an effective and strategic contribution to global security. I hope that we shall return to a principled debate on strategy in the near future in this House and in the other place.

In preparing for this debate I have consulted a number of people who, from their experience as senior military personnel, have a better reservoir of knowledge than I could ever have. They have generously commented as well on aspects of the military covenant. I shall focus more immediately on the covenant itself, and I begin with a brief local vignette. Six months ago I presided at the service at Halifax Minster for the laying up of the colours of the Duke of Wellington’s Regiment. The regiment has now become a battalion within the Yorkshire Regiment. It was a very moving occasion, provoking not only powerful feelings among the military personnel present, and there were plenty of them, but equally powerful responses from the citizens of Halifax, both young and old. The Duke’s regiment had been their regiment and often the soldiers had been their soldiers, so the memories—some black and sorrowful, some heroic and inspiring—were their memories. It was an instructive and very personal indication of the significance of the relationship of mutuality, trust and respect between a community and its military personnel. In other words, here was the military covenant earthed in a local community.

The stream of funerals at Wakefield Cathedral of service personnel from Afghanistan has been another sharp reminder of the cost of war and of what we expect of those who offer their lives for military service. There is no other role within society where the reality of giving one’s life is so sharply within focus, or where the expectations of the role—that is, the covenant with servicepeople and their families—has quite the same edge. Death is one reality that cannot be ruled out, and the rawness of our emotions cannot be downplayed.

This short debate gives us an opportunity to look afresh at the military covenant and how it was covered by the SDSR. I shall focus on the welfare issues within the covenant, allowing others to focus elsewhere if they wish. We can do so, of course, alongside the recommendations of the Strachan report, on which I believe the Government should be duly congratulated. That task force has stimulated fresh ways of thinking about how the Government and society as a whole can fulfil their obligations to develop further the military covenant which, rather like our constitution, is unwritten and is perhaps best left in that form.

All in this House would doubtless agree that ensuring that the covenant is in robust health is as much a moral imperative as it is a strategic one. We owe an enormous debt of gratitude to those who have served and continue to serve in our Armed Forces. I have already alluded to the potential costs to individuals and families. I shall use this occasion also to pay particular tribute to the dedicated and loyal service provided by those who support them, including our military chaplains past and present. I also pay tribute to reservists, now numbering some 20,000 recently serving. I should say that that includes two clergy from our own diocese, who have been on active service in Iraq and Afghanistan in these past years.

That moves me on to ask some practical questions. First, what steps have been taken to update the existing package on terms and conditions of service, and what is the envisaged timeframe for the development of a new employment model? Alongside this, I am prompted to ask for some indicators in education. The Strachan report points to education throughout the service career as a priority and the SDSR highlights support to ex-service personnel to study at university. I have commented on the Browne report’s impact in another debate in the Chamber and would welcome assurance that the changes in higher education funding will not delay the SDSR’s recommendations in this area.

I revert to the excellent work of the Strachan task force. As I have hinted, the avoidance of semi-legal language is much to be welcomed. Those noble Lords who have sight of the more scurrilous of the tabloids will know that the Anglican Communion is itself struggling to put together a covenant. Similar issues of legalism or non-legalism have arisen there. I am sure that legalism is best avoided all round. Interestingly, the Old Testament is riven with a number of different models of covenant. The most attractive feature of all of them is an avoidance of a language which legislates. Instead, the model is one of gift. Each partner willingly gifts to the other. Here, we begin with a gift of military service and a paired gift is offered by the nation to all in military service. That gift is shared by government and the wider community. It is eloquently set out in the task force’s document.

Within all that, however, we need confidence that such gifting is assured, especially from government. Here there are lacunae. In neither Strachan nor the SDSR is there an analysis of the welfare needs of serving personnel and veterans. Any research into that has been ad hoc and piecemeal. There are real questions about the ability of regiments and corps individually to look after families. There are also specific issues about the adequacy of support for reservists as they return to their normal work following the pressured extremes of military service. These issues argue for a permanent mechanism through which we can review the situation in the future. I realise that the question of how we assess the treatment of Armed Forces personnel has been raised in another place within the context of the Armed Forces Bill. As I understand it, the independent external reference group, which assesses annual progress against the service personnel Command Paper, is due to be phased out or brought in-house to the Ministry of Defence, where its independence is less assured. Could the Minister shed some light on the logic of that decision?

Finally, I accept that this time of financial stringency is hardly one in which to encourage the setting up of new posts and appointments, but ought there not to be someone who effectively acts as the reviewer of armed services welfare? That might be combined with other work while remaining a distinctive function. The reviewer would report to the Secretary of State for Defence perhaps once every four years. Such a statutory measure might help depoliticise our discussions on the military covenant and ensure that the sacrifices that I mentioned earlier are responded to by a proper sense of giftedness from the nation’s side of the covenant. Without a clear assurance here, one cannot guarantee the relationship essential in a military covenant. Field Marshal Montgomery commented:

“Leadership is the capacity and will to rally men and women to a common purpose and the character which inspires confidence”.

This confidence must be rooted in a mutually assured covenant which has clarity about both its purpose and its commitment. Again, Montgomery noted—and I conclude—that:

“Theological virtues amount to this: get your major purpose clear, take off your plate all which hinders that purpose and hold hard to all which helps it, and then go ahead with a clear conscience, courage, sincerity and selflessness”.

16:23

[Lord Glenarthur]

My Lords, the right reverend Prelate the Bishop of Wakefield has done us all a service both by initiating this short debate and in his thoughtful and interesting speech. He has done so close on the heels of the debate earlier today held by my noble friend Lord King. I will again concentrate my remarks on the reserves of all three military services, to which the right reverend Prelate referred, and the relevance of the military covenant to them.

I have read the Report of the Task Force on the Military Covenant—the Strachan report—which was published in September. On page 19, paragraph 2.5 addresses the issues of reservists. I very much endorse what it says about the lack of on-base support, which is mostly available to regular service families. In particular, there are practical difficulties for reservists who return rapidly from deployments to their civilian occupations, far removed from military units. I dwelt on this in my noble friend’s debate this morning. My interest in this lies, as my noble friend on the Front Bench knows, in my long-serving capacity as honorary colonel and honorary air commodore to medical reserve units.

I will highlight three of the report’s policy options in relation to reservists. First, on recognised identity cards for reservists, I was astonished to discover from the report that not all reservists are regularly issued with identity cards. As the rubric at the bottom of the page says, some get them but some do not. Even I get one, much to my astonishment, as the honorary air commodore of a Royal Auxiliary Air Force squadron. What is being done to address this issue, which would perhaps allow such benefits as the practical opportunity to access the joint personnel administration system remotely? What can be done to help those who do not work with the reserves all the time but spend some of their time in civilian employment?

Secondly, there is the question of providing information to reservists’ general practitioners. It seems bizarre that, evidently, there is currently no system to transfer an individual’s Defence Medical Services records back to his or her GP after deployment. Having spent many years in health administration, I would say that this is extraordinarily poor clinical governance, which should be put right at once. There should also be help for GPs in making available help for reservists. My noble friend on the Front Bench made some encouraging remarks about this earlier. In the days of digital data transmission, I simply cannot believe that it is too complex an issue to administer. I would be very grateful if the Minister could write to me about it in greater detail.

Thirdly, support from employers is part of a theme that I and my colleagues on the National Employer Advisory Board addressed over many years. There should certainly be support from employers but there should also certainly be support for employers, so that they can more readily understand the nature of military service of any kind, but particularly reserve service. We used to have a scheme known as Employers Abroad, which the Americans and Australians call Boss Lift. It allowed employers to visit reservists on exercises and operations so that they experienced some of the activities, witnessed the camaraderie and sense of purpose that existed among their employees’ service units and developed a sense of what these individuals do and how that can be brought back and made use of in the civilian workplace. I have taken part in several of these.

However, I understand that the Employers Abroad scheme was stopped, or at least put on hold, some six months ago, following a Cabinet Office directive to do with a freeze on marketing. Frankly, sometimes I despair. My colleagues and I have spent 10 years or more, during deployment on two huge operations, at the highest levels of the MoD, explaining the need to win and maintain the support of reservists’ employers at a time when some 10 per cent—more than the 20,000 referred to by the right reverend Prelate—of reservists had been deployed. I hope that my noble friend will accept that it is wholly counterproductive in the longer term to diminish that effort and put at risk all the relationships that have been worked on so hard, particularly by SaBRE—Supporting Britain’s Reservists and Employers—which has worked at the coal face on this with civilian communities up and down the country. As page 5 of the report on the military covenant says:

“Many people in Britain have little or no contact with the Armed Forces and have little understanding of military life. There is a need to build on public support to create a greater and more enduring understanding”.

The right reverend Prelate referred in his comments—perhaps elliptically, although I know that he meant to refer to it—to something called defence career partnering, which is another issue that I was deeply involved with as chairman of the National Employer Advisory Board. It stemmed from a wish to see much more flexibility in the careers of individuals, whether regulars or reservists. However, as we have heard, it has recently developed legs, so to speak, and has produced innovative concepts, some of which are very relevant indeed to the military covenant. They could be helpful across a broad range of circumstances.

It was not always easy to advance the concept of defence career partnering. I spent two years or so as co-chairman of the MoD steering group on the subject. There were those who readily grasped the possibility of positive outcomes for the benefit of defence and industry, but some were not so easily convinced. What surprised me, however, was that there was a very real enthusiasm on the part of industry in many forms to find partnering opportunities, not just in terms of careers but in a much wider sense, so I am encouraged to begin to believe—perhaps my noble friend will confirm whether I am right—that, whereas defence career partnering is not a whole answer to many issues, it is at least part of the answer. The fact that it is owned now by the MoD, not by a single service, is of huge benefit. In some elements of it, I can well understand the complexities in terms of career planning, such as sorting out terms and conditions of service. Some of the issues are closely related to what the right reverend Prelate said about returning servicemen and so on.

We are talking about mutual benefit. If we are fully to grasp the notion of the big society, so strongly advocated by my right honourable friend the Prime Minister, does my noble friend not agree that we have to be rather more broad-minded in what can be achieved through flexible and willing partnering relationships? Will he perhaps take the time to review the progress to date, in particular the very genuine offer of support from industry and others, and does he not agree that such an initiative could do much to enhance the value of the military covenant?

16:31

[Lord Lee of Trafford]

My Lords, first, I congratulate the right reverend Prelate on initiating this debate. I declare interests as vice-chairman of the All-Party Group on the Armed Forces and president of the relatively newly formed Liberal Democrat Friends of the Armed Forces.

In recent years, particularly during the conflict in Afghanistan, there has been a welcome upsurge in support for our Armed Forces: increasing support through the media; increasing support here in Parliament, welcoming the returning troops; and, of course, a much wider support among the general public. Prior to the 2010 election, both Conservatives and Liberal Democrats commissioned reports into the state of the military covenant. The Coalition: Our Programme for Government, published in May 2010, made a commitment to,

“work to rebuild the Military Covenant”.

In June, the Prime Minister indicated that the military covenant would be enshrined in law for the first time. Then, in summer 2010, the coalition Government established a task force on the military covenant, chaired by Professor Hew Strachan, who was referred to earlier, to support taking that work forward.

The SDSR, published in October 2010, talked of rebuilding and formalising the covenant, and went on:

“The Covenant represents a promise of fair treatment, on behalf of the nation, to ensure personnel are valued and respected as individuals and that they and their families will be sustained and rewarded by commensurate terms and conditions of service”.

However, there was also the ominous warning:

“We cannot shield the Armed Forces from the consequences of the economic circumstances we face”.

What we have to do, as interested and supportive politicians, is to compare rhetoric with reality—to congratulate but also to question and, perhaps, to admonish where necessary.

Fairness demands that we acknowledge some of the previous Government's achievements: doubling the compensation payments for the seriously injured; doubling the welfare grant for families of those on operations; giving better access to housing schemes and healthcare; giving free access to further education for service leavers with six years’ service; and more phones and internet access for those deployed in Afghanistan.

The coalition Government started well, doubling the operational allowance for Armed Forces serving in Afghanistan and providing university and further education scholarships for children of those killed in action since 1990. However, I have to question some of the reductions in allowances that were announced last week. Taking away or reducing existing allowances can create disproportionate ill feeling and in my view should be contemplated only where allowances are grossly excessive or overgenerous. Changes have been made to the home-to-duty travel allowance, which assists personnel with the cost of daily travel between their home and place of duty. At present individuals are responsible for the first three miles of their journey. In future this will increase to nine miles—heaven knows why that figure was chosen and where it comes from—even when they have no choice in the location of either home or duty premises. This change will be introduced over three years. The disturbance allowance is to be reduced by 10 per cent. For those with children, the additional elements previously paid will be reduced by 53 per cent. The “get you home (early years)” allowance is designed to enable junior members of the services to maintain links with close family as they adjust to service life by funding four journeys to the family home per year. In future, it will be available only to those undergoing initial training and for all personnel under the age of 18. The “get you home (seagoers)” allowance is designed to support retention of seagoing personnel by reducing the impact of routine separation. The current provision of 12 journeys to the individual’s place of residence will be reduced to 10. Some of those reductions are a little mean and disappointing.

In preparing for this debate, I carefully read Hansard covering the Second Reading of the Armed Forces Bill on 10 January in the other place. Interestingly, virtually all the debate focused on covenant issues. The Secretary of State said that,

“the Bill sets out the framework for the covenant”.

Perhaps most importantly he gave a specific commitment to lay,

“an annual forces covenant report”,—[Official Report, Commons, 10/1/11; cols. 47-48.]

before Parliament each year covering healthcare, education and housing, with discretion to go beyond those topics.

As regards service accommodation, we all know the financial pressures that the MoD faces but it is vital that necessary repairs and maintenance are carried out, otherwise a much greater liability develops. I wish to ask my noble friend one or two questions. What extra provision is being made to accommodate serving personnel and their families when they return from being based in Germany, as half will return by 2015 and the remaining half by 2020? The previous Government originally promised that all the proceeds from the sale of Chelsea Barracks would go back into Armed Forces accommodation. The site was sold for £959 million. How much of that was actually spent where it was intended to be spent? The previous Government said that the final £159 million of the proceeds would be subject to negotiation with the Treasury. Has the money definitely been spent on accommodation?

However, not everything can, or should, be done by Government. Charities such as Help for Heroes have achieved outstanding results, but there are also smaller, yet very successful, supportive specialised charities; for example, Tickets for Troops, a registered charity which provides free tickets to musical, sporting, entertainment and cultural events for members of our Armed Forces, and is led by the noble Lord, Lord Marland. This was launched in November 2009. Since then more than a quarter of a million tickets have been donated and 85,000 troops have signed up to the scheme.

16:37

[Lord Ramsbotham]

My Lords, I too congratulate the right reverend Prelate on obtaining this debate. Having spent many happy hours and days in Bishop’s Lodge, Wakefield, when my father was the bishop, I am sure that under him it is in equally good hands.

Yesterday the Cross-Benchers had the great pleasure and privilege of having the Prime Minister address us for nearly an hour. I made a point of asking him what he meant by, and intended by, the Armed Forces covenant. He replied that it was a debt that the nation owed to the Armed Forces in return for them putting their lives on the line that amounted to a fair reward and lifelong support for them and their families. I cannot think of a better description.

I was extremely glad to note that the Armed Forces covenant was mentioned in the SDSR, which showed that, although a lot of it was about equipment, people have not forgotten that Armed Forces issues are essentially about people. However, I hope that nobody thinks that the Armed Forces covenant is merely an SDSR issue to be revisited in 2015. It is a living issue, today and every day. There is a particular purpose to it which I will come to.

As Professor Hew Strachan mentioned in his report on the Armed Forces covenant, commissioned by the Prime Minister, the covenant is not one covenant but three covenants in one. The first is between the Government and the Armed Forces. That essentially covers the care and support of members of the Armed Forces during and after their service. I make no apology for returning to an issue that I raised this morning in the debate secured by the noble Lord, Lord King of Bridgwater, namely the question of a Veterans Minister. I believe firmly that unless there is a named person responsible and accountable for overseeing the covenant, it will not happen.

The Minister took me to task because he thought that I was suggesting that there should be centralised control and direction. I was not saying that at all. I have said many times on the Floor of this House that there is “what” and “how” in making certain that things happen. The Government should deliver the “what” and the “how” should be left to local areas. This morning I quoted examples of local areas that are implementing this. The trouble is that recently people have been swamped with “how”. We do not need it: we need “what”, and somebody needs to be doing it.

My reason for mentioning the Cabinet Office was highlighted by a letter that I was copied into from the rehabilitation services group in the Ministry of Justice. It states:

“Our Minister is aware of the content of The Murrison Report”,

into mental health issues, which we discussed this morning,

“but as it does not contain specific recommendations for the MOJ it has not generated the need for formal response at this time. However, we would of course want to support any work which improves the delivery of health services to offenders. To that end, if DH”—

Department of Health—

“policy is sufficiently developed in the future to include new and/or veteran specific elements then we will want to engage to ensure that delivery of that to prisoners and offenders in the community is as effective as possible”.

In other words, we are doing nothing until somebody co-ordinates it. This relates to the covenant.

The second part of the covenant is between the nation and the Armed Forces. The return from the nation is seen most obviously in the donations given to service charities, and in the use that the charities put them to.

The third part, which we must never forget, is within the command chain. My ancestor, Sir John Moore, laid down the ethos of the Rifle Brigade, the regiment that I joined. He said that it was a mutual bond of trust and affection between officers and riflemen, which the officers had to earn. That is very true: the mutual bond of trust and affection between the structure of the forces and the people serving is something that has to be earned. That structure includes government. There have been examples of where it has not been earned. The covenant is the most obvious demonstration that that trust is understood and is being earned.

I am very glad that the right reverend Prelate mentioned veterans, whom we discussed earlier. I will say something briefly about those who I am very worried might become veterans prematurely unless the full implications of the Armed Forces covenant are implemented and understood. I remember a black year in my service, 1977, when the Government of the time implemented what was known as the Irishman's pay rise, when the pay increase was less than the charges made on soldiers. I remember commanding officers resigning because they refused to stand up to tell their men that what was being offered was good, because they knew it to be bad. I am very concerned that the chain of command must be told the truth—not least at a time when we are asking enormous operational sacrifices by our men and women, as one can hear for oneself if one goes to talk to them.

So it was that last week, I saw allowances being cut. When I see all the heat being engendered by the Officers' Pensions Society over the reduction in pensions, I think back to that time and I am enormously worried about the trends that I see creeping into retention rates, particularly of experienced people, commanding officers and bright young people, before their service is ended. If ever there was a warning sign to the Government, that is it. Please, please, please do not tamper with the covenant. It means something. It means that the Armed Forces will be there on behalf of the nation to do what the nation expects them to do, as it has had so vividly and regularly illustrated over the years.

16:45

[The Lord Bishop of Hereford]

My Lords, like others, I thank my friend and colleague the right reverend Prelate the Bishop of Wakefield for making this debate possible.

The themes of both the military covenant and the strategic defence and security review require of us an understanding and valuing of identity and role: our identity as a United Kingdom in today's and tomorrow's world and, therefore, our potential role in military terms, including strategic defence and security. Just as those are issues in the review, so it seems to me the issues of the identity and role of our military personnel lie deep within our understanding of the military covenant, which links us with those who risk their lives on our behalf—and on behalf of peace and security in other countries—and whom we so greatly value, appreciate and honour. As we heard from the Minister in the earlier debate today, there are already 236,000 veterans of Iraq and Afghanistan. As he also reminded us, many of those are young. I will return to that later.

I can identify with my friend and colleague the right reverend Prelate about the military covenant being earthed in local communities. Your Lordships will not be surprised to learn that that is represented very strongly within Hereford diocese, with all our links with the Rifles and the Queen’s Dragoon Guards. The regiment was given the honour and freedom of the city of Hereford and is held in such high esteem throughout the county—and, indeed, much more widely—as shown by the number of people who turned out in our streets to honour the servicemen on their return from Afghanistan, the numbers in attendance when the freedom of the city was given to the regiment a few years ago and the increasing number who are there on Remembrance Sunday as well as, tragically, when needed, on the occasion of funerals.

As we have been reminded, part of the military covenant is to provide care not just for our military personnel but for their families. I pay tribute to the introduction of the Elizabeth Cross and its recognition and valuing of the families of those killed in action. I know from first-hand experience how much that is appreciated and what a difference it makes to them.

I turn to the theme of the consequences of the cuts in allowances, which has just been mentioned by the noble Lord. I also express concern at the way in which the current salami-slicing weakens how our military personnel are valued. Sadly, I know of soldiers for whom that salami-slicing has become a tipping point for their leaving the armed services—just as we heard other accounts of that earlier. That lack of valuing leads potentially to a weakening of morale as well as to people leaving the services.

Perhaps I may also observe that military personnel may be lost easily but, as some noble Lords will know far better than me, replacing them takes much longer and is much more difficult. For example, it may take many years for the regiment near us in Hereford to replace or build up its numbers due to the length and demands of the training. That is a further reason why we should not take lightly the consequences of the recent reduction in allowances.

Care for military personnel once they finish their service is also a vital area, which was again referred to in our earlier debate. Once more, such care seems to be an area in which we need to improve as much as possible because that, too, is part of the covenant with our personnel. As noble Lords referred to earlier, there needs to be ongoing healthcare, both physical and mental, and we also need to ensure that we provide as best we can the support, encouragement and opportunities for employment that younger veterans go on to when their term of service comes to an end.

We were also reminded earlier by the noble Viscount, Lord Slim, that there is a special need to care for the families of wounded service men and women, including widows and widowers as I have already mentioned. Therefore, I add my voice to those calling for the utmost care to be taken in any reductions in allowances, given the potentially deleterious effect on reducing morale and weakening the covenant. There may also be consequences on the length of time and difficulty involved in recruiting new people if such salami-slicing does indeed become a tipping point for people leaving.

16:52

[Lord Sheikh]

My Lords, I welcome the opportunity to contribute to a second debate on defence matters in your Lordships’ House today. The subject that we are discussing now is as important as the topic of our earlier debate. The theme running through both is the duty that we, the nation, owe to those who risk their lives and serious injury for the sake of our security. I congratulate the right reverend Prelate the Bishop of Wakefield on providing the House with the opportunity to debate these vital issues.

The importance of the military covenant has attracted increasing focus in recent years, not least as the terrible suffering incurred by those who have served in military conflicts has become increasingly apparent. The first duty of government is to secure the defence of the realm, and undoubtedly the most vital asset in that endeavour is the people who undertake that task. That is the basis for the military covenant, and it is our obligation to ensure that we consider and address their needs. Unhappy service families can result only in unhappy service personnel, and that would represent a failure to meet the terms of the military covenant.

There has been much academic interest in and commentary on the various components of the strategic defence and security review. The themes of these commentaries have been included in the wider debates that we have had in your Lordships’ House on defence matters, including our consideration of the strategic defence and security review in November last year. The strategic defence and security review contains much to be welcomed—not least that this was the first such review for 12 years. Much has changed in the nature of the threats that we face, in the nature of our Armed Forces and in public opinion over that period. To ensure that we continue to align effectively the changes with the requirements of the military covenant, I welcome the Government’s commitment to make these reviews a regular occurrence.

However, it is important that we do not forget the context in which the review was conducted. Commitments and overspending on defence projects under the previous Government totalled some £36 billion—three times the annual defence budget. In that context the delivery of an 8 per cent reduction in the Ministry of Defence budget was an extreme challenge. We should not diminish the seriousness of the situation in which the strategic defence and security review was prepared and considered.

Those who serve our country have the right to expect that the Government will look after their well-being and the well-being of their families. Whatever the deficiencies of previous approaches, we must make sure that we live up to that ambition, and I believe that the Government have made a good start. However, they have started from a low base. The outcome of the Armed Force Continuous Attitudes Survey in May 2010 revealed that only 32 per cent of our Armed Forces felt valued. That should cause us all alarm and alert us that action needs to be taken.

An example of the Government’s commitment to reverse this negativity can be seen in the decision to double the operational allowance. That, in the climate of wider fiscal tightening, is a sign of the priority that the Government attach to those serving in our Armed Forces in theatre. The Armed Forces Bill, which is currently under consideration in another place, contains provisions that will require the Secretary of State to produce an annual report to Parliament on the health of the military covenant. That is a bold and decisive step and will enable us to keep a much tighter, focused scrutiny on how the military covenant is being advanced. It is right that more rigorous attention should be paid to how the military covenant is being delivered and that the Government are able to explain how we are meeting our side of the bargain.

The decisions that had to be made in constructing the strategic defence and security review were undoubtedly complex. Balancing the nature of the threats that we must overcome with the horrific fiscal pressures that confront us as a nation in order to arrive at a balanced and coherent strategic posture is not simple. Undoubtedly, repairing the damage to the military covenant that has arisen in recent years cannot be done in a vacuum and the Minister has a difficult path to tread. In that context, I should be grateful if he could confirm that the Government’s commitment to the military covenant is not conditional. I know that the Government have been working very hard to identify areas for savings and where better outcomes can be delivered most cost-effectively. In guiding his approach to the military covenant, I hope that the Minister can assure us that his focus will continue to be on the needs of those who serve in our Armed Forces, the needs of their families and the needs of those who are now veterans, and that the important measures contained in the strategic defence and security review will contribute to our efforts in restoring and then maintaining the military covenant. Our troops—present and past—deserve nothing less.

16:58

[Lord Bilimoria]

My Lords, when he was Leader of the Opposition, the Prime Minister David Cameron made this assertion:

“Everyone should know what an enormous priority the Conservative Party attaches to our Armed Forces and to keeping Britain safe, and we will always make the spending necessary to deliver that”.

I thank the right reverend Prelate the Bishop of Wakefield for initiating this crucial debate at this time.

All jobs are important, but the military are willing to make the ultimate sacrifice, so they are always a special case. There has to be a special arrangement to compensate for that sacrifice. I always thought that the special arrangement ought to be delivered through government. I always thought that it was through government that the gratitude of the people could be expressed, and servicemen and their families looked after and remunerated well, and their equipment, clothes, weaponry, accommodation at home and abroad and trauma care supplied and subsidised at the best possible level by a nation that is committed for a lifetime. This is where we as a country have gone down a slippery slope. In India, my father was General Officer Commanding-in-Chief, Central Army Command. There I know a soldier’s family is cared for for life, well after the death of the serviceman, as my grandmother and my mother have experienced. There is a commitment, a strong bond, that holds the soldier to his country, and the soldier’s family is born into the military family, as I was. This trust and care encourages camaraderie, morale and esprit de corps, which you cannot buy.

The previous Government got the balance between the public and private sectors completely wrong. I have said this before a number of times. Public spending went up to nearly 50 per cent of GDP when it should be nearly 40 per cent. As for the Armed Forces, we have got it the wrong way round. Public pay is not high enough, and we are making further cuts, as we have heard. Cuts worth £250 million are being made to servicemen’s allowances. Surely these are the people who should suffer last at a time of economic austerity, given what they are sacrificing. We must view the NATO level of 2 per cent of GDP on defence expenditure as a base, not a ceiling. While defence expenditure is set to go up over the spending review period in cash terms, as a percentage of GDP it is actually going to go down. Over the past three decades, our defence expenditure as a percentage of GDP has halved from 5 per cent. In 2009, it was 2.5 per cent. We are at war at the moment and, if you do the sums, you could argue that we are already at 1.5 per cent of GDP.

Our Armed Forces are spread too thinly. The SDSR is all about means, it is not about ends. We have aircraft carriers without aircraft and nuclear submarines without AWACS, and I fear that that is where the covenant is heading. It is now written in law for the first time in the Armed Forces Bill, but there is little action to justify those words. I just heard first hand a story from my son at boarding school. His friend’s uncle is a commanding officer and has recently had to use his own money to buy clothing and boots for his troops. Are we really stooping to this level? This parsimony reaches well beyond equipment. I am sure that most of us remember that in June 2008 the noble and gallant Lord, Lord Dannatt, who is in his place, pointed out that the starting salary of a new recruit was, on average, £16,000 compared, at that time, with the basic salary of a traffic warden of over £20,000. The pay scale has risen, but in line with inflation. It has not risen in line with the level of sacrifice that these men and women are making.

This SDSR has been drafted in wartime. We have to keep in mind the future. People’s memories can be short, especially when we enter a peacetime period. Our Armed Forces need to know that the covenant will be honoured in peace and in war. To protect the needs and interests of our Armed Forces, including our reserve forces, at home and abroad is not a choice the Government must make. It is compulsory. It is required because the Government are not just making good on their own commitment, they are holding true to the promise of the people. I do not think that any of us can question the strength and emotion of the people of this country. We see it expressed time and again. Just look at the support garnered through charities and the private sector. This is the big society at work. We have Help the Heroes, the Army Benevolent Fund, the Soldiers’ Charity and the Royal British Legion. I could go on.

It is very good to hear that the Government plan to start to right the discrepancy between compensation for physical injuries and for mental illnesses. For too long, the mental stresses and strains of our servicemen have had to be endured. They have not been recognised and have been undercompensated. Just this month, a professor at the Department of Psychology, Harvard University, told me the harrowing fact that in January 2009, for example, more United States soldiers committed suicide after returning from the battlefield than were killed in combat in Iraq and Afghanistan combined.

It is the people’s promise to repay the tremendous debt of gratitude that this nation owes to its Armed Forces. We know that soldiers attempt to fulfil their duties, whatever the circumstances; it is the commitment that they have made. But soldiers’ confidence and morale reaches much higher levels when they know that they have the support of the people back home, and the trust and support of the Government. They must know that the country can trust that the Government will take care of them while they are fighting, that they will take care of their families, that that is a priority, and that they will always show that commitment.

How can they feel that it is a priority when they see the way in which so many veterans are treated and some of the appalling accommodation that is available during peacetime and wartime? How can they feel that it is a priority when they are worried about the well-being of their families? In India, after my father died, my mother was, and still is, given the utmost level of care, affection and respect by the Indian Army. It is a lifetime commitment. We need to guarantee that veterans never feel as though their sacrifices have been forgotten.

The noble Lord, Lord Ramsbotham, suggested that we should have an independent commissioner. I believe that we should have an independent veterans’ commission. A veterans' commissioner would co-ordinate outside the MoD and look at pensions, social security, prisons, health and charities to ensure that our veterans are protected and cared for because of the incredible contribution that they have made. There needs to be a balance between the MoD and the Armed Forces. The NHS has scared me greatly because doctors and nurses are often overshadowed by NHS managerial staff. In the MoD and the Armed Forces, is the tail wagging the dog?

In conclusion, the services are called the services because they serve our country. The right reverend Prelate spoke about leadership. Last week, this was explained to me by Professor Ranjay Gulati at Harvard Business School as a tripos: logos—the knowledge and experience needed to garner trust and respect from those who follow you; pathos—the emotional intelligence and understanding needed to form bonds with those who follow you; and ethos—the possession and adherence to a set of moral and ethical values that are important to those who follow you. The Armed Forces epitomise service leadership.

At Sandhurst, where my grandfather was commissioned, the motto was “Serve to Lead”. At the Indian Military Academy, where my father was commissioned, the motto was:

“The safety, honour and welfare of your country, come first, always and every time. The honour, welfare and comfort of the men you command comes next. Your own ease, comfort and safety comes last, always and every time”.

The Army is keeping its side of the covenant. I know that the Minister believes in the covenant. Unfortunately, the Government do not, and we as a nation should be ashamed of this.

17:08

[Lord Marlesford]

My Lords, many years ago the Times had a very influential leading article headed, “It is a Moral Issue”. I was particularly glad that the right reverend Prelate the Bishop of Wakefield referred to the moral dimension of the military covenant. I believe that military service is a huge privilege for those who are fortunate enough to have the opportunity to serve. My brief and wholly undistinguished national service in the Army, in which I never heard a shot fired in anger, has had a lifelong influence on me. Perhaps most of all, it has given me some understanding of the Armed Forces and certainly a lifelong interest in their welfare.

I was very glad to hear the noble Lord, Lord Ramsbotham, refer to the Prime Minister’s definition of the military covenant, which is clearly an extremely good one. In the short time we have to speak, I would like to explore some of the detail. First, we must never forget that the military covenant is of a higher order than the obligations of the Government towards any other people they employ. There are two reasons for that, the first being that people in the Armed Forces are less able to enforce or even advocate their own interests than any other employees of the state. The second reason is, of course, that they might die. If we try to analyse what the military covenant is all about, it is the obligation to ensure that our Armed Forces are given the resources and conditions with which to carry out the missions that are assigned to them. The first thing is indubitably obvious, but sadly in recent history it appears not to have been obvious. It is that the Government of the day must ensure that a proper analysis is made of the proposed commitment before any forces are committed to a theatre. We will not know for a few months yet exactly how that did or did not apply in the case of Iraq, but I am afraid it is clear that it was not properly worked out when it came to Afghanistan.

The individual components of the obligation are many, including the quality and quantity of equipment required, which means everything down to the fuel and the ammunition, along with the other supplies for that equipment. It includes adequate training of all personnel before they are committed to the field, proper sustenance in the form of food and clothing, and medical services, particularly on the battlefield. One of the most moving experiences of my life was the opportunity to visit the hospital at Camp Bastion. It is a most amazing institution. The whole question of service families has been referred to several times. Families matter most to their members and therefore it is essential that things like housing, education and facilities for children are fully taken care of. Then, as is the case for anyone, there is the need for decent career prospects, which all too often are not taken into account.

I am afraid that there has been a lack of understanding of the Armed Forces at the highest levels of the Civil Service, particularly in the Cabinet Office, the Treasury and even the MoD. The Treasury seems to see the Armed Forces as a sponge to be squeezed. That is not a good attitude to take towards the Armed Forces, and we have been given some examples today of the attempts to squeeze the sponge. Part of the reason for this is the fact that probably no one in the Civil Service today has ever served in any of the forces. After all, National Service ended some 50 years ago in, I think, December 1960. Indeed, relatively few people in the other place have ever served, but there are some, including some very distinguished ones. It is particularly lucky that in the Ministry of Defence we have several Ministers who have served in Her Majesty’s Forces. If we accept that there is a lack of understanding, experience and sympathy at the top of the Civil Service, it is absolutely crucial that our political leaders make up for it and ensure that what we call the military covenant is honoured.

It is crucial that the three service chiefs and the Chief of the Defence Staff continue to have direct access to the Prime Minister. That itself is part of the military covenant. If the covenant is not maintained, the supply of first-class people for our Armed Forces will diminish. That will be a betrayal of the crucial obligation of any Government: the defence of the realm.

17:14

[Lord Guthrie of Craigiebank]

My Lords, first, I declare two interests. I am president of the Army Benevolent Fund and colonel of a regiment, the Life Guards, which is currently serving in Afghanistan. Secondly, like other noble Lords, I thank the right reverend Prelate the Bishop of Wakefield for introducing this extremely important debate.

I am delighted that the Government are addressing seriously this very important subject, with the Prime Minister inviting Professor Hew Strachan to produce a report. Charities such as the Royal British Legion, Help for Heroes, SSAFA, the Army Benevolent Fund and many others have made very helpful contributions to the debate. By supporting the concept of a military covenant, much has been achieved by both the present and the previous Governments, particularly in the medical field; for example, treatment of the wounded at Selly Oak and Headley Court.

However, the Government need to realise just how difficult it will be to honour the covenant without continuous commitment to it. The need for that commitment is unlikely to go away in any of our lifetimes. The services have suffered for years from financial neglect. Other great departments of state have core budgets which increase greatly—for example, the Department of Health, the Department for Education and DfID—but not the Ministry of Defence, which for long periods has been taken for granted. The quality of life of service men and women has deteriorated. I hope that it is realised that great dangers are being run. Those in the services understand that defence has to accept a share of the pain in order to pay off the debt facing the country. However, the aggregate of what people are facing in terms of allowances, together with decreasing promotion opportunities, is making high-quality service men and women think very hard about their futures.

The last three commanding officers of 22 SAS, a regiment of which I have just ceased being colonel, have either left or are leaving the Army. They are worried about the future and the future of their families. The Army needs to hang on to such quality. I could give your Lordships other examples. Allowances are being changed. Soldiers largely accept this, but what really concerns them is the logic used to justify it. It is couched in terms that do not recognise the demands of military life. Continuity of education allowances is an example. They are not just a perk for officers; they affect all ranks. More stability may be promised, but if people want to be promoted, they will have to move to gain experience. If they do not do that, the services will be worse off.

Many service men and women are now worried about their pensions. They feel that the unique requirements of the Armed Forces are not being recognised in the review of public sector pensions. I suspect that one of the reasons that we are in this predicament is that the Ministry of Defence, although proclaiming the importance of people, does not always reflect that when allocating the defence budget. Accommodation, barracks, married quarters, education, pay and conditions of service have suffered when compared with expensive equipment programmes. When savings have to be made and made too quickly, too often the only way to get the money is to look at the MoD estates, people and conditions. Too often, unlike people, the equipment projects are protected by contracts, and I think that we have the balance rather wrong.

In sum, I hope that the Government realise just how difficult it will be to honour the covenant. Too many service men and women feel that the MoD, the Treasury and other departments of state and political leaders of all parties do not really understand the difference between the military and civilian life and that those who serve the Crown are not foremost in their thinking. The Government must acknowledge how serious the situation is today and must remain committed. If they do not remain committed, the services, which are almost on the point of haemorrhaging, will haemorrhage quickly, and we will damage one of the great departments and institutions of state.

17:21

[Lord Rosser]

My Lords, I add my congratulations to the right reverend Prelate the Bishop of Wakefield on securing this debate. He is an expert on the meaning and purpose of covenants, since the idea of a covenant comes from scripture and is used in the Old Testament to describe the relationship that God has with his chosen people. A covenant is a mutual relationship of obligation and care; both sides promise to look out for the other and, in return, both sides can count on each other, too. That in essence is what the military covenant is about: a covenant between the Government, the nation and its Armed Forces. We had a debate earlier today about the physical and mental rehabilitation of military veterans, including our responsibilities to them under the military covenant.

We have the covenant for a number of reasons, not least because we recognise the role and duties of the Armed Forces in defence of the state and that carrying out such duties can result in serious injury or death in action for service personnel. We recognise their commitment and their courage and their devotion to duty and, as part of that, we recognise that we have a responsibility to support them and care for them and their immediate dependants during and after service.

The military covenant is a subject on which the Government have expressed some very firm views. Towards the end of last year, the Secretary of State for Defence said that he would,

“rebuild the Military Covenant left shattered by Labour”—

a clear indication that at times, at least, that gentleman is not enamoured of the idea of maximising the extent to which a bipartisan approach to defence can be secured. He set up a task force to find,

“low cost, innovative policy ideas”.

It reported recently, and the Secretary of State committed to taking forward two recommendations. The first was an Armed Forces community covenant, encouraging volunteers to support their local forces, and the second a commendation scheme, thanking individuals or bodies who give support to the forces. The chairman of the Forces Pension Society described the task force proposals as, “incredibly wet and feeble”, and added:

“If this is all the Government can offer to rebuild the covenant, we have a long battle ahead”.

The Government have not yet given their response to all the task force proposals, and perhaps the Minister will be able to update us on that point and on the work being undertaken on the military covenant by the Ministry of Defence.

The Government plan to publish an annual Armed Forces covenant report which, if it is going to continue the previous Government's plans, will provide an annual assessment of the Government's progress in implementing commitments to strengthen the covenant. Perhaps the Minister could confirm that that is an issue that the Government's proposed annual Armed Forces covenant report will address.

One of the innovations we introduced in 2008 was the impartial oversight of the Government's progress at strengthening the military covenant. The External Reference Group, as the right reverend Prelate said when opening this debate, was set up as an independent monitor to be a check on the Government’s implementation of the service personnel Command Paper, the first cross-government strategy on the welfare of Armed Forces personnel, which incorporated some significant improvements. It is essential that such reports are independent, expert-led and above politics. The Royal British Legion has raised concerns about this issue. Can the Minister say who will be doing any scrutiny and assessment and producing the annual forces covenant report? What issues and subjects will be covered in that report? Will it be undertaken by independent people or will it be a report by Ministers? What will be the future role of the External Reference Group?

When in Opposition in 2009, the now Secretary of State for Defence, Dr Liam Fox, said that,

“the Government must look at issues of housing, healthcare and veterans' welfare if it ... wants to avert a serious crisis in recruitment and retention”.

These are obviously matters that would come within the ambit of the covenant. Can the Minister say when they intend to build on the improvements the previous Government made to service accommodation in the light of the strategic defence and security review, which appears to indicate that cost of accommodation is a target area for savings?

The Government have been criticised for their intention to scrap major reforms to the system of inquests into military deaths. The changes we legislated to introduce and were due to be implemented imminently were supported by service charities and families. The Coroners and Justice Act 2009 would have delivered a better inquest service and ensured that the coroner undertaking military inquests had the training necessary to conduct an effective investigation. It would also have created a system of appeals against a coroner’s decisions. This has now been undone by the Government’s intention to scrap the office of the chief coroner and abandon the reforms that families want. In view of the vote in your Lordships’ House to save the office of the chief coroner, can the Minister tell the House whether the Government will now accept the outcome of that vote in the light of their commitment to the military covenant.

Then there is the issue of pensions. The Government plan to link public sector pension increases to the consumer prices index, rather than the retail prices index. This will result in lower pension increases than people had previously anticipated and expected and will disproportionately affect members of the Armed Forces and their dependants who rely on their pensions at earlier ages than almost anyone else. The reduction over the years in the anticipated and expected level of pension payment to some individuals, including seriously injured service personnel and Afghanistan war widows, will run into hundreds of thousands of pounds as their anticipated pensions are reduced for the rest of their working lives. When challenged on this last November, a Ministry of Defence spokesman said:

“It is not possible to treat the armed forces differently from other public servants”.

Can the Minister say whether that statement represents his view and that of his defence ministerial colleagues? Is such a statement consistent with the intention and meaning of the military covenant?

At the time your Lordships’ House debated the strategic defence and security review, there were reservations, in some cases strong reservations, about some of the decisions that were part of that review. The Minister prayed in aid the Government’s analysis of the financial situation, and will perhaps do so again today. No doubt, that is the Government’s justification for their approach to Armed Forces pay, which is hardly designed to improve morale. For a military covenant to have credibility among and within the Armed Forces, it is imperative that the Armed Forces are provided with the resources to undertake the commitments, clearly defined and with clear objectives, that they are expected to carry out and meet, and are not expected to undertake commitments which cannot be, for whatever reason, properly resourced. That relates not just to equipment and manpower, but to the welfare of service personnel and their families, given that that also helps to maintain morale and ensure operational effectiveness.

I do not doubt for one moment the personal commitment of the Minister to the military covenant or his own determination and, I am sure the determination of his defence ministerial colleagues, to try to ensure that the commitments our Armed Forces are expected to undertake are clearly defined and continue to be backed up by the level of resources needed to show that the military covenant is a meaningful and credible covenant which reflects the admiration and esteem that the people of this country feel for our service personnel.

17:28

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, I, too, congratulate the right reverend Prelate the Bishop of Wakefield on securing this important debate on the military covenant. In addition to the excellent debate that we had earlier today in the name of my noble friend Lord King, we had a debate on 12 November on the SDSR. As I said then,

“the SDSR is the start, not the end, of a process that will give us the Armed Forces that we need to face the challenges of the future while meeting the demands of today”.—[Official Report, 12/11/10; col. 393.]

The SDSR was the first review in 12 years and the first specifically to incorporate a security dimension—an acknowledgement that today defence and security are indivisible.

In setting out our defence and security strategy for the coming years, our overwhelming priority was to ensure operational success in Afghanistan, not least by giving our Armed Forces, who continue to deploy so courageously, all necessary resources. In addition, we had to work within the constraints of the biggest financial crisis in a generation and to reach our conclusions without damaging essential capability, the military covenant or critical industrial capability.

We recognise the need to do more to ensure that our Armed Forces veterans and their families have the support that they need and are treated with the dignity that they deserve. Members of our Armed Forces are second to none. They willingly accept the sacrifices that they may be called on to make. They enter into a lifestyle that can, at times, prevent them from enjoying aspects of life that many of us take for granted. That sacrifice is also borne by their families.

The military covenant originally set down the mutual obligations that exist between the nation, the Army and each individual soldier in recognition of the extraordinary commitment and sacrifice that soldiers may be called on to make, including the ultimate sacrifice. Those soldiers and their families should expect to be treated fairly and to be valued and respected. This debt of honour enshrined in the military covenant is something that I am sure noble Lords and noble and gallant Lords would acknowledge. While we were in opposition, however, we felt that the covenant was beginning to fracture. Consequently, the Government are rewriting the covenant as a tri-service document, the Armed Forces covenant, which expresses the enduring general principles that should govern the relationship between the nation, the Government and the Armed Forces community.

The Armed Forces covenant will provide a framework for government policy that aims to improve the support available for serving and former members of the Armed Forces and the families who carry so much of the burden, especially in the event of injury or death. The Armed Forces Bill currently going through the other place contains a clause requiring the Secretary of State for Defence to present an Armed Forces covenant report to Parliament every year. That requirement for an annual report will be enshrined in law and the report will play a crucial part in holding the Government to account to ensure that they are honouring the covenant.

One of the first things that the coalition Government did was to set out a number of concrete measures to rebuild the covenant. The programme for government described a number of measures that are designed to rebuild the covenant. They range from support for the education of service personnel to increasing support to veterans’ mental health needs. We have already doubled the operation allowance and changed the rest and recuperation arrangements. It is right that we properly support the families of those who have sacrificed or are prepared to sacrifice so much. In December last year we announced details of a new scheme to provide further and higher education scholarships for the children of service personnel killed on active duty. The scholarship will meet the cost of tuition fees and living expenses. Nothing can make up for the loss of a parent, but we hope that the scheme can in some way demonstrate the overwhelming gratitude of the nation for the sacrifices that some of our service families have made.

We also believe that it is important to support our service leavers as they transition to civilian lives, and that we should do all we can to help to make that transition successfully. In December, for example, we announced enhancements to the scheme that enables service leavers to go to university. Investing in their education is an investment in this country’s future prosperity, so we are reducing the qualifying period from six years to four and removing the qualifying period completely for personnel who are medically discharged.

In England we have announced the introduction of a pupil premium within state schools. This additional funding aims to enable schools to provide the extra support needed to mitigate the effects of frequent changes of school and the effects of separation from a serving parent deployed on operations.

In addition to the measures within the programme for government, the Prime Minister ordered the creation of a covenant task force under Professor Strachan. Its remit was to develop a series of low-cost policy ideas to help rebuild the military covenant, focusing particularly on ways of involving charities, private companies and civil society. Professor Strachan’s report was published on 8 December and we immediately accepted two of its recommendations: the community covenant, which aims to encourage support locally for the Armed Forces community; and the Chief of the Defence Staff commendation, which aims to recognise those who have shown support and assisted our Armed Forces in many different ways. We aim to launch both of these schemes in the spring. We are now consulting across Government and with other stakeholders on the report, and will issue a full government response commenting on each of the 90-plus recommendations, also in the spring.

We are committed to meeting the mental health needs of our people. Last year we accepted all the valuable recommendations in my honourable friend Dr Andrew Murrison’s excellent report, Fighting Fit: A Mental Health Plan for Servicemen and Veterans. The report focuses on improving the identification of mental health problems and better outreach, assessment and information services. It sets out 13 recommendations to encourage engagement with serving and former service personnel with mental health problems. We are now working hard to bring all these improvements together in one overarching strategy.

Stability and mobility are often competing forces in service life. We believe that we can better organise our Armed Forces to provide greater stability and minimise the mobile nature of the role that is so often the root cause of many of the difficulties that our Armed Forces families are faced with. Financial pressures are making it difficult for us to do as much as we would like to improve the accommodation that we currently provide for service families, but I am pleased to say that work started in December on a project to provide 260 new high-quality sustainable homes for soldiers and their families on the Canadian estate at Bulford, near Salisbury.

I turn to questions that I received. The right reverend Prelate the Bishop of Wakefield asked about the timetable for the development of a new employment model. This is a project aimed at the long term. Work is now getting under way but it cannot be implemented immediately. The study will be conducted over the next 12 to 18 months. Timelines for implementation will be devised following the concept phase. The new employment model project will review current terms and conditions of service and make changes where appropriate, to bring the expectations of service personnel and the demands we place on them more into line. At the heart of the new employment model is a recognition that, where mobility is required for service reasons, appropriate support and compensation must be available.

I assure the right reverend Prelate that it is not our intention to phase out the external reference group. We will continue to call upon and welcome the input of the external reference group, which brings together representatives from across Whitehall, the key service charities, the three families federations and academia, and delivers an independent judgment on the Government’s efforts in supporting the Armed Forces community. Indeed, we were able to offer reassurances to the group when it met last week.

My noble friend Lord Glenarthur asked three questions, the first of which was about ID cards. Many reservists already have a permanent ID card. I am looking into the issue and will write to my noble friend as soon as possible. I will also write to him in response to his question on medical information being passed to reservists’ GPs. On support to employers, the MoD aims to build support from employers of members of the volunteer Reserve Forces through its SaBRE campaign. We run a website and a free phone support line to communicate the benefits associated with employing a reservist.

My noble friend Lord Lee asked about the return from Germany. As announced by the Prime Minister, as part of the strategic defence and security review the Government have decided to accelerate the rebasing of 20,000 military personnel in Germany with a view to returning half of them by 2015 and the remainder by 2020. Work is ongoing to look at how best we do that.

The noble Lord, Lord Ramsbotham, made a point about the Veterans Minister. We absolutely accept that we must work across government to best support veterans and I pay tribute to the work done by the previous Government to improve that. We must now take that further. The question is whether simply moving the location of the Veterans Minister would be the best way to achieve that.

A number of noble Lords, including my noble friend Lord Lee of Trafford, the noble Lords, Lord Ramsbotham and Lord Bilimoria, the right reverend Prelate the Bishop of Hereford and the noble and gallant Lord, Lord Guthrie, mentioned allowances. I am well aware of the strong feeling on that issue and know how seriously my right honourable friend the Prime Minister takes the covenant. A strong economy is a national security imperative. The Government conducted the SDSR against the background of the dire fiscal situation, which requires difficult decisions on reducing public spending. Proper support to our service personnel is equally essential. An appropriate set of allowances is an important element of that support and will remain so in future. However, it cannot be immune from careful scrutiny to ensure that it remains appropriate. While reductions in that area will never be welcome, the package of changes that we are introducing has been developed in full consultation with the service Chiefs of Staff and represents the best balance between affordability and fairness.

I have run out of time. I will write to the noble Lords who asked me other questions. Again, I am most grateful to the right reverend Prelate for giving us the opportunity to discuss these important issues today. We are absolutely committed to ensuring that our Armed Forces have the support that they need and are duly recognised for the important role that they fulfil and the sacrifice that they make in the defence of the nation. Neither they nor the nation should expect anything less.

House adjourned at 5.42 pm.