House of Commons

Thursday 3rd February 2011 Commons Chamber

Thursday 3 February 2011

The House met at half-past Ten o’clock

Prayers

Thursday 3rd February 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 3rd February 2011 Commons Chamber

The Secretary of State was asked—

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

1. What recent discussions she has had with her EU counterparts on mackerel quota.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I have had various discussions about north Atlantic mackerel, including discussions with Maria Damanaki, the EU Fisheries Commissioner, and discussions at Council of Ministers meetings in Brussels in December. Our discussions centred on hugely increased catches by Iceland and the Faroe Islands, and their failure to agree on stock management measures. In the light of that, the EU Commission agreed to table proposals for sanctions against both Iceland and the Faroe Islands if no agreement was possible in the near future.

[Tom Greatrex]

The Minister will be aware of the Icelandic Government’s comment that the proposal to block Icelandic vessels from landing mackerel in European Union ports is neither surprising nor effective, given that most of their catches are landed at Icelandic ports. Is it not time that the matter was dealt with seriously, and should not Iceland’s accession to the EU be put on hold until the dispute is resolved? It is having a hugely disruptive influence on a core economic interest in Scotland.

[Richard Benyon]

I entirely agree. My consultations with Maria Damanaki and others across the Government have centred on the proposition that when a country is seeking to join a club, tearing up the rule book before it even enters is strange behaviour. We aim to ensure that Iceland’s accession is seen in the light of its actions in relation to the fish stock.

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

I agree that if we are to have quota rules, they must be obeyed. Has the Minister any other views on quotas— specifically in relation to fishermen in the under-10-metre sector—that he might wish to include in his discussions so that we do not experience another crisis in the summer?

[Richard Benyon]

We will be consulting the industry shortly about changes in the operation of our domestic fleet and about how we can help it to secure greater sustainability. The issue really comes down to the sustainability of stock. Approximately 1% of the egg survey is in Icelandic waters. There is an obvious way in which the Icelanders can negotiate. I urge them to operate in the way that we do across fisheries—to sit down and talk, rather than acting unilaterally.

[Nigel Adams (Selby and Ainsty) (Con)]

2. What steps she is taking to reduce fish discards; and if she will make a statement.

[Matthew Hancock (West Suffolk) (Con)]

3. What steps she is taking to reduce fish discards; and if she will make a statement.

[Tony Baldry (Banbury) (Con)]

6. What steps her Department is taking to reduce fish discards.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

The United Kingdom Government are pursuing a policy of minimising discards through the reform of the common fisheries policy in 2012. Work is also being undertaken domestically with our fishing industry to increase the selectivity of fishing and to improve the utilisation of the remaining unavoidable fish catches. Levels of discards from the UK fleet have been decreasing year on year since 2002. I am committed to taking further action.

[Nigel Adams]

Are there any lessons to be learned from countries such as Norway, Iceland and the Faroe Islands, which have managed to replenish their fish stocks and in which the common fisheries policy has completely failed?

[Richard Benyon]

It is beyond doubt that the common fisheries policy is broken. It is based on a centralised top-down system, and we must reform it by decentralising it. We must also make the management of our fisheries relevant to the way in which we manage the marine environment as a whole.

We can learn lessons from other countries. As our exchanges on the previous question made clear, they are not repositories of pure virtue, but there are certainly lessons that we can learn about the local and regional sea base and management.

[Matthew Hancock]

Was the Minister as shocked as I was by a recent television documentary about fish discards? I was appalled by what fishermen who work so hard have to do because of the rules. Will the Minister assure me that he has been working on the issue not just since the public outcry, but since the moment that he was given the job?

[Richard Benyon]

I applaud the Fish Fight campaign, which has been conducted very ably by Hugh Fearnley-Whittingstall. My one criticism is of the line that the fight back starts here. I should say in fairness to the previous Government that the fight back started many years ago—and the present Government, too, have worked extremely hard on catch quotas, fishing for the market, and a variety of measures to reduce the number of discards. I am happy to work with anyone. We need to win public support and, in that regard, the programme was a great success.

[Tony Baldry]

Speaking as the last Conservative Fisheries Minister in the Major Government, I can tell my hon. Friend that I thought he was considerably better at identifying fish at Billingsgate than I could ever have been.

I believe that the whole House supports my hon. Friend on the need to reform the common fisheries policy. Let me say to those who oppose quotas that reducing fishing and protecting fish stocks by reducing effort is no easier an option, and that we must face the reality that fishermen will not want to keep their boats in port.

[Richard Benyon]

I am grateful to my hon. Friend for his kind words. When interviewed at five o’clock in the morning, I would be hard pressed to recognise my own children, let alone fish stocks. I am grateful to my friends and enemies who have sent me fish charts, with which I wiled away the long winter evenings. He rightly says that there is no one-size-fits-all solution to this problem; there are opportunities to increase effort control, but we also have to deal with the problem of quotas. That is a problem in a mixed fishery and it has been part of the driver towards the number of discards, which we are so keen to reduce.

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

I know that the Minister is well aware of the pioneering efforts made by the Scottish white fish fleet and the Scottish Government in recent years to reduce dramatically the number of discards going into the North sea—the relevant figure is about 30%. People in coastal communities are pleased that the issue is now getting the wider prominence it deserves and has deserved for a long time. I am grateful to him for outlining his Government’s commitment to radical reform of the common fisheries policy, but I still question whether there really is the political will across the European Union to make the kind of changes necessary to tackle discards. We welcome his commitment, but what are the realistic assessments—

[Mr Speaker]

Order. We do have to have a question. I call the Minister.

[Richard Benyon]

I am grateful for the hon. Lady’s comments and I applaud the work of her constituents in trying to ensure that catch quotas work. I am glad that we managed to expand the scheme in the December round. She is right to say that we have to build alliances across the European Union, and I am working extremely hard to do that in the fringes of Council meetings and elsewhere. We are trying to get support at the radical end of the reform spectrum, so that we can achieve the kind of changes that mean that discards are a thing of the past and we can address the concerns raised by her constituents and constituents of all Members, including those representing inland constituencies, by ensuring that sustainability is at the heart of our fisheries management policies.

[Kerry McCarthy (Bristol East) (Lab)]

One of the methods of dealing with the problem of overfishing and depleted fish stocks is the use of marine conservation zones. Will the Minister update the House on what he is doing to ensure that there are more of these zones, not only in British waters, but overseas?

[Richard Benyon]

We are progressing with the implementation of the Marine and Coastal Access Act 2009, which will result in marine protected areas—marine conservation zones—around the coasts. We have four projects up and running, and I am working very hard to ensure that they are properly resourced and working towards the timetable of 2012. I very much hope that they will be able to deliver on that, and I will keep the House informed on progress. At the recent OSPAR talks in Bergen I was able to support a wider proposal in respect of international waters. The work we do on international fisheries and fisheries partnerships is key to ensuring that fishery conservation measures not only apply in our own waters, but are followed up elsewhere.

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

Does the Minister agree that, as Denmark has shown, further action can be taken by this Government, in conjunction with the devolved Administrations, to cut discard levels this year? Will he seek approval for an increase in the scope of this year’s catch quota trials, which half the Scottish white fish fleet expressed an interest in joining? Will he pledge to incentivise investment in more selective nets and in on-ship CCTV to monitor what stocks are being taken from the sea? Would those measures, together with radical reform of the CFP, not add up to an effective national action plan to end for good this appalling waste of good quality fish?

[Mr Speaker]

There were a lot of questions there, but I know that we will hear a pithy response from the Minister.

[Richard Benyon]

The UK Government have a very clear strategy to ensure that we reduce the level of discards and do not wait until 2012 to achieve that. Our fishing for the market scheme is addressing the 54% of discards created by the fact that there is no market for those products. We also managed to get an extension of the catch quota trials, and I was extremely pleased about that, because they achieve the virtue of catching less but landing more. That is the holy grail of fisheries management.

[Tessa Munt (Wells) (LD)]

4. What progress she has made on improving the performance of the Rural Payments Agency.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

Progress continues to be made in addressing the dire legacy described vividly in the independent review of the RPA published last year. Despite the issues arising from the updating of farmers’ maps and reduced staff numbers, the RPA met its target to pay 85% of 2010 claimants by the end of December. But there is still much to do and it will inevitably take some time to address some very long-standing problems fully.

[Tessa Munt]

I ask the Minister to recognise the work of the Farm Crisis Network, particularly the work of Suzie Wilkinson, the FCN’s co-ordinator in Somerset, and the pastoral and practical support it gives to farmers working under stress. In Somerset, there were 12 new cases in January, 10 of whom are owed something like £295,000. Farmers face eviction by banks, are unable to pay for feed and some may have to sell their stock because of TB problems. Will the Minister ensure that the RPA accelerates the cases of Somerset farmers, such as Bob Pether, whose payments have been incorrect every year since—

[Mr Speaker]

Order. We are grateful to the hon. Lady.

[Mr Paice]

I have huge admiration for the work of the Farm Crisis Network, which I have visited and met on a number of occasions. The hon. Lady is right to say that it supports some very hard-pressed farmers, particularly small farmers, for whom the single farm payment is a major part of their income and without which they would be in desperate straits. I am determined that the RPA should find a way forward to get some cash into the hands of those people as soon as possible. If she would like to write to me about particular cases, I would be happy to pursue them.

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

Will the Minister tell us how many staff will be cut from the RPA as a result of the 30% departmental spending cuts? Will he also explain how that will speed up payments to farmers?

[Mr Paice]

The hon. Lady assumes that the RPA was working efficiently, but it certainly was not, as the previous question demonstrates. Yes, the reduction in overall public expenditure means that the RPA is having to take a reduction in staff alongside all other arm’s length bodies, but at the same time it is becoming far more efficient, with better work practices and a new chief executive who started a fortnight ago. I am convinced we can do better with less.

[Dr Julian Huppert (Cambridge) (LD)]

7. What plans she has to ensure that access to forests is maintained or improved.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

The public forest estate consultation explores a range of models for the ownership and management of the estate and how important public benefits such as access can be maintained. An example would be how lease conditions could be used to ensure that access and other public benefits are protected.

[Dr Huppert]

In addition to established legal rights of way and Countryside and Rights of Way Act 2000 access rights, will the Secretary of State ensure that there are robust additional protections for access rights that are currently permitted access only, and will she safeguard existing access for bikes and horses?

[Mrs Spelman]

We had a lengthy debate last night in which I made it clear, at length, that permissive access rights are very limited in number and are on land that the public forest estate does not own.

[Barry Gardiner (Brent North) (Lab)]

Will the Secretary of State tell the House the projected figures for the next 10 years for the revenue that will come from the public forest estate? Will that revenue be offset by the benefit to the Exchequer from the sale of such land?

[Mrs Spelman]

Different types of forest are subject to different proposals in our consultation document, which is a genuine consultation. The planned sales—a continuation of the previous Government’s programme—are expected to raise £100 million over the spending review period. That will be part of DEFRA’s overall provision within that period.

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

I welcome the Secretary of State’s genuine consultation over the next 11 weeks—12 weeks in all. When will she make a statement to the House after the consultation has finished?

[Mrs Spelman]

First, we need to make it absolutely clear that this is a genuine consultation, unlike a lot of the consultations that I experienced under the previous Government. We want as many people to take part as possible. There is a statutory three-month period; Ministers will reflect on relevant considerations and bring to the House our considered view in a timely fashion.

[Mary Creagh (Wakefield) (Lab)]

Public access is absolutely vital to local communities. The Secretary of State talks about her consultation period, but before that period is over, the Government will start selling off 10,000 hectares of public forest land. That is more than was sold in Labour’s entire period in office. I should like to know what right communities will have to bid for that land. How long will they have to raise the money? Will it be sold as leasehold, and is it correct that the selection for this year deliberately avoids woodlands that give public benefits because the Government want to maximise the capital raised from assets?

[Mrs Spelman]

The criteria for the planned sales are set out in the public domain on the Forestry Commission website. They are a continuation of a programme of sales that have taken place over the past three decades. As the hon. Lady knows, her party’s Government sold off 25,000 acres—[Interruption]—without the protection that this Government will provide.

[Mary Creagh]

Hon. Members cry “Shame,” but we sold that off to reinvest the money in the forest; this money is to be reinvested in flood defence schemes. The land will be sold with no higher rights of public access. Government Members should think very carefully about what is happening. Is it not the case that, on the public forest, the Secretary of State does not know what she is doing, does not know why she is doing it, and nobody wants her to do it? Is it not time to stop and think again?

[Mrs Spelman]

I think the hon. Lady was not listening clearly last night. Ministers have repeatedly given assurances in this House that access and other public benefits will be protected. However, many of the pieces of land that fit the criteria the Forestry Commission has set out do not have access attached to them at present. She should reflect carefully on our public consultation document and gain a better understanding of what happened when Rigg wood was sold off under the conditions set by her party’s Government in their contract: without protection, access is now denied.

[Mr Adrian Sanders (Torbay) (LD)]

8. What steps she is taking to reduce the volume of international trade in ivory.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

The UK supports the global ban on the international trade in raw ivory imposed in 1989. While occasional one-off sales have been permitted in the past, we are working to ensure that no further sales of ivory take place without firm evidence that such sales will reduce poaching. In the UK, we employ stricter domestic measures than those required under the convention on international trade in endangered species concerning the trade in ivory.

[Mr Sanders]

I think the Government are doing a good job, building on the work of the previous Government, but there is still a great deal of concern that we are not tackling where the exchange takes place: on the internet. Do the Government have any plans to try to stop the sale of ivory through internet transactions?

[Richard Benyon]

My hon. Friend is right to point to that development in the illegal trade in ivory. For that reason, it is important that we continue to support schemes that give us evidence: for example, MIKE, the monitoring of illegal killing of elephants; and—dealing precisely with his point—ETIS, the elephant trade information system. We support those international efforts to make sure that we understand the problem and that we in this country have our house in order. I am impressed by the expertise found in a variety of agencies and shall continue to ensure that we play our part.

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

9. What steps she is taking towards reform of the common agricultural policy.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

The Government have recently responded to the European Commission’s communication, “The CAP towards 2020”. Our response calls for ambitious reform of the CAP that will enable farmers to meet the challenges and opportunities of the future.

[Annette Brooke]

I thank the Secretary of State for her answer. The second pillar of the CAP provides essential support to farmers to deliver environmental public goods. Which of the European Commission’s proposed options for reform does she think best balances the need to maintain landscape and diversity with food production and the protection of consumers and taxpayers?

[Mrs Spelman]

The whole of the Commission’s proposed reform of the CAP should address the twin challenges that the hon. Lady describes. Obviously, it is the combination of direct payments and the payments under pillar two—in particular, in this country, the way we use agri-environment stewardship schemes—that balances best the environmental benefits with food production. That is why the coalition Government are committed to increasing by 80% higher level stewardship.

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

The Secretary of State will be aware of the unease among farmers in Wales and the Welsh Government about the UK Government’s current position on CAP reform. Will she inform the House what progress she is making in developing a joint negotiating position?

[Mrs Spelman]

My right hon. Friend the Minister of State and I took the opportunity to invite the Welsh Minister for Agriculture to meet the Commissioner with us as early as June last year. We have had successive meetings with all the devolved Administrations and will continue to do so, as the reform process is likely to take a great deal of time. I find that we have much in common with the Welsh Assembly’s position and believe that there is much that we can do as we negotiate the reform to ensure that we get a good deal for farmers in Wales.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I ought to declare an interest as one of the few practising farmers in this country. [Interruption.] In this Parliament.

Will the Secretary of State, when considering the reform of the CAP, consider that Europe will have an important place in enabling agriculture to feed the world? Will she move away from the CAP’s structural faults, such as the growing of tobacco that is of such poor quality that no one wants to use it, and ensure that those practices are stopped?

[Mrs Spelman]

It is of the utmost importance that farmers in Europe are encouraged to produce more food and to do so sustainably. When we look at the threat to our society globally in relation to food security, it is clear that the nations that have the capacity to increase production sustainably are the ones that we should be fully behind.

[Mr Denis MacShane (Rotherham) (Lab)]

I mean the Secretary of State no harm, but as the second closet European in the Cabinet, does she agree that if we are to reform the CAP it is no use agreeing only across this Chamber? We have to convince our Irish, Spanish, French and Italian friends. The isolation of her party from the main centre-right conservative parties in Europe does not help.

[Mrs Spelman]

I have some good news for the right hon. Gentleman: the coalition agreement states clearly that we desire to be a “positive participant” in Europe. My colleagues and I have set about building alliances in order to secure the reforms that will benefit taxpayers, farmers, consumers and the environment. I am pleased to report that he will find that the position of our traditional friends—the Scandinavian countries and the Netherlands—and that of the German, English and Welsh farming unions is very close. That is the kind of alliance that brings about changes.

[John Pugh (Southport) (LD)]

10. What recent progress has been made on reducing the incidence of diseases in the bee population; and if she will make a statement.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I am pleased to report that there has been a significant reduction in the number of colonies lost from all causes. For example, losses over the 2009-10 winter were 16%, compared with 30% in 2007-08, and cases of foulbrood disease have decreased steadily since 2008. It is clearly too early to know the results for the current winter, but I can tell the hon. Gentleman that the national bee unit has lost only two out of 180 units.

[John Pugh]

I thank the Minister for that response. The previous Government’s promises to fund research into bee diseases created a buzz of anticipation, so can I take it that the coalition have a proper plan “Bee”?

[Mr Paice]

The previous Government committed £4.3 million to research on bee health, as the hon. Gentleman rightly said, and I am happy to pay tribute to them for that. Of that sum, £2 million was for the insect pollinators initiative, and £2.3 million was for the healthy bees plan, and we hope that those resources will deliver results. I must say, however, that that was the result of a massive campaign by Back Benchers on both sides of the House, which forced the previous Government to commit those resources.

[Mrs Mary Glindon (North Tyneside) (Lab)]

11. When she plans to make an announcement on funding for individual flood defence schemes during the comprehensive spending review period.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

The Environment Agency has been consulting regional flood defence committees on the programme for 2011-12. The agency’s board will be deciding the allocation of funding to each region shortly. Information on individual schemes will be published as soon as possible. Decisions on funding for future years depend on the outcome of DEFRA’s consultation on the way schemes are funded.

[Mrs Glindon]

People in the north-east whose homes were devastated by the floods in 2008 have learned that planned flood defences have now been deferred. What message does the Minister have for those people who, as well as living with the worry of future floods, have the added financial concern of losing all insurance cover because those defences are not guaranteed to go ahead?

[Richard Benyon]

First, those schemes have not been rejected; they will be looked at again to ensure that they can provide good value for money for the taxpayer. Secondly, we are consulting on a payment-for-outcomes scheme, which for the first time will ensure transparency in flood funding, allowing local communities to understand where they are in the pecking order and how they can assist in ensuring that their flood schemes come forward. On insurance, we are working closely with the Association of British Insurers, so that we can ensure future cover after the statement of principles ends.

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

Everyone realises that money is tight, but will the Minister look again at the importance of the Leeds flood alleviation scheme on the River Aire? In 2007, the city centre was centimetres away from flooding, with £500 million of damage to 3,000 properties projected. It is an incredibly important scheme that cannot simply be left to gather dust.

[Richard Benyon]

I am conscious of the scheme’s importance to the people of Leeds, and much work can be done to ensure that parts of it are certainly brought forward in a viable form. My right hon. Friend the Secretary of State has had discussions with the hon. Gentleman’s colleagues and she will be happy, as I will, to discuss the intricacies of the scheme. At the moment, it will cost roughly £250,000 per property, which is a difficult sum to get around in terms of value for money. Many other schemes provide much better benefit, but I very much hope that we can work with the local authority and with hon. Members to ensure that, in time, we bring forward elements of it.

[Mr Jamie Reed (Copeland) (Lab)]

It is a matter of fact that the Government have decided to cut flood defence spending by 27%. Those cuts mean that the Environment Agency has had to change the way in which it allocates resources through its outcome-measure assessments, and that has already had an effect upon flood defence schemes throughout the country. Will the Secretary of State today give a guarantee—not assurances, but a guarantee—that her cuts will not prejudice flood defence schemes in rural areas and other less populated areas, where the economies of scale for flood defence spending are very different from schemes in more urban areas?

[Richard Benyon]

I can assure the hon. Gentleman that proposals under the payment-for-outcomes scheme, on which we are consulting, will make things easier for communities that have traditionally missed out on flood funding, such as those he describes in rural areas, and that funding allocation will be clear. I shall just correct him, however. On a direct comparison of funding, we are spending approximately 8% less than the previous Government over the same period. One year ago, his party announced 50% capital cuts, and if he were sitting on the Government Benches and intending to favour flood funding, he would have to explain where else he was going to make cuts.

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

12. What recent representations she has received on the sale of land managed by the Forestry Commission in England.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

Since the beginning of October, we have received 4,200 representations on the sale of the public forest estate, but most of those were in response to press coverage, not to the real consultation document, which was published on 27 January.

[Mr Watts]

Should it not be clear even to this Government that selling off our forests is a bad idea that has no public support? Will the Minister abandon the policy before she is forced to do so because of public pressure?

[Mrs Spelman]

The hon. Gentleman was perhaps not in the House last night, so allow me just to remind him that, in the last few months before the general election, the party of which he is a member published when in government an operational efficiency programme setting out the case for long-term leases of the public forest estate and for getting

“greater commercial benefit from the public forest estate”.

[Harriett Baldwin (West Worcestershire) (Con)]

I have had more representations on this issue than on any other since I was elected—probably about 500 so far. If I send them on to the consultation with a covering letter, can the Secretary of State reassure my constituents that they will all be counted as individual submissions?

[Mrs Spelman]

I can give my hon. Friend that assurance. All hon. Members should actively encourage their constituents to read the genuine consultation document. There has been an awful lot of mythology in the press, and we would welcome responses to the genuine consultation.

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

Given that 60% of private English forests outside the public forest estate are under-managed, and that only 16% of them meet Forestry Stewardship Council standards, compared with 100% of Forestry Commission woodland, are not the public absolutely right to oppose this sell-off, which puts high levels of access and biodiversity at risk?

[Mrs Spelman]

I do not accept that it puts biodiversity at risk. That is something that I am particularly committed to enhancing and improving, as is set out in the proposals. The hon. Lady’s point will remind everybody that the public forest estate covers only 18% of woodland. Under the reforms that we propose, the Forestry Commission would continue in a regulatory role, and I would expect it to help us to achieve even higher standards of maintenance in both the public and the private forest.

[Andrew George (St Ives) (LD)]

Bearing in mind the Secretary of State’s concerns about public perception of the consultation proposals, does she agree that now may be the time to provide greater clarity about the conditions governing how the 40,000 hectares announced in the comprehensive spending review will be disposed of?

[Mrs Spelman]

I am happy to provide clarity. The criteria for the continuing sales of land as part of the CSR planned release are published and in the public domain on the Forestry Commission website. They look principally for sites that are less accessible and have a large requirement for expenditure. The criteria are set out in the public domain, and I am sure that the hon. Gentleman can help to point people to the right place.

[Sir Peter Soulsby (Leicester South) (Lab)]

I have read the consultation paper. I have also read the impact assessment, which shows that the selling of our forests and dismantling of the Forestry Commission has nothing to do with the costs or the benefits. We know that the Government are not listening to the big society or the community, because community groups are desperately worried about having to take on responsibility for their woods and forests. I note that today, as yesterday, the Secretary of State has not even mentioned her phoney argument about regulation, because it is so weak. At the heart of this, one question remains: just why is the Secretary of State determined to sell off our precious woods and forests?

[Mrs Spelman]

That was part of last night’s debate. It is clear that the Opposition do not want community groups and charities to be able to take ownership and management. That is clearly a divide between our parties. This is not primarily about cost and benefit. The point about regulation still stands. The Forestry Commission is both the regulator and the largest seller of timber in the market that it regulates. In this day and age, that kind of conflict of interest cannot continue.

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

13. What progress has been made in resolving the single payment scheme difficulties experienced by Mr Peter Philpot.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I apologise very much for the unacceptably long delay in resolving the issues on Mr Philpot’s single payment scheme claims. For the House’s information, I should declare that I know Mr Philpot personally. This is one example of the dire legacy at the Rural Payments Agency. I understand that Mr Philpot is due top-up payments for the 2007 and 2008 scheme years, and these will be made by the end of this month. Resolving the underlying problems will take longer, but I am committed to seeing that permanent solutions are found.

[Mr Baron]

The Minister kindly acknowledges that the RPA has failed my constituent over a long period. Will he detail in writing what has held up the claims so far, and which entitlements are causing the problem, in time for a meeting on 15 February between the National Farmers Union and Mr Philpot?

[Mr Paice]

To be honest, I am not sure that I can write to my hon. Friend detailing which particular transfers or entitlements are wrong. The problem is the computer system, which is completely inadequate for its purpose. It was commissioned, of course, by the previous Government, and it is not fit for purpose, especially in very complex cases such as Mr Philpot’s, where a large number of transfers of entitlements have had to be brought into play.

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

14. What progress she has made on improving the performance of the Rural Payments Agency.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I refer my hon. Friend to the answer I gave earlier.

[Rehman Chishti]

Has the Minister considered the merits of outsourcing the agency’s payments process to improve performance and efficiency?

[Mr Paice]

The short answer is yes—which my hon. Friend might be happy to settle for. I should emphasise, however, that that was one of the recommendations in the report that we published last year. We are pursuing it, but we have to ensure that we get the existing stuff working so that we do not interrupt payments even more while we look at the whole process of outsourcing.

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

15. What steps she is taking to reduce fish discards; and if she will make a statement.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I refer my right hon. Friend to the answer that I gave earlier.

[Simon Hughes]

I listened to the Minister’s earlier answers. Fish, like forests, are of as much interest in Bermondsey and Southwark as anywhere else in Britain. What is he doing not only to deal with the common fisheries policy, but to ensure that people at home understand the benefits of eating more fish, particularly sustainably caught fish, so that they can both be healthier and help to solve this Europe-wide failure?

[Richard Benyon]

The Fishing for the Market project, which is being carried out by DEFRA, analyses the 54% of discards that are created because there is no market for those fish. Some of them are perfectly edible delicious fish, such as dab. We must also ensure that the public ask for Marine Stewardship Council accredited fish, which can be bought at the fishmonger and the supermarket. Supermarkets are the key to driving forward this agenda.

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

The common fisheries policy is probably the most unmitigated disaster in EU history—and that is up against some pretty stiff competition. The doctrine of common resource has been a disaster from the beginning. The Minister says that the common fisheries policy is broken, so why is he talking in terms of reform. Why does he not just abolish it?

[Richard Benyon]

I could spend all my energy trying to unpick the common fisheries policy from various treaties, probably going back to the treaty of Rome. However, I am dealing with an industry in crisis, and with people’s jobs. They want me to push at a door that is open. I urge the hon. Gentleman to read the Commission’s paper and position statement, because for the first time there is an opportunity to decentralise this matter and to get back more local control. That is what the industry wants, and what we all want.

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

16. When she plans to announce proposals arising from her Department’s consultation on the Dangerous Dogs Act 1991.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

We are working closely with the Home Office, and we expect an announcement shortly regarding antisocial behaviour, in which the issue of dogs will be included.

[Gavin Shuker]

Members from across the House who have had serious dog attacks in their constituencies will welcome that answer. There are, however, serious concerns about the ability to implement any changes that come from the consultation, given the serious and deep cuts to the Department for Communities and Local Government and to neighbourhood policing. I would like the Minister to respond to that.

[Mr Paice]

I cannot pre-empt the announcements that the Home Office will make shortly. I assure the hon. Gentleman that the plan is not for massive additional public expenditure in dealing with this issue. He will have to await the proposals that will be published shortly.

[Mr James Gray (North Wiltshire) (Con)]

We are all concerned about dangerous dogs—of course we are—and about the antisocial element among ordinary dogs. None the less, does the Minister agree that there is a risk that perfectly normal dogs that bark might suddenly find themselves captured in all-encompassing anti-dog regulations? Will he be cautious in addressing the problems raised by the hon. Member for Luton South (Gavin Shuker)?

[Mr Paice]

My hon. Friend is right to urge caution. There are two slightly different perceptions. One is of the dogs that people use as fashion accessories, such as the pit bull-type dogs used by the louts that we sometimes see walking about the streets. However, the tragedies often involve household pets that, for some reason, have gone wrong. We have to bear that in mind and look at the whole picture.

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

17. What recent estimate she has made of the level of farm incomes; and if she will make a statement.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

The latest forecasts of farm incomes were published on 27 January. They indicate that average incomes are likely to show a marked increase in 2010-11 on arable farms, but to fall on livestock farms. I am sorry to say that the current price for grain is likely to increase that differential.

[Miss McIntosh]

Is the Minister aware that incomes are expected to drop by 60% for pig farms, 30% for sheep farms, 48% for farms with grazing livestock and 24% for dairy farms, and that the increase for arable farmers that he referred to is due only to the single farm payment? In the context of common agricultural policy reform, will he assure the House, and farmers, that the emphasis will remain on farm production and on ensuring a fair return to our producers?

[Mr Paice]

I do not think that my hon. Friend is right to attribute the rise in arable income to the single farm payment. It is because the price of wheat today is more than double what it was a year ago. As my right hon. Friend the Secretary of State said earlier, our approach to the common agricultural policy is about trying to drive up productivity and competitiveness and to stop wasting money in areas in which it should not be spent. That is why we want to see a greater proportion of the funding spent on pillar two, in which we can actually aid competitiveness.

[Nia Griffith (Llanelli) (Lab)]

Can the Minister tell us what talks he has had with Treasury colleagues about encouraging the banks to lend more to farmers? Farmers in my constituency are suffering considerable difficulties and finding that banks are changing terms and conditions and refusing to accommodate their needs in any way.

[Mr Paice]

The hon. Lady is not alone in having constituents with those problems, and of course they are not restricted to farmers. As she will know, my right hon. Friend the Chancellor has already made a number of statements on the subject, including about ways in which he can press the banks to be more open with their lending and perhaps charge less for it.

[Jo Swinson (East Dunbartonshire) (LD)]

18. What recent assessment she has made of the effectiveness of the convention on international trade in endangered species; and if she will make a statement.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

DEFRA has not undertaken any recent assessment of the effectiveness of CITES. The next opportunity to examine the extent to which the convention is delivering the objectives of its strategic plan will be the CITES standing committee in August.

[Jo Swinson]

The Minister may be aware of the recent cross-border crackdown on illegal wildlife smuggling in central Africa, which led to arrests and the seizure of 150 kg of ivory, 1,000 African grey parrots, 17 turtle shells, seven leopard skins, two lion skins and a rather grisly haul of ape heads. That successful operation was co-ordinated by Last Great Ape, a dedicated non-governmental organisation. What is DEFRA doing with ministerial colleagues to ensure that such civil society organisations, which are vital to that work, are supported by Department for International Development funding and backed up by ambassadors in making it clear that our endangered species must be protected?

[Richard Benyon]

I applaud my hon. Friend for her commitment to this matter. I will certainly work with colleagues in Departments such as DFID to ensure that we co-ordinate the great deal of work that we are doing to sponsor schemes that crack down on poaching, such as the one that I described earlier. We have to understand that the real problem is the end user. We can have our house in order here, and our wildlife crime unit does wonderful work supporting endeavours such as those that she mentions, but ultimately we have to deal with those who believe that the products in question are useful in medicine, and those who use ivory in ornaments. That is where the problem really comes from.

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

The Minister will be aware that if we are to enforce the convention in Britain, we need to ensure that we have at our airports and seaports the customs officers who are needed to do the work. Can he assure us that there will be no diminution in the effort put in to ensure that endangered species and other animal products are not introduced to this country?

[Richard Benyon]

I can assure the hon. Gentleman that I am working very closely with Home Office colleagues on their consultation on the new border regime. I have visited the animal reception centre at Heathrow and seen the expertise there, and we want to keep that skill base active across the country.

[Mr Christopher Chope (Christchurch) (Con)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

My Department takes responsibility for safeguarding the environment, supporting farmers and strengthening the green economy. In that context, I am sure that Members of all parties will join me in welcoming the publication of Foresight’s latest report, “Global Food and Farming Futures”. That excellent body of work, co-funded by my Department, is a searching and rigorous assessment of the global food challenges between now and 2050, and I urge all Members to read it.

[Mr Chope]

Why can my right hon. Friend not give an unequivocal guarantee that in any sale of Forestry Commission land, existing public rights of access will be maintained exactly as they are at the moment, whether on or foot, by bicycle or on horseback? The failure of her colleague in the other place to give an unequivocal answer to that question yesterday has increased, not allayed, public suspicion on that subject.

[Mrs Spelman]

The Minister of State, my right hon. Friend the Member for South East Cambridgeshire (Mr Paice), gave precisely that undertaking in the debate last night, and I believe that he has reiterated it today.

[Mary Creagh (Wakefield) (Lab)]

The Campaign for Better Transport today launched a “Save Our Buses” campaign. Its research shows that Cambridgeshire county council is proposing to phase out all council bus services, and that Northamptonshire county council plans to cancel all existing rural services. Can the Minister tell the House what advice he has given the Department for Transport, or what advice has been sought, about the impact of those bus cuts on rural communities and economies?

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I can assure the hon. Lady that I am working closely with ministerial colleagues in the Department for Transport to ensure that a variety of solutions are found in respect of rural bus services. One problem is that such services are extremely expensive, and the vast majority of the buses go around the countryside transporting nothing but air. We need more customer-responsive local solutions. The Government can assist those in a variety of ways.

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

T2. Does the Secretary of State agree that the new National forest, which covers much of my constituency, is a model of what can be achieved by the private sector and the third sector in delivering excellent access to, and enjoyment of, the amenities of our woodlands?

[Mrs Spelman]

I certainly do. I met representatives of the National Forest Company this week. It is a wonderful model of what can be achieved. It involves schools and volunteers and has achieved a lot of regeneration on former industrial sites.

[Barry Gardiner (Brent North) (Lab)]

T3. Does the Minister agree with the Country Landowners Association that pillar one of the common agricultural policy should increasingly deliver public and environmental goods, or does he agree with the National Farmers Union, which thinks that that would increase costs for farmers, and therefore opposes the idea?

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

The Government, as has been published in our reply to the Commission’s proposal, believe that pillar two is the better vehicle for the delivery of public goods, which is why we believe that pillar one should gradually be phased out over a long period. We can then concentrate resources on transparent payments to farmers for delivering access, environmental benefits and a range of other public goods, including farming competitiveness.

[Graham Evans (Weaver Vale) (Con)]

T4. My constituency is extremely fortunate to have Delamere forest, the largest woodland in Cheshire. Can the Secretary of State assure me, and my constituents, that this Government will always protect public access rights to Delamere forest?

[Mrs Spelman]

Yes, absolutely.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I would be very disappointed, and so would my constituents, if the forests and woodland question was diverted into a question of access. It is a question not of access, but of ownership. Deep in the DNA of English people is that for years and years they have been fed up because they have been told, “You can come, by our grace and favour, and walk on our land, but you can’t own it.”

[Mrs Spelman]

It is a question of both ownership and access. As I explained to the House yesterday, when the hon. Gentleman’s party was in government, it also looked at both ownership and access.

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

T5. People in Northumberland will never forget the devastating impact of floods on communities such as Rothbury, Warkworth and Morpeth. Will the Minister therefore assure me that he will take a personal interest in the Morpeth flood relief scheme? It is obviously impossible for all flood relief schemes to proceed at the same time, but the impact on Morpeth, which was visited by leaders from all political parties, was devastating.

[Richard Benyon]

I am more than aware of the impact of those floods on the people of Morpeth, and of the fantastic community spirit that came out at the time. The community wants to ensure resilience against flooding in future. I assure the right hon. Gentleman that I will meet him, and them, at any time to ensure that we can carry that forward.

[Ian Lavery (Wansbeck) (Lab)]

Morpeth is actually in my constituency. The townsfolk are absolutely livid—and devastated—that the Morpeth alleviation scheme is being deferred. Will the Minister agree to meet me as a matter of urgency to discuss the Morpeth project?

[Richard Benyon]

I am very happy to meet the hon. Gentleman and members of the lead local flood authority to discuss that with him, if he can arrange a time with my office.

[Andrew Bingham (High Peak) (Con)]

T6. I am sure that, like me and many other hon. Members, my right hon. Friend the Minister has received many representations on the future of public forests. I have more than 3,000 acres of Forestry Commission land in my constituency. Public rights of way will be protected by law, but will he give me a cast-iron guarantee that permissive access rights will also be protected, maintained and freely available under any future management agreements?

[Mr Paice]

I am glad that my hon. Friend has asked that question, because it allows me to emphasise that there is a difference between dedicated rights and permissive access. Dedicated rights apply to more than 90% of the forest estate that we own. They cannot be taken away or removed; they are there in perpetuity. However, a lot of people confuse those rights with permissive rights. The only places in the forest estate where there are such rights are land that we do not own, but have by leasehold—mainly on 999-year leases. We cannot dedicate such land because the original leases prevent us from doing so, but all Forestry Commission-owned land has dedicated access, which is permanent.

[Mr Dennis Skinner (Bolsover) (Lab)]

We hear today that farmers and many others are not able to get hold of grants from the banks to further their causes. In the light of that, will the Secretary of State tell the banks that under no circumstances will they be able to buy forests?

[Mrs Spelman]

We have made it perfectly clear that the Forestry Commission has a duty and a responsibility, with any of the planned sales of the public forest estate, to satisfy itself that those who wish to buy are qualified to do so and have the necessary expertise to safeguard the high standards of protection of the environment and its biodiversity, public access and other public benefits.

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

T7. In my constituency we are delighted that our work against dangerous dogs and their owners has been recognised by DEFRA, and that the borough of Ealing has been selected to pilot the dog ASBOs—or “dogbos”. Can the Minister give us further details on how those are intended to work?

[Mr Paice]

I admire my hon. Friend’s doggedness in pursuing this subject, and she is right to do so. I congratulate Ealing on applying to take part in the pilot scheme and we welcome its interest, but no final decisions have been taken.

[Mark Durkan (Foyle) (SDLP)]

The Secretary of State earlier used warm tones in promising future positive engagement with the devolved Administrations on the future of the CAP. Will that engagement be on the basis of DEFRA continuing to ignore the deeply held views of the devolved Administrations on the future of pillar one?

[Mrs Spelman]

We have been proactive in our engagement with all the devolved Administrations, and recognise the importance of direct payments to farmers. It is that assurance that the devolved Administrations are seeking, and I confirm that Ministers understand the challenges of farming in less favoured areas and will defend those interests.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

T8. Can the Minister offer any help and support to the monks of Caldey island off the south Pembrokeshire coast in their attempts to introduce the red squirrel to their island?

[Richard Benyon]

I applaud the monks, and their Member of Parliament, for their support for this scheme. Like me, they have seen what has happened in Anglesey and the eradication of the grey squirrel there, which has almost been achieved. That will bring benefits for the regeneration of the red squirrel, and we are looking at it closely in connection with our project in the north of England.

[Jessica Morden (Newport East) (Lab)]

Last week I had more representations from constituents who are saddled with the problem of unadopted drains and sewers. Can the Minister give me an update on what progress has been made since the consultation finished at the end of last year?

[Richard Benyon]

We will make an announcement very shortly. I understand the fears and concerns of the hon. Lady’s constituents, and we are determined to take forward that very important part of the Flood and Water Management Act 2010. I will be in touch with her shortly.

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

T9. Recently in Wolverhampton we had a serious incident involving a dangerous dog. Does the Minister agree that police officers need adequate training to deal with dangerous dogs and the skills necessary to handle such situations?

[Mr Paice]

I have huge sympathy with those affected by what happened in Wolverhampton, which was a huge tragedy. A well-meaning family took in a stray dog, which then turned on their child; it could not have been a worse situation. Wolverhampton city council has rightly advised that if people find stray dogs, they should tell the council rather than taking them in. My hon. Friend is right to refer to police training. Some forces have put a great deal of resources into training their officers to deal properly with such incidents, and the rest should follow that example.

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

Yesterday in Victoria Tower gardens there was a photo opportunity for MPs, organised by Animal Defenders International, with an inflatable elephant. It was as surreal as it sounds. The event was to highlight the fact that DEFRA has yet to arrive at conclusions on the public consultation on the banning of wild animals in circuses. Can the Minister of State tell us when we may expect that announcement?

[Mr Paice]

I can tell the hon. Gentleman that the decision is imminent. This is very important. We are well aware of the work that he started on this subject, and will make an announcement shortly.

[Rory Stewart (Penrith and The Border) (Con)]

Will the Minister please give us more detail on exactly what will happen with IT management and mapping to speed up payments, particularly for small farmers?

[Mr Paice]

The Rural Payments Agency has been very involved over the past six or nine months with the providers of our IT system in introducing what they apparently term a number of “fixes” to the system to try to overcome many of the problems, and they are now working through, and enabling us to get through, some of the backlog. I suspect that we will shortly be making a decision on making manual payments, to ensure that more farmers, especially small farmers, receive their money.

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

Kielder forest, which will provide the bulk of the income under the Government’s plans to sell off our national heritage, is home to 31 sites of special scientific interest, as well as red squirrels and ospreys, yet the Government consultation classifies it simply as “commercial”. What guarantees can the Secretary of State give us that the public interest and conservation interests will be met in perpetuity, given that the forest is classified as commercial?

[Mrs Spelman]

We need to be perfectly clear that Kielder forest is predominantly commercial, but that it retains within it sites of special scientific interest and other recreational amenities that will be protected by the conditions set in the leases—in addition to the legislation that protects such things—if that is the outcome that arises from the proposals under consultation.

[George Freeman (Mid Norfolk) (Con)]

Following the very important recommendations laid out in last week’s Foresight report on the role of agricultural research in tackling climate change and promoting food security, what representations can the Secretary of State make to our European colleagues to ensure that we have a regime in Europe that encourages agricultural innovation?

[Mrs Spelman]

We regularly raise these issues with a number of European Commissioners, not just with the Directorate-General for Agriculture and Rural Development. I have often commended the work of the report to European Agricultural Commissioners for the warning that it gives to the food, farming and research community of the twin challenges of environmental change and food security that mean that we have to use all our endeavours to build the capacity in European agriculture to produce more food sustainably for a hungry world.

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

The consultation on the dangerous dogs legislation posed the possibility of extending the law relating to public land to private property, as supported by postal workers unions. Will the Government make that commitment when they announce the outcome to the consultation to protect workers such as doctors, midwives and postmen and women?

[Mr Paice]

The hon. Lady is right that the consultation posed that question. We believe that existing legislation might be slightly inadequate, but does cover what we might call the curtilage of property—the footpath to the door, or whatever—as well as open public space. However, there was very little support in the result of the consultation for extending the legislation inside the door and into people’s private property—which, as I intimated earlier, is, sadly, where a lot of the attacks happen.

Business of the House

Thursday 3rd February 2011 Commons Chamber

11:33

[Hilary Benn (Leeds Central) (Lab)]

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

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

The business for the week commencing 7 February will be:

Monday 7 February—Opposition day (un-allotted day) [half-day] [first part]. There will be a half-day debate on Government policy on the cost of fuel. This debate will arise on a Scottish National party and Plaid Cymru motion, followed by motions relating to the 10th report from the Standards and Privileges Committee on the registration of income from employment and the eighth report of session 2008-09 from the Standards and Privileges Committee on all-party groups.

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.

The provisional business for the week commencing 14 February will include:

Monday 14 February—Second Reading of the Budget Responsibility and National Audit Bill [Lords].

I should also like to inform the House that the business in Westminster Hall for Thursday 17 February will be a debate on a Transport Committee report: Priorities for investment in the railways.

[Hilary Benn]

I am grateful to the Leader of the House for that reply. On his submission to the Independent Parliamentary Standards Authority review, which has been published this morning in a written statement, may I welcome what it says about the need for fundamental reform? That view is forcefully shared right across the House, and we all hope that IPSA will listen.

On counter-terrorism, the shadow Home Secretary has offered cross-party talks to draft emergency legislation, but it is still not in the Library. The Government said in their review last week that using a statutory instrument would be very difficult in the event of a major incident. May we have an update?

Last night, we saw just how unpopular the plan is to sell off our woodlands and forests, with several Members on the Government Benches voting against the Government. Lib Dems will have noticed that they do not have a single Minister in the Department for Environment, Food and Rural Affairs. I pity them, having to reply to all those e-mails to explain why they voted for a policy that they must, in their hearts, loathe. At least their president, the hon. Member for Westmorland and Lonsdale (Tim Farron), had the courage to speak out and vote with us on that. May we have a detailed statement from the Environment Secretary on the extraordinary claim she made this week, which was repeated by the Prime Minister yesterday, that the reason for the sale is an apparent conflict of interest between the Forestry Commission’s roles as a regulator and as a seller of timber? As a former Environment Secretary, may I tell the Leader of the House that, in my three years in the job, not a single person raised this matter with me? The House is entitled to know what the Secretary of State has discovered in just nine months that none of her predecessors worried about in the 90 years since the Forestry Commission was founded. This is a bad policy looking for an excuse.

I must hand it to the Government, however, and give them credit where it is due. Given that the proposal might not even save any money, it takes a special kind of genius to unite just about everyone else against it. The truth is that people do not agree with it and they do not want it; even No. 10 is now briefing that it does not think it has been very well presented. So not for the first time I say to the right hon. Gentleman that the Government are going to have to change their mind.

Talking of which, there has been much comment this week about the Prime Minister having to come to the rescue of the Health and Social Care Bill because it, too, has been poorly presented. Will the Prime Minister come to the House to explain whether he blames himself for that, given the revelation this week that he is having trouble persuading his own brother-in-law, an NHS cardiologist, that the upheaval is a good idea? His brother-in-law is apparently worried that hospitals will be disadvantaged. If the Prime Minister cannot even reassure his own family about the proposals—and the Health Secretary certainly cannot persuade the House—is it any wonder that the public are not buying them? Will the Leader of the House ensure that we have enough time in Committee properly to consider the Bill, because, to judge from the Second Reading debate, there are still far more questions than there are answers?

May we have a debate on one of the greatest achievements of the previous Labour Government: Sure Start? [Interruption.] It is interesting to hear Conservative Members jeering Sure Start. Before the election, the Prime Minister went up and down the country—we have certainly heard that one before—saying that he was strongly committed to it. He promised that he would back it. He even had the nerve to criticise my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) for trying to frighten people about this; and his right-hand man, who is now the Education Secretary, said:

“On Sure Start, we won’t cut funding”.

It could not have been clearer. Except that we now learn that the budget is going to be cut. A survey by the Daycare Trust and 4Children shows that 250 Sure Start centres are expected to close in the next 12 months, and six of them are going to be chopped by the Tories’ own flagship borough, Hammersmith and Fulham. It is no wonder that parents are worried sick. Another week, another betrayal. Will the right hon. Gentleman explain why anyone should now trust any promise made by the Prime Minister before 6 May?

Finally, I have not only been reading the Leader of the House’s submission to IPSA; I have also been reading his blog. Musing on hard times, he wrote:

“I predict that The Times list of the most popular girls’ names in the year may include a new one—Austerity.”

May I predict in return that, when it comes to boys’ names this year, Dave, George and Nick are not going to be very popular? If the right hon. Gentleman is looking for alternatives, may I suggest Complacency, Incompetency and, as for the Deputy Prime Minister, that is a really easy one: Duplicity? What is in a name? A lot!

[Mr Speaker]

I think I will take the last observation as a joke, but in any other context the use of the word “duplicity” would not be appropriate. I am sure, however, that good humour is what was intended by the shadow Leader of the House.

[Hilary Benn]

Indeed it was, Mr Speaker.

[Sir George Young]

I am sorry that the right hon. Gentleman’s punchline did not work.

I welcome what the right hon. Gentleman said about IPSA. I am absolutely clear in my own mind that we must adhere to the principle of the independent setting of our allowances; we cannot go back to the bad old days. I am equally clear that we must stick with the principle of transparency. On the other hand, IPSA must recognise that the allowances are meant to support us in the job we were sent here to do: fighting for our constituents, holding the Government to account, and scrutinising legislation. In many respects, the current administration and structure of allowances get in the way of our doing that job. I therefore very much hope that IPSA is able to respond to the representations I have made, and to those which I hope other colleagues will also make, and that it will come up with a revised system that enables us to get on with the job we were sent here to do.

On control orders, I welcome the opportunity of cross-party talks, and I will certainly pursue with the Home Secretary the issue the right hon. Gentleman raised.

We had an extensive debate on forests yesterday, and a lot of the exchanges today were also focused on the forests, so I cannot promise time for an extra debate. I welcome yesterday’s debate however, in which my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs dismissed many of the myths surrounding our proposals, explained that this was an opportunity to improve the levels of public benefit from our woodlands, and drew attention to the fact that the previous Government sold off 25,000 acres of woodland with a bare minimum of protection. There will be no further debate on that subject for the time being therefore, but we are, of course, consulting and listening, as both the Prime Minister and my right hon. Friend the Secretary of State said yesterday.

On the health reforms, we are simply carrying out the policy of the previous Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). This is what he said to the Liaison Committee a few years ago:

“We have been asking in people from the private sector to review what we can do to give them a better chance to compete for contracts…so the independent sector increases its role, will continue to increase its role and, in a wider and broader range of areas, will have a bigger role in the years to come.”

He went on to say:

“The test at the end of the day is not private versus public, it is value for money, and it is not dogmatic to support one against the other.”

I therefore hope the Opposition will support what we are doing: driving forward the agenda set out by the right hon. Member for Kirkcaldy and Cowdenbeath.

On Sure Start, there are sufficient resources in the programme to maintain the existing structure of Sure Start children’s centres, so I reject the accusation that was made.

The right hon. Member for Leeds Central (Hilary Benn) asked for more time for the Health and Social Care Bill. The Opposition did not vote against the programme motion setting out the time available for the Bill, so it is astonishing that he should raise that subject now.

On the right hon. Gentleman’s final point, perhaps Prudence would have been a more appropriate name.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A great many hon. and right hon. Members are seeking to catch my eye, but there is a ministerial statement to follow and then two heavily subscribed debates under the auspices of the Backbench Business Committee, time for which it is my responsibility to protect. There is therefore a premium today on single, short supplementary questions and the Leader of the House’s characteristically pithy replies. Even allowing for that, I am afraid that many Members will be disappointed today.

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

May we please have a statement on the future of the maternity department at Fairfield hospital in Bury, following yesterday’s decision by NHS officials to confirm the closure decision that was made by the last Government?

[Sir George Young]

I understand my hon. Friend’s concern about the decision taken on 2 February by the NHS North West board on the reconfiguration of maternity services in the north-west, which followed a period of consultation. I will, of course, draw his concern to the attention of my right hon. Friend the Secretary of State for Health.

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

The Leader of the House will be aware of today’s very important Westminster Hall debate on parliamentary reform, led by the hon. Member for Brighton, Pavilion (Caroline Lucas). Will he join me in encouraging as many newly elected Members in particular to take part in the debate to offer their ideas for making this place work better, and will he show his ongoing support for parliamentary reform by attending in person?

Also, the Government have set a grown-up precedent in allowing a free vote on next week’s Backbench Business Committee motion on prisoner voting rights. Will the Leader of the House now ensure that votes on all Backbench Business Committee motions will be unwhipped, to ensure that any outcome this House comes to can truly be said to represent the will of the House?

[Sir George Young]

I am grateful to the hon. Lady for her question. I do hope to attend the debate on parliamentary reform later today in Westminster Hall, a debate to which my hon. Friend the Deputy Leader of the House will be replying. He shares my commitment to and appetite for more parliamentary reform.

On the hon. Lady’s second point, I welcome the opportunity that this Government have given the Backbench Business Committee not just to propose subjects but to table motions. If a motion is tabled that causes difficulties for the Government, the Government may have to take a view, as we did with the debate on contaminated blood, so, with my right hon. Friend the Chief Whip sitting a few feet away from me, it would be rash to make any commitment about unwhipped votes.

[Kris Hopkins (Keighley) (Con)]

May I ask the Leader of the House for a debate on representation on local enterprise partnerships? My constituency has no representation on the Leeds city region LEP, so we are having to rely on a Bradford-based, Bradford-centric, soon-to-be-imposed shadow mayor.

[Sir George Young]

I understand my hon. Friend’s concern. I would be more than happy to raise the structure of the LEP in his constituency with my right hon. Friend the Business Secretary, to see whether we can get a broader base of representation.

[Mr Ben Bradshaw (Exeter) (Lab)]

May we have an urgent debate on the devastating impact of the Government’s policies on bus services, in the light of today’s report showing that Devon would be among the worst affected parts of the country, losing services in Exeter and the rural areas, thereby reversing the great progress made under the Labour Government on improving bus services?

[Sir George Young]

The right hon. Gentleman may have an opportunity to raise that subject in Wednesday’s debate on the revenue support grant for local government. Some 80% of bus services outside London are commercially run, and so do not depend on direct funding from councils. There has been no cut in the financial support that we provide for those services, and we have protected the statutory concessionary travel schemes.

[Mr Stewart Jackson (Peterborough) (Con)]

May we have a debate on record-keeping at the UK Border Agency? Hon. Members will be aware that we recently debated the successor to control orders, but we are also routinely told that it is not possible to provide information on how many individuals are using articles 3 and 8 of the European convention on human rights to avoid deportation when they should be removed from this country. Will the Leader of the House have a word with our colleagues in the Home Office to investigate this unsatisfactory situation?

[Sir George Young]

I understand my hon. Friend’s concern. I wonder whether he would be able to get the information about the numbers that he quite rightly seeks by tabling parliamentary questions, but in any event I shall raise the matter with the Home Secretary.

[Bill Esterson (Sefton Central) (Lab)]

In yesterday’s Westminster Hall debate, which I secured, on the future of children’s centres, it became increasingly clear that many local authorities are unable to afford to maintain the current network of Sure Start children’s centres. Given that concern and the recent reports from my right hon. Friend the Member for Birkenhead (Mr Field) and my hon. Friend the Member for Nottingham North (Mr Allen) on early intervention, will the Leader of the House think again about providing Government time for a debate on this issue which is incredibly important for the future not just of our children, but of the country?

[Sir George Young]

The Government are committed to the policy to which the hon. Gentleman has just referred. There will be an opportunity to pursue the matter further on Monday, when Education Ministers will be before the House, and I will tell my right hon. Friend the Secretary of State for Education that the hon. Gentleman may be in his place to do just that.

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

On the subject of names, I wonder how many boys born this year would welcome their parents calling them Hilary.

May we have a debate in Government time on the worrying practice that the new Labour Government did nothing about, namely the finger-printing of our children in schools without parental permission? I am delighted that the Government have made plans to deal with that practice, but may we have a debate in Government time to talk about whether it should happen at all?

[Sir George Young]

I understand my hon. Friend’s concern. I will raise the matter with the Home Secretary or the Secretary of State for Education, whichever is the most appropriate, to clarify exactly what the coalition Government’s response is to the procedure to which he has referred.

[Ian Murray (Edinburgh South) (Lab)]

Recent events in Egypt have demonstrated the importance of the BBC World Service and its interpretation of events. The cuts in the service that were announced recently mean that Voice of America will be the only real international broadcaster left. Will the Leader of the House allocate time for a serious debate on the future of the BBC World Service and how it can return to being the world’s international broadcaster?

[Sir George Young]

I am not sure that the assertion that the Americans have a monopoly on the broadcasting of what is going on Egypt is correct.

The Foreign Secretary made an extensive statement on the World Service last week, which was followed by a series of questions and answers. I cannot promise a debate on the subject, but the next session of Foreign Office questions will provide another opportunity for it to be raised.

[Mr Peter Bone (Wellingborough) (Con)]

Following the right hon. Gentleman’s exchange with the Chairwoman of the Backbench Business Committee, the hon. Member for North East Derbyshire (Natascha Engel), may I point out that I have voted for the Government more times than the Prime Minister, the Deputy Prime Minister and the Chancellor of the Exchequer added together?

If the Government must whip, would it not be useful for the details to be on the Order Paper so that we know which votes are whipped and which are not?

[Sir George Young]

Let me put my hon. Friend’s observation into context by saying that I suspect he has also voted against the Government more often than the Prime Minister and the Deputy Prime Minister.

I am sure that my hon. Friend receives the same communication that I receive, indicating just how keen the Chief Whip might be on his attendance in relation to particular issues. I am not sure that it would be sensible to put the information on the Order Paper.

[Nic Dakin (Scunthorpe) (Lab)]

Replying to a question from my right hon. Friend the Member for Cynon Valley (Ann Clwyd), the Prime Minister said that the previous Government had planned to phase out Remploy workers. That does not appear to be accurate. Will the Leader of the House ensure that the record is corrected?

[Sir George Young]

I understand that a programme has been introduced by Remploy. It is now in the third year of a five-year modernisation plan agreed with the last Government, which involved the merging or closing of 29 factories and the setting of challenging targets for a huge increase in the number of disabled people helped into work. We are totally committed to supporting disabled people in employment. We confirmed as part of the spending review that the five-year £555 million operational budget and status of Remploy would remain unchanged—and we did that at a time of financial constraint.

[David Tredinnick (Bosworth) (Con)]

Can my right hon. Friend tell the House why the windows of some Government buildings in Parliament square are still boarded up following the students’ demonstration? The Ministry of Justice managed to fix the windows of the Supreme Court next day, but it seems that the Treasury cannot do the same for Her Majesty’s Revenue and Customs.

[Sir George Young]

I am sure that funds are available for that purpose somewhere in the Treasury.

The 41 damaged window panels were removed from the site on 22 January. Replacement work will begin on 12 February and will be completed by the end of the month. Orders were placed by the contractor following clarification and agreement on costs with the loss adjuster.

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

According to the police, Wind street in Swansea has the second highest level of recorded crime in Britain. May I ask the Leader of the House whether he is free on Saturday night to take a stroll down Wind street with me and to witness at first hand the outstanding work of the police in apprehending criminals? They made 48 arrests in December. Observing their work would help to inform the right hon. Gentleman in advance of the forthcoming debate on the police grant, as it demonstrates that cutting police numbers will endanger the safety of the public.

[Sir George Young]

The former Home Secretary, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), made it clear that had his party been re-elected, there could have been no guarantee that police numbers would not fall.

I thank the hon. Gentleman for his generous invitation, but I am otherwise engaged on Saturday night.

[Jessica Lee (Erewash) (Con)]

Will my right hon. Friend consider allocating time for a debate on the role of the voluntary sector? My constituency contains the excellent Erewash council for voluntary service and other voluntary organisations, and a Derbyshire voluntary, community and independent sector volunteering passport scheme has been introduced. Such a debate would provide an excellent opportunity to discuss successful schemes throughout the United Kingdom and the sharing of best practice.

[Sir George Young]

I agree with my hon. Friend. I was pleased to hear about the excellent work being done in her constituency, which is an example of the big society in action. I encourage her either to apply for a debate in Westminster Hall or, with other Members, to approach the Backbench Business Committee to establish whether time can be found for a debate on this important and serious issue.

[Alison McGovern (Wirral South) (Lab)]

Will the Leader of the House find time for a debate on the Prime Minister’s pet project, the so-called big society? Phil Redmond, the chair of National Museums Liverpool and a television producer who has been lauded by the Prime Minister, said today that he

“went along with it all because I thought it would be a good way of getting things going, but it’s been impossible to get any traction because of the cuts”.

Is it not about time that we debated the big society on the Floor of the House?

[Sir George Young]

As I indicated in my response to my hon. Friend the Member for Erewash (Jessica Lee), I should welcome a debate on the big society on the Floor of the House. I am aware of the pressures on many voluntary organisations. That is why we set up a £100 million fund to help smaller charities through this difficult time, and to enable them to continue and develop their sound work.

[Neil Carmichael (Stroud) (Con)]

Given the importance of the Health and Social Care Bill, may we have an opportunity to discuss public health, which performs an important function in helping our health services?

[Sir George Young]

The Health and Social Care Bill contains a fairly large section on public health, because it transfers responsibility for that sector from primary care trusts to local authorities. There should be opportunities for discussion of important health issues in Committee, and my hon. Friend will certainly be able to discuss them on Report.

[Kevin Brennan (Cardiff West) (Lab)]

The Leader of the House has expressed his enthusiasm for further parliamentary reform, and he will be attending this afternoon’s debate on the subject in Westminster Hall. Will he bear in mind the fact that the change in our sitting hours which was introduced in 2002 proved pretty disastrous and pretty un-family friendly for those who wanted to take their children on the school run in London? The question is not as simple as some make it out to be.

[Sir George Young]

The hon. Gentleman is right: the question of the sitting hours is not a simple one. As he may know, the Procedure Committee is about to conduct an inquiry, and I am sure that it would be pleased to hear his representations. I understand that it proposes to present the House with some options at the end of its report so that Members can decide if and how they want to change the sitting hours.

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

Will my right hon. Friend allow a debate on the establishment of academies aimed specifically at children suffering from autism and Asperger’s syndrome?

[Sir George Young]

That is an important subject which the House ought to debate. My hon. Friend could apply for an Adjournment debate or a debate in Westminster Hall, or he could approach the Chair of the Backbench Business Committee. The House might then be able to give the issue the time that it deserves.

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

This is an old vintage, Mr Speaker. The Information Commissioner has forced the Foreign Office to give me the stock list of the ministerial wine cellar. A debate on the future of the wine cellar might identify some Government savings. There is a Château Latour 1962 in there, valued at £3,600. Can the Leader of the House tell me which Minister deserves to drink it?

[Sir George Young]

I have made some inquiries. The House will be pleased to hear that consumption of wine has fallen by 30% since the coalition Government took over.

[Robert Halfon (Harlow) (Con)]

Will the Leader of the House find time for an urgent statement on iEngage, the secretariat of the newly formed all-party parliamentary group on Islamophobia? iEngage has a track record of being aggressively anti-Semitic and homophobic, and has extensive links with terrorism in Tunisia and the middle east. In its capacity as the secretariat, it now has access to the parliamentary estate. Will the Leader of the House raise the issue with the Serjeant at Arms as soon as possible?

[Sir George Young]

The Serjeant at Arms will have heard what my hon. Friend has said. As he knows, I announced a few moments ago that there would be debate on all-party parliamentary groups on Monday evening, and it will provide an appropriate forum for him to develop his case.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

British Midland International recently announced the withdrawal of its service between Glasgow and Heathrow. That will result in hundreds of job losses, and will also have an impact on the local economy and the travelling public. May we have a debate on the future of domestic airlines? It appears that the major British companies are opting for the more profitable transatlantic flights and abandoning the domestic routes.

[Sir George Young]

I understand the hon. Gentleman’s concern, which I am sure is shared by his constituents. I cannot promise a debate, but I will raise the matter with the Secretary of State for Transport and ask him to write to the hon. Gentleman.

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

Will the Leader of the House ask my right hon. Friend the Chancellor to make a statement on the Office for Budgetary Responsibility and the OECD’s assessment of the structural deficit at the last election, so that the deficit denial of the shadow Chancellor, the right hon. Member for Morley and Outwood (Ed Balls), can be exposed for what it is?

[Sir George Young]

It is indeed the case that debt now stands at more than £1 trillion, its highest ever level. The deficit is the largest in the G20 and in our peacetime history, and we have experienced the deepest and longest recession in the G20. The coalition Government would welcome a debate on the economy, and the opportunity to draw attention to our disastrous inheritance from the last Government.

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

May we have a statement on the future of the 1,500 people employed by Her Majesty’s Revenue and Customs at Queens dock in Liverpool? I understand that a decision has been reached to close the building in which they work, contrary to the information I was given in a written answer only two weeks ago.

[Sir George Young]

Treasury questions will take place on Tuesday, but I say to the hon. Lady that, along with other colleagues, a lot of us lost our local HMRC offices in the previous Parliament under a programme of closures that her party introduced. However, I will of course raise the specific issue with Treasury Ministers.

[Charlie Elphicke (Dover) (Con)]

In the spirit of sober government, may we have a debate on the UK’s competitiveness, because although the manufacturing figures are to be celebrated and praised, Pfizer’s decision to pull out of east Kent highlights the legacy of years of business being overtaxed, overregulated and discouraged?

[Sir George Young]

I am grateful to my hon. Friend for highlighting the encouraging manufacturing figures published earlier this week. The Opposition have been oddly silent on yesterday’s construction figures, which showed the country returning to growth after the Labour party’s recession. We have not heard a peep from the shadow Chancellor on this morning’s good news that the UK’s service sector hit an eight-month high in the same month.

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

May we have a debate on issues that Liberal Democrats vote for in this House and then oppose in their constituencies? I suggest that we have a fortnight’s debate to make sure that we can get all the issues in.

[Sir George Young]

The hon. Gentleman is treading on dangerous territory, because I recall a campaign on post offices in the previous Parliament when a large number of Labour Members said that they would oppose post office closures, but then voted against the motion that we put before the House.

[Julian Sturdy (York Outer) (Con)]

I have recently received a number of representations from constituents about empty property rates. Will the Leader of the House consider having an urgent debate on the matter?

[Sir George Young]

There may be an opportunity for my hon. Friend to raise that issue on Wednesday when the House debates local government finance. I understand the concern of those who are leaving their property empty not because they want to but because they cannot find any tenants. I will raise that matter with my right hon. Friend the Secretary of State for Communities and Local Government.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

Can the Leader of the House tell us whether the draft counter-terrorism Bill is ready? If it is not ready, why have a succession of Ministers, including the Home Secretary, told us that it will be in the Library very soon?

[Sir George Young]

No date was given when the relevant Minister made the statement to the House, which I believe was a fortnight ago. The shadow Leader of the House told us that cross-party talks might take place on this issue so, given that background, it might be sensible not to publish a Bill straight away.

[Kwasi Kwarteng (Spelthorne) (Con)]

Given that the number of managers in the national health service increased five times faster than the number of nurses, does my right hon. Friend think it would be a good idea to have a debate on best management practice in government?

[Sir George Young]

My hon. Friend rightly makes a point that was also made in last week’s debate on the Health and Social Care Bill. I hope that it will be re-emphasised in Committee. It is indeed our policy to reduce the overheads of running the NHS and put the resources saved into front-line care.

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

May we have a debate in Government time on the tax gap and the contribution that reducing that gap could make to tackling the deficit? Estimates of the gap vary from £20 billion to £100 billion, and we need to clarify the situation. I note that the Government have invested an additional £900 million to gain £7 billion in additional tax. Given that tax offices have closed, would it not be sensible to have a debate so that we can clarify whether we should be investing in this system, rather than reducing it?

[Sir George Young]

As the hon. Gentleman said himself, we are investing in the system. We have put an extra £900 million into tax collection, precisely to reduce the gap. He will have an opportunity on Tuesday to cross-question the Chancellor on this matter.

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

I read with interest the Leader of the House’s submission to the Independent Parliamentary Standards Authority today, including his specific point about family-friendly hours. May I recommend, or ask him to consider, a change that would neither cost the taxpayer any money, nor have anything to do with IPSA, which is to bring forward the time of Thursday sitting from 10.30 am to 9 am, so that colleagues in this House who do not live in the home counties can get home to their families in the north and west of England, Wales, Scotland and Shropshire before midnight?

[Sir George Young]

I understand the point that my hon. Friend makes. There are consequences for the House and for Committees if we move the sitting time forward to 9 o’clock. I say to him what I said to the hon. Member for Cardiff West (Kevin Brennan), which is that the Procedure Committee will hold an inquiry into sitting hours. It awaits, with mounting anticipation, the representations from my hon. Friend.

[David Cairns (Inverclyde) (Lab)]

Such is the enormous concern among those on both sides of the House about the Government’s plans to close many of our coastguard stations that yesterday’s Westminster Hall debate was completely oversubscribed and many hon. Members did not get the opportunity to speak. Given that, can the Leader of the House schedule a longer debate on these plans, which are greatly concerning many of our seaside communities. The plans were described to me by a shipping expert in the following terms:

“I honestly believe this is complete madness and will result in disaster”.

[Sir George Young]

I understand the hon. Gentleman’s concern, which I know is shared. I cannot promise a debate in Government time, but perhaps he and other Members who are affected by the proposals could go to the salon of the Chair of the Backbench Business Committee to put in a bid for a debate, either in the House or in Westminster Hall.

[Andrew Stephenson (Pendle) (Con)]

The special constabulary is an important part of the policing family, and specials make a significant contribution to the fight against crime and antisocial behaviour in Pendle. National specials weekend takes place on 12 and 13 February, so may we have an urgent debate on the important role that specials play and how we can recognise the contribution they make?

[Sir George Young]

I am grateful to my hon. Friend for bringing to the House’s attention the fact that national specials weekend is coming up. Specials play a key role in tackling crime and antisocial behaviour, and as part of the policing family. We want to do all we can to support them and see this group of volunteers as a good example of the big society.

[Valerie Vaz (Walsall South) (Lab)]

Many musicians, especially violinists, are having difficulties with and facing inconsistencies from the airlines about carrying their musical instruments on planes. Will the Government make urgent representations to the airlines, which have different policies, to ensure that the expensive instruments do not have to be put in the hold and do not have to be classified as hand luggage?

[Sir George Young]

This issue certainly arose a few years ago when there was a big change in the level of airport security, but I thought that the matter had been resolved and that violinists were able to take their instruments with them. If that is not the case, I will raise the matter with the Secretary of State for Transport to see whether we can overcome the problem.

[Nick de Bois (Enfield North) (Con)]

Will the Leader of the House find time for a debate on antisocial behaviour and bullying of children by children outside the school gate? Evidence on this was provided to me by children at Carterhatch junior school in my constituency, and such a debate would allow us to consider their recommendations for dealing with it.

[Sir George Young]

My hon. Friend will know that I have announced the date of the Second Reading of the Education Bill, which contains clauses that deal directly with discipline at school, giving teachers and heads greater powers to tackle antisocial behaviour. He may therefore have an opportunity on Tuesday to raise the matter with Ministers.

[Albert Owen (Ynys Môn) (Lab)]

May we have an urgent debate on the future of citizens advice bureaux funding, which has been squeezed by both local and central Government? When I raised the matter with the Treasury, I was told that it was looking to enhance the role of citizens advice bureaux, given rising unemployment and debt. Extra resources will be needed to do that, so may we have a debate on that important point?

[Sir George Young]

I understand the hon. Gentleman’s concern, and this subject was raised last week. Following that, my hon. Friend the Financial Secretary to the Treasury wrote to the hon. Member for Stretford and Urmston (Kate Green) and a copy of the letter was put in the Library. I suggest that the hon. Gentleman has a look at it, because it sets out our proposals to establish a money advice service, delivering the UK’s first nationally available free financial advice service.

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

My constituents can enjoy good local tourist attractions such as Halesowen abbey and Dudley zoo. May we have a debate about the importance of promoting areas of the country that are not commonly thought of as being tourist destinations, in order to drive economic growth and job creation?

[Sir George Young]

The Minister with responsibility for tourism, the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Weston-super-Mare (John Penrose), will develop a tourism strategy. I might suggest to him that he should visit Halesowen abbey and Dudley zoo as part of the strategy of promoting tourism within the country without damaging outbound tourism.

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

Will the Leader of the House be bringing forward proposals to limit and reduce the number of Ministers in the Government? I am sure that he is aware that in 1856 there were 58 Ministers in the Government, 15 of whom held Cabinet rank. Today, there are 119 Ministers, 23 of whom hold Cabinet rank. If the Government are so keen to go forward with their unilateral reduction in the number of MPs, surely it is only right that the number of Ministers should be reduced pro rata as well.

[Sir George Young]

I am grateful to the hon. Gentleman. We had an extensive debate on this when the Parliamentary Voting System and Constituencies Bill was going through this House. It is now in another place where there is also extensive debate. If and when we get the Bill back in this House, there might be an opportunity for him to raise the matter, but of course, that would not apply until after the next election and into a new Parliament, whereas the proposals for MPs would apply before the election.

[Henry Smith (Crawley) (Con)]

Gatwick airport is located in my constituency, as are many travel companies. Given the recent crises in tourist destinations such as Tunisia and Egypt, in an uncertain world, will the Foreign and Commonwealth Office consider making a statement on the sort of co-ordinated advice it can give to travel firms about repatriating tourists?

[Sir George Young]

I think the FCO has a website that is regularly updated, which gives advice to those who are thinking of travelling overseas. It includes FCO advice on the desirability of going to those destinations and the precautions that travellers should take. However, I shall raise with the Foreign Secretary the issue that my hon. Friend has touched on.

[Anas Sarwar (Glasgow Central) (Lab)]

The Department for International Development will publish the conclusions of the multilateral and bilateral aid reviews at the end of February. Given that they could change the way in which we spend billions of pounds around the world, will the Leader of the House please ensure that they will be accompanied by an oral statement to the House?

[Sir George Young]

I cannot guarantee that they will be accompanied by an oral statement, but I will raise the hon. Gentleman’s point with my right hon. Friend the Secretary of State for International Development to make sure that the House is kept informed.

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

I welcome the Government’s moves to reduce the top rate and the small profits rate of corporation tax. Will the Leader of the House find time for a debate on having a single, flat rate of corporation tax, which would give UK plc a unique competitive advantage in the global economy?

[Sir George Young]

There are Treasury questions on Tuesday, in which my hon. Friend might be able to cross-question Treasury Ministers, but he is right to draw attention to the coalition Government’s proposals to reduce corporation tax to make this the most competitive country in Europe in which to do business.

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

I think the Leader of the House has been made aware of the fact that I wrote to the Chancellor on 1 November about one of my constituents and that I did not receive a reply until 25 January, some 86 days later, without even an apology for the delay. Given that the Government have committed to getting all Members a reply within 20 working days, will he update the House as to why the Treasury has neither courtesy nor punctuality?

[Sir George Young]

The Government are committed to providing timely replies to hon. Members and I am sorry for the delay. I have seen the letter, which does offer an apology for the delay in responding, and I shall raise the matter again with my colleagues in the Treasury. Of course, there will be an opportunity for the hon. Gentleman to repeat his point on Tuesday, when Treasury Ministers will be here.

[Graham Evans (Weaver Vale) (Con)]

The village of Sutton Weaver is divided by two separate postcodes, which has caused numerous problems to my constituents. Despite a very strong campaign by Sutton parish council, Royal Mail has refused to unify the village under a single postcode. May we have a debate on applications for postcode changes and enhancing local democracy?

[Sir George Young]

I understand my hon. Friend’s concern. I shall pass his comments on to my right hon. Friend the Business Secretary. My hon. Friend will be familiar with the code of practice that governs changes to Royal Mail’s postcode address file, known as PAF. Royal Mail will consider making changes only if they will not materially affect the efficiency of its nationwide network of operations.

[Barry Gardiner (Brent North) (Lab)]

In his earlier remarks about IPSA, the Leader of the House was right to stress the importance of maintaining independence. Will he similarly ensure that MPs will never again be asked to vote on their own pay and that this matter will remain free from political influence?

[Sir George Young]

I understand the hon. Gentleman’s concern. He will have seen my written ministerial statement last month, which I put on the Order Paper, indicating what would happen for this year. Looking further ahead, it is proposed, under the Constitutional Reform and Governance Act 2010, that MPs pay, allowances and pensions will be determined by an independent body.

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

On the eve of national apprenticeship week, may we have a debate to highlight the Government’s excellent policies in this area, which make it much easier to take on board new employees as apprentices than it was under the previous Government?

[Sir George Young]

My hon. Friend is right—there are 75,000 more apprenticeships and we have protected the science budget. This is, indeed, laying the foundations for future growth.

[Chris Bryant (Rhondda) (Lab)]

The Leader of the House did not make any reference to Bills coming back from the House of Lords in his statement. I presume that is because he knows that Report in the House of Lords can take up to eight or nine days and that Third Reading cannot be on the same day as Report, so there is currently no prospect of the Government getting their Parliamentary Voting System and Constituencies Bill in time for a referendum on the alternative vote on 5 May unless they make consensual concessions. Will he urge his colleagues to do that?

I think it was a slip of the tongue when he said earlier that the cut in the number of MPs would apply during this Parliament. I know the Government have been threatening guillotines in the House of Lords, but culls in the House of Commons might be a step too far.

[Sir George Young]

The Government are determined to get the Bill through in time to hold the referendum on the proposed date. I very much regret that there have been some very loquacious interventions down the other end which have impeded the progress of the Bill. The point I was making was that in order to have fewer MPs in the next Parliament, we have to pass legislation now, but that we do not have to pass any legislation now to reduce the number of Ministers in the next Parliament.

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

May we have an urgent debate on the provision of literacy and numeracy training for MPs? Successive shadow Chancellors have certainly struggled with the latter and cannot recognise a structural deficit even when they see it.

[Sir George Young]

I am grateful to my hon. Friend. It is indeed the case that we were running a substantial structural deficit before we hit the financial recession and the problem with the banks. Anyone who denies that there was a structural deficit denies the reality.

[Mr Denis MacShane (Rotherham) (Lab)]

After the Prime Minister’s very kind and generous statement to the 1922 committee that all Conservative MPs will either have a seat after the next election or be sent to the House of Lords, may we have an extra debate on the reduction of representation Bill? As a historian, will the Leader of the House say whether there is any example in the history of parliamentary reform that has led to a reduction in representation in this House?

[Sir George Young]

Well, the right hon. Gentleman’s Government reduced the representation of Scottish MPs, so that is a fairly easy one to answer. I have the privilege of attending the 1922 committee—he would be very welcome to cross the Floor and see the light—but I am not aware of such a specific undertaking. If he had any idea of how Conservative associations work, he would know that the notion that anyone could be guaranteed a seat in the next Parliament is very ambitious indeed.

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

May we have an urgent statement from the Government on the timing of election counts in Scotland? There have been reports this week of election administrators saying they will not start counting until Friday. They tried that on in the general election and in the last Scottish elections, but it is unacceptable—people in Scotland want to know the shape of their Government as soon as possible. As the Secretary of State for Scotland retains responsibility for elections to the Scottish Parliament, may we have a statement as soon as possible so that he can pull the election administrators into line?

[Sir George Young]

I understand that the Advocate-General in another place has made a very clear statement on this, but I shall certainly raise the matter again with him and ask him to write to the hon. Gentleman.

[Mr Speaker]

I thank colleagues for their co-operation, as a result of which all 47 Back Benchers who wished to contribute had the chance to do so.

Proposed Directive (Information Systems)

Thursday 3rd February 2011 Commons Chamber

12:18

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

With permission, Mr Speaker, I would like to make a statement on the proposed European directive on attacks against information systems, which we have decided to opt in to.

Hon. Members will not need me to tell them how much we benefit from the services that are now available online. In 15 years, the number of global web users has jumped from 16 million in 1995 to more than 1.7 billion today. About three quarters of all British households now have an internet connection, and last year nearly two thirds of all adults in Britain bought goods or services online.

We want to build on our cultural and economic success in the online world, but with the growth of the internet has come the growth of a new type of crime and a new risk to our national security. We now face a real, ongoing and persistent threat from other states, terrorists and criminals operating online. They are stealing commercial secrets, they are trying to take sensitive Government information and they are defrauding ordinary people.

Cybercrime, often carried out by organised criminals, is now a major and growing threat to all sectors of our economy, and we should be in no doubt: online attacks can have a significant real-world impact, from people's bank accounts being emptied to industrial plants and critical infrastructure being disrupted. The risks from cyberspace are now so great that the national security strategy placed the threat as one of the top tier of risks to our national security.

Recognising the seriousness of the threat, the Government are already investing heavily in cyber-security. Following the strategic defence and security review, we committed £650 million of new investment over the next four years to transform our protective capabilities in cyberspace. Our response is led by Government, but uses the resources and knowledge of the private sector, including those parts of the private sector that own and operate large elements of our digital infrastructure. The programme explicitly depends on building strong relationships with like-minded countries around the globe, because the problem is an international one and online criminals do not respect international borders.

Here in Britain we have long-standing laws against computer misuse, but we need to be able to take action also against cyber-criminals operating overseas; it is therefore clear that we need to work across national boundaries. That means our law enforcement agencies working with their partners overseas to identify suspects, gather evidence and bring criminals to justice. The European Union directive on attacks against information systems supports those aims. The directive builds on an existing 2005 EU framework decision with which Britain was already compliant. It is also consistent with the Council of Europe convention on cybercrime, which Britain is in the final stages of ratifying. Opting in further demonstrates our commitment to internationally co-ordinated action against online threats.

The directive will ensure that there is a basic set of agreed minimum rules in relation to online crimes and penalties across the EU that member states must build into their legislation. It will also ensure that member states respond quickly to requests from other member states for assistance in cybercrime cases. Those measures will benefit Britain and other countries that have active online economies, because it will mean that cyber-criminals will not be able to hide in European countries that do not have as well-developed laws against cybercrime as we do.

The directive also seeks to address the threat from large-scale attacks on information systems by ensuring that member states have adequate legislation to allow the prosecution and punishment of those organising, committing or supporting large-scale attacks. That is not a hypothetical threat: it is a real, existing problem for the British Government and British business. Finally, the directive sensibly takes into account changes in the threat picture since the framework decision was agreed, such as tackling the creation of malicious software and other innovative tools that criminals have invented to commit offences.

It is for all of these reasons that we have decided to opt in to the directive. It fits with our approach of making Britain a tougher place for online criminals to operate in, and it will mean that the reach of our law enforcement agencies extends outside our borders. By opting in now, we do not accept that the draft directive is perfect. We will work to ensure the final text is in Britain's interests and we will seek to negotiate out any proposals we believe are unnecessary.

I pay tribute to the work done by the European Scrutiny Committees of both Houses. They do much to ensure that European legislation is right for this country. On this specific directive, both Committees agree that there is a case for further EU action in this area.

Cybercrime is a major threat to Britain. The aims of the directive are consistent with the aims of the Government in protecting our country, our economy, our businesses and our citizens from those who seek to misuse the online environment. I commend this statement to the House.

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

I thank the Minister for providing the Opposition with a copy of the statement in advance of the announcement to the House.

I have listened carefully to what the Minister said about the Government’s decision to opt in to the draft directive on attacks against information systems. It is clear that there is a growing threat of large-scale simultaneous attacks against information systems and an increased use by criminals of so-called botnets—networks of computers infected by a virus that can be activated remotely. There is clearly a real terrorist threat, as well. It is right to say that there has to be a robust and consistent approach to this problem, not only across the EU but internationally, and we know that a sensible way forward is to build on the framework decision agreed in 2005.

In a report by the Commission in July 2008, the implementation of the framework decision was found to be relatively good, but a number of new threats had been identified; the draft directive has therefore been produced. The matter was before the European Scrutiny Committee on 3 November 2010, at which time the Government still had not decided whether to opt in to the draft directive. I, too, pay tribute to the hard work that the Committees in both Houses do on behalf of us all.

I welcome the decision, but I have a number of questions for the Minister. First, why has the decision been made now to opt in to the draft directive? After the European Scrutiny Committee had considered the matter, the Minster wrote to the Chair of that Committee stating that a decision on whether to opt in had to be made by 23 December 2010, and promising to let the Committee know the decision at that point. I understand that he then wrote to the Chair of the Committee on 31 January confirming that the UK was opting in to the directive. When was the decision actually made? Was it made before 23 December? If the decision was delayed, why?

In his statement, the Minister said, “By opting in now, we do not accept that the draft directive is perfect. We will work to ensure the final text is in Britain's interests and we will seek to negotiate out any proposals we believe are unnecessary.” Would it not have been more consistent and logical to have opted in to the draft directive much earlier, to ensure that the British government could influence it and have their say? On such a matter, and given that we are building on the already well- established 2005 framework decision, was it not in our interest to have our say early on? Why wait until the end of the process?

Secondly, we understand that there will have to be changes to domestic legislation on issues such as extraterritorial jurisdiction and including all the offences set out in articles 6 and 7. Will the Minister explain the exact changes that will be required, in particular to the Computer Misuse Act 1990 and any other legislation? When will the House be asked to deal with those matters?

Thirdly, the directive sets out the need for a national contact point to provide an initial response to urgent requests for information within eight hours. With the transition from the Serious Organised Crime Agency to the National Crime Agency, what ring-fenced funding will be available for the initial response work, and how will the overall cuts to the Home Office budget affect the ability to provide that response?

Fourthly, under article 15, there is a requirement for the collection of statistical information on offences covered by the draft directive, including details of the number of offences reported, the follow-up and the number of investigations, prosecutions and convictions each year. Although the Minister has indicated previously that some of those data are already collected, what further resources will be needed to ensure that the full datasets are collected, and who will do that? What additional resources have been allocated for the purpose from the £650 million he mentioned?

Fifthly, what plans does the Minister have for dealing with the increase in penalties to a maximum term of imprisonment of not less than five years? Does he envisage creating a new offence to deal with aggravating factors, or increasing the length of existing sentences?

Finally, may press the Minister on another matter? Although we welcome the announcement of the opt-in to this directive, it is deeply disappointing that the Government have failed to opt in to the draft directive on human trafficking. We ask them to think again.

[James Brokenshire]

I thank the hon. Lady for her broad welcoming of this decision and the actions that the Government are taking to combat the threat of cybercrime and on cyber-security. This is probably the first time that the House has had the opportunity to debate a number of these issues and ask questions on them, so I welcome the opportunity as part of our scrutiny of EU directives.

With regard to the hon. Lady’s questions, I can assure her that the opt-in decision was made in time, so there is no issue of any harm in that sense. The negotiations and detailed consideration of the directive were started only recently, so the UK’s position has in no way been compromised by our decision. Indeed, the timing has been part of respecting the parliamentary scrutiny—allowing the three-month period so that the European Committees can do their work.

The hon. Lady raised questions about changes to legislation and made other points on how implementation might take place. I think that it would be premature to address those points directly until we see the final version of the directive, which is still subject to further discussion and consideration. We will investigate clearly and set out for the House properly how we intend to take matters forward once the directive has been finalised.

The hon. Lady asked questions about the national contact point and about statistics, information and funding. As I have set out, the Government take the issue of cybercrime and cyber-security very seriously, which is highlighted by the £650 million that the UK has committed as part of its national cyber-security programme. We are considering carefully how allocations will be made for that, taking account of the need to ensure that the UK continues to respond effectively to the challenges posed from the online environment.

I welcome the hon. Lady’s broad welcoming of the decision to opt in. We see positive benefits and direct advantages from the directive. On her point about the EU directive on human trafficking, we did not decide to opt in at the outset because it contained no operation or co-operation measures from which the UK would have benefited. We have said that we will review that position after implementation of the directive, at which point the UK could apply to opt in retrospectively.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Owing to the pressure on time, please could we have short questions and short answers?

[Mr William Cash (Stone) (Con)]

The Minister may not be surprised to hear that, as Chair of the European Scrutiny Committee, I do not agree with his assertion that this has been done in accordance with due process. The former Leader of the House of Lords gave an undertaking that, in matters of opt-ins, an indication would be given to the Committee in advance of their intention. That indication has not been given. The draft is still under scrutiny and is currently deficient, as the Minister has conceded. What is the point of having a scrutiny process if it is compromised by decisions taken in advance of that consideration in full by the Committee, which would no doubt have recommended a debate?

[James Brokenshire]

I hear my hon. Friend’s point. We obviously reflected on the conclusion from the Committee’s initial response on the directive, which stated:

“We agree that large-scale attacks against information systems are likely to have a cross-border dimension and require close co-operation between Member States. We think that the legal base proposed is appropriate and accept that there is a case for further EU action to respond to new methods and tools for committing cyber crime.”

As he will realise, there is a three-month period in which the UK must respond to those issues. We take scrutiny very seriously. Indeed, making this statement on the Floor of the House underlines the importance that we place on allowing scrutiny to be applied. Obviously, the directive still requires more work and consideration in the negotiation, and that is precisely what the Government will do.

[Chris Bryant (Rhondda) (Lab)]

Does the Minister not understand that when Britain is dilatory in signing up to new directives and pieces of legislation, particularly those which have obvious cross-border relevance, it is deleterious to the British interest, because we are unable to take part in the full process of developing the policy? What he said earlier about why we are signing up to this directive but not yet to the directive on people trafficking makes absolutely no sense.

[James Brokenshire]

We examine the directives on a case-by-case basis, and I have set out clearly that we decided to opt in to this directive so that we could be part of the negotiations. As I said in response to the hon. Member for Kingston upon Hull North (Diana Johnson), the human trafficking directive contained no co-operational measures from which the UK would benefit, which was why we decided not to opt in, but we certainly keep the issue under review.

[Mr James Clappison (Hertsmere) (Con)]

The motivation behind the change in the law might or might not be worth while, but there is a question about how and where we determine the legislation that governs this country. Will the Minister confirm that this directive has been agreed notwithstanding the fact that it was held under reserve by the European Scrutiny Committee and that it involves a change in the law and, apparently, the creation of new criminal offences, all of which are taking place without an opportunity for a debate in this House, let alone a vote? Has our law-making process not been bypassed altogether so that we now have a law that, whatever its merits, has simply been made in Brussels?

[James Brokenshire]

I simply do not agree with my hon. Friend’s analysis. We have allowed scrutiny of the approach and of the directive. I hear his point, but the implementation of the directive will take place in this country, and I think that the importance of cross-border working on an issue such as cybercrime, where close co-operation is needed, means that that work at EU level is important. We clearly keep the interests of the British people at the heart of our intentions, to ensure that the decisions made add to their protection, which is threatened by increasing levels of cybercrime and by those who wish to prey on them using computers and the internet.

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

Does the Minister agree that by opting in to the directive we will strengthen the UK’s leadership role in the fight against cybercrime and that, were the UK to sign up to the EU directive on human trafficking, we could provide additional leadership in that field as well?

[James Brokenshire]

As I have said, we keep the position on the human trafficking directive under review. I think that the directive that we are considering today has clear benefits and builds on the work of the Council of Europe’s convention on cybercrime, which, interestingly, the previous Government signed up to in 2001 but never got around to ratifying. That highlights the importance that this Government place on international co-operation when dealing with these important matters.

[Bob Blackman (Harrow East) (Con)]

I welcome the statement, but cybercrime does not recognise international or EU boundaries, as my hon. Friend recognises, so will he confirm that there is nothing in the directive that will prevent us from seeking to co-operate with other Commonwealth countries, our friends in the United States and other like-minded countries to combat that menace?

[James Brokenshire]

My hon. Friend makes an important point about the need for international co-operation. It is one of the reasons that we have ratified the European convention on cybercrime, which has in fact been signed up to by a number of countries outside Europe, including the United States. We take the important issue of international co-operation very seriously, and the directive we have decided to opt in to underlines and telegraphs that commitment, but clearly there is work to do with countries outside the EU as well.

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

Nowadays, investigators need access to current and historical data in order to achieve a successful prosecution in cybercrime and other internet crimes. In the past, the United Kingdom wanted seven years to be the key measure throughout Europe of the time that IT providers, banks and so on held back-data, so that we could get proper investigations going. Does the directive set a limit and require all EU Governments to place a duty on IT providers to hold data for the same time?

[James Brokenshire]

The directive is focused on the criminality and on cyber-attacks. It includes provisions on mutual co-operation, but it does not set the sort of framework to which my hon. Friend refers.

[Lorraine Fullbrook (South Ribble) (Con)]

Will the Minister confirm that the measure is not about sovereignty, but about practical co-operation that is vital to our national interests?

[James Brokenshire]

My hon. Friend sums up the measure very well. It is very much focused on practical co-operation and on ensuring common standards, which, building on co-operation, better information and mutual assurance, provide practical benefits for the United Kingdom, given the challenges that we face from cybercrime committed not only in this country, but in other EU countries.

[Mr Christopher Chope (Christchurch) (Con)]

The Minister refers to the Council of Europe convention, which covers 47 countries plus the United States and other countries, but what added value does the directive have when compared with that convention? If the directive is inadequately drafted, as my hon. Friend the Member for Stone (Mr Cash) says it is, why do we not wait to see whether it can be correctly drafted before we sign up to it?

[James Brokenshire]

The directive builds on the convention and deals with certain additional issues, such as the response that other EU countries provide to requests for information on cyber-related attacks and cybercrimes, so we think that it has important benefits. It is precisely because of those practical benefits that we think it appropriate to opt in at this point and to negotiate on and change the drafting where it requires further work. We believe that, because of the directive’s practical and direct benefits, it is important to be there and do that.

[Dr Julian Huppert (Cambridge) (LD)]

Will the Minister help me on a technical point? I understand that the directive is a repeal-and-replace measure; it repeals a directive to which the UK is party and replaces it with a new version. If the UK had opted out of the directive—I am glad that it has not—would it have still considered itself bound by the original 2005 framework decision? If not, what would the implications have been for UK cyber-security, given that that framework decision provides for police and judicial co-operation on cross-border cyber-threats?

[James Brokenshire]

I am very grateful for the hon. Gentleman’s question, which transcends this directive, which is a Title V measure, as contrasted with the third pillar measures that are subject to the potential block opt-out in 2014. I hesitate to go into the technicalities, but we have clearly opted in to the directive, so it falls within the Title V base rather than the third pillar base. It was a technical question, and I am sorry for that rather technical response.

[Charlie Elphicke (Dover) (Con)]

In Dover, we see human trafficking and all too often the evil perpetrated by international gangs in the physical sphere. We should sign up to directives only when we get information-sharing and international assistance, because crime knows no borders, but can the Minister reassure the House that there will be no mission creep from cybercrime to the snooping that we have seen under the Regulation of Investigatory Powers Act 2000?

[James Brokenshire]

My hon. Friend makes a very important point, and, in striking the right balance, we approach those issues with the rights of the individual’s freedoms and liberties very much at the forefront of this Government’s mind. We believe that the directive is important and will add value, but we will approach those issues with liberty and freedom at the forefront of our mind.

[Neil Carmichael (Stroud) (Con)]

I have been a victim of mobile telephone fraud, so will the directive have the scope to deal with cybercrime in connection with such fraud?

[James Brokenshire]

The directive is very much focused on computers and computer systems, rather than on telephones and mobiles, but, as telephone calls and Skype add to computers’ ability to facilitate contact, such communication might be brought within the scope of the directive.

Points of Order

Thursday 3rd February 2011 Commons Chamber

12:45

[Mr William Cash (Stone) (Con)]

On a point of order, Mr Deputy Speaker. I am gravely concerned about the manner in which the previous business has been dealt with. There appear to be a stream of such opt-ins in the pipeline, so I suggest that appropriate action be taken to ensure that at least the Chairman of the European Scrutiny Committee—myself—is given adequate notice and advance warning of any such statement, because the Committee has been effectively bounced, and that is not in the interests of the good order of this House, in the Standing Orders or in the spirit of the undertaking that the former Leader of the House of Lords gave.

[Mr Deputy Speaker (Mr Nigel Evans)]

That is not a point of order for the Chair. It seems to be an extension of the statement that we have just had, but Members on the Treasury Bench will have heard what the hon. Gentleman said.

[Mr Christopher Chope (Christchurch) (Con)]

On a point of order, Mr Deputy Speaker. “Erskine May”, at page 412, says:

“The Speaker has deprecated as ‘unparliamentary’ the practice of voting in both lobbies as a demonstration of a ‘third’ position.”

Last night, in Division 189 on the Government’s amendment to the Opposition’s motion, 17 Liberal Democrats abstained or did not vote and a further six voted both for and against—and four of them had voted for and against the main motion a few minutes earlier. Will you, Mr Deputy Speaker, repeat the ruling that it is unparliamentary for hon. Members, whether Liberal Democrats or from any other party, to behave in that way?

[Mr Deputy Speaker]

While such action is not out of order, Mr Speaker and his predecessors have deemed it unparliamentary. The hon. Gentleman’s point will have been heard on both sides of the House, and Mr Speaker will reflect upon the matter.

Backbench Business

Thursday 3rd February 2011 Commons Chamber

[18th Allotted Day]

Consumer Credit and Debt Management

Thursday 3rd February 2011 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

Mr Speaker has selected the amendment in the name of Robin Walker and several other hon. Members.

12:47

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

I beg to move,

That this House notes with alarm recent evidence showing a fourfold increase in the use of payday lending since the beginning of the recession and that high cost credit lenders advanced approximately £7.5 billion to low and middle income consumers in 2008 alone; recognises the problems of financial exclusion, lack of financial and debt management education, lack of price competitiveness in the unsecured lending market and the near monopoly positions of many large lenders which contribute to the high costs of borrowing; considers that without action these factors could worsen family debt, poverty and financial difficulties to the detriment of the economic recovery; therefore calls upon the Government to introduce, alongside measures to increase access to affordable credit, regulatory powers that put in place a range of caps on prices in areas of the market in unsecured lending which are non price-competitive, likely to cause detriment to consumers or where there is evidence of irresponsible practice; and believes that such caps should take account of the desirability of maintaining access to affordable and responsible credit, the likely impact on the supply of credit and the cost of enforcement, that they should be regularly reviewed and that they should use the total cost of credit, calculated on a yearly basis, to ensure that lender avoidance and distortions in price are prevented.

It gives me great pleasure to present to the House today an opportunity to put on record its support for the introduction of caps on the total cost of lending, and so protect Britain’s poorest consumers from the practices of so-called legal loan sharks. My introductory remarks are set out in three sections. I shall address, first, the problems; secondly, how the proposals would tackle them; and thirdly, in seeking people’s support for the motion, the concerns that they might have about the proposals.

To begin with, however, I shall tackle what we are not talking about today. The proposal is not about a usury law or about setting a single cap for interest rates. Previous Governments rightly concluded that that would not be the right thing to do. All the briefings that Members have received from industry lobbyists have been about such proposals, and the often cited Office of Fair Trading research is also about such an idea, but let me stress that there are flaws in that proposal, which is why we suggest that something different needs to take place. I shall also be clear that this is not a debate about how we abolish the high-cost lending market, or about stopping people borrowing. Credit is a vital part of the economy and, clearly, a part of the UK lifestyle. Indeed, one challenge that we face during our economic recovery is to encourage people to take a sensible and sustainable approach to credit, because, given how we live in the UK, it is a key part of our future.

Debt and credit is a much greater part of the UK’s psyche than any other country’s. As Third Sector Foresight points out, Britain has double the debt of continental European countries, and personal savings are at their lowest levels since the 1940s. In April last year, private debt in the UK stood at a whopping £1.4 billion, and living that way has its own consequences. Surveys by PricewaterhouseCoopers show that debt levels in our society mean that the average household is paying 15% of its net income purely on the interest it owes to service such debts.

Our focus in this debate is on a very specific aspect of credit provision. The high-cost credit market is very different in its practices in comparison with other, more mainstream forms of lending. We are talking about the payday loans of £100 until the end of the month that keep getting repeated, the doorstep lending of £200 that is offered to people so that they can buy a new sofa, and the hire purchase agreements offering deals that people sign so that their kids can have a new TV.

Above all, this debate is about the spiralling costs at the heart of such loans, because it is the rates that people charge that make this a billion-pound industry. It is all legal, and it is all growing. While some forms of high-cost lending have been with us for generations, we have also seen in this country a rapid expansion in the scale and use of these forms of credit in the past few years alone. That is driven in part by the drying up of mainstream credit. PricewaterhouseCoopers reports a staggering 79% drop in secured lending in the past year. Research by Consumer Focus predicts a rise in payday lending alone of 40% to 45% in the next few years. There has also been a fourfold increase in payday lending since 2008.

I see for myself the impact that this has on my community in Walthamstow. Our high street now has a large number of shops offering short-term loans, hire purchase agreements and credit deals. That is a badge of poverty. These companies see our fragile economic conditions as fertile ground. The aptly named Mr Crook, who is the chief executive of Provident Financial, the largest home credit company, says that he expects a growth in his target market as a direct result of the comprehensive spending review. Who does he mean by that? He means those with poor credit histories and those with no credit histories. In my cosmopolitan corner of London, one of these companies employs only people who speak more than two languages, so that they can target newly arrived residents who do not understand or know the British banking system. He also means those who are facing redundancy or are newly unemployed.

Indeed, as we see higher levels of unemployment, the need to act quickly becomes even greater. As a lady from Leicester who recently contacted me pointed out, as a public service employee on a redundancy notice she could not borrow from either her bank or her local credit union, so what other option does she have? That is when this kind of lending becomes a problem. Some can manage such credit, but the toxic mix of low incomes, perpetual interest payments and no choice affects too many people in our country.

[Helen Goodman (Bishop Auckland) (Lab)]

My hon. Friend is making her case most eloquently. My constituency also has shops where people pay possibly three times as much for white goods, furniture and so forth. Is she aware that, although the problem is intensifying, it is not new? I wonder whether she has read Proverbs 22:

“If you have nothing with which to pay, why should your bed be taken from under you?”

When people cannot pay, their beds and their fridges are taken from them.

[Stella Creasy]

My hon. Friend makes an eloquent point. Indeed, I am grateful for the support that we have had from Church Action on Poverty for the campaign and for the proposals before the House.

[Neil Carmichael (Stroud) (Con)]

Does the hon. Lady agree that the Bills of Sale Act 1878, which enables lenders to go into people’s homes and take property, should be reviewed, because that is an unintended consequence of the Act?

[Stella Creasy]

The hon. Gentleman raises an interesting point which Members might want to cover during the debate.

Most importantly, we are looking at the principle of how we could stop people getting into such high levels of debt because of the rates they are charged for the borrowing that they undertake.

[Mr Jim Cunningham (Coventry South) (Lab)]

Has my hon. Friend noticed that these businesses and shops are advertised on television? Does she have anything to say about that?

[Stella Creasy]

I do indeed, but I will leave that to my much more eloquent colleague, my hon. Friend the Member for Darlington (Mrs Chapman), who has done some sterling work in introducing proposals on how we might address some of the problems caused by advertising.

It is the captive nature of this market that makes intervention so key. The lack of competition for these products keeps prices artificially high, along with profits. The Office of Fair Trading says that there is not enough of what it calls “substitutivity”. Let me put it more simply. As the industry itself admits, 25% of home credit users and 23% of payday users have no other credit option. Consequently, these companies can extract what might be termed an economic rent. They set the terms of the trade in what they will lend at a risk that is much too high for consumers. In this context, I pay tribute to the work of the right hon. Member for Welwyn Hatfield (Grant Shapps), who is now a member of the Government, and who published a report in 2009 highlighting the lack of competition in this market and its consequences. As he said,

“We think it is obscene that anyone should end up paying 10,000% APR, particularly when the evidence suggests that these loans are targeted at some of the most vulnerable members of our society”.

These are people for whom such repayments become a weight on their finances and their families—people who do not have large amounts of disposable income and for whom any change in circumstance, be it divorce, job loss or increases in rent, can tip them into destitution. The Consumer Credit Counselling Service says that one in eight people who contacted it for help with such unsecured debts in the first half of last year were on jobseeker’s allowance. Contrary to what might have been suggested this morning on the “Today” programme, one in 10 payday loan customers are on £11,000 per year or less. These are people like the man who contacted me because he currently has nine payday loans that he is trying to pay off. One company, Wonga, is chasing him for £1,600 for an £800 loan that is 40 days overdue. The first loan was meant to be a stop-gap to bridge the gap between one job and the next pay cheque, but the interest in itself quickly becomes the long-term debt. If those are the problems, what are the solutions?

[Barry Gardiner (Brent North) (Lab)]

I am grateful to my hon. Friend for the very powerful argument that she is making. Does she agree that part of the problem is that a vicious cycle develops, whereby companies use the rate of default to justify the increasing percentage that they are charging on the loans? That is a completely fallacious argument, but one that they always advance to the regulator.

[Stella Creasy]

I strongly agree with my hon. Friend. Few companies have been able to explain to me precisely how they manage to set their rates; they seem to pick a number out of the air and go with that. However, I will return to that point in some of my suggestions for solutions.

There is a new proposal that we, as a House, can take forward to address this phenomenon, and that is what the motion is about. It is based on new evidence about what would work in addressing the impact of such loans on our constituents. That is why I come to the House today not to speak on my own but to speak with the backing of many different organisations from a wide range of sectors. I want to put on record my thanks to Citizens Advice, which has opposed other measures such as interest rate caps, but in contrast believes that these proposals could offer a way forward; to Consumer Focus, who says of this motion that it is

“a different, and more considered, approach than the blanket application of a blunt interest-rate-cap”;

to Martin Lewis, a passionate advocate for financial education, as many Members may have found out earlier this week, who had also opposed interest rate caps but supports these proposals as “much more sensible”; and to the Better Banking campaign, London Citizens, the Co-operative movement, Compass, the GMB, Unison, Church Action on Poverty, the New Economics Foundation, the Centre for Responsible Credit, and countless others, especially those on Twitter, who have supported these proposals.

All those people agree that we can have an effective, evidence-based policy, and that we can learn about what works from other countries where such measures have been introduced. Nothing that I am proposing today is rocket science or untried or tested. When we talk to people outside the UK, we find that they are surprised that we have not dealt with the problem so far.

[Steve Rotheram (Liverpool, Walton) (Lab)]

We, as parliamentarians, should congratulate my hon. Friend on this debate. Is she aware that today is the centenary of the death of Robert Tressell? I am sorry that I am unable to stay for the whole debate because I am going back to Liverpool—where he was buried, unfortunately in a pauper’s grave—where there is a series of events. A hundred years on, people are still being exploited. Does my hon. Friend agree that this issue should garner cross-party support to stop the exploitation of ordinary working families?

[Stella Creasy]

Indeed, in the spirit of cross-party support, I was delighted to hear the Mayor of London say that the rates that these companies charge are extortionate. I hope that I can convince him to take more action on the matter for Londoners.

I have been struck by the response to our market from people from other countries. As a local MP, I regularly leaflet for my local credit union outside the premises of the legal loan sharks in my high street. Last Friday, I spent 20 minutes trying to explain to an outraged Polish woman that the companies could charge her such rates; something that does not happen in her country. As her English was not great and my Polish was even less so, my gesticulations about where the credit union could be found were perhaps unclear. However, her anger and amazement that this was legal in Britain was easy to translate.

I am not asking hon. Members to come and stand on a chilly high street in Walthamstow with me. Recent European Commission research shows what we should do and what we should not do. Members may have been told the edited highlights of that 500-page research document. Having read the whole thing, I will offer them some more. It says that we should learn from the experience in America, where interest rate caps that were set too low have caused problems for lenders and consumers. By contrast, it highlights the benefits of a European model. Perhaps that is not a winning proposition for some Government Members, but I hope that they will bear with me.

The document shows that many ways of capping are used in different countries. Britain is increasingly isolated in not dealing with this market in the same way. Fourteen European countries have a form of capping system or a ceiling on charges. In France, the cap is a third over the market average. In Slovenia, there is a spread of caps, with 13% for a long-term loan and 453% for a shorter-term loan. In Belgium, the cap is based on the amount that is lent, rather than on the rate. There are different levels for loans below and above €1,250. Some countries, such as Ireland, cap only part of the market, whereas others, such as Germany, have limits on all forms of lending. The motion draws on what has been learned from the examples of what works and what does not. It calls for a regulator to introduce a series of caps in the areas of the unsecured lending market in the UK that are not price competitive and where there is evidence that not doing so would cause consumer detriment.

It is worth considering the nature of the UK high-cost lending market. A range of products is available from short-term payday loans, to complicated hire purchase agreements and home credit arrangements. Because there are no caps in our system, the rates can range from 271% and 440% to an eye-watering 4,000% or more. None of the companies can provide pricing data to explain why it has arrived at such rates. Under the proposal, the regulator would step in and look carefully at these markets to determine, on the basis of the evidence, how best to proceed.

Competition is a clear challenge. Just six companies operate in the home credit industry, one of which owns 60% of the market. The motion calls for intervention where there is evidence of a lack of competition. It also highlights the need to intervene when there is evidence of consumer detriment. Consumer detriment is littered throughout the practices that the companies get away with: the rolling over of loans and the compound interest that that generates; the administration fees; and setting the level of loans well beyond the realistic reach of their clients’ incomes so they cannot pay them off. Friends Provident today admitted that 29% of payday loans are refinanced, and that on average the refinancing rolls over twice. Some 15% of home credit loans are refinanced and rolled over into a new loan before the end of the term. Those practices are designed to ensure that consumers pay, but that they never end the relationship. Instead, they are caught in a never-ending cycle of payments and loans.

[John Pugh (Southport) (LD)]

The hon. Lady keeps mentioning these companies. She may not be aware that in my constituency, it is national banks that have exploited migrant workers. The advantage, which we secured, is that they have a regulatory body that called them on it and got the system adjusted.

[Stella Creasy]

The hon. Gentleman makes a good case for regulation, which is what the motion would introduce. However, it would be considered regulation that takes account of the market and of how it affects consumers. That is why I have confidence that the proposals would be effective if they were taken forward by the Government.

Markets change and the motion is about being responsive to that. It takes into account how consumers and lenders interact with the market. It draws its effectiveness from an evidence-based process. It is regulation at its best and boldest. Crucially, the proposals overcome the problems associated with previous proposals, which calculated the interest rate. Instead, the total cost of credit would be considered. That difference makes all the difference.

There is strong evidence from countries with caps that lenders have tried to avoid them or to compensate for their profit loss by applying higher charges. In Poland, following the introduction of caps, lenders introduced a mysterious convenience fee to make up the difference. The European Commission report shows that there is support—although not from providers, of course—for capping all the costs associated with loans to tackle such behaviour across the sector. The key to that measure will be how the caps are calculated. We have proposed that they should be annualised for ease of comparison and based on the total cost of the loan, rather than the interest rate alone. Calculating on the total cost makes it clearer to consumers what they will actually pay. There would be no small print and no nasty surprises that undermine people’s attempts to budget for repayments.

The motion is deliberately open about who would regulate. That is because changes have been proposed that would involve a number of bodies in the process, including the Office of Fair Trading and Consumer Focus. The Members who tabled the motion are open on how the regulatory process should be taken forward, but we want it to be taken forward.

The regulator would work with all stakeholders in the industry, including the lenders. I know that the industry is frightened by the proposals because of the amount of spin that they have sent to hon. Members. That is a pity because if they had been involved, we could have learned from their experience in considering the appropriate levels of capping. Their churlish opposition to any form of price capping and their attempts to conflate concern about interest rate caps with this matter highlight a disgraceful attitude towards vulnerable consumers. That is why self-regulation is not an option and why we as politicians must move towards intervention.

We have seen in other industries that where there is a lack of competition, regulators can work with consumer representatives and providers to set effective frameworks. That has happened in the water industry, the energy industry and the financial services industry. The proposals therefore build on the best practice in market intervention. I believe that British consumers deserve the best practice.

Having set out the proposals, I will take on some of the arguments that have been made against them. In doing so, I urge hon. Members to learn from that most famous of Dickensian characters, Gradgrind, who argued:

“Facts alone are wanted in life. Plant nothing else, and root out everything else.”

Some people have argued that capping the costs of credit would cut lending in the industry and put firms out of the market—a market that Consumer Focus estimates is worth £35 billion a year. I urge hon. Members to read the European Commission research that investigated that very point and found no evidence to support it. Indeed, the OFT research that is often quoted is based on an industry study, which says that people could end up borrowing from friends and family. Furthermore, the EU research found that countries with no caps had higher levels of illegal lending than those with some form of cap.

Some people fear that if caps were set, there would be a race to the top for all lenders. That suggests that caps would encourage all banks and building societies to start charging 4,000% interest rates. When Policis considered the matter in 2004, it found no evidence to support that concern. The motion calls for a range of caps to reflect different types of loans. That reflects the fact that mainstream banks would not compete with lenders in the unsecured market.

[Lorely Burt (Solihull) (LD)]

On the Policis research, the former Labour Minister with responsibility for consumer affairs, the hon. Member for Cardiff West (Kevin Brennan), stated:

“Government carefully considered the case for a cap on interest rates following research carried out by Policis in 2004. The research showed that imposing a cap on interest rates could result in lenders withdrawing from the riskier end of the market, including the home credit market, denying vulnerable consumers access to legitimate sources of credit”.—[Official Report, 22 March 2010; Vol. 508, c. 149W.]

[Stella Creasy]

It is a pity that the hon. Lady was not here at the start of the debate when I set out clearly that the proposal is not for an interest rate cap, but for a cap on the total cost of credit. As I said, that is a difference that makes all the difference to the efficacy of the proposals. That is why many groups that share the concerns in the research that the hon. Lady has set out, are not concerned about these proposals. I urge her to look closely at that distinction. I will press on now because many hon. Members wish to speak and I know that the Minister will have a substantial amount to say.

Another point that has been raised is that new provisions in the Consumer Credit Act 2006, which came into force recently, may well change the market. Although those provisions are welcome, the protection that they offer presumes that choice is open to consumers and that if they are simply equipped with clearer pricing and the chance to rethink loans, that will resolve the problems that we have discussed. Customers with no alternative, struggling to make ends meet, cannot exercise choice or avoid borrowing. If someone is tied to the train tracks, knowing when the train is coming makes only a limited difference to their chances of survival. Until we give consumers a level playing field by producing powers to cap costs, we will not change the dynamic of the relationship.

Others have argued that the powers needed already exist, and that the Competition Commission could investigate and act. Indeed, the Office of Fair Trading referred the home credit market to the commission in 2004, as the hon. Member for Solihull (Lorely Burt) pointed out, and came up with various remedies. Here I turn to the views of Citizens Advice, which argues that the problems are getting worse, not better. That shows that those powers have not worked, so it is time to strengthen the intervention that we make in the market.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The hon. Lady has already indicated that a lot of Back Benchers wish to get in. It was recommended that her speech should last 15 minutes, and she is way over that. Could she please bring her remarks to a close?

[Stella Creasy]

I will, Mr Deputy Speaker.

Finally, people have suggested that we need to introduce more competition by encouraging affordable lending, and I agree, but I do not see that there is a choice to be made between capping the costs of credit and supporting credit unions. Furthermore, it will take a long time for credit unions to become a serious, affordable alternative. In contrast, cutting rates would have an impact on people’s debts now.

I know that some people are concerned about the concept of regulation, but in the motion I simply urge the Government to close the loophole that they have created by saying that they will commit to regulation on the costs of store cards and credit cards but leave this vulnerable market untouched.

The weight of evidence means that I will hold firm in not accepting the amendment, as much as I welcome the strong cross-party support for the proposals. We all know that that support exists, and in these days of new politics I want to celebrate it, but I fear that the warm embrace of consideration could turn into the slow of death of progress without firm direction from the House. The longer we delay affirmative action, the longer our constituents will pay high rates.

Make no mistake, the problem will get worse, not better. As Uriah King of the American Center for Responsible Lending points out,

“payday lenders are aggressively seeking new markets because they are being curtailed here in the US”.

We can all see the consequences in our communities. One example of this is the uncle who came to me last year because his 16-year-old nephew had been given a £300 loan by a home credit agency. His family will struggle to repay that debt. He is angry, you bet, but he knows that it is all legal. What chance for the next generation if we do not act now? Mr Crook will be licking his lips at their predicament.

Let us not delay. There is evidence to support my proposals, and there is political will in the House for this to happen. Let us consider the motion a belated submission to the credit review, giving the Government a clear and urgent message that the time for capping costs has come. Voting for the amendment would dilute that message. The clock is ticking. Research by R3 shows that 44% of people in this country now struggle to make ends meet until pay day, and the problem will only get worse. Those people are our constituents, and they are our responsibility. I ask Members to please give them more than consideration—please give them action. Support the motion and protect the poorest consumers above the needs of loan sharks.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. As hon. Members can see, this is a popular debate and a five-minute limit has been introduced, with the usual injury time for the first two interventions. Members do not have to take the full five minutes—if they do not it will mean that more people can get in—and they do not have to take interventions.

13:13

[Jackie Doyle-Price (Thurrock) (Con)]

It is a great pleasure to speak in this debate and to follow the hon. Member for Walthamstow (Stella Creasy), who made her case with great passion, as I think all Members would agree. It is important that we consider the whole issue of indebtedness, which has become a plague on our country and will only get worse as time moves on. We all want appropriate measures in place to protect those who rely on credit from the activities of unscrupulous lenders. I bring some knowledge to this subject, having worked in a previous life as an adviser to the Financial Services Consumer Panel. We have long been concerned about the inadequacy of the current framework of consumer credit regulation, so now is clearly the appropriate time for change.

Although I fully support the objective behind the hon. Lady’s motion—ensuring that there is adequate regulatory protection for consumers and that regulators have adequate powers to intervene as appropriate—I am not sure whether the caps that she describes are necessarily the answer. However, it is appropriate that we consider the whole breadth of how credit is regulated as part of the credit review. We should leave no stone unturned in ensuring that the regulator has the appropriate tools and, more importantly, the appetite to take enforcement action where poor practice is identified. I was therefore happy to put my name to the amendment.

[John Pugh]

I assume that as the amendment has been tabled by Back Benchers to another Back Bencher’s motion, the Whips will take no part whatever in persuading people to vote for or against it. Am I right in making that assumption?

[Jackie Doyle-Price]

What the Whips choose to do is entirely a matter for them, but I wish to support the amendment rather than the motion because the motion is too prescriptive. We have seen credit providers be very innovative in finding their way around regulatory obligations, so we should not be too prescriptive. If we introduce obligations on providers to treat their customers fairly and lend responsibly, and obligations on the regulators to be prepared to use their judgment to intervene, we will not need to rely on price-prescriptive caps, which might impede our ability to take action against bad providers.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Does the hon. Lady agree that the nature of the problem means that urgent action is needed? Her point that providers are good at getting around obligations means that a very strong signal from Government is needed, which suggests that we should support more prescriptive measures.

[Jackie Doyle-Price]

I believe that that actually makes the case for the early introduction of the consumer protection and markets authority proposed as part of our reforms to the tripartite regulation system. At the moment, we have a consumer credit system regulated by the OFT, in which the tools available are not very effective. With the reforms to the tripartite system, we have a great opportunity to state that we expect the new authority to take real action. In the past there has been a lot of, “Oh dear, isn’t this terrible?” and a lot of wringing of hands from regulators, but they have had no real ability to stop poor providers doing business or to give them appropriate penalties. That is what we want to see from the reform of the regulatory system.

One reason why many consumers find themselves in punitive agreements is that deals are often marketed in terms of the cost per week, so they do not necessarily understand exactly how much they will pay for their credit. That practice is not just restricted to doorstep lenders and loan sharks, because all too often we see it on our high streets, as the hon. Member for Walthamstow mentioned.

I wish to draw attention to one particular organisation, a company called BrightHouse. There is a branch on High street in Grays, and I thought I would do a bit of price comparison. At the moment, it is advertising a nice, attractive 46-inch LED television that currently retails at £849 in Currys. BrightHouse is retailing it at £1,478.11, but it quotes a weekly payment of £13.64. On the face of it that sounds affordable, but ultimately the customer will pay a total of £2,127.84 for the product—two and a half times the price that they would pay in a normal high street store. That is why we need to consider extending affordable credit provisions more widely, so that consumers are not ripped off by such companies.

[Damian Hinds (East Hampshire) (Con)]

Does my hon. Friend agree that in such rent-to-own cases, the annual percentage rate advertised may well be shown as 29.9%, which is in fact the cost of the credit, but the grey pricing means that the sticker price is elevated? That highlights exactly how companies try to get around whatever measures are put in place, even if they are very sophisticated.

[Jackie Doyle-Price]

That is why we must avoid being prescriptive about how we tackle the problem. We can make rules, but firms will find ways of getting around them. We could put in place an overarching obligation for the regulator to say, “We will take action when we think something is not fair”, and we will be able to point out that such practice is not fair by any stretch of the imagination. However, we need to set that expectation for the regulator—that it will take action when unfair activities take place.

The hon. Member for Walthamstow mentioned affordable credit. Ultimately, we will not tackle the problems until more affordable credit is available. With that in mind, I should like to ask what more the Government can do to establish and foster the growth of credit unions and to think in a big society way.

[Sheila Gilmore (Edinburgh East) (Lab)]

In the light of the hon. Lady’s support for affordable credit, will she put pressure on the Government to extend the life of the growth fund?

[Jackie Doyle-Price]

I was about to say that I am asking the Government to think in a big society way about what they can do to encourage the growth of credit unions. It would be nice if Opposition Members allowed Government Members to make our case, because we have as much to advance on this subject as they have.

I pay tribute to my local borough council, which has welcomed Essex Savers credit union into its civic offices and other properties that it owns and manages. I encourage the Government to consider what facilities it could offer to credit unions—post offices were mentioned, but we could also use jobcentres. That would give credit unions access to more savings, and they would therefore be able to make more loans. I have now run out of time, but I hope the Minister takes that on board.

13:21

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

I pay tribute to my hon. Friend the Member for Walthamstow (Stella Creasy) for her sterling and tireless work. I also pay tribute to the cross-party support for her motion and the widespread support from groups that I do not believe have ever spoken to each other before, which shows the strength of feeling.

I am speaking today because of a constituent on income support who went to BrightHouse and was told it was fine for them to buy any item, however expensive it was and whatever the rates they would have to pay back. I am here for the couple with children who lost their house through redundancy. As well as very large mortgage-related debts, they must pay 10 other debts, including five from credit cards, all of which are spiralling out of control, to a total of £37,000. That is the tip of the iceberg in just one constituency. Citizens Advice informs me that in my constituency—just one constituency in one part of the country—it is dealing with work relating to debts in excess of £2 million. That cannot be right, which is why I believe we have such a consensus.

Just before Christmas, I received a nice, handwritten card in the flat that I rent in Vauxhall. The nice person who signed it told me that I could get £300 immediately. The only problem was that the annual percentage rate was 272%, which would mean that I would have to repay £546. Six companies control 90% of that market in the UK. That is scandalous. New Members received £4,000 loans for office items. What would they think about paying back £7,280? Perhaps I should not have said that quite so loudly—people writing about this debate might think that it is an excellent idea. Seriously, however, that is the problem facing the poorest communities in our country today.

The hon. Member for Thurrock (Jackie Doyle-Price) compared prices between an electronics supplier and BrightHouse. In Argos it is possible to buy a 60 cm double oven for just under £280, but the total after interest for the same item in BrightHouse is almost £590. That is nonsense—it is immoral and it must be stopped.

I should like to deal briefly with credit rates, which hon. Members have mentioned. Some say that if we act, there is a possibility that people might go elsewhere to access credit. I understand that, but I cannot see too many of my constituents in north Wales heading to Manchester airport to take the next flight to New York on the off chance that they can get cheaper credit there.

The movement for action is growing globally, including in this country. It is tremendous that we are seeing widespread, cross-party support, and support throughout business and civic society. I commend the motion and hope it wins support. I also hope the Government put behind them whatever qualms they may have had, because this matters in our constituencies, whatever parties we represent, and whatever part of the country we come from. The motion will make a difference to the poorest members of our society. It is right and moral, and we should take action.

[Mr Deputy Speaker (Mr Nigel Evans)]

Thank you for your brevity.

13:25

[Duncan Hames (Chippenham) (LD)]

I should first declare an interest as a member of the West Wilts credit union.

I congratulate the hon. Member for Walthamstow (Stella Creasy), who has done so much to raise the profile of this issue in a matter of months since we have been in the House, and all Back Benchers who helped to secure this timely and important debate. I also acknowledge that my hon. Friend the Minister has an admirable track record on financial inclusion that is far longer than mine.

I understand that the Government seek to make policy on the basis of strong evidence and wide consultation, and that my hon. Friend must properly consider all the submissions that his Department receives. However, I have long been clear in my mind about the moral imperative for action, as well as to the practical case for certain caps on the total cost of borrowing.

Back at the hustings meeting at which I was first selected as the Liberal Democrat candidate for Chippenham, I was asked this popular and well-worn question: “If you could make any new law, what-would it be?” I said that I would cap the cost of consumer lending. I am not generally inclined—[Interruption.] Opposition Members who are looking to establish some consensus in the House would do well to welcome those who support the motion. As I said, I am not generally inclined to rely on new laws and regulations, but it seems to me that capping the cost of consumer lending would be a suitable exception.

High-cost consumer credit works for some people. It can provide a useful bridge across a difficult period. Some consumers use such services in a fully informed and responsible manner and derive benefit from them. However, I also see too many of my constituents caught up in vicious cycles of debt and trapped by unscrupulous and irresponsible lending.

It can be particularly difficult for people to resist taking on further unaffordable borrowing when a representative of the lender is in their home, seemingly innocently chatting about what will get them through Christmas or a child’s birthday. Those tactics will be familiar to colleagues across the House from their surgeries and casework. In my view, they are exploitative.

In advance of this debate, I was contacted by Glenis Ansell, a financial inclusion officer from Wiltshire’s Community First, who works with constituents of mine in Chippenham. Through the Wiltshire Money Line, she works closely with the county’s four credit unions and its housing associations to deliver responsible and reasonable lending to local people. That is an excellent example of efforts to expand access to affordable credit, which we are calling for in both the motion and the amendment. Last year, they saved £250,000 in interest payments alone, and I commend them for their work.

In her work, Glenis sees first hand the appalling toll taken on some vulnerable people, who are targeted by doorstep lenders. She reports cases in which vulnerable adults become too scared to open their own front doors for fear that they will be confronted again by agents demanding repayment. She put to me this perfectly straightforward question: what protection is there for vulnerable people who are targeted by legal but unscrupulous lenders? I hope the Minister answers that for her today.

A range of caps on the total cost of loans would go some way to addressing that very point. I am aware that the Government have some anxieties about prejudging the outcome of their consultation, but I would not want those anxieties to prevent the House from taking a positive view towards the proposed cost-of-credit caps. I therefore intend to support the amendment tabled by my hon. Friend the Member for Worcester (Mr Walker).

13:29

[Ian Lavery (Wansbeck) (Lab)]

I too congratulate my hon. Friend the Member for Walthamstow (Stella Creasy) on bringing this important issue to the Floor of the House. I welcome the opportunity to participate in this debate today. There can be no doubt that there is a real need to tackle the uncompetitive nature of this market and protect individuals and families from excessive interest rates and charges by increasing access to affordable credit. The Consumer Credit (Regulation and Advice) Bill will provide an opportunity to make progress on these matters.

Like many other areas of the UK, my constituency of Wansbeck is suffering greatly from the effects of the worldwide global recession. Since the start of the recession, mainstream lenders such as high street banks have been much less willing to lend money. It is estimated that approximately 5 million to 7 million people in Britain are denied credit either because they do not have a bank account or because they have no credit history. This leaves more and more people in Wansbeck and beyond with only the option of unsecured lending such as payday, doorstep and hire purchase lenders. It is estimated that more than 1.2 million people use the payday lending market—a staggering fourfold increase since the start of the recession—and more than 3 million use the home credit market. Furthermore, rising unemployment, housing costs and VAT could leave numerous families struggling to make ends meet, which would add to the problems they face.

However, it is still relatively easy for anyone to run up substantial debts, and tragically people end up with debts they cannot deal with or service. It was recently reported that the people of the United Kingdom are well over £1 trillion in personal debt, and personal insolvency in the UK has reached record levels.

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

Will my hon. Friend give way?

[Ian Lavery]

I would prefer not to, as I have only five minutes.

As always, the most vulnerable members of society are hit the hardest, and people on low incomes or in receipt of benefits are left to the mercy of non-mainstream loans— payday, home credit or pawnbroking. Currently, six lenders account for 90% of the home credit market and there is little competition to drive interest rates down. The lack of competition keeps rates artificially high, with the most vulnerable having to pay the price—literally. The APR for payday lenders often begins at 600% and can escalate to 2,500% or more. Home credit lenders, who make home visits in order to collect repayments for their short-term loans, can charge £82 in interest and collection charges for every £100 lent.

It is not surprising that families turn to illegal loan sharks for help to tackle their immediate financial problems. At this stage it is worth remembering that the coalition Government’s solution to the heinous problems with loan sharks in the north-east was to scrap the north-east illegal money lending team. In addition, the coalition shows no appetite to clamp down on excessive interest rates and loan costs—it is clearly out of touch with ordinary people and their problems.

In Wansbeck, the local citizens advice bureau is doing its best to provide good quality debt advice services, but the withdrawal of finance and the reduction in staff numbers are causing real problems. There are some 900 clients in Wansbeck alone, dealing with £10 million of debt. The casework is increasing as the manpower reduces.

If we are to help and protect my constituents and others like them we need to make progress on two fronts. We have to tackle both illegal and legal loan sharking. At the same time, we need to increase access to other, more affordable forms of credit. We need to improve access to credit unions in Britain, but credit unions in Wansbeck have had their funding reduced. I remind the Deputy Prime Minister and his fellow Ministers that they signed an early-day motion in 2005 that called for action on interest rates charged by doorstep lenders, but they have taken no action now that they are in government and in a position to do so.

13:34

[Justin Tomlinson (North Swindon) (Con)]

I thank the Backbench Business Committee for agreeing to the request from the hon. Member for Walthamstow (Stella Creasy) and me for this debate. There is true cross-party support for this—more than 40 Members from different political parties supported us—and we were delighted to secure this three-hour debate. I am pleased that so many want to speak, which shows a real desire to make a difference on this crucial issue.

Many hon. Members will set out compelling reasons for the importance of this issue from their individual casework. Organisations such as the citizens advice bureaux say that 60% of their work is dealing with financial difficulties. It is surely better to tackle the problem at the source, but all too often consumers are simply not equipped to make informed decisions. It is the high-cost lenders who take advantage.

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

My hon. Friend and I organised a debt awareness day in Swindon, where we found an alarming lack of knowledge, including people thinking that the APR was the be-all and end-all and not realising that the total package could be dramatically more expensive. The motion addresses that problem.

[Justin Tomlinson]

My hon. Friend is spot on, and all too often we find that consumers are simply not equipped to make informed decisions.

It is suggested that total cost caps are the solution, and I support the principle. Surely there is an unequivocal case for saying that for borrowing X amount, there should be an absolute limit on the sum to be paid back. We should protect consumers from the very worst.

The motion is 99% there, but the amendment expresses a slight hesitation. There is still a nervousness, because whatever we do will have consequences. When organisations such as Consumer Focus and MoneySavingExpert, which is run by Martin Lewis, say that we must be mindful of possible consequences, it is right and proper that we should take a measured and detailed look at the issue to ensure that the consequences are thought out. The evidence is inconclusive—

[Bill Esterson (Sefton Central) (Lab)]

I take the hon. Gentleman’s point about the consequences, but the evidence from Members on both sides of the House suggests the problem is with the difference between voluntary and mandatory regulation. Unless enforced, the regulation just will not happen.

[Justin Tomlinson]

That is why I support the principle, but—as the hon. Member for Walthamstow said—it is essential that we make things better, not worse. We should not rush in if we have not considered all the consequences. However, we need to act urgently and, crucially, with a desire to find a workable form of total cost caps. For those people who say that additional regulation would push people into the hands of the illegal loan sharks or that extra action will damage our case for protecting vulnerable consumers, I point out that we have just seen significant changes to the credit card industry that have not affected people’s access to credit cards. We should not fear that the market would collapse.

I urge the Minister to look into the sales techniques of doorstep lending. They include nudge-nudge techniques that encourage people to take on expensive, long-term debt. Such lenders concentrate on having relationship managers who go into the homes of the consumers. They argue that that helps them to assess whether the consumer can afford to borrow more money. The relationship manager has a cup of tea and a chat. They might ask, “Christmas is coming up, have you made plans for that?” The consumer says that her children want the latest expensive toy, and the representative offers to lend some money—at a high cost. The consumer is nudged into a long-term cycle of debt, and that is one of the most important areas to consider.

My flagship issue is financial education, which is included in the motion. I launched the all-party parliamentary group on financial education for young people on Monday, with my hon. Friend the Member for Chippenham (Duncan Hames) and the hon. Member for Walthamstow as vice chairs. Some 171 MPs have signed up and it is supported by the Personal Finance Education Group and Martin Lewis of MoneySavingExpert. I am grateful for that support, as it is unbelievably important that we have savvy consumers who understand that they can shop around and are equipped to make informed decisions.

There is an incredibly strong case for making the costs more transparent, and it is another reason why total cost caps are so important. All too often, people judge a debt on the APR. There are many issues with high APRs, but there are extra charges as well, which is why the crude cap on interest rates alone was previously rejected. There should be a cap on everything. That would also allow consumers to make good comparisons.

I know that some hon. Members will criticise organisations such as Wonga.com, but I have to give it some credit, because of all the organisations that have lobbied me, it is the only one that has said, “We will work with whatever changes are put in place.” That should mean clear, understandable and transparent costs—I would support that. However, we cannot just look at APR. Part of Martin Lewis’s financial training for me was the following good example: if someone takes out £3,000 on a credit card at the age of 19 on a typical APR of 17.9% and makes only the minimum payments, they will not clear that debt until they are 60 years old. Although the 17.9% does not look too bad, there are long-term implications, which again supports the principle of total cost capping, showing all the costs, including what it will really cost over the lifetime of the debt.

I fully support any measures to give greater access to credit unions. Being conscious of the time, I will simply bow to my hon. Friend the Member for East Hampshire (Damian Hinds) for championing this subject in Parliament. I urge the Minister to take that on board, as well as the need to make available greater access to social funds, in particular by allowing greater flexibility in emergencies. All too often, the need to acquire debt is a result either of consumers wanting something now rather than later or of sudden changes in circumstances. We need to be in a position to help out those in the latter situation.

Finally, I want to address the principle of the savings culture in this country. The hon. Member for Walthamstow talked about how we have the lowest savings rates and the highest levels of debt. That is this nation—we have an insatiable appetite to buy now and pay later. Over the long term we need to change that, because where possible people need to have a savings buffer for changes in circumstances. So I urge the Minister to consider all the different options proposed. We have cross-party support for the principle. I am sorry that there is an amendment to the motion, because it will take up time in the Division Lobbies, but we are 99.9% there. The question is how we do this. However, we need to consider all the consequences, and I have every faith that we will be able to make a difference for the people who need our help the most.

13:42

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

I rise to speak in favour of the motion. As a former policy officer for Citizens Advice Cymru—before my election to this place—I was able to see how the nature of the advice issues dealt with by the citizens advice bureaux in our communities changed dramatically during the second half of the previous decade. Although welfare benefit issues had previously been the staple diet of bureaux, personal debt cases rapidly became the largest single issue dealt with by advisers, totalling well over a third of all client issues. Citizens Advice client figures offer a detailed insight into the social problems faced by communities across the UK, and the latest quarterly figures for Wales are sobering. Total client inquiries over the year totalled nearly 390,000—a year-on-year increase of 19%, of which debt-related cases totalled more than 134,000, which was an incredible 37% of all cases and an increase of 14% on the previous year.

There is always a lag between the true human cost of any recession and a return to economic growth, and things will certainly get much worse before they get better. The current fiscal policy of the UK Government will, I am afraid, only exacerbate matters. The economic record of the previous UK Government has rightly been criticised for the manner in which the public finances were allowed to run out of control, but the manner in which consumer debt was allowed to rocket has received little attention. Consumer debt in the UK lies at around £1.4 trillion—a sum equivalent to 100% of the UK’s total annual economic output. To put this in context, in 1997 combined personal debt stood at about £500 billion. It is an incredible figure that will be a significant economic headwind for the future.

There is a great social crisis facing communities across the UK, and the UK Government cannot stand idly by. We need a comprehensive solution involving regulation of the high-interest lending market. However, central and devolved Governments also need to work together to put in place a package of support and educational services to deal with acute debt problems as well ensuring that financial capability is increased among the wider community. We welcome the decision of the UK Government to regulate the excessive interest rates of credit and store cards, but there are no plans to intervene in the high-interest lending market involving payday loans, pawnbrokers, doorstep lenders, mail-order cheque-cashing agencies and high street alternatives such as Oakam.

My predecessor, Adam Price, introduced a ten-minute rule Bill—the Interest Rates (Limits on Charges) Bill—that would have introduced a capping structure with the aim of achieving the ambitions of the motion we are debating today. People who rely on these sorts of products are often extremely vulnerable and on low incomes, and face interest charges of up to 2,500%. It is exploitation at its worst, and the lax regime that currently exists in the UK is indefensible. These sorts of business models were pioneered in the US, but in the land of the free there has been a backlash: 15 states have prohibited payday lending, and 35 states have introduced interest caps. Furthermore, in Europe, as we have heard, 14 countries have some sort of capping structure.

I would like to touch briefly on the issue of debt management plans, and the need for the sector to be subject to robust statutory regulation, including—at the very least—a cap on fees for the debt advice they offer, and subject to an independent audit funded by themselves.

[Nia Griffith (Llanelli) (Lab)]

Why is the hon. Gentleman’s party attacking Communities First, which has done some very good work on providing debt advice? Why is it suggesting that it should no longer receive funding from the Welsh Assembly Government?

[Jonathan Edwards]

I am afraid that I have no idea what the hon. Lady is talking about—perhaps we can discuss it another time.

One of the growth industries of the recession involved advice sharks, who exploit the human misery caused by the downturn. On a fee basis, individuals and families find themselves signing up for expensive debt management schemes, which only increase their problems. It is estimated that in 2010 companies would have amassed fees in excess of £250 million, often on an up-front basis and with consumers encouraged to take out further credit to pay for these fees. These matters are being considered as part of the consumer credit and insolvency review. However, we need urgent action now to protect consumers, and I would urge Ministers to act with haste.

To close, I would like to congratulate the Welsh Government on some of their exciting initiatives. The creation of the Welsh financial education unit is a step towards ensuring that future generations are more financially literate. The all-Wales lending unit is at the forefront of the fight against illegal lending in my country, and an all-Wales coverage of credit unions to provide alternative affordable lending is much to be welcomed. However, I would urge more ambition in my own country—by rolling out interest-free JAK-banking-like products in our credit unions, and through the creation of a national money advice service made up of existing providers and based on the excellent money advice and budgeting service in the Republic of Ireland.

13:39

[Andrew Bingham (High Peak) (Con)]

I support wholeheartedly the principle of this debate. As the world changes, so does the way we do many things—and none more so than the way we can borrow money. In days gone by, there were usually only two ways of borrowing money—through a bank or, for a mortgage, a building society. Things are very different nowadays.

Anyone who has spent time watching daytime television—I had the misfortune to do so when I was ill several years ago—will be struck by the number of adverts offering quick and easy solutions to money shortages. They are everywhere, whether it be the array of “where there’s blame there’s a claim” law firms offering redress by way of riches, which is something about which I have a strong view—but that might be for another day—cash-for-gold schemes or guided bankruptcy proceedings to escape debts that are already out of control. However, the most prevalent are the offers of loans. Pictures of happy smiling families delighted by the consolidation of their debts under increasing finance are rife. Loan companies with their own television channels promise untold happiness if a person calls them to borrow more and more money. Indeed, some adverts only just stop short of saying, “You can now borrow enough money to get completely out of debt.”

The latest method of debt marketing is the provision of payday loans, lending money at over 1,000%, and companies offering this type of loan are flourishing—they are everywhere. As the motion states, £7.5 billion was lent to low and middle income earners in 2008 alone. It is easy-to-obtain credit, but is frighteningly expensive to service the debt. These company names are becoming as familiar as the old banks and building societies, as they appear not just on televisions but on premier league football shirts, advertising hoardings up and down the country and in various newspapers. I am sure that we have all received many e-mails offering us loans.

I trust, Mr Deputy Speaker, that you will be unlikely to need a payday loan, but if you did and you did a Google search for UK payday loans, your search would yield some 9.8 million hits. If you wished to spare yourself the inconvenience of a credit check, you would still have almost 2 million hits from which to choose.

“Neither a borrower nor a lender be” was, in days gone by, an idealist maxim, but most of us incur debt in some form or another over our lives. At this point, I will resist chiding Labour over its policies on national debt. The ability to repay should be the first consideration for anyone entering into any credit agreement. For the man in the street, however, that is becoming harder and harder to do as the lending methods become ever more varied and complicated. Working out exactly how much has to be paid back on any loan is becoming more and more difficult, as is being able to compare it with other offers.

[Karl Turner (Kingston upon Hull East) (Lab)]

I agree with an awful lot of what the hon. Gentleman is saying, but I wonder whether he shares my concern at the Government’s scrapping of the financial inclusion fund. Around 50% of the advice that my citizens advice bureau gives is on debt management, and it tells me that that will stop as a direct result of the Government’s policy.

[Andrew Bingham]

I thank the hon. Gentleman for his intervention, but I think that we are trying to get some cross-party agreement here. Can we try to deal with the issue of debt and work together on this instead of indulging in political arguments?

I would like to talk about financial education in schools, which my hon. Friend the Member for North Swindon (Justin Tomlinson) has also mentioned. A good education teaches children about the past and prepares them for their future. In a world where debt has become vital to so many important milestones in life, it is right that we should help our children to understand how to budget and how to negotiate their way around credit agreements. I was at the launch event for the all-party parliamentary group on financial education for young people, and I would like to pay tribute to those who set it up. A huge number of MPs were present. Teaching financial matters in schools could be the saviour of many people in years to come, but it will not help adults today. At the launch of the all-party group, Martin Lewis of moneysavingexpert.com spoke with eloquence and passion about his concern at the mountain of debt that people are accumulating, unaware of the consequences of their actions and with little or no comprehension of their total debt liability. Mr Lewis’s concerns are supported by a constituent of mine in the High Peak, who wrote to me about a loan that he took out eight years ago. After eight years of making all payments in full without a single default, he has still not paid back a penny of the principal sum. Indeed, to discharge the loan after eight years, he still had to pay more than 100% of the original amount that he borrowed.

I am not an advocate of legislating at every opportunity. I believe that, through education, we can help people to make informed choices. I support the amendment urging regulators to consider putting in place certain regulatory powers, which would give them the chance to act. However, we too might eventually have to consider taking action against those lenders who operate in a way that is unfair and exploitative, and who offer seductive products in a way that does not explain their consequences for those who sign up to them. A requirement to publish a total lending cost figure for each loan, which could be used as a yardstick by which a lender’s offer can be judged, is in my view a sensible step. In that way, the high-cost credit lenders would flounder because the market would send them down, and the sensible, sustainable methods of credit and the people who offer them would survive, for the good of all.

13:53

[Mrs Jenny Chapman (Darlington) (Lab)]

The United Kingdom is lagging behind on the regulation of consumer credit. The UK’s poorest borrowers pay the highest price for credit in Europe. Fifteen American states have now dealt with payday loans, and the cost of credit is also capped for all US servicemen and women. Even President Bush could see that his soldiers needed protecting from excessive interest and administrative charges. In the United States, the Centre for Responsible Lending estimates that credit regulation saved consumers $2 billion in 2009. We know that payday loans frequently leave borrowers unable to pay other debts.

Much is made by the industry of the possible unintended consequences of regulating payday loans, but research such as that from the university of North Carolina shows that restrictions on payday loans had no significant impact on the availability of credit for households in North Carolina. In fact, more than twice as many former payday borrowers reported that the absence of payday lending had had a positive rather than negative effect on their household. The state’s regulation helped more households than it harmed.

[Bill Esterson]

My constituent, Mark Billard, wrote to me recently. He said:

“Most US states and European countries have a legal limit to stop lenders charging whatever they want.”

That point has also been very well made by my hon. Friend. Does she agree that the danger of the amendment is that it would reduce the chances of such legal protection for those most in need of help?

[Mrs Chapman]

My objection to the amendment is that this is a Back-Bench debate, and it should be an opportunity for Back Benchers to express their views.

The New Economics Foundation published a report in 2008 that included evidence that restricting payday loans did not push people into illegal borrowing. Rather, the market for affordable loans actually strengthened in such circumstances. In America, small mainstream loans for less than $600 became more widely available following a clampdown on payday lending, as aggressive marketing by payday lenders disappeared.

We have heard it argued that caps on credit in France and Germany have led to reduced access to credit for the least well-off, but that argument rests on evidence from a narrow base of research. In fact, restrictions on access to all kinds of credit vary between Britain and other European countries. It is argued that borrowers know what they are doing and should jolly well live with the consequences, but the individuals getting into trouble with these loans are desperate. They are not in a position to shop around. Their problems, as well as their credit, are compounded until they are no longer able to cope.

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

The hon. Lady is making an interesting case. Does she agree that borrowers often do not know what they are doing, and that it is our job, as elected Members, to protect not the moneylenders but our constituents? Does she also agree that the motion, for which I have a lot of admiration, and the amendment suffer from one problem—namely, the assumption that the regulator will be able to solve the problem? Does not the evidence from a whole variety of regulators, including Ofcom, Ofgem, Ofwat and the Charities Commission, suggest that regulators are far too often wet and useless? Would it not be much better to put these powers—which should be draconian, but exercised with the judgment of Solomon—in the hands of a feisty Back Bencher? May I suggest the hon. Member for Walthamstow (Stella Creasy) for the role?

[Mrs Chapman]

The only kind of regulation that is really going to get to the nub of the problem is the one that caps the cost.

To argue that high-cost loans are necessary simply cements the market dominance of high-cost lenders and, worse, cements endemic poverty. The industry is seeking asylum in the under-regulated UK market, having been forced out of certain American states and parts of Europe. Other countries are getting a grip on the problem. The debt industry is resisting regulation, claiming that it has the best interests of its customers at heart. I am afraid that that simply will not wash.

The motion before the House does not propose to outlaw short-term lending or impose a cap on APRs. It simply asks the Government to agree to curb the worst excesses of the credit and debt industry. The Office of Fair Trading recognises that there are problems with this market, and it is beginning to regulate more closely. But the regulation that counts, the one that will actually make a difference, is the one that cuts the cost. There are many problems with this market, but the biggest problem for consumers is the spiralling cost of the loans. Loans are rolled over and charges are added until they become not an occasional crutch but the only means of getting by. Consumers become trapped in a cycle of debt. How different this reality is from the fun, free-and-easy way in which high-cost lenders and debt management companies market their products.

My hon. Friend the Member for Walthamstow (Stella Creasy) has explained carefully that the motion attempts to bring about a cap not on the APR but rather on the total cost of credit. The motion does not prescribe a particular cap or propose anything that might cause credit to be unavailable to those who need it. The motion has been carefully crafted to bring about a limit on the overall costs. It does not propose a requirement for a new regulatory body and it will not close down short-term lending.

The motion does not condemn debt. Debt is a necessary part of modern life. It enables us to get married, to go to university and to buy a house or a car. It gets many people through life’s emergencies, such as a broken washing machine or unexpected travel, but it is not right that those least able to afford high charges, those who are in desperate situations and unlikely to shop around, should have to pay the most.

We know that people are deliberately targeted by high-cost lenders in their marketing and are enticed into taking loans they cannot afford. These are the people for whom the normalisation of high-cost lending has the cruellest consequences. Time is up for the worst of these expensive loans. It is up to this House to tell the Government it wants to change the rules.

Finally, I would like to pay tribute to the sterling work of my hon. Friend the Member for Walthamstow on this issue. She has demonstrated how the at times confusing procedures of this House can be effectively used to bring forward an important issue and, if good sense prevails, to make a difference. Her tenacity goes to prove that it is always a mistake to confuse gentleness with weakness.

Our concern for this issue is not borne of soft naivety, but from seeing first hand the effects on the lives of our constituents of these exploitative charges for borrowing. I commend this motion to the House.

14:00

[Mr Robin Walker (Worcester) (Con)]

I beg to move amendment (a), to leave out

“alongside measures to increase access to affordable credit, regulatory powers that put”

and insert

“measures to increase access to affordable credit; urges regulators to consider putting”.

The amendment stands in the name of more than 20 other Back Benchers, and I am grateful to the many distinguished Back Benchers from different parties for their support and to the Backbench Business Committee for the opportunity to speak in this debate.

I move this amendment in support of the excellent motion of the hon. Member for Walthamstow (Stella Creasy), and I congratulate her on the passionate campaign she has led to secure this debate and on the meticulous research that underpins her motion today and her speech. I support her campaign for better financial education, and I was delighted to become a founder member of the all-party parliamentary group on financial education for young people, along with her and many other Members, when it was launched by my hon. Friend the Member for North Swindon (Justin Tomlinson), who has seconded this amendment.

We are debating a motion that I personally would be prepared to support in its entirety, but which, through a small change, I hope will win even greater support from both sides of the Chamber. The purpose of the amendment is to set forth clearly the opinion of this whole House—and in particular of Back Benchers from every party—on such an important matter and to support the call for action on the cost of credit and the means by which the hon. Lady has called for action with a range of caps, but also to clarify that the answer is not necessarily new regulatory powers. I move this amendment as a result of concerns raised with me both by constituents and by fellow Back Benchers that one aspect of the motion could see it defeated were it left unchanged. I think this is too important a matter to allow that to happen.

The amendment protects the wording that calls on the Government to increase access to affordable credit. It is absolutely right that the Government should act in this area; that is a point from which I think few would demur. I have had some involvement in two significant initiatives that the Government are already taking on this front. They are initiatives that benefit many people in my constituency of Worcester. I have spoken in this House before about the importance of the move to bring credit unions into the post office network, and I know that the Black Pear credit union in Worcester is anxious that this measure be brought forward as soon as possible. Like the hon. Lady, I have campaigned on my high street, in my case leafleting for this credit union. I am glad to be able to say that Labour councillors in Worcester do the same. I would like to take this opportunity to remind the Government of the urgency of the need for progress on this matter and of the revitalising effect that this step could have for both our credit unions and our post offices.

The second organisation that I wish to mention in this context is My Home Finance, whose shop in Worcester I was delighted to open just before Christmas. It is supported by local housing associations including Sanctuary Housing, Nexus Housing and Worcester Community Housing, and it is backed by the Department for Work and Pensions and the Royal Bank of Scotland. This great new initiative provides loans directly to people’s bank accounts at an APR of 29.9%, compared with typical doorstep loans of 272% or loan shark rates with APRs in the thousands. Moves such as these that are already under way reflect the priority which the Government are already giving to increasing access to affordable credit, but I have no reservations in calling on the Government to do still more.

What I and many other Back Benchers on the Government Benches feel uncomfortable about supporting is the call to create new regulatory powers at this moment in time. We will hear many arguments in this debate about the effect of capping rates. Some will argue, as I do, that some form of flexible capping is not only attractive but morally right, while others will warn of the perils of driving people out of the regulated market altogether and into the hands of loan sharks. The hon. Member for Walthamstow has suggested an elegant solution in her form of words in the motion, taking account of the need to balance access with price and providing a degree of flexibility, but even this formulation requires the Government to introduce new regulatory powers.

Many of my colleagues on the Government Benches are allergic to increasing regulation, and all of us would like to see better, rather than more, regulation accepted as a general principle of government. I and many other Members fear that for the Government to create new regulatory powers in this area at this moment could be a mistake. To regulate without a very careful analysis of the market would carry great risks and, as so often happened in the past, such regulation could have unintended consequences.

[Mr Chuka Umunna (Streatham) (Lab)]

I noted the wording in the hon. Gentleman’s amendment. If we are to introduce further regulation, is now not the time to do it, given the Government’s current big reforms of financial services in general in this country, some of which I support? I accept that regulation is not necessarily always the answer, but one of the problems with the financial services sector is that it can be very short-termist and has to take account primarily of maximising shareholder value through dividends and increasing share prices. To my mind that is precisely why, in this case, we need to have regulation. Perhaps the hon. Gentleman can enlighten us about why he thinks the sector can in this respect voluntarily bring itself to heel.

[Mr Walker]

I am very grateful for that intervention as it gives me time to make the next part of my speech, which is on that very subject. I am certainly not calling for self-regulation in this area. I am calling for the regulators to look at this.

It is important to note that the Government have announced plans to create a new consumer protection and markets agency, whose focus will be squarely on protecting individuals and consumers. That will be a refreshing change from the vast and fragmented scope of the Financial Services Agency. Such an agency would be ideally placed to consider this matter and to work closely with consumers and the industry to find the best way to deliver a range of caps on prices, balancing the needs of access to credit with those of price. Without that regulator in place, I believe it would be a mistake to create new regulatory powers subjecting such an important matter to the change and disruption inevitably entailed in a handover of responsibilities: far better that we clearly indicate the will of this House that regulators must consider these matters and take them seriously.

I return to the fact that I support this motion. Like many other Back Benchers of all parties, I want to see action taken to cap the cost of credit. I am deeply concerned about the levels of interest charged for payday lending and want to do everything I can to protect my constituents from loan sharks.

[Rachel Reeves (Leeds West) (Lab)]

The constituent who came to see me at my surgery last week because she could not sleep at night because of the payday loans and the interest rates charged urged me to vote for today’s motion. She will see no benefit from urging the regulator to consider introducing caps. She will see benefit only from those caps being introduced.

[Mr Walker]

I am afraid I disagree. The caps have to be introduced in the right way. The best way for the Government to take action on this is to drive forward access to credit, improve financial education and encourage a genuinely competitive market in affordable credit. I support the suggestion that a range of caps should be given serious consideration but, in common with many other Back Benchers, oppose the creation of new regulatory powers at present. By accepting my amendment, the House can send a clear message of intent without sacrificing this worthy motion to complex arguments and ideological disputes on regulation. I believe that the amended motion would represent a clear expression of Back-Bench opinion from across the whole House, and I therefore commend it to the House.

14:07

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate my hon. Friend the Member for Walthamstow (Stella Creasy) on securing the debate. I agreed almost entirely with the comments of my hon. Friend the Member for Darlington (Mrs Chapman) apart from the use of the descriptive term “gentleness”. I think the emotions of passion and commitment were more apparent in the contribution of my hon. Friend the Member for Walthamstow.

This is a timely debate, because we are still experiencing the effects of the worst global financial crisis in over 70 years, which plunged the global economy into its deepest recession. As a result, the finances of households throughout our country, especially those on low incomes, are balanced on a knife edge. Four out of 10 people in the UK are worried about their current level of debt, and with household debt set to increase according to the Government’s own Office for Budget Responsibility, we need to do all we can to make sure that they do not go over the edge due to irresponsible and unfair lending.

I am a supporter of both the Consumer Credit (Regulation and Advice) Bill and today’s motion, because they seek better regulation of unfair lending practices in the marketplace, where disproportionately high interest rates or charges, and sometimes a combination of both, can be levied. Such a move would bring a welcome stop to short-term lenders charging wholly excessive APR rates, which people are often so shocked to read about. The highest I have found was on an infamous website only a couple of days ago that was providing a very modest APR of 4,200%. People often say that it is unfair and misleading to quote annualised rates for short-term credit, but even if we break it down to a weekly or monthly rate, they are by no means cheap. We also have to question what happens when a person experiencing financial hardship finds him or herself in an even more difficult situation and cannot make the agreed repayment date.

No one is arguing for credit to be withheld from people who need it; what we are calling for is responsible lending, coupled with protection for vulnerable consumers, and an open and fair market. It is important not to single out short-term credit when dealing with unfair practices, but to deal with the market as a whole. That is another reason why I support the motion, as it encompasses all forms of lending and would include, for example, credit cards and store cards, the regulation of which the Government have already committed to. Quite significantly, what we are calling for would bring the situation in our country in line with what is increasingly becoming the position in other countries around the world, for example those in Europe and the United States, and even in some parts of India.

I am also extremely pleased to see that the motion addresses the important issues of financial literacy and financial exclusion, which are the other half of the problem. In a recent Westminster Hall on bank account provision in Scotland, I illustrated the problems that financial illiteracy and financial exclusion can create. In a former life I was a dental practitioner—I am a glutton for punishment; what can I say? Our practice employed a new dental nurse who had no credit history at all. She did not have a driving licence, she was straight out of school and she had sadly lost her birth certificate, as her parents had had a messy separation. She was not able to open a simple bank account. Instead, every week she had to take her cheques to one of the local pawn shops and pay £3.50 just to get her weekly salary. That is a simple story, but the same situation affects a great number of people across the UK, and when they find themselves in need of credit, they often turn to short-term lenders. According to research, 5 million to 7 million people are denied credit either because they do not have a bank account or because they have no credit history.

I admire credit unions, and I am a great believer in their work. Indeed, Glasgow has more credit unions and members than any other city in the United Kingdom, with 34 credit unions in total and more than 120,000 members, and financial asset portfolios of more than £170 million. Credit unions are grass-roots organisations that are truly community-led. However, what I admire most about them is that they actively work to improve the financial literacy of their members and tackle financial exclusion. It is in that context that they have an invaluable role to play in our country, because not only can they offer accessible financial services, but they could provide some of the financial education and debt management advice that so many need. I hope that the Government will look to invest more to expand the work of credit unions in the coming months.

The Consumer Credit (Regulation and Advice) Bill and the motion before us represent an excellent opportunity to show that, during these tough economic times, we will look not only to protect the most vulnerable, but to bring about a cultural change in this country in our approach to savings and debt. I sincerely hope that hon. Members in all parts of the House give the motion and my hon. Friend the Member for Walthamstow the support that they deserve.

14:12

[Lorely Burt (Solihull) (LD)]

Let me begin by congratulating the hon. Member for Walthamstow (Stella Creasy) and the excellent way in which she has promoted her cause today. Everyone here wants to see a fair and accessible system of credit provision. No one in the Chamber today wants to see loan sharks or other unscrupulous lenders continue.

The coalition Government have begun a consultation on the best ways of achieving that. Personally, I am absolutely in favour of some form of regulation. There is no question about that. However, the problem is that calling on the Government to adopt caps now would prejudge the outcome of the consultation, and I should know, because I withdrew my private Member’s Bill on unfair charging for unauthorised overdrafts, as, although the Government were minded perhaps to support it, continuing with it would have prejudiced the outcomes. Therefore, although caps would ostensibly seem to be a reasonable way to stop excessive charging, we should examine them in the light of the evidence brought forward by the charities that support vulnerable people.

I have spoken to debt advice agencies and charities that do not think that caps will work. Some warn that the imposition of caps would remove many lenders from the market and drive people who are desperate for cash into the arms of illegal loan sharks. The chairman of the Consumer Credit Counselling Service has said:

“Interest…caps can harm people seeking this type of credit more than they help them.”

Another organisation, the Centre for Responsible Credit—one that I had not heard of before—has written to me to say that it disagrees, bringing to light a new European study. All those points must be looked at objectively. We have to think with our heads, not our hearts.

[David Rutley (Macclesfield) (Con)]

My hon. Friend makes some important points, and I completely understand the strength of opinion and the aim of trying to ensure that we have affordable credit. However, when I questioned Martin Lewis during his appearance before the Treasury Select Committee, he said:

“The main thing we could do to improve your regulations—to stop mis-selling, to have better informed consumers, to have more responsible borrowing, to penalise irresponsible lenders—would be to teach every child in school how finances work.”

We need to get the balance right in this debate when it comes to education, not just about credit, but about the importance of savings. Does she agree with those sentiments?

[Lorely Burt]

Yes, I totally agree with my hon. Friend.

Many Opposition Members who have spoken in this debate are new, so I wonder whether I could gently remind them that the previous Government launched three inquiries into the problem, all of which cautioned against using caps.

[Rachel Reeves]

My hon. Friend the Member for Walthamstow (Stella Creasy) has explicitly set out in her motion that we should have a cap not on interest rates, but on the overall cost of credit, so what the hon. Lady is talking about is not in the motion. Does she recognise that?

[Lorely Burt]

I thank the hon. Lady for her intervention, but no, I do not entirely recognise that, because I am not sure that she is distinguishing between what the two actually mean. I am not against what the hon. Member for Walthamstow is promoting, but I question her position. After 13 years—13 years in which her Government gave the matter due consideration and in which her party had an unquestionable desire to help—she seeks to introduce something now, in the middle of a Government consultation, when she knows that the Government cannot commit themselves in case they prejudice the consultation.

[Stella Creasy]

Will the hon. Lady give way?

[Lorely Burt]

I will, but the hon. Lady should please be brief.

[Stella Creasy]

I just want to check that the hon. Lady understands that this is a Backbench Business Committee debate, so in theory Back Benchers could take a position that is different from that of the Government. If the Government were concerned about the consultation, they could abstain from the vote, thereby protecting themselves against any question of judicial review, whereas Back Benchers are free to express an opinion. Does she not agree?

[Lorely Burt]

Back in the real world, we do not want to abstain. We—the Government—want to support her proposition, so I am disappointed that she is taking the view she has.

We cannot accuse the Government of doing nothing. This week the consumer credit directive came into force, enforcing a 14-day cooling-off period. We have also increased the money going into catching, prosecuting and imprisoning loan sharks—these pariahs who feast on the misery of the desperate. The illegal money-lending teams are doing a great job and have been very effective, and we have also launched the consultation—the one that the hon. Lady does not seem to be interested in acknowledging.

[Mark Durkan (Foyle) (SDLP)]

Will the hon. Lady give way?

[Lorely Burt]

I am sorry, but I cannot any more.

I, too, am impatient to see help for vulnerable indebted people, but there are other things that we could be doing. When the Financial Services Authority and the Office of Fair Trading merge into one regulator, one option could be to give that newly formed body the power to introduce caps if it felt them to be appropriate. Another option that I should like my hon. Friend the Minister to consider is the use of the post office network as a method of access for credit unions, especially as the Government have halted Labour’s closure programme.

The amendment, which I tabled along with the hon. Member for Worcester (Mr Walker) and other Back Benchers, retains all the good aspects of the motion without committing the Government to any course before the end of the consultation. I urge Opposition Members to support the amendment, so that we as a Parliament can work together to end this scourge, with our heads as well as our hearts.

14:19

[Teresa Pearce (Erith and Thamesmead) (Lab)]

Thank you, Mr Deputy Speaker, for allowing me to contribute to this important debate. I also thank my hon. Friends the Members for Walthamstow (Stella Creasy) and for Darlington (Mrs Chapman) for tabling the motion.

Let me begin by putting the record straight. The hon. Member for Solihull (Lorely Burt) said that my hon. Friend the Member for Walthamstow was not interested in consultation. In fact, she took part in this consultation.

Incomes in my constituency are, on average, lower than those in other parts of London. Unemployment is higher, and the dole queue is lengthening. My constituents are only too well aware of the exploitative practices of the payday and door-to-door credit lenders, for they are the target audience of firms hoping to cash in on other people’s misery. I believe that now is exactly the right time to propose a cap on the cost of credit. The recession means that mainstream banks are not lending, everyday costs are rising, wages are being pushed down, and the ranks of the unemployed are growing. Increasingly, payday and home credit lenders are becoming the only option for people who are struggling to make ends meet, but that option comes at a terrible price—a price that people may be paying year after year after year.

The speech of the hon. Member for North Swindon (Justin Tomlinson) reminded me of an experience that is not part of my casework, but an actual case of mine. I recall that, when I was 21, my three-year-old daughter and I spent our first Christmas in decent housing after three years living in a slum dwelling with no bathroom. I wanted to buy a Christmas tree and some decorations, which would have cost about £10. It might as well have been £100, because I did not have £10.

I have to ask myself this: if a door-to-door lender had offered me a £10 loan, would I have taken it? I probably would. Would that £10 have involved me in years of loan payback? It probably would. Would that have become a spiral of debt which would have meant that I would not be here now? Yes, it probably would. When people are living from week to week to the edge of every pound and penny, their lives can be thrown into crisis for the want of a new pair of shoes. It is such tipping points that can send their lives up or down. It is the ultimate game of snakes and ladders. I believe in giving people a ladder, and I think that the motion provides a key rung to help people out of the despair that comes with endless debt.

Oakam and Wonga.com have stores and billboards across London offering payday loans, longer-term loans and emergency loans to people with poor credit ratings. The rates on those loans are staggering. Many of the companies that provide those loans hire only staff with second languages so that they can cynically and specifically target immigrant communities.

It is the most vulnerable people who would be helped by a cap on the cost of credit. One in 10 UK payday customers has an annual income of less than £ll,000, and according to the UK’s largest debt charity, the Consumer Credit Counselling Service, one in eight of the people who asked it for help in the first half of last year were receiving jobseeker's allowance. I believe it is our responsibility to legislate, on behalf of those who sent us here, to protect people in such circumstances, and I hope that today we will see the political will that is necessary if we are to crack down on the companies who exploit them. I support the Consumer Credit (Regulation and Advice) Bill tabled by my hon. Friend the Member for Walthamstow, and I hope that it will be given its Second Reading in the House tomorrow. It seeks to improve access to more affordable versions of credit through, for instance, credit unions and the post office network.

I am pleased that the motion recognises the problems of financial exclusion and the lack of financial and debt management education in this country. Along with more than 200 other Members, I recently joined the all-party parliamentary group on financial education for young people, which was mentioned earlier by the hon. Member for High Peak (Andrew Bingham). I hope that, through the work of that group, we can improve financial education in schools, and I hope that all its members will support the motion.

While these measures may help, their impact will be minimal unless a range of non-competitive caps on credit in the unsecured lending market are also introduced. I urge Ministers to listen carefully to the debate, to recognise that the high-cost credit market is exploitative legal loan sharking, and to step in, do what Governments should do, and regulate accordingly by capping the cost of credit for the benefit of the most vulnerable people in constituencies such as mine and many others.

14:24

[Damian Hinds (East Hampshire) (Con)]

If hon. Members will forgive the pun, may I say that it is encouraging that there are such high levels of interest in this Chamber in this subject, particularly among the new intake? I pay tribute to the hon. Member for Walthamstow (Stella Creasy) and my hon. Friend the Member for North Swindon (Justin Tomlinson) for their interest, which has been shown not only in this debate, but in the hon. Lady’s private Member’s Bill and the Westminster Hall debate, and in my hon. Friend’s institution of the all-party group on financial education for young people. I commented at the time that, as so many people were crammed into the room, he had managed to make financial education for young people the new rock and roll.

Almost all of us in this Chamber, wherever we are on the spectrum of belief in free market economics, conclude that something else needs to be done to curb the worst excesses in the credit market. A number of us also have examined other countries in the world, both those in the European tradition, such as France, Germany and Italy, and those in the Anglo-Saxon tradition, such as Australia, Canada and most of the states in America, and asked, “Can they all be wrong?” Perhaps instead they are on to something in having some sort of usury ceiling and sensible credit limit.

Any approach to this matter has to cover all the aspects of education, advice and this country’s culture about debt, must include smart regulation that protects the most vulnerable, and must provide for proper alternatives, such as credit unions. They, in particular, have an important role to play, not only in providing affordable credit, but in encouraging the savings that a number of hon. Members have discussed.

There are a couple of problems with the motion. First, it refers to various “caps on prices” without saying what that means. It is not clear whether that would be a cash or a percentage cap. When lenders talk about the total cost of credit, they normally refer to a cash figure, but I assume that the hon. Member for Walthamstow was referring to a percentage.

[Mr Umunna]

Does the hon. Gentleman accept that the fact that a definition of the cap is not given would allow the regulator some form of flexibility in the event that it is required to take action?

[Damian Hinds]

I am grateful to the hon. Gentleman for that intervention and for being my minute man. That does create extra flexibility but we do need to know what we are talking about. A number of hon. Members have drawn a distinction between an interest rate cap and a cap that includes interest and other charges—that is what the annual percentage rate is; APR includes some other charges. It does not include behavioural charges, default charges and so on, and I do not understand mathematically—I am happy to take an intervention on this for a second minute—how they could be factored into a general cap that would apply to credit products extended to everybody, given that, by definition, behavioural and default charges are incurred only by some customers.

Another problem with the motion is its emphasis on a lack of competitiveness, because that is not the problem in this area. I do not wish to be too pernickety, but I do not think that “many” lenders can be in a “near monopoly” position, as the motion suggests. In many ways, stimulating competitiveness further might end up being counter-productive, but in the three minutes available there is no chance of our discussing that aspect.

This country is both blessed and cursed with a very diverse and dynamic consumer credit market. We are blessed because of the variety, where there is a product to suit just about every need in the market. Even payday lending can be very rational; it could be very rational for someone trying to avoid current account bounce charges to take out a payday loan instead. Very few people are excluded from the legal and, therefore, regulatable market altogether.

We are cursed by this market because of the ubiquity of the messages about credit that people are bombarded with; the emphasis on what people want to borrow, rather than what they need or can afford to pay back; and the complexity involved. Even very highly educated people find it difficult to understand every product and every aspect of every product. I am sure that some Members of this House struggle, as I do, with understanding some aspects of some of these products.

That complexity highlights one of the great difficulties with introducing new regulation, because companies make money in this market in lots of different ways. Rent-to-own companies, such as BrightHouse, which has been mentioned more than once in this debate, would almost certainly not be curtailed by any restriction on the cost of credit, because so much of the money they make is on the sticker price, relative to Argos or Currys, rather than on the charge for credit.

I am running out of time already, so I had better hurry up. The experience in America suggests that where there is effective regulation of cash lending, other sectors such as rent-to-own or good old-fashioned catalogues are stimulated, and if there is a clamp down on interest rate charges, that will stimulate growth in behavioural charges and so on. Everybody in this House probably agrees that a blunt, general, across-the-board APR cap is not a good idea, so the challenge is whether we can come up with a regime that curbs the worst excesses of the market without putting entire segments and entire product categories out of the market, and that protects the most vulnerable. We need a regime that does not push them into the arms of illegal loan sharks—the sort of people for whom the idea of a late payment penalty is a cigarette burn to the forearm.

[Justin Tomlinson]

Does my hon. Friend agree that that is exactly why we should be considering all of the actions that need to be taken as part of the credit review, so that we can get a measured and sensible approach which means that we do not end up, by default, aiding the illegal loan sharks?

[Damian Hinds]

I agree with my hon. Friend entirely. The amendment to the motion is very sensible and very welcome.

Having a range of caps on different products in the market is one option for achieving the two aims I have just set out. However, the market is diverse and dynamic; the mention of the growth in payday lending in the motion is a good example of how the market keeps changing. In such a market, the danger of such an approach is that when certain categories are capped, there will be growth in different categories as people try to morph products and move into different areas of the market to avoid regulation.

If caps are to be considered, one idea that I would like to throw into the mix for the Minister to consider is what I call a twin cap. Rather than having caps on different categories, we could set out a formula with a maximum rate of simple interest combined with a one-off percentage of the principal—for example, a 30% interest rate and a 15% arrangement fee. I suggest that structure because it more closely reflects the actual cost of providing loans. Shorter-term loans cost more to provide because there is a fixed-cost element for the initiation and completion of the loan. My own back-of-the-envelope modelling—I stress it is no more than that—suggests that some credit companies may well set their prices in that way. If there were a cap of 50% annual interest plus a 15% one-off charge, just about every segment of the market would survive, but by curbing the very worst excesses over time, we could bring that down.

I do not have time to go through the rest of what I wanted to say, but we should not forget everything else—supplementary charges, roll-over charges, missed payment charges and minimum payments. Critically, lenders should be required to take all reasonable steps to make sure that loans are paid down and that charges never exceed a set percentage of the outstanding loan in any given month.

14:31

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

It is a pleasure to speak in the debate and to follow the hon. Member for East Hampshire (Damian Hinds). I agreed with many of his remarks. I congratulate my hon. Friend the Member for Walthamstow (Stella Creasy) on speaking not just with passion and power but with the authority of someone who has done tremendous work in this area, and I hope that hon. Members across the House will endorse her proposal, her private Member’s Bill and the motion she has moved today.

I have been encouraged by the extent of cross-party consensus today. Whatever our views on the national debt and the deficit, I hope that hon. Members from all parties will agree that this issue is a massive problem. I want to put on record some of the problems being experienced by my constituents. I have the challenge, but also the great honour, of representing the community of Royston, which sits near the heart of my constituency and is one of the most deprived areas in Scotland. There are very low rates of pupil attainment at school and very low rates of schoolchildren moving into college and university. When I contacted North Glasgow advice centre in Royston last week, it told me that debt issues make up nearly half of all its work at the moment. Of the debt issues it manages, consumer debt, including credit and store card debt, personal loans and people dealing with pawn shops, make up 76.4%.

The centre told me the terrible story of a pensioner couple, aged 70, who are still paying off the remainder of their mortgage and who came to the centre last week. The interest on their mortgage is being paid by the Department for Work and Pensions but there is a shortfall. When the centre explored their income and outgoings, it found they were paying £80 a week to a well-known doorstep lender. That type of abuse demonstrates the urgent need for regulation in this area.

[Paul Blomfield (Sheffield Central) (Lab)]

Is not one reason for urgency precisely that those in multiple debt are faced with doorstep lenders who visit them regularly so that they are inevitably drawn towards paying those debts above others that would normally be considered priority debts, such as rent and utilities? Allowing those debts to fall by the wayside causes greater problems such as eviction.

[Mr Bain]

My hon. Friend makes an extremely powerful and accurate point. The looming crisis in personal debt was summed up last April by Citizens Advice Scotland, which said:

“The problem is not just the number of people who are in debt…. It’s the extent of the debts that those people have.”

Having analysed the problem, it found that

“On average, Scottish debtors have debts that are 50% higher than they were five years ago. And for every £1 they earn per month, the average Scottish debtor owes £28 in debt.”

Today, we have the opportunity to begin the process of ensuring that that burden does not rise through this Parliament.

The hon. Member for Solihull (Lorely Burt) mentioned the EU consumer credit directive, but in many ways, that has added to the problem facing us today. Previously, providers were required to give two thirds of successful applicants for credit cards the advertised rate; under the directive, that will fall to just 51%. That change will leave millions of consumers paying more than they expected when they applied for credit, and people in that situation will increasingly resort to short-term credit.

Five minutes from my home and my constituency office, in Springburn shopping centre, is a BrightHouse store. I shall share with the House some of the prices that my constituents were being charged for basic goods last week. For a washing machine with a cash price of £703, the payable amount under the BrightHouse credit scheme was £1,558.44. For a freezer with a cash price of £773, the amount payable through BrightHouse was £1,714.44. For a children’s bunk bed set, the cash price was £345.69, but the BrightHouse credit charge was £765.96. We have the time to act now. I urge Members to seize the opportunity and to stop my constituents and those of Members on both sides of the House having to experience that sort of abuse from the short-term credit industry.

In the short time left, I shall mention Provident cheques. Provident specialises in lending small sums, typically between £200 and £300, but with borrowers having to take out the loan for the longest borrowing period, we have seen interest rates ranging from 170% to 500%. A customer borrowing £200 over 55 weeks pays £330, equivalent to an APR of 177%.

Members in all part of the House must surely appreciate that markets must have morals. We can act today to begin the process of regulating the industry. I urge the House to grasp the opportunity.

14:38

[Stephen Lloyd (Eastbourne) (LD)]

I echo my colleagues in paying tribute to the hon. Member for Walthamstow (Stella Creasy) for pushing this issue and bringing the motion to the House for us to debate. It is incredibly important.

When I first heard about the astronomical APRs charged by the payday loan firm, I was extremely concerned. When I discovered that the precise APRs charged were way beyond what I had feared or even imagined possible, ranging up to 2,000% in some cases, I was absolutely staggered. However, having carried out research over the past few months, I have discovered that the subject is horrendously complicated. Others have talked about that complexity, and I shall do so as well.

We all know that there is one primary factor that maintains the status quo of iniquitous social exclusion for those at the very bottom of the income ladder—one primary factor that stops people from advancing socially and economically. That factor is financial exclusion, as the hon. Member for Walthamstow so brilliantly identified. Many people in disadvantaged areas have no formal savings, access to credit or even a bank account. In 2011, in one of the richest countries on Earth, that is an absolute travesty.

I wrote to a number of the companies that provide payday loans and met their representatives; I also spoke with a number of constituents who have been on the receiving end of those companies’ wares. I inquired robustly about their business model. I checked it, went through the process and had my team research it. Frankly, I was surprised by what I discovered: there are not necessarily large groups of our poorest citizens paying through the nose for higher interest loans, and the business model does not necessarily target people who habitually default before their loans are compounded. In the main, I found that lenders—the main suppliers—went to great efforts to ensure that their customers were able to pay back loans by building up trusting relationships with them. That was not the reality that I had expected, so it was a learning experience for me. It is important that debates in this House are informed by facts, and the fact that I have taken on board is that some of those firms play a vital role in certain communities.

[Yvonne Fovargue (Makerfield) (Lab)]

Could the hon. Gentleman explain to a constituent of mine who has six loans from payday loan companies, each one borrowed to pay off the other, how that could take place if the companies are targeting people to ensure that they have the ability to pay?

[Stephen Lloyd]

The hon. Lady raises a good point, and an important one. There will be some anomalies, but when I did the research I found that the majority of people who use payday loans pay them back regularly, otherwise the business model would collapse. I hope to be able to explain that as I go through my remarks.

The companies offer credit to those who are financially excluded by larger and seemingly more reputable financial institutions, such as those banks that are now owned by the taxpayer. Although some of those loan companies have been associated with inescapable cycles of debt, as my hon. Friend the Member for Chippenham (Duncan Hames) mentioned earlier, and with poverty, as noted by pressure groups such the excellent End Legal Loan Sharking, I now recognise that the whole issue is simply not as black and white as it has been painted.

[Duncan Hames]

Does my hon. Friend accept that the huge growth we have seen in the sector recently is an indication of how profitable this business is for those organisations?

[Stephen Lloyd]

My hon. Friend is absolutely right. The figures I have show that the sector is worth in excess of £1 billion per annum, and heading towards £1.5 billion, so it is clearly very profitable. That is the point I want to make, if Members will bear with me.

The blunt reality is that many disadvantaged people simply do not have access to high street banks, which we all take for granted, and consequently they are forced to look elsewhere. They have no choice, and there is the rub. It is not simply people with poor credit ratings who seek the services of firms offering payday loans. A reality check is needed, because in modern society across the UK there is a real and present demand for quick, short-term loans to bridge the gaps between when individuals need money and when they are paid.

Those people need the money for quite normal transactions, such as paying for a grocery bill or for an MOT, and they need it for the short term, just a couple of days before they get their payday cheque. The money is for mundane expenses that everyone has experienced, but they can be very different for people who need payday loans, because in that area a failure to find the money can quickly lead to a crisis that will take them from normality to abnormality in the space of 24 hours. That is a problem, because if well-meaning pressure groups are successful and able to see off established payday loan companies or force some of them to withdraw from the market, where will people turn?

The hon. Member for Walthamstow made the point in her Westminster Hall debate that just six companies are responsible for 90% of business in that market. Although I do not necessarily agree that that constitutes an uncompetitive market—six major supermarkets in this country control 90% of their whole sector—I feel that regulating the market further might make it even less competitive. I think that greater monitoring of payday loan providers by the Office of Fair Trading to ensure that they are acting in a moral and responsible way and in the best interests of the consumer would be the right way forward. Financial exclusion is a horrible and vicious cycle, and poorer families can spend an additional £1,000 per year on essentials.

That brings me to our high street banks, which are an integral part of this country’s economy and vital to our recovery. All the banks in this country, however, are still in existence thanks to the massive 2008 bail-out at huge cost to the taxpayer—all of them. Yet, those banks continue to ignore a great number of taxpayers to whom they owe so much. In the banks’ defence, they claim that such customers are high-risk and unprofitable, but banks are unable to understand their needs and inaccurately assess the risks they pose.

The sector is worth £1.2 billion and clearly profitable, as my hon. Friend the Member for Chippenham said, but it ignores those 6 million people, so they are left to the payday loan companies, none of which I should want to be great friends with. My point is, however, that because the banks do not step in, the payday loan companies have to, and without them the situation might be catastrophic for the many millions of people who need them so desperately.

14:45

[Ian Murray (Edinburgh South) (Lab)]

I, too, congratulate my hon. Friend the Member for Walthamstow (Stella Creasy). Since we became Members, she has been a stalwart campaigner on the issue, and to have a political issue of such like trending on Twitter—if Government Members would like to look up that term later, they are very welcome to—is a great credit to the campaign that she has run and to her for representing not only her constituents, but the constituents of all of us.

Many people on both sides of the House support the measure, and I was interested to hear the hon. Member for Chippenham (Duncan Hames), who is in his place, bring to the Chamber his great deal of experience on the issue. I am disappointed that he is going to put that all to the back of his mind when wandering into the Lobby this afternoon, but I hope that in the next hour he will change his mind and support what is one of the most valuable things that we can do in the Chamber.

The issue affects many of my constituents and constituents throughout the country. Debt breaks up families, demolishes relationships and, all too often, leads to suicide and death, something that has not been highlighted this afternoon. Rarely are high-interest services used as a one-off; the spiral of debt, through chasing the tail of debt as others have said, can lead to families throughout the country becoming caught in a debt trap and, all too often, a death trap.

I have been struck by the APR and total credit costs that we have heard about this afternoon. My hon. Friend the Member for Glasgow Central (Anas Sarwar), who is not in his place, spoke about 4,000% APR, and although I appreciate that the motion is not just about capping APRs, but about the total cost of credit, I think that such figures should send a shiver down the spine of every Member in the Chamber.

Moreover, the hon. Member for North Swindon (Justin Tomlinson) explained that a mere 17.9% APR can take up to 40 years to pay off if someone makes just the minimum payment, so even small APRs, which attract people to credit, can have significant consequences if there is no education to resolve the issue.

Short-term credit companies advertise aggressively. We just have to walk down our local shopping streets to see posters, advertising boards and window displays publicising payday loans and credit. Many of us know about such aggressive advertising, and Members have already described how lenders can create relationships in a person’s own living room, but the main concern about advertising is that many people look for authorities on the issue and then give the adverts credence because of them. Indeed, adverts for payday loans with APRs of almost 3,000% have been carried on the website of the Department for Communities and Local Government—an authority to which people might look and say, “If they’re saying it, this must be acceptable.”

Rising unemployment, housing costs and the VAT increase could leave families and ordinary people in a far worse situation, pushing them towards higher credit costs when paying for birthdays, Christmas, household repairs or just everyday living.

[Helen Goodman]

My hon. Friend mentioned the significance of the personal relationships that firms build up with borrowers. Does he agree that the network of people who are on incentivised contracts with the companies, and incentivised to maintain people in debt, is one of the biggest market barriers to the conventional banks coming into the sector?

[Ian Murray]

I am grateful to my hon. Friend for mentioning that. One would think we had rehearsed it, because I was about to go on to say exactly that. The chief executive of the country’s largest payday lender, Peter Crook, recently said that he was likely to see a large increase in his target audience owing to the rising levels of unemployment. That highlights the relationships that are created not only to keep people in the spiral of debt but to keep the people who are pushing the debt in the spiral of commissions and maintaining their own lifestyles. That shows that strict regulation is required, not a code of conduct that could easily be dismissed by some of the more unscrupulous lenders. It also shows that those who are least able to pay are being charged the most at a time when they are least able to pay for this kind of credit.

Of course, capping the total cost of credit is not an idea that has been plucked out of the air. As my hon. Friend the Member for Walthamstow demonstrated, there is evidence from around the world showing that it is perfectly possible to regulate the payday and home credit markets without adverse effects—all it takes is the political will to do so. There are undoubtedly detailed issues that would have to be resolved, but we are elected to this House to find solutions to problems, not to find problems to stop solutions, which is how I read the well-intentioned amendment. The political will is in the Chamber today to do something about this, and we should all grasp the moment and do what is right for our constituents.

14:49

[Richard Graham (Gloucester) (Con)]

Today we have gathered in all parts of the House as the champions of sensible consumer credit for the most vulnerable in our communities. It is interesting that so many of these champions are new Members of this House. Among our company, I pay tribute, as many others have done, to the hon. Member for Walthamstow (Stella Creasy) and to my hon. Friends the Members for North Swindon (Justin Tomlinson) and for East Hampshire (Damian Hinds) who have been leading the way in setting out our concerns about consumer credit.

The hon. Member for Erith and Thamesmead (Teresa Pearce) referred to snakes and ladders and concluded that the motion was all about increasing the ladders of opportunity for her constituents. In truth, it is about the other side of the equation: reducing the number of snakes, reducing the amount of credit that is made available through payday lending, and ultimately putting a squeeze on the loan sharks—the one species of fish which we might all agree we would not mind if the beastly EU fisheries legislation sorted out for ever.

The motion proposed by the hon. Member for Walthamstow calls on the Government to introduce caps on prices. Interestingly, when she introduced the motion, she called for the regulator to put these caps in place. All that is at stake in terms of whether we vote for the motion or for the amendment is the narrow issue of whether it is the place of the Government to impose caps on prices or whether it is the responsibility of the Government to encourage a regulator to do so. In that respect, it is relevant that the snappily named “son of OFT”—the consumer markets protection agency, if that is to be its final name—is the relevant body that should be putting caps on prices. The consultation is out there, and we should all be participating in it and encouraging the new agency to do so, as the motion and the amendment suggest.

The other side of the equation, which is all about the ladders of opportunity, comes back to the other issue dear to the hearts of many of those in the Chamber—how to provide sensible credit to vulnerable constituents. I declare an interest, as have many hon. Members, as a member of the Gloucester credit union. I pay tribute to the Government, specifically the Department for Work and Pensions, for funding a post to enable five small credit unions to form together into a Gloucestershire-wide credit union, which will be launched in March. It is through credit unions that we will make credit available to such constituents. I hope that it is part of the Minister’s plans—no doubt he will tell us more—for credit from credit unions to be available through the network of 11,500 post offices.

The final point I would like to make about the ladders of opportunity is on financial education. I pay tribute to my hon. Friend the Member for North Swindon on the new all-party parliamentary group on this matter. Although it is a less attractive game than bashing bankers, I urge all Members to work with the financial services institutions in their constituencies, many of which provide considerable free financial education.

[Mark Durkan]

The hon. Gentleman compared the motion and the amendment and suggested that the motion called on the Government to introduce caps. It actually calls on the Government to introduce regulatory powers that would allow the introduction of caps. The amendment calls on the regulators to consider introducing caps. Do the regulators currently have such powers? If they do not, the amendment is specious.

[Richard Graham]

I thank the hon. Gentleman for that contribution. The amendment encourages the Government to introduce

“measures to increase access to affordable credit”

and

“urges regulators to consider putting”

caps on prices. I believe that that is precisely the form of words that is appropriate. That is why I support the amendment. It recognises that 95% of the motion is right, but that it needs a significant but small fine tuning.

14:56

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I, too, praise my hon. Friends the Members for Walthamstow (Stella Creasy) and for Darlington (Mrs Chapman) for their hard work on this issue and for securing this debate through the Backbench Business Committee.

In the poorest communities in my constituency and throughout Teesside, the most vulnerable people are being preyed on by loan sharks and payday lenders. That is especially true in these difficult economic circumstances. The two councils in my constituency offer financial advice services that provide free support to people who need it, with support from Citizens Advice and the credit unions. Those services are well used by local people and sometimes they are the only accessible source of advice and support. Such services could be developed if post offices worked alongside credit unions as a post bank. I believe that the Government have a role in regulating to prevent vulnerable people from being targeted and taken advantage of.

It is no surprise that among the only businesses to have consistently benefited from the credit crunch are pawnbrokers and cash-for-gold shops, which offer quick-fix financial solutions for those in need of money. As the Office of Fair Trading and the Competition Commission have said, the fact that customers seeking short-term loans cannot afford to shop around has meant that there is little competition in the sector, which has inflated rates artificially.

In my constituency, the north-east illegal money lending team has worked tirelessly in communities such as Easterside to drive out illegal loan sharks who have been taking advantage of vulnerable people. It helped to set up sustainable lending and saving by community-based credit unions. The Minister has decided to withdraw funding for such teams and expects a national body based in Birmingham to replace them. I can only guess that that is part of the new consistent localism agenda that the Government have displayed.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

The hon. Gentleman will know, I would have thought, that an independent study was done on how best to use the funding for illegal money lending teams. We have taken on the broad recommendations of that study. It suggested that a central team would be more effective and use the money better. The people in the north-east will still have the services of the illegal money lending teams.

[Tom Blenkinsop]

I do not accept that evidence, because the new team will not do the follow-up work that helped to set up the credit unions in those communities. A team in Birmingham cannot have the relationships with local people that can defeat the local illegal moneylenders who people know on their estates. I have campaigned hard against this decision, which I believe will leave communities in my constituency vulnerable to illegal loan sharks, after all the hard work that has been done to rid us of such criminal moneylenders.

I back the motion because, contrary to the opinion of the hon. Member for Solihull (Lorely Burt), it is not true that regulating the lending market will push people to use illegal loan sharks. In the real world, evidence shows that high-cost lending may be a precursor to illegal lending because people get into such a financial mess, and have such poor credit ratings as a result, that they turn to illegal lenders. And not only that: they are often dragged into criminal activity themselves as repayment by favour or in kind, such as hiding fenced goods, drugs or weapons. When they get caught, they lose their job and spiral downwards.

With rising unemployment, the increase in VAT and the high cost of fuel, I genuinely fear that more and more of my constituents may feel that their only option is to turn to high-cost lenders such as payday, doorstep and hire-purchase lenders. The Government have already committed to regulating excessive interest rates on credit and store cards, and it is now time for them to focus on higher-cost unsecured lenders. That is why I support the motion. Now more than ever, it is absolutely necessary to protect vulnerable and often desperate people who turn to companies for credit that could destroy any hope of their having financial security in future.

15:00

[Craig Whittaker (Calder Valley) (Con)]

I assure the hon. Member for Walthamstow (Stella Creasy) that although my grandmother was called Crook, neither she nor I are related to the person whom she named earlier. I thought I should put the record straight on that one.

In Calder Valley, we have the fantastic Calderdale credit union of which I must declare I am a member. It does some great work in combating doorstep lending and has achieved much in the local community of Todmorden to offset those lenders’ high interest rates. It has done so through a great education programme and, of course, through providing small loans at a much lower rate, in line with that of most banks and reputable high street lenders.

Last week, I attended our local Sure Start centre in Todmorden, at which Barclays bank held a money skills training programme for a group of young people and young parents. It explained the many aspects of finance and, importantly, the value of saving, and it became clear that the majority of the group of about a dozen young people had already come into contact with doorstep lenders.

Some of the stories that we heard around the table were absolutely horrendous, and three key points came out of the discussion. First, young people are dealing with incredibly high interest rates from doorstep lenders. Secondly, those lenders’ tactics are horrendous, with some of them knocking on the door at 4 am or 5 am to collect overdue money. Thirdly, as has been mentioned today, the most vulnerable sometimes enter a vicious cycle in which they are encouraged to extend loans time and again, or to add a television or washing machine.

As has been mentioned several times, many Members attended the launch of the all-party group on financial education, which was set up by my hon. Friend the Member for North Swindon (Justin Tomlinson) and attended just last Monday by Martin Lewis. There is a real desire among all MPs to bring back financial education for our young people at school. Gone are the days when banks promoted bank accounts and the concept of saving to our young people at an early age through schools. We need to bring back a robust system in which our children are educated in finance in a consistent way.

The education programmes of our high street banks, to which many of the banks’ staff dedicate their own time, such as the Barclays money skills programme, are having an impact where they are targeted. The great results provided by credit unions such as Calderdale credit union in tackling doorstep lenders are leading to progress, albeit with very limited funds, through high levels of dedication from their staff. Sadly, however, there is not enough progress and far too many doorstep lenders continue to target the most vulnerable with well advertised, huge APRs, often in the thousands. That is not only obscene but immoral, and we need to take steps to introduce measures to increase access to affordable credit. We must also urge regulators to consider putting in place a range of caps in parts of the market in which immoral and often unscrupulous operators target the most vulnerable people.

[Ben Gummer (Ipswich) (Con)]

My hon. Friend talks about some of the positive things that the banks are trying to do, but the vast majority of debt cases that I have seen in my surgeries have originated in appalling lending decisions by high street banks. It is important to stress that now while we are hitting everyone else.

[Craig Whittaker]

My hon. Friend highlights a serious problem, but it is important to appreciate that some of our high street lenders have recognised, in the light of what has happened, that they must do more to target the most vulnerable to highlight financial issues, as they are doing.

I support the amendment because it is important to have a widespread review and not just a prescriptive briefing, particularly given that unscrupulous companies currently get around advertising the high cost of credit by massively increasing the base price of goods on offer, examples of which were given by my hon. Friend the Member for Thurrock (Jackie Doyle-Price) and the hon. Member for Glasgow North East (Mr Bain). I urge hon. Members to support the amendment.

15:05

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

It is a pleasure to speak in this debate and to follow the hon. Member for Calder Valley (Craig Whittaker), who spoke well about an area that I know well and where I have relations. I add my congratulations to my hon. Friend the Member for Walthamstow (Stella Creasy) on showing the leadership to get this motion on the Order Paper today and to publicise it. She has been an example to us all.

This has been a good debate. Many hon. Members have spoken well and made excellent points. If the vast majority of hon. Members accept that there is a significant problem, it is a question of what the Government can and should do about it. As one hon. Member said, there is a legitimate argument in favour of funding financial inclusion education in early-years education. Partly because of the progress made in recent years, that is necessary, but it is not sufficient on its own. We should welcome the fact that 350,000 loans have been made by the not-for-profit sector, but that is not enough, and the enormous problem of people being charged appalling rates of interest remains.

The question is this: if the Government decide that they cannot allocate the funds that they have allocated previously, can they take regulatory action to improve the situation and make a genuine difference? That is why I am disappointed by the response of some Government Members. They have a far greater grounding in such matters than I do and have spent much of their previous careers and parliamentary time in dealing with this issue, but they have not grasped the nettle, and they will not support the motion. Instead, they are taking a course of action that will ultimately delay things and put the matter in the hands of a regulator that has not been given sufficient political direction to tackle the problem head on.

[Lorely Burt]

Will the hon. Gentleman give way?

[John Woodcock]

If the hon. Lady does not mind, I will not take interventions because we need to hear as many speeches as we can.

The Conservatives and Liberal Democrats, when they were the opposition, spoke well of the need to tackle the level of debt in society and pointed out some faults in the previous Government’s policies. Now is their chance to do something.

Labour must accept that although we must protect people’s right to choose, we must not continue to give unscrupulous companies a means to exploit people. I hope that the Consumer Credit (Regulation and Advice) Bill, which my hon. Friend the Member for Walthamstow introduced, promotes credit unions. I am deeply proud of Walney Island credit union, which was set up by Churches in response to mass redundancies at Barrow shipyard to help people through those enormously difficult times. We should no longer tolerate the gap being filled in this way while alternative forms of credit are introduced.

In our privileged financial position, we have no need of loans of the kind regularly taken out by the poorest members of our society, but my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) spoke so well about the choice that she would probably have ended up making in desperation had she been in a situation in which she did not have enough money to get through Christmas.

The freedom to make choices is important, but it is ultimately part of the Government’s role to prevent us from being exploited and making the wrong short-term choices when in a desperate situation. That is what this debate is about, and I hope that Members on both sides of the House will support the motion.

15:11

[Mark Durkan (Foyle) (SDLP)]

I join others in commending the hon. Members for Walthamstow (Stella Creasy) and for North Swindon (Justin Tomlinson) for securing this debate, even though they differ on the amendment.

Many hon. Members have described the problems in their constituencies. The problem is that firms in the credit market are able to exact credit terms that are lucrative for them but punitive for their customers. When we hear of some of the eye-watering interest rates that end up being charged, it is natural to think that there should be a law against it, and people look to this House to provide some sort of bulwark against open-sky exploitation. The motion asks the House to give the Government a mandate—although it is not a prescriptive mandate—to put regulatory powers in place that would provide caps that would be sensitive to the circumstances and needs of those who are in dire straits and otherwise financially excluded. Those caps would also be sensitive to the dynamics of different parts of the markets and sub-markets—

[Damian Hinds]

Will the hon. Gentleman give way?

[Mark Durkan]

No, because—

[Damian Hinds]

On the wording.

[Mark Durkan]

Well, I am addressing the wording. Many people are misrepresenting the motion and the amendment.

The motion would not put prescriptive caps in place or require the Government to do so immediately. The hon. Member for Solihull (Lorely Burt), who supports the amendment, said that a Government consultation is under way. But that consultation is not just asking the regulators what they think: it is rightly asking all of us what needs to happen to provide properly regulated financial services and proper protection to customers, both business and personal. Instead, the amendment says that we do not even want the Government to consider the question of regulatory powers that would protect those customers—we should ask the regulators to consider that question instead. Who are the regulators? The very consultation that the hon. Lady was talking about is about who the regulators will be in the future and what powers they will have. So the amendment is an evasion and dereliction of parliamentary responsibility, because it would simply ask the regulators to think about the issue—when we are still thinking about who the regulators should be and what powers they should have. It is a case of “There’s a hole in my bucket, dear Liza.” If people want an answer to this problem, they should not back the amendment.

[Damian Hinds]

Will the hon. Gentleman give way?

[Mark Durkan]

No, because I want to give other hon. Members a chance to speak. The hon. Gentleman is supporting the amendment and he ended up pleading with the Minister to consider what he called “twin caps”. I do not know why he did that when he is backing an amendment that says that the Minister should not consider anything to do with caps. So the hon. Gentleman does not want the Minister to have anything to do with this and instead it should be unspecified and unknown regulators.

There is even more uncertainty about who the regulators in Northern Ireland would be. If I, as a Member representing Northern Ireland, were to support the amendment, I would be asked by my constituents, “Well, who are the regulators in our country?” It is unclear who the regulators would be in Northern Ireland. That is why I cannot join others in sidestepping the main point of the motion by backing the amendment.

I would like to join my Celtic colleague, the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), in making a point about debt management and debt management plans. There are not only loan sharks out there, but debt sharks, who pose as debt dolphins coming up to help people who are deep in dire debt. We need clearer regulation. We know that an Office of Fair Trading report found that more than 129 companies were engaged in various questionable practices; and we know that there are models for statutory schemes, not just in other jurisdictions such as the south of Ireland and elsewhere across Europe, but even in Scotland, where there is a debt arrangement scheme that provides a good model for protecting consumers in dire need of credit but being exploited in the name of debt management plans.

The term “flipping” was used during the parliamentary expenses scandal to describe MPs changing houses. In the debt management plan arena, of course, we have flipping as well, with companies sucking customers in with unsustainable terms then flipping them on to more exorbitant terms in the future.

15:16

[Mr Chuka Umunna (Streatham) (Lab)]

I also congratulate my hon. Friend the Member for Walthamstow (Stella Creasy) on securing this debate, which I think has been a very good one. I also endorse the comments of the hon. Member for Foyle (Mark Durkan) about the amendment.

In the little time available, I want to widen the debate to talk about financial exclusion in general. We have discussed these issues over the past few weeks, and in the coming months, when we will be talking about some of the big macro-prudential issues relating to the financial services sector, we will be considering whether to separate out our banks between investment and retail; and we will also be considering banks’ loss-absorbing capacity, risk assets and such like. However, it is extremely important that we do not forget some of the issues presenting challenges for the people we represent. The hon. Member for Ipswich (Ben Gummer), who is no longer in his place, referred to the raw deal that many of our constituents are getting from the big retail banks. I endorse what he said.

A 2004 investigation by The Guardian found that payment protection insurance, for example, was being widely mis-sold by many of the banks to customers who would not be able to claim under the terms of the insurance. Banks were making profit margins of up to 80% on those products. I am a member of the Treasury Select Committee, and last November I took the chief executive officer of Lloyds Banking Group to task for charging extortionate rates of interest for arranged overdrafts. He was levying a charge of 19.3% on his customers—more than 38 times the bank of England base rate. Last month, Barclays was fined £7.7 million by the Financial Services Authority for misleading savers, and RBS was fined £2.8 million by the FSA for its inadequate handling of customer complaints.

The increase in personal debt has been mentioned. It is not coincidental that, since 2000, productivity has risen at double the rate of wages, which have in some sense stagnated. As a consequence, people have borrowed and household debt has exploded. That might also explain why we have seen an explosion in the demand for short-term credit. It has already been mentioned that in 2009 the payday lending industry was worth more than £2.2 billion—more than 3.5 times what it was in 2006. However, we are where we are, and the need for credit has now become a basic essential of everyday life. I would be prepared to bet that most people in the Chamber have a credit card. We all come under different stresses when we go through different things in our lives—for example, moving home.

One of the problems is that it is often the poor and the vulnerable who are most in need of credit. That was one reason I wanted to participate in today’s debate. I represent a constituency that is varied but has pockets of severe deprivation, and we find that it is those people who are struggling to gain access to credit and struggling with financial issues. In the past four months, my local citizens advice bureau has dealt with well over 400 debt advice queries. Despite that, however, those poor and vulnerable people are the very ones getting the rawest deal from the sector in terms of the services they are being provided with. Three million people in this country do not have a bank account, and 35% of those in deprived communities do not have access to simple banking services.

I think that the hon. Member for Eastbourne (Stephen Lloyd) mentioned the fact that the industry has pointed to all that it has been doing since 2003 to introduce basic bank accounts. Typically, the bank accounts that have been introduced since that time allow customers to receive their pension or benefit payments and perhaps have a debit card, but they do not offer overdrafts and they often do not provide access to a cheque book. They do not provide the full menu of services that we would all expect.

For me, this is simple: the industry is failing to do anything about financial exclusion. With the present voluntary commitment, the sector lacks sufficient incentive to dedicate its resources to help to address the issue, not least because of its obsession with maximising shareholder value. Yes, it has a legal duty to do that, but that sometimes goes against its obligations to society, which has provided £1.3 trillion of support to the sector since they global financial crisis came to a head. In addition to supporting the motion, I would like us to introduce a universal banking service obligation, to prevent people from needing to go to the doorstep lenders in the first place.

15:21

[Sheila Gilmore (Edinburgh East) (Lab)]

I want to thank my hon. Friend the Member for Walthamstow (Stella Creasy) not only for securing this debate, but for the campaign that she has been waging on this subject since she was elected. Mention has been made of the review of consumer credit, and of the consultation, which closed some time ago. It is important to remember that that review would not even have looked at some of these issues if my hon. Friend had not pushed for them to be examined, so we are here today in part because of her efforts.

It always worries me when people say things like, “We don’t need to regulate yet” or, “We’re all in agreement with this, but—”.

[Lorely Burt]

The Labour Government had 13 years in which to regulate, and they conducted three investigations into this very subject. They did not bite the bullet, however, so the hon. Lady should not be criticising us. We are conducting a consultation nine months into this Government.

[Sheila Gilmore]

The hon. Lady has been told on several occasions by various Members that the proposal in the motion is different from some of the proposals that were not taken up by the previous Government. If I had been in this place then, I would have been pushing my Government to do exactly what the motion proposes. It is not good enough to say, “If your Government did not do this, you should not propose it now.” For how long does she think should we be disbarred from making such proposals? One year, two years, 13 years? On that basis, we might as well not be here at all, but perhaps some Members on the Government Benches would prefer that.

[Craig Whittaker]

I understand the party politics involved, but does the hon. Lady acknowledge that we have already heard a lot of evidence today about how these unscrupulous companies get around the process anyway simply by increasing the base price? We need to take time out to have a look at this in a proper, regulated manner.

[Sheila Gilmore]

I am not convinced that we have heard assertions or evidence that that could happen. If we always decided not to legislate because someone could get around the law, there might be a case for not legislating.

I should declare an interest as a solicitor, and one of the things that drew me to the law as much as to politics was my belief that the law is a valuable tool to help those who are more vulnerable. The law is a lever to create a better balance of power between those who have power and assets and those who do not.

I am not saying that we should regulate on absolutely everything, but regulation is necessary if we are to deal with a problem that has expanded greatly, partly but not entirely because of the recession. The industry is incredibly seductive for people; it offers them attractive places to go and produces attractive adverts that make everything seem very easy. There is widespread agreement on the need to help people and to make changes, provided that that is not done through regulation, but we must will the means, not just the end. It is not enough to have warm words and to keep talking about how important it is to have measures to deal with financial exclusion and vulnerable people. We have to will the means to do that.

There was a recent Westminster Hall debate on basic bank accounts, in the course of which it became clear that, for all the espousal of financial inclusion, there is a growing inability to will the means that are needed. The measure before us is one of them, and there are several more. In my earlier intervention I referred to the growth fund. Every Member wants there to be more sources of affordable credit. We are all great supporters of credit unions—indeed, I am a member of my local credit union—and we want their lending to be expanded.

One practical recent measure that led to that expansion was the growth fund. As a result of it, lending by credit unions and other community-based financial institutions was able to expand greatly. That will end in March this year, however. Some people might say, “Well, that’s the date your Government set for it to end.” I must say yet again, however, that had my party been re-elected last May, I would have been pressing them to extend the growth fund because it has built up many credit unions and other community-based financial institutions to provide an alternative for people. Without that lending capacity however, many such organisations will have to reduce their lending activities substantially; that is what they are telling me. The alternatives that people often say should be in place before we legislate will therefore not be in place if we do not go on expanding through the growth fund.

I was also concerned to hear that the financial inclusion taskforce within the Treasury, which the previous Government set up, is, in effect, being wound up. Several of the people who were working in this field have already been redeployed to other activities.

If we want to put our money where our mouth is, we need to put in the financial resource and the legislation. Even at this stage in the debate, I hope that Members are willing to decide to vote for the motion and not support the amendment, and to put pressure on the Government to continue the work that the previous Government did in a variety of fields. This is part of the big jigsaw puzzle that we have to address when dealing with financial inclusion and the problems some people face. We need all the following measures: we need credit unions, but we need the resource to go with them; and we also need community-based financial institutions and other sorts of credit unions.

There is one further small provision that the Minister might want to consider: reforming and extending community investment tax relief. Many community development financial institutions—community-based lending institutions that lend to individuals and businesses—would like that, and I hope that the Government are prepared to consider this further measure that is part of the wider jigsaw puzzle.

I commend the motion, and I hope the consensus that has been apparent will translate into support for it.

15:28

[Nia Griffith (Llanelli) (Lab)]

I congratulate my hon. Friends the Members for Walthamstow (Stella Creasy) and for Darlington (Mrs Chapman) on proposing today’s motion. I especially congratulate them on recognising the complexity of the problem and on presenting us with a practical and realistic proposal for cracking down on the excessive fees and costs charged by doorstep lenders. The Opposition Front-Bench team is pleased to support the motion.

I also pay tribute to my hon. Friend the Member for Walthamstow for using parliamentary procedures and organised campaigning so effectively to highlight this problem and for seeking to find a workable solution. It is a tribute to her that her work has inspired so many other hon. Members to prioritise the issue, to do their own research and to try to think through workable ways of cracking down on extortionate charges. She is fully aware of the reasons why a single cap on interest rates—perhaps an arbitrary figure plucked out of the air—would not be the solution and could have unintended consequences.

My hon. Friend has understood the evolution of our thinking, from first having reviews when we were in government, to the position in our manifesto in which we pledged to clamp down on such practices. She has used her own research and has come up with a practical solution, which she has explained in her speech and the motion, which comprises a range of powers that the regulator needs to tackle the problem. As my hon. Friend the Member for Streatham (Mr Umunna) has said, we are asking the Government to consider the matter now precisely because they have been looking at regulation. Those are the reasons why it is particularly appropriate that the motion should have been brought forward today, with its practical solution to the problem.

Many of those on low incomes have no reserves to help them get through difficult times. They struggle to make ends meet and pay their bills. Any loss of income or small change in circumstance can lead to their having to choose between putting the heating on and putting food on the table, driving them into the hands of those offering payday loans. It is therefore not surprising that there has been a particularly rapid increase in the payday loan market over the past few years. In 2009, the payday lending industry was worth more than £1.2 billion, more than three and a half times what it was worth in 2006. There are now some 1.2 million people using the payday lending market and more than 3 million people using the home credit market. The problem has been further exacerbated in the past couple of years by the tightening up among mainstream lenders. People have found their credit limits from mainstream lenders suddenly curtailed, and they have been forced to look elsewhere, thereby swelling the numbers of those relying on high-cost doorstep borrowing or home credit firms.

Those on low incomes often have the least choice. Those with the lowest incomes often end up paying the highest prices for goods and services. They often do not have the spare cash to bulk-buy or take advantage of special offers; nor do they have the credit ratings to walk into high street stores and use a credit card. Many on low incomes do not have access to the internet, and even if they do, many do not have the credit cards to enable them to go internet shopping. It is the lack of choice that makes people particularly vulnerable. They have no option but to turn to the doorstep lenders and home credit companies, which charge exorbitant rates on their cash loans or hire purchase agreements. The lack of choice or competition in the market makes it particularly important that the Government should step in and regulate.

There is a parallel between this debate and what we did in government to tackle the scandal of the high unit cost of electricity charged to those who pay using prepayment tokens. When we were in government, my right hon. Friend the Member for Doncaster North (Edward Miliband), the then Secretary of State for Energy and Climate Change, put considerable pressure on the regulator Ofgem to tackle the energy companies with sustained pressure itself. The energy companies eventually reduced the unit costs paid by those using prepayment meters—reduced, yes; but admittedly not reduced to the very cheapest rates, which are paid by those who can shop around and choose to pay by direct debit, in recognition of the fact that, as the energy companies pointed out, there is a higher cost involved in the administration of prepayment meters. Nevertheless, there was a recognition that the charges had been too high, and they were reduced.

The motion that we are debating today asks the Government to intervene in a similar way in the high-cost doorstep lending market. By introducing new regulatory powers, a regulator can work with the industry, taking account of the legitimate extra costs of collecting frequent small payments in person, and can work to achieve realistic reductions in exorbitant interest rates and charges. This is not about imposing an arbitrary interest rate cap that would drive companies to slap on other charges; nor is it about driving legal companies out of the doorstep-loan markets, leaving vulnerable customers prey to the illegal loan sharks. This is about working with the industry to reduce the overall cost that the customer has to pay for payday loans and home credit.

As the hon. Member for South Norfolk (Mr Bacon) has so forcefully reminded us, regulators need teeth, and it helps if they also have strong backing. That is precisely why it is so important to have the stronger wording of the motion proposed by my hon. Friend the Member for Walthamstow, which refers to

“regulatory powers that put in place a range of caps,”

rather than the weaker wording suggested by the amendment. Our experience with prepayment meters was that it took strong leadership and firm pressure to effect the necessary changes. I strongly suspect that tackling the excessive charges of doorstep lenders and home credit companies will also require strong powers and political will.

As the motion says, it is important to increase access to affordable credit. When we were in government, we took concerted action to promote access to alternative sources of credit through the growth fund. That increased the availability of affordable personal loans by third sector not-for-profit lenders such as credit unions and community development finance institutions. Between 2006 and 2010, 350,188 loans were approved and payments amounting to £152 million were made. I hope the Minister will tell us whether the Government plan to continue that provision beyond April 2011.

Let me return to the issue of regulation. As my hon. Friend the Member for Streatham pointed out, this is a particularly appropriate time for the Government to introduce regulatory powers. It is bad enough that low-income communities are bearing the brunt of taxation changes and the Government’s savage cuts to entitlements and public services. The very least that the Government could do is accept our modest proposal, and protect people from excessive charges for doorstep loans.

What we are asking today is for the Government not to pass by on the other side of the road—not to ignore those who are being ruthlessly exploited—but to take some simple, straightforward steps to clamp down on this callous exploitation.

15:36

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

I congratulate the hon. Member for Walthamstow (Stella Creasy) on securing a debate on this important subject, on which there is so much common ground. I believe that there is a consensus across the House that we need to protect vulnerable people, especially those on low incomes, from irresponsible and, worst of all, illegal lenders.

There is, of course, some debate about how we should protect consumers from exploitation. Although today’s discussion has rightly ranged widely, the motion and many contributions have focused on one particular option for credit regulation, namely a cap on the total cost of credit. I shall deal with that specific point in some detail later, but in order to do justice to a number of the excellent speeches that we have heard, I shall begin by responding to some of the many points that have been made.

One of the huge benefits of a debate such as this is that the House has a chance to contribute actively to the Government’s ongoing work and, in particular, to our two ongoing consultations. However the House votes this afternoon—and I strongly urge all Members to support the amendment tabled by my hon. Friend the Member for Worcester (Mr Walker)—I assure Members that we are in listening mode. We have not reached our final conclusions, not least because one consultation has not closed and we have yet to analyse all the submissions made in response to the call for evidence. Let me, however, tell the House what the Government have been and are still doing, and how we have learned from the previous Government’s attempts. Of course, they rejected proposals for caps on consumer credit not once, not twice, but three times.

The previous Government were not shy or inactive in this regard, and some of their policies were good. We are continuing those policies and hope to improve on them. Let me give two examples. The first relates to illegal moneylenders—the loan sharks who will use intimidation and even violence to collect their money. They are criminals, and they need to be identified, caught, charged and imprisoned. The previous Government set up illegal moneylending teams whose job was to help to enforce the law in communities throughout the country. They are specialist teams consisting of trading standards officers and seconded police officers who are taking the fight to the loan sharks. Despite the cuts that we are having to make, we have maintained spending in that area, and we hope to make the money go further and work harder against those criminal loan sharks by reorganising the teams and following the recommendations of an independent study.

My second example relates to the availability of more affordable credit. We are actively trying to make some of these high-cost credit markets more competitive so that people on low incomes can have more choice and credit can be affordable and accessible. I have made no secret of my support for credit unions and the building of closer links between them and the Post Office, enabling more people to take advantage of their services. I am pleased that we have seen real progress in that regard, and that many credit union customers who sign up for the service can now pay in and withdraw money at their local post offices. I am working with others across Government to establish where and how we can go further. I hope that we shall be able to proceed with new measures, but we must work out the details.

We are doing other things, and other things are happening. We have seen the vital development of better education about credit and about finance more widely. The Consumer Financial Education Body is funded in full by a Financial Services Authority levy on the financial services industry. It will provide Britain’s first national financial advice service, which will offer a free, impartial financial education to all along with an annual financial health check. That will enable people to manage their financial affairs better. Clearly we can and should do more, and I particularly welcome the setting up of the all-party group on financial education for young people by my hon. Friend the Member for North Swindon (Justin Tomlinson).

In addition, this very week, the consumer credit directive came into force, which introduces new and powerful regulations for consumers that will have far-reaching consequences for the high-cost credit market. I know that not everyone in the House shares the same view of Europe and European legislation, but I am sure that we can all agree that the new requirements on lenders to undertake a creditworthiness assessment before any loan is made and the new 14-day cooling-off period for consumers, allowing them to withdraw from any credit agreement, are welcome. Under the directive, pre-contractual information for the consumer will now have to show the total cost of credit and how much has to be paid back. I believe that the new regulations and their changes will make a real difference.

From that list it should be clear that the Government have been active and lots of new measures have just been implemented, but I want to go further. That is why, jointly with the Treasury, my Department has launched two reviews that will be fundamental to the regulation of consumer credit in future. First, the Government are reviewing the framework for financial services regulation, including the two current consumer credit regulators, the Office of Fair Trading and the Financial Services Authority. The review is an opportunity for us to look at how best to regulate consumer credit and who should have responsibility for that. We are consulting now and any new regulator may well end up with greater powers to intervene in the consumer credit market to introduce the powers that many here today are seeking.

The FSA has already made its thoughts known on this subject in a discussion paper about “Product Intervention”. Chapter 6 deals with product intervention options for the new regulator and mentions price capping. Paragraph 6.40 states:

“Price capping is the most radical price intervention and would involve us making difficult judgements about the appropriate price we regard as consistent with good consumer outcomes. However, we consider that it is an option that should remain open.”

The Government have also launched a review of consumer credit and personal insolvency, which takes an end-to-end view from the decision to borrow to how we support people in difficult circumstances and help them to resolve their debt. It looks, for example, at the advertising of credit, which has been mentioned by several hon. Members.

I cannot give any undertakings today about what will emerge as a result of those reviews, because we are still considering the evidence. Nothing has been decided and it would be irresponsible of me to stand here today pre-empting their results, but we are not afraid of taking action where the evidence justifies doing so. We will not hesitate to act where there is evidence of detriment to consumers or exploitation of them. The Government want poor households to be able to strike a better balance between how they save, insure and access credit, and we are looking at a lot of ideas.

For example, we believe that there are great gains to be had from collective purchasing. We are working with the insurance industry and social landlords to develop and promote affordable home contents insurance for social tenants. If those products succeed, they will enable many more households to claim back the cost of household emergencies, rather than relying on high-cost credit to replace essential goods if they are burgled or if a high-cost item, such as a washing machine breaks down. We hope that the trials of such products will commence in March or April this year. Such measures will not be an immediate solution, but they could help those on low incomes even more than caps on high-cost credit.

I come to the one specific issue that the hon. Member for Walthamstow wishes us to focus on: a cap on total credit. The motion calls on the Government to consider introducing a cap on the total cost that lenders can charge for credit. At first glance, that appears sensible. Yet, despite what she said, the evidence base for her new approach is limited, to say the very least. What seems sensible at first glance could have huge unintended consequences for those we are trying to help. Without a proper assessment of the evidence it would be rash and frankly negligent to rush into this proposal. We know that there have been studies carried out that show that an interest rate cap could have very detrimental impacts on the vulnerable—that was accepted by the previous Government. This year’s OFT review of the high-cost credit market ruled out not just interest rate caps, but any price controls in the market. The EU review that the hon. Lady prayed in aid is ambiguous on this, to say the least.

A forthcoming study, which has not yet been published, has been undertaken by Policis. It has had the advantage of collaborating with Claire Whyley, chair of the credit sub-group of the Financial Inclusion Taskforce and chair of the FSA consumer panel, and Paul Jones, who is the leading expert on social lending. The study concludes by saying that if a cap were to be constructed to take in the total cost of credit, including penalty charges and similar, more of those on low incomes would be likely to find access to mainstream options restricted or curtailed altogether. That is the only evidence I have seen that deals with this issue in detail. We have to assess these issues, because the hon. Lady’s proposals do not do what she claims. We need to gather evidence and properly assess it, and I reassure the House that we will do that. When we have analysed the evidence and got the results of consultations, we will report back to the House. We will not be afraid of taking tough measures if they are required.

15:45

[Stella Creasy]

I want to put on record my thanks to all Members who have taken part in today’s debate. The fact that 21 Back Benchers have come to speak and that there has been broad agreement suggests that this issue cannot be ignored any longer. I note the exceptions of the hon. Members for Solihull (Lorely Burt) and for Eastbourne (Stephen Lloyd) and their concerns. They might want to reflect on their ability to add heat to a subject that requires light. That is the challenge we face today.

I am deeply disappointed by the Minister’s approach to the debate. He offers so much and at the last minute takes it away. To talk about the discussion on total cost credit and then quote from an industry-led report that has been funded and supported in that way is a shame. Notwithstanding that, I hope he will accept that the broad support from Members today shows that there is agreement that there is a problem that needs to be addressed, and that the measures brought forward so far have not been satisfactory. The issue, then, is how we should proceed.

I had hoped to convince the Minister today that the Opposition’s proposals, to which the motion speaks, are rooted in evidence—recent evidence that he has previously put forward to me to support his case. I note that he has changed his mind now, but perhaps he will change it again. The big truth at the heart of this issue is that the longer the Government linger, the more problems will deepen. I go back to the point that nearly half of households, as a direct result of the economic conditions we are in, are struggling to make ends meet, and that 10% of them are borrowing from the people we have been discussing. The longer we fail to act, the more these rates will cripple families across the country, so I urge him not to reject the proposals simply because of an ideological objection to regulation. Regulation done well has been supported by Hayek.

I also urge the Government not to reject the proposal simply because it comes from the Opposition. I say to the Minister: “You may have used your party to delay progress to date, but you will not stop the pressure from the people of this country for something to happen. That has been very clear today. You have left your own Back Benchers uncomfortable by forcing prevarication, but please do not leave that wound to fester. Work with all of us who would support and encourage a form of capping. We will not let you throw these proposals out and we will do what we can to continue this debate and keep this issue alive. We will hold you to account because our constituents demand and need nothing less. If only the Government stand in the way of progress, I urge them to reconsider. Please support the motion as it is and do not amend it. Please show clear leadership and send a clear signal to our constituents that you are not in the pocket of the legal loan shark industry but that you stand as we do with the poorest consumers in this country, seeking action now.” I tell the Minister honestly that if he does that and makes a clear commitment to doing that today, we will applaud him; if he does not, we will never forgive and we will never forget.

Question put, That the amendment be made.

15:48

Division 190

Ayes: 271

---

Conservative: 228
Liberal Democrat: 42

Noes: 156

---

Labour: 145
Plaid Cymru: 3
Scottish National Party: 3
Democratic Unionist Party: 1
Social Democratic & Labour Party: 1
Green Party: 1
Independent: 1
Liberal Democrat: 1

Main Question, as amended, put and agreed to.

Resolved,

That this House notes with alarm recent evidence showing a fourfold increase in the use of payday lending since the beginning of the recession and that high cost credit lenders advanced approximately £7.5 billion to low and middle income consumers in 2008 alone; recognises the problems of financial exclusion, lack of financial and debt management education, lack of price competitiveness in the unsecured lending market and the near monopoly positions of many large lenders which contribute to the high costs of borrowing; considers that without action these factors could worsen family debt, poverty and financial difficulties to the detriment of the economic recovery; therefore calls upon the Government to introduce measures to increase access to affordable credit; urges regulators to consider putting in place a range of caps on prices in areas of the market in unsecured lending which are non price-competitive, likely to cause detriment to consumers or where there is evidence of irresponsible practice; and believes that such caps should take account of the desirability of maintaining access to affordable and responsible credit, the likely impact on the supply of credit and the cost of enforcement, that they should be regularly reviewed and that they should use the total cost of credit, calculated on a yearly basis, to ensure that lender avoidance and distortions in price are prevented.

Legal Aid Reform

Thursday 3rd February 2011 Commons Chamber

16:03

[Yvonne Fovargue (Makerfield) (Lab)]

I beg to move,

That this House has considered the matter of the reform of legal aid.

I thank the Backbench Business Committee for agreeing that this important topic be debated prior to the closure of the consultation on proposals for the reform of legal aid in England and Wales. The consultation paper proposes to cut an estimated £350 million from the civil legal aid budget. Roughly two thirds of those cuts are directed at people who are currently legally aid-able, and one third will come from remuneration cuts to providers, who are expected to do the same work but for less money.

Some £279 million will be cut from civil legal aid, and about half a million people will lose their entitlement to legal aid. The majority of them come from low- income households, and the Ministry of Justice’s own equality impact assessment acknowledges that they will be predominantly women, black and minority ethnic people and ill and disabled people. However, while the consultation acknowledges this, it also says that it is not just about cost but that it is the “right thing to do”. I believe that I can demonstrate that both the cost argument and the statement that it is the “right thing to do” are incorrect, and that the implementation of these proposals to reduce civil legal aid will hit the poorest hardest, increase the cost to other public bodies, and have a potentially catastrophic effect on not-for-profit advice agencies, including citizens advice bureaux and law centres.

[Keith Vaz (Leicester East) (Lab)]

I congratulate my hon. Friend on securing this debate. Does she agree that one of the issues that should be addressed is poor decision making by public authorities, particularly in immigration, where the UK Border Agency fails to make good decisions based on good evidence? That is why people have to go to the tribunal, and that is why they need legal aid.

[Yvonne Fovargue]

I thank my right hon. Friend for that comment. I will come to that later when I suggest some ways of saving money in the system.

Whole swathes of advice areas are removed from the scope of legal aid, particularly the social welfare law category. Welfare benefit is removed completely from legal aid. According to the Ministry of Justice’s own equality impact assessment, 63% of clients who received legal aid in this category had a disability, 54% were female and 27% were from a black and minority ethnic background. However, this is justified by stating that the

“accessible, inquisitorial and user friendly nature of the tribunal means appellants can generally present their case without any assistance”.

It also states:

“Advice and help are available from a number of sources including Job Centre Plus and the Benefits Enquiry Line”.

So people who have had their claim refused by Jobcentre Plus or the Benefits Agency are to go to them for support in challenging the decision and they will help them. I have to say that that is not the experience I had when I worked for an advice agency.

[Stephen Lloyd (Eastbourne) (LD)]

On the basis of what the hon. Lady has said, which I support entirely, would she be interested to know that Brighton Housing Trust’s Eastbourne advice centre deals with at least 800 specialist housing cases per year and anticipates that this will fall to about 100? Are we really expecting Jobcentre Plus to take up the slack?

[Yvonne Fovargue]

Yes, I totally agree. In fact, my local citizens advice bureau has phoned the Benefits Agency 100 times and has had no response apart from saying that everyone is busy.

These issues are not considered of sufficiently high importance, but when a person is ill or has a disability one of their major concerns is having an adequate income to enable a decent quality of life. The early advice available under this funding can save money. Some 80% of social welfare legal aid cases have positive outcomes for clients. In the agency where I worked, 70% of our reassessment appeals were successful, and that negated the need for a costly tribunal.

I would like to debunk the myth that these cases are not complex. My own CAB in Wigan dealt with a case for three years where the Department for Work and Pensions asserted that a couple were living together as man and wife, despite evidence from a neighbouring local authority that Mr M was resident there and receiving benefits, and that he merely visited to look after his disabled daughter, assisting with her care on occasion. Mrs M was summonsed for benefit fraud, convicted, and ordered to repay £27,000. The CAB continued with the case, appealed three times, and went to the Secretary of State. At the final appeal, Mrs M was found to owe £236—a reduction of more than £26,500. Was that a complex case? Would it be suitable for a telephone helpline? I do not think so. That client needed the face-to-face help given by a skilled CAB adviser and was funded by legal aid.

[Lilian Greenwood (Nottingham South) (Lab)]

I congratulate my hon. Friend on securing this debate. Does she agree that the suggestion that legal advice could be provided over the phone fails to understand the level of support that is provided by many legal representatives, particularly when they are dealing with vulnerable groups such as asylum seekers and refugees—often people who face persecution, are separated from their family, and perhaps do not have English as a first language?

[Yvonne Fovargue]

I agree with my hon. Friend. In times of stress, people often need the support of a friendly face.

For every £1 of legal aid expenditure on welfare benefits in the Wigan borough, £20.50 per year of additional benefit is obtained for clients. Nationally, for every £1 of legal aid expenditure on welfare benefits, the state potentially saves £8.80.

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

rose—

[Yvonne Fovargue]

I would like to make a little progress, because the debate is quite late.

Debt is another area that will be removed from the scope of legal aid, except for cases in which the client’s home is at immediate risk. The impact assessment shows that 55% of debt clients are female and that 30% are likely to have a disability. Yet again, the consultation paper states that, although debt problems are important to the individual, they are not important enough to warrant legal aid funding.

I have seen the effects of debt on individuals, and the cost—both human and to the state, including to the NHS—of not resolving debt issues at an early stage. A project that I was involved in used a recognised NHS scale to monitor stress levels before and after the advice process dealing with unsecure debts. The primary care trust believed that in the first nine months of the project, three suicides had been prevented. At what cost? In Wigan, the citizens advice bureau deals with 616 debt clients per year at a cost of £123,000 to the state. It reschedules £4.83 million worth of debt and writes off £3.47 million worth. For the expenditure of £123,000, £367,000 is saved.

I support the expansion of financial education into schools and communities, but that will not assist people who are in debt now. My experience is that when the issue is raised in schools, more parents arrive at the advice agency’s door because they are made aware that there is somewhere to go. They almost feel that they have got permission to go there.

[Paul Farrelly]

Every conscientious MP knows the value of citizens advice bureaux. Quite simply, without them, our offices would be swamped. That prospect awaits us. My hon. Friend has highlighted the situation in Wigan. Citizens Advice has highlighted that 730 fewer people will receive specialist debt advice in Stoke-on-Trent, 1,280 fewer in my area of Newcastle-under-Lyme, and more than 1,500 fewer in north Staffordshire. Does she agree that this is not only a false economy, but a heartless cut?

[Yvonne Fovargue]

I agree with my hon. Friend. I will go on to give some figures on the impact that the proposals will have on advice agencies.

Agencies that provide telephone advice such as National Debtline have a great role to play, but they cannot replace face-to-face advice, as my hon. Friend the Member for Nottingham South (Lilian Greenwood) said. The reality is that people need to sit down with an adviser. They need the reassurance and trust of a relationship that is built up over time.

There is a reason why social welfare law problems, including employment, housing, debt and benefits, were given primarily to advice agencies: the interlinking of those problems. Limiting the scope and the type of the problems that advisers can deal with limits their ability to deal with the whole person and with all their issues. For example, legal help might prevent somebody from losing their home because of debt, but it will not address the causes of that debt, such as unfair dismissal or a refusal of sickness benefits. I could give examples of many areas that are taken out of the scope of such help, but I believe that colleagues will mention them. The list is extremely long and access for the most vulnerable is severely curtailed in many cases.

I shall turn now to the effect on citizens advice bureaux and not-for-profit providers. The Ministry of Justice estimates that this sector will lose 97% of its legal aid funding. Currently, local citizens advice bureaux receive £26 million of legal aid funding, with the largest amounts being spent on debt and benefits. If the proposals are implemented, £20 million will go in one fell swoop and there will be a significant impact on the ability to deliver not only legal aid-eligible services but all other client services. A survey undertaken by Citizens Advice showed that if the proposal went ahead, 80% of local bureaux would have to withdraw specialist services, 85% would have reduced capacity to meet clients’ needs and, most shockingly, 51%—more than half—felt that there would be a risk to the continuation of the whole CAB service in their borough.

Legal aid funding cannot be treated in isolation from other sources of advice funding, especially as the consultation assumes that people can access other services to pick up the slack. The free advice sector is suffering disproportionately from public funding reductions, and even agencies such as the Royal National Institute of Blind People, which have no legal aid funding, have approached me to say that they could not deal with any increase in demand for their services due to the impact of the proposals.

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

The hon. Lady is making an eloquent case, particularly on behalf of organisations that are currently giving evidence on these matters to the Select Committee on Justice. Does she recognise that there ought to be some scope for funding to be provided for an examination of the sources of some of the problems on which advice is being sought, whether they are public bodies that make poor decisions, as the right hon. Member for Leicester East (Keith Vaz) rightly pointed out, or the banks?

[Yvonne Fovargue]

I totally agree that there is scope for other funding provision, but that has not been available yet. In fact, provision is being withdrawn because of the withdrawal of funding for face-to-face advice from citizens advice bureaux.

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

Does my hon. Friend also accept that the need for advice is rising in the current economic climate, particularly on employment, social welfare benefits and debt?

[Yvonne Fovargue]

I completely agree. This is a time of great change for many clients, and the need for legal help is even more vital.

The suggested resolution to the problem is the community legal advice helpline, the gateway to civil legal aid services that will offer non-eligible clients access to paid services. First, I wish to take issue with the premise that the legal aid scheme has expanded beyond its original intentions. Actually, the Legal Aid and Advice Act 1949 was promoted with very wide objectives, which were explained as being intended to provide

“legal advice for those of slender means and resources so that no one will be financially unable to prosecute a just and reasonable claim or to defend a legal right”.

I am not convinced that a gatekeeping telephone helpline will promote that.

Access to telephone advice is important, and I would welcome any expansion of it, but it has to be implemented in tandem with face-to-face services. Clients need to have that choice. The community legal advice helpline uses an 0845 prefix, which is very expensive from a pay-as-you-go mobile. Many people with learning disabilities or mental health issues prefer to attend in person, to pick up on non-verbal signals and build the trust necessary to tell the advisers their problem. Citizens advice bureaux make a particular effort to reflect the communities that they serve, and that is why people use their services.

As an aside, I should like to mention volunteers, who are mentioned in the consultation paper as another way for people to pick up advice if the proposed changes are made. However, I do not believe that that is true. Volunteers work best and most confidently when they are supported and encouraged by specialists. It was only when that support was provided that the number of volunteers and the depth of the work that they undertook increased significantly in the bureau that I managed.

There are opportunities to save money in the justice sector without placing the burden on front-line services. The Ministry of Justice intends to reform the Legal Services Commission, and there is a large amount of bureaucracy in the administration of legal aid. I spent 60% of my time managing 30% of the money that I got. A lighter-touch procurement, auditing and payment mechanism could be found, and that needs to be considered seriously.

[Karl Turner (Kingston upon Hull East) (Lab)]

On the point about volunteers, many of my colleagues in my chambers, and in local firms of solicitors, volunteer their services to advice bureaux regularly. The incidence of that will diminish given the dreadful cuts to those firms’ legal aid and the fact that they cannot take on trainees as a result of the cuts. Advice is diminishing drastically as a result of the Government’s cuts.

[Yvonne Fovargue]

I agree with my hon. Friend that pro bono advice provision is important, but it is not available in all places. In fact, in the conurbation that I served, there was no pro bono advice.

It is also important to decrease the need for civil legal aid by addressing poor decision making by public bodies and avoiding the need for tribunals. We should take the lawyers out of tribunals, make legal processes simpler and improve public legal education. Early advice saves money and keeps cases out of the courts. We should look to fund that kind of advice instead of salami-slicing and looking at administratively convenient categories of problems. Advice provision needs to be organised around people’s real needs and their need to be treated as an individual, not as an individual problem.

Access to justice is one of the cornerstones of a free and civilised society. It is vital that everyone, particularly the most vulnerable, has equal access to the law, no matter who they are, where they live or how much money they have. The Government’s consultation proposes to remove access to justice for the most vulnerable. Is that access to justice, or justice denied?

[Several hon. Members]

rose—

[Mr Speaker]

Order. More than 20 hon. and right hon. Members have applied to speak in the debate, as a result of which I have imposed a limit of five minutes on each Back-Bench contribution. I simply remind Members that they are not obliged to use their full five minutes if they do not wish to do so. I am keen to get everyone in, but Members need to help me to help them, and to help each other.

16:19

[Anna Soubry (Broxtowe) (Con)]

I declare an interest at the outset, because as you and others may know, Mr Speaker, until my election in May, I worked for 16 years as a criminal barrister in Nottingham and other places such as Leicester and Derby.

It is important to remember that there is a need to make cuts in public expenditure—that is common ground in the House. We have had many debates on where the blame for that lies, and we could continue them, but I suggest that that would not be helpful this afternoon. We are where we are. No Government Member welcomes having to make such cuts, but we have the largest deficit of any G20 country and, with considerable regret, the Government have been left in a position in which they have no alternative but to make severe cuts in public expenditure, including on legal aid.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Does the hon. Lady accept the Citizens Advice report that says that the Government’s proposals will not only limit access to justice but increase public expenditure?

[Anna Soubry]

I do not know about the latter point. I have been in contact with the citizens advice bureau in Broxtowe, and I have made it very clear to Nottinghamshire county council that it is imperative to exercise great care in cutting the budget of that CAB. The Prime Minister and the Lord Chancellor have spoken about that and it is recognised that citizens advice bureaux do a magnificent job. Every Member of the House knows that, because their case loads would increase enormously without them. There is a danger that in these difficult times, they will have to deal with more cases, and it is imperative that they have the resources they need.

[Stephen Lloyd]

Does my hon. Friend agree that the role of citizens advice bureaux is preventive and enabling? They focus not on generating unnecessary litigation, but on preventing crisis. Therefore, properly resourced citizens advice bureaux will actually save money.

[Anna Soubry]

Good point, well made, if I may say so, Mr Deputy Speaker. [Interruption.] Sorry, did I say Mr Deputy Speaker? [Hon. Members: “Yes!”] That is outrageous. I apologise most sincerely, Mr Speaker.

I ask the Minister carefully to consider these cuts in legal aid. Many would agree with me that it is imperative that we ensure that the most vulnerable people in our society do not suffer when we make these sorts of cuts. It is also important to protect the interests of those citizens who cannot protect themselves, and I have two examples regarding the reduction in eligibility for legal aid in the family division.

A father who is denied contact with his children will no longer be eligible for legal aid. I submit that that cannot be right, not only because of the father’s rights to see his children but because of the rights of the children, who have no access to justice. Their interests must be protected by society—they need to see their father. Likewise, if a mother has separated from the father of her children and he then threatens to take them overseas, she too will no longer be eligible for legal aid. That is not only unfair on her as she will not want her children taken overseas, but not fair on her children who will want to have contact with both their parents.

Former colleagues of mine at the Bar have told me that they have many concerns, including in the area of housing. Somebody who is living in squalid housing conditions will more than likely have been eligible for legal aid in the past. That will continue to be the case in many circumstances. However, my concern is that legal aid will no longer be available so that people in that situation can force a landlord to make repairs—to begin to solve the problem before it becomes the sort of problem that would still be eligible for legal aid.

I am told—I am grateful to my hon. Friend the Member for South Swindon (Mr Buckland)—that we are paying £24.7 million in legal aid for welfare claims. In my time in this House, it has struck me that one reason why so many people come to their MPs and to the CABs with their cases—and eventually have to go to the law—is the profound failings of the Department for Work and Pensions. One of the best things that we could do is ensure that that Department is working properly, efficiently and effectively, because that would save us considerable sums of money. As a new Member, I found it astonishing that we actually have MP-dedicated hotlines for our caseworkers to ring to sort out problems that should never have arisen but have done so because of the ineffectualness of the Department. I urge the Government to ensure that we sort that out.

Finally, I make a plea for the Bar, which has had no increase in fees for decades. Yet again the criminal Bar is being asked to reduce its fees by 10%. Prosecuting counsel who are prosecuting a rapist or a persistent dwelling house burglar will be paid a fixed fee of £60. Sometimes members of the criminal Bar work for less than the interpreter in court, and invariably they are paid considerably less than the medical expert who may be assisting them in their work.

I am grateful for the opportunity to contribute to the debate. I am sure that the Minister will have heard all these points and I look forward to the action that will result.

16:28

[Ms Karen Buck (Westminster North) (Lab)]

I congratulate my hon. Friend the Member for Makerfield (Yvonne Fovargue) on introducing this debate. She spoke with enormous clarity and mapped out the ways in which the cuts in legal aid will have an impact on our constituents. I also congratulate the hon. Member for Broxtowe (Anna Soubry) who made many points with which I agree, including a warning to beware labelling all lawyers as fat cats. Legal aid lawyers work extremely hard for relatively modest remuneration, and we should remember that.

I do not wish to repeat the key points that these cuts represent a false economy; that there are real dangers in taking whole areas out of the scope of legal aid because so many cases are complex, and cases such as debt and housing run into each other and cannot be separated out; or that there are limits to the value of phone advice. These are very important points, but I will not dwell on them further.

I want to make three further points. First, if there was ever a time to be scaling back on legal aid, particularly in civil and social welfare law, this is not it. We are seeing massive upheavals in public service delivery: in education, to which I will return; in housing, through the proposals in the Localism Bill, which will introduce short-term tenancies; in welfare, with £18 billion being taken out of the welfare budget through the cuts in housing benefit; in disability benefits; and, as mentioned, in rising unemployment and the broader economic context.

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

Does the hon. Lady not accept that the current cost of legal aid is unsustainable? We are spending £38 per head of population on legal aid, whereas in Australia it is £9, and in France £3. These reforms are therefore essential to get our economy back on track.

[Ms Buck]

There are so many points with which to respond to that intervention. We cannot compare systems between countries. It is not helpful because the legal systems and the delivery of legal aid support are so different. The Labour Front-Bench team are willing to discuss the legal aid budget, particularly in some aspects of criminal legal aid. There are areas in which savings can be made, but I am particularly concerned about civil and social welfare law.

My second point, which was made strongly during an earlier Westminster Hall debate, concerns the impact of these cuts—given the speed and depth at which they are being made—on the legal aid firms, law centres, citizens advice bureaux and other advice agencies. In many cases, they draw on legal aid for part of their funding. The removal of legal aid funding is like a game of Jenga: we start pulling out the sticks and the whole edifice is in danger of collapse. I think we will see a massive, unplanned spate of service closures across the country, and we will not be able to control where they happen. There will be advice deserts, and many of our constituents will struggle as a consequence.

I will provide an example of what I am talking about. This reform is being delivered at the same time as cuts in local authority spending. The London grant scheme is being repatriated to the boroughs without ring-fencing, which means that advice services in London are at the whim of local boroughs that are themselves under pressure. Therefore, the grant funding that should complement the Legal Services Commission funding is unlikely to be there. That will clearly impact severely on citizens advice bureaux and law centres. As has been said, politicians will regret taking this decision. I am already seeing—I am sure that other hon. Members are seeing it too—people coming to me for what should be a legal advice and representation service that in many cases we are not qualified, and certainly not resourced, to provide. I predict with absolute certainty that our surgeries will be flooded with more and more desperate and angry people who cannot get the proper representation they should.

Finally, I want to touch on the disproportionate impact on women, children, people with disabilities and people from black and minority communities. We know from the scope of the areas affected that these cuts will fall most heavily on them. We have heard about family law and asylum-seeking communities, particularly asylum-seeking children, who will be left at risk because of these cuts. However, I want to make a particular case for education and special educational needs. In my borough there is a particular problem of children without school places—350 were without a place before Christmas. Those children and their families need advice and representation, and the parents seeking to take action against their local authority for denying them a statement of special educational needs are a particularly vulnerable group. We know from the number of tribunals that succeed that 82% of parents’ appeals that reach tribunal are upheld. The removal of assistance from those parents, many of whom simply do not have the skills or resources to make their own case, will mean that their children will not get the education to which they are entitled.

I urge the Minister to rethink many aspects of the proposals, in particular the narrowness of the scope that is being applied to legal aid cases and the arbitrary way in which the services are being withdrawn.

16:35

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

I congratulate the hon. Member for Makerfield (Yvonne Fovargue) on opening the debate and on setting out her genuine concerns about the impact that some of the changes could have on her constituents. I accept that, as a new Member, she can to some extent deny responsibility for what came before, because she was not a Member under the previous Government. I look around her, however, and see ex-Ministers who know full well that they would have been taking the same decisions as we are, and I find their tutting and shaking of heads intellectually extremely dishonest.

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

I should like to reinforce that point. There were no fewer than 30 consultations on legal aid between 2006 and 2010, which gives the lie to the argument that there is a divide on this matter. Both parties were faced with the same challenges, so let us approach the debate on that basis.

[Tom Brake]

rose—

[Mr Speaker]

Order. Before the hon. Gentleman responds to that intervention, I hope that he will confirm to me that he is not accusing any Member of being personally dishonest, because we cannot have that in the Chamber.

[Tom Brake]

Of course I am not accusing any ex-Minister of being personally dishonest.

I thank the hon. Member for South Swindon (Mr Buckland) for his intervention. I think that Members on both sides of the House regret the decisions that are having to be taken, but it is incumbent on Ministers and Members on this side to come forward with solutions. If the Opposition want to be taken seriously, they need to offer solutions as well.

[Kate Green]

Does the hon. Gentleman not agree that the solution that the Government are proposing—namely, the wholesale removal of significant categories of social welfare law—is the most damaging and unsatisfactory way to proceed?

[Tom Brake]

I hope that the Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), is listening carefully and that there might be some adjustments to what is being proposed. We need to hear solutions, however. We do not need to hear a list of concerns without it being followed by solutions. We all face this problem.

I want to use this debate as an opportunity to raise a couple of specific points, about which I have written to the Minister. I thank him for meeting me, Steve Triner and other representatives of my local citizens advice bureau to discuss their concerns about the proposals. I have also recently had meetings with three solicitors in my constituency office. Like other Members on both sides of the House, I too have received a wide range of briefings from various organisations. I received a briefing yesterday from the Equal Rights Trust, and I want to raise a specific point in that regard. I hope that the Minister will be aware of the points that have been raised with me, as I have already written to him about them.

The first point relates to medical negligence. There is concern about the impact that the changes could have, and whether particularly difficult and complicated medical cases for which the NHS would previously have taken responsibility might be passed over to social services, resulting in their having to take on the financial costs of, for example, the most serious obstetric mistakes involving brain damage in very young children. That is a very specific issue, and I hope that the Minister will be able to respond to it.

My second point relates to family law. Interestingly, in my meeting with the solicitors, they were not particularly concerned about the idea of a telephone helpline. They were, however, concerned about what would happen beyond that stage, in regard to referrals. They wondered whether there would be a means of identifying at the beginning of the process that someone could not be dealt with by telephone and that a face-to-face meeting would be required.

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

Does my hon. Friend share my concern that people with mental health issues might not get equal access to justice when they are involved in family disputes?

[Tom Brake]

My hon. Friend makes a strong point, and I hope that Ministers will listen to such points in the debate and during the wider consultation.

In family law, people are rightly encouraged to pursue mediation in cases that are currently supported through legal aid. During the meeting, the point was made to me that Government bodies and associated organisations are often unwilling to pursue a route that involves mediation. Government Departments and associated bodies will be required to show a willingness to engage in mediation, if that is now the direction the Government are moving in.

I have already made a couple of points about telephone advice, but there are also concerns about whether any local knowledge will be embedded in any telephone advisory service, and about conflicts of interest that might arise as a result of that, particularly if there are a limited number of suppliers to whom a case can be referred.

During the meeting, CAB representatives expressed the concern that they would now be in the position of having to take up very personal cases, and therefore be very much in the front line rather than acting as an independent body, so they might end up having to represent a particular individual against the other party in the case. They are worried about how that would impact on their independence. They are also worried that a lot of court time would be lost, particularly if more people ended up representing themselves. There is a good job to be done in making that process clearer and simpler, so that if more people do represent themselves there is less risk that they fail to turn up with the right papers or on time.

[Mrs Helen Grant (Maidstone and The Weald) (Con)]

The hon. Gentleman says these changes rely on people being able to help themselves, but what about people with learning difficulties or mental health problems, or people who cannot speak English very well, and what about people who are too frightened to face their opponent?

[Tom Brake]

I thank the hon. Lady for that intervention. The Minister has heard those concerns, and I hope he will seek to address them.

The chair of my local CAB has highlighted the fact that the financial inclusion fund will close at the end of March. I understand that transitional funding proposals are being looked at, and perhaps the Minister can respond on that point.

The Equal Rights Trust raised with me the issue of stateless people, who will now be unable to claim legal aid unless they apply for asylum. Some unexpected consequences may flow from that. I hope the Minister will respond to that point at the end of the debate.

This is clearly a very difficult issue for the Government, and I know the Minister will do everything he can to address it effectively. We do not like being in the position we are in, but we have to address this issue now.

16:42

[Mr Ben Bradshaw (Exeter) (Lab)]

I congratulate my hon. Friend the Member for Makerfield (Yvonne Fovargue) on securing this important debate and commend her for her excellent speech.

Given the welcome fact that so many Members want to contribute, I will confine my remarks to the impact of the Government’s proposals on my local citizens advice bureau in Exeter, whereby it would lose all its welfare benefits funding, and funding for debt cases would be restricted to instances where there is an “immediate risk” of homelessness. Taken together, my CAB estimates that the changes will affect up to 700 cases a year in Exeter alone. The director of Exeter CAB, Steve Barriball, has described as “perverse” the fact that the Government are proposing to fund debt advice only when the client faces an immediate risk of homelessness. He says:

“It is widely accepted that timely intervention is more productive and reduces costs elsewhere, such as County Court repossession and other action.”

As other Members have said, these changes represent a terrible false economy, and in the case of Exeter they come at the same time as the local authority, Devon county council, is proposing to cut its support to the CAB by a massive 20%, as part of its attempt to grapple with a 27% reduction in funding from central Government. Yet it is estimated that for every pound of public money spent on CAB services, the CAB saves the public purse £12.20.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I appreciate what my right hon. Friend is saying about his local citizens advice bureau. In Wolverhampton, the citizens advice bureau handles some 1,600 cases a year that are funded by such help, involving 26 employees. The local director has said:

“The CAB would effectively go back 20 years in its development”

if the current proposals go through. In response to the hon. Member for Carshalton and Wallington (Tom Brake), who spoke a few moments ago, would my right hon. Friend care to contrast those proposals with the record of the Labour Government, who increased the funding to citizens advice bureaux when the recession was coming, precisely because we knew that there would be a greater need for debt advice as economic times got tough?

[Mr Bradshaw]

My right hon. Friend is exactly right. Indeed, I was about to make the point—gently, I hope—to the hon. Members for Broxtowe (Anna Soubry) and for Carshalton and Wallington (Tom Brake) that it is not good enough for Government Members to excuse every cut that this Government are implementing by talking about the need for fiscal consolidation. There is a clear choice to be made about the speed and degree of fiscal consolidation, and there is growing evidence that the speed and degree of fiscal consolidation being pursued by this Government is not only damaging important services such as the CAB, but damaging our economic recovery. All hon. Members need to do—

[Rehman Chishti]

rose—

[Mr Bradshaw]

No, sit down.

All hon. Members need to do is look across the Atlantic at the example of the United States under Barack Obama, who is pursuing a Keynesian economic policy, like the one that we advocate, where growth was 3.5% in the last quarter, as opposed to a 0.5% contraction here. So please, let us have no more lectures from Government Members about there being no alternative to these savage cuts.

For all the Government’s rhetoric about the big society, the CAB is the big society in action. It is staffed mainly by volunteers, helping everyone, and in particular the vulnerable, and saves the state millions of pounds in the process by ensuring that people in difficulty do not fall into crisis, the fallout from which the state then has to pick up. The Government’s proposed changes to legal aid and their impact on the work of CABs such as mine in Exeter will have a deeply damaging impact on the fabric of our communities and will cost us all far more in the long term. I therefore urge the Government to think again about this short-sighted and false economy.

16:46

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

I, too, thank the hon. Member for Makerfield (Yvonne Fovargue) for introducing this debate. In the spirit of the sentiments expressed by my hon. Friend the Member for South Swindon (Mr Buckland), I want to take part not in a partisan way, but on the basis of trying to progress the debate. Other Members have spoken about employment, welfare benefits, education and immigration, but it is on clinical negligence that I wish to express some of the views that I have encountered at my weekly surgeries.

The Government’s view is that if legal aid for clinical negligence cases is removed, alternative funding will be available in the form of conditional fee arrangements, which will be funded on the basis of a success fee and after-the-event insurance. Under Lord Jackson’s reforms, such fees will be unrecoverable from the losing party. The point that has been made to me, which I wish to highlight to the Minister, is that if legal aid is withdrawn and cases have to be funded by conditional fee agreements with insurance, there will be instances where the cost to the public purse may well be higher. For example, a solicitor at my surgery told me about a cerebral palsy case that was settled for more than £3.75 million. The costs involved were more than £100,000. The case was legally aided, but if it had been funded through a conditional fee arrangement, with, say, a recoverable success fee of 60%, the total costs would have been £160,000. There would also have been a substantial after-the-event insurance premium, so the case would have cost the public purse far more than if it had been funded by legal aid. That is the position where cases are successful, and where the Legal Services Commission does not pay anything.

I appreciate that some Members may have not followed the full argument, and I apologise for using legal jargon, but the fundamental point remains that although we may be saving legal aid costs, we may end up paying more into the national health service budget to cover legal fees and insurance premiums. In essence, we will have public money chasing public money, in a circle that will not deliver legal justice on a value-for-money basis. The counter-argument is that if Lord Jackson’s recommendations are implemented in full, there will be no increase in costs, as success fees and after-the-event insurance premiums will not be recoverable from the losing party. However, Lord Jackson has recommended that damages be increased by 10% to make up for the shortfall in solicitors’ costs, with a 25% cap to be deducted from damages. In the cerebral palsy case that I have mentioned, that means that the damages would have increased by £375,000, which would be an alarming escalation in public funds paid.

I appreciate the difficulties caused to the Government by the escalating drain on the public purse, and I suspect that many measures relate to concern about the costs incurred by solicitors who are chasing ambulances or investigating spurious, unviable and unsuccessful cases. However, I will say to the Minister, who I know has a great deal of expertise in this field, that clinical negligence cases are now conducted by a small group of specialist solicitors who focus on dealing with complex cases. It is increasingly rare for solicitors to tread the old route of simply applying for investigative help certificates for every client who walks through the door with a potential claim, because the cases are just not viable.

The special cases unit of the Legal Services Commission, which is based in Brighton, now seems to apply a robust criterion to all applications for LSC funding in order to ensure that cases with merit are granted funding. David Keegan, director of the commission’s high cost cases unit, has said:

“We need to ensure that access to justice is as wide as possible and it is in the best interest of clients.”

I would add only that those objectives must be reconciled in the most cost-effective way possible.

I think it pertinent that Lord Jackson’s objective in conducting his year-long costs review was to make recommendations for the promotion of access to justice. If legal aid is no longer available, the costs may become disproportionate.

I am acutely aware of the Government’s laudable intentions, but I worry about unintended consequences. The point that has been made to me most forcefully, time and again, is that if we genuinely want to save costs, it is imperative for the national health service litigation authority to make early admissions of liability rather than protracting settlement of cases. What tends to happen is that no one in a hospital wishes to admit negligence, and a game of bluff develops. Solicitors and the NHS Litigation Authority conduct a legal battle, which is often settled at the last minute. That is why we see headlines about cases involving liability claims amounting to tens of thousands of pounds running up legal bills of hundreds of thousands of pounds. Like most people, I cannot understand the logic of that. In such cases, early settlement would avoid a pointless game of poker with our money, the emotions of patients, and the good will of staff in the NHS.

16:51

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

I congratulate the hon. Member for Makerfield (Yvonne Fovargue) on securing time for this important debate. I declare an interest as one who has in the past undertaken publicly funded work both as a solicitor and as a barrister.

I am a member of the Select Committee on Justice, which is ably chaired by the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) and which is currently conducting research into this issue. We have received an unprecedented amount of evidence from concerned groups, and I shall voice some of their concerns in the limited time available to me.

I believe that the proposals in the Government’s consultation document are unethical, and will have long-standing and drastic effects on the make-up of our legal system. They will effectively pave the way for the creation of a “market” for the supply of legal assistance, and I believe that the quality of the assistance that is available will decrease. As a result, the wealthiest in society will be okay while those who are not wealthy will not.

The consultation document notes—with, I believe, unintended irony—that

“access to justice is the hallmark of a civilised society”.

We must do all we can to uphold that principle, but the proposed reforms will cause the legal aid market to be driven by cost rather than by the needs of clients and the quality of advice that they are given. I believe that a move to fixed fees for all cases will result in suppliers taking only the least complicated cases, which will mean that the most vulnerable will be more frequently left without legal advice. The need to generate profits will lead to firms taking on unqualified staff, which in turn may well lower the quality of service.

Gwynedd Law Society has written to me drawing attention to a real danger in Gwynedd and Anglesey, where, for a population of approximately 190,000, only 10 firms currently provide civil legal aid. There are no large firms in the area. Most of those firms assist clients in both Welsh and English.

The cuts in legal aid will be felt deeply in many areas of society, but the worst effect will be on the most vulnerable, which is extremely worrying. There is a letter in The Times today signed by a number of experts in family law, among them Stephen Cobb QC, chair of the Family Law Bar Association, and David Allison of Resolution. I cannot read the letter into the record, much as I should like to, but I commend it to Members.

Family lawyers will undoubtedly be giving up in droves, creating advice deserts, and it is our children who will suffer. I have with me several case studies showing that under these proposals mothers will be able to do nothing where children are not returned to them in certain circumstances. I find it very worrying that legal aid will be removed for ancillary relief in divorce cases. Most pressingly, ancillary matters such as child custody and maintenance will not be dealt with sensibly, and it is difficult to overestimate the devastating effect this will wreak on children caught up in these disputes. Indeed, the psychological effects that can be wrought on children when care is not taken in resolving disputes can be deep and long lasting. The justice system has a duty to protect the most vulnerable in our society—that was, of course, one of the founding principles of legal aid. Who are the most vulnerable in society? I would say that it must be our children. Overwhelmingly, the impact of the proposals on the most vulnerable members of our society will be catastrophic. I am talking about people receiving advice on debt, housing and welfare, as well as children standing in the middle of these disputes.

We must not allow these changes to be made. In the name of decency, ethics and providing decent cover for those less able to look after themselves, we cannot allow them to be made. We must not hold such an integral component of our justice system hostage to efficiency savings. If we do so, the effects will be brutal.

I ask the Minister to respond to one last point. I hope that this consultation will be a real one. The one on court closures left me underwhelmed, because it was deeply unimpressive, flawed and probably pointless.

16:56

[Guto Bebb (Aberconwy) (Con)]

It is a privilege to contribute to this debate. I wish to discuss the impact on rural areas, including my constituency in north Wales. I also wish to associate myself with the comments made by my hon. Friend the Member for Broxtowe (Anna Soubry). I could just replicate a lot of what she said, but I wish to concentrate on the issues specific to north Wales.

One of the concerns among people in north Wales and certainly among people in my constituency is that these proposals have the potential to be another attack on services available in rural areas. Only one firm not based on the north Wales coast offers legal aid in my constituency. Therefore, only one firm inland offers such services. The consultation document would result in that firm giving up that provision, which would be a loss to the area, because people would have to travel to gain access to legal advice and legal services. In this age of high fuel costs and so on, there would, thus, be an added burden before people could even access services that might be available on the coast. People in rural areas are concerned about whether the proposals are, again, an indication of a Government retreating from offering services across the whole of this country, and that is an issue to address.

Another specific issue affecting my constituents in north Wales relates to the fact that they often try to access services in Welsh. This is a crucial point, because my constituency is fully bilingual. On the coast, 20% to 25% of people speak Welsh as a first language, but inland the percentage is significantly higher. When people are dealing with real issues of concern and are trying to access support at crucial times in their lives, their ability to access those services in their mother tongue is very important. The impact assessment highlighted that issue in relation to services in cities in England and in south Wales, but I wish to ensure that the Department is aware that there is an issue to address in relation to services provided in Welsh.

One of my concerns relates to the consultation document’s reference to the need to provide a direct telephone line service. I am sure that the hon. Member for Dwyfor Meirionnydd (Mr Llwyd) is well aware that, although Welsh speakers would often prefer a service to be provided in Welsh, when they access services by telephone they almost feel that they have to speak in English first. When the service is available in their locality and they are able to walk into the offices of a firm that they know and have used in the past, they are able to talk to the solicitors in Welsh. The fact that we are proposing to offer so many legal aid services through the medium of a telephone line raises concerns about the provision of a fully bilingual service in a Welsh context.

Since I was elected in May, I have been astounded by the amount of quasi-legal casework. I find myself dealing with cases on which I am not qualified to offer advice or guidance. Before coming to the Chamber this afternoon, I asked whether my insurance as an MP would be sufficient to cover me when I am asked to offer legal advice and guidance. I have a real concern that as we are dealing with these significant changes to the provision of legal aid services, we are also looking at a significant reduction in the funding of citizens advice bureaux. As a result, MPs will end up dealing with cases that they are not qualified to deal with in a way that will be very unsatisfactory to the individuals seeking advice and guidance. That will also be very unsatisfactory for MPs, who could damage their reputation by offering advice and guidance that they are not qualified to give.

I recognise that the Government have to deal with the deficit. I am very pleased that the issue we are debating is currently under consultation, but that consultation has to be real. I shall certainly contribute to it, as will many members of the law profession in my constituency. My real concern is that if the proposals are not amended we will end up with a situation in which people in many parts of rural Britain and rural Wales do not have access to legal services. I am seriously concerned that some of the most vulnerable people in my constituency will have to access legal services only by telephone in a language that is not their mother tongue. I would find that unacceptable.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I remind colleagues that Front-Bench speakers will be called from 5.38 pm or thereabouts, so there is real pressure on time.

17:01

[Mrs Mary Glindon (North Tyneside) (Lab)]

First, I congratulate my hon. Friend the Member for Makerfield (Yvonne Fovargue) on securing the debate. Unlike her, I do not have any experience of giving legal advice or doing legal aid work, but I did benefit from the legal aid system many years ago when I successfully pursued maintenance payments for my daughter.

My reason for speaking in the debate is that I was alerted to the Government’s proposed reforms by a constituent of mine who practises as a solicitor in a well-respected law firm in Newcastle upon Tyne. She spelled out to me just how devastating the cuts would be for many of my most vulnerable constituents who need legal aid now or might need it in future. The Government claim that they want to be fair, but removing the right to help with legal costs from those who need it to obtain appropriate representation when they are making a legal challenge is overtly denying those very people a right to justice. Indeed, the chairman of the Bar Council of England and Wales, Nicholas Green, QC, has described the cuts as a “shrinkage of justice”.

Like many MPs, I have been contacted by a number of organisations on this matter, each making a case for retaining the £350 million in the legal aid budget. They were all concerned about the range of areas being taken out of scope because of the huge cut in funds being made towards 2014. The Law Society has stated that

“the civil legal aid scope cuts, in social welfare law, appear to be targeted against areas of law, which are most relevant to the poorest and most vulnerable members of society”.

That is borne out by the information I have received from the director of the citizens advice bureaux that operate across the borough of North Tyneside, serving the constituencies of both North Tyneside and Tynemouth. He advised me that the cuts to legal aid are a double whammy, as the Government have just announced the end of North Tyneside CAB’s financial inclusion fund from April this year. So, with cuts to legal aid, North Tyneside’s CAB will lose two and a half debt specialist posts and one and a half benefit specialist posts, and the end of the financial inclusion fund means that a further four and a half posts will go.

Last year, our CAB handled more than 72,000 cases. Staff dealt with cases involving £25 million-worth of debt, not including mortgages, and managed to write off £4.5 million-worth of that debt for local people. Furthermore, with work carried out on benefits this year, the CAB in North Tyneside is projecting benefit gains of nearly £900,000. In the light of those figures, it is easy to imagine the hardship that will be caused by the loss of funding that to date has made such a difference to constituents, whose only avenue of help is the legal aid route.

[Rehman Chishti]

On page 5.5 of the 2010 Labour manifesto, on which the hon. Lady stood for election, her party committed to

“find greater savings in legal aid”.

How does she intend to satisfy that commitment if she does not support the changes that the Government are bringing in?

[Mrs Glindon]

Our Front-Bench team do not deny that certain efficiencies had to be made. In fact, as was said previously, they committed money to help during the recession.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

The problem with the proposed cuts in legal aid is that they are wholly counter-productive. The Government may save money in the legal aid budget, but they will incur expenditure in other budgets. There are ways to save money in the Ministry of Justice budget, and I will touch on them in my speech.

[Mrs Glindon]

Mark Almond made it plain to me that the work carried out by the citizens advice bureau with the help of legal aid funding definitely helps the most vulnerable—those whose lives are the most chaotic, or who have literacy and other language problems. Self-representation, as proposed in the Bill, is a non-starter for that group of constituents.

In debt advice, private debt advisers are not the answer. The Government’s own study on private debt advice found that more than 80% of those businesses provide incorrect and inappropriate advice, often at a cost to the client, and that they refer clients to advisers who are, in fact, debt collectors. Do the Government really want to impoverish the poorest more by directing them down that path?

The most vulnerable would, again, not benefit from the proposed telephone helpline. In North Tyneside, it is estimated that fewer than 10% of citizens advice bureau legal aid clients would be able to access the system, because of literacy or language problems. Such a system could be considered only as an adjunct to the present system.

Through the work of Lord Carter’s review, the Labour Government made efforts to find savings, always with the aim of striving to protect social welfare law. Labour Members believe that savings could be found in other areas to continue that protection. As the director of North Tyneside CAB told me, although losing jobs and expertise is a massive problem, his biggest regret is that the changes to legal aid will fail clients. The coalition Government need to take heed of this debate and of the views expressed by the many experts who are making the case for the 500,000 people who will lose out as a result of the cuts. The cuts are not fair and definitely not just.

17:07

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

It is interesting to observe in the remarks made by those on both sides of the House that we are not talking about lawyers. As the hon. Member for Makerfield (Yvonne Fovargue) said in her opening remarks, this debate is more about trained, local, part-time and sometimes voluntary advisers who step in to help the vulnerable in need of advice. They work in citizens advice bureaux and other organisations in the voluntary sector and, in my opinion, although often not lawyers themselves, they are a rare example of legal provision at a low cost to the public purse.

I accept that reductions are necessary in expenditure and in the deficit that is, as we know, costing us £120 million a day—a point well made by my hon. Friend the Member for Broxtowe (Anna Soubry). I am sorry the right hon. Member for Exeter (Mr Bradshaw) is not in his place, as I am sure he would challenge me on that and we could have an interesting debate. However, as each of us has only a few minutes to speak, I will plough on. The problem with the proposed cuts is that they will be expensive in the long run and that, as set out, they will not do what the coalition Government have set out to do, which is to protect and help the vulnerable.

I represent a town, Hastings, that is wonderful in many ways but deprived in others. The unemployment rate is high at 5.6%, compared with a UK rate of 3.5%, and we need the support of agencies to advise those on low incomes and the unemployed. In my town, agencies have formed consortia to win social welfare law contracts. They have vocal and powerful advocates who have been to see me. I mention in particular Julie Eason and, from the citizens advice bureau, Dina Christadoulis. They have convinced me of the need for the service that they provide. The average cost of what they provide to clients is £200 or less. Even if what they do takes three times as long, that is the cost—it is really good value. We need to make cuts, but that area of the front line is not the place for them. We should not be taking social welfare out of scope.

[Stephen Timms (East Ham) (Lab)]

I agree with what the hon. Lady is saying. If legal aid is to be withdrawn as a source of funding for exactly the kind of work that she describes, does she accept that the Government really must find an alternative source elsewhere?

[Amber Rudd]

I am grateful to the right hon. Gentleman for that comment. I am speaking up on behalf of the agencies in Hastings precisely because I value the work that they do in helping the vulnerable there. I also make the point, as several Members have done, that removing the funding is not efficient for costs. He is absolutely correct that we need to find another source of funding in order to continue to protect those services.

The advice from those agencies is crucial to the clients, who in many cases cannot represent themselves. The agency I spoke with had kept records that showed clearly that 56% of its clients have a long-term illness or disability and that 68% have long-term mental health problems. I am worried that some of my most vulnerable constituents may really struggle to manage their casework and prepare for a tribunal hearing without the help of legal aid-funded services.

I welcome the simplified welfare system that the Government are working on. My right hon. Friend the Secretary of State for Work and Pensions has some excellent proposals that will be coming through, which I hope and believe will make the welfare system much simpler. Until then, we must recognise the situation we are in and acknowledge that errors are made and that vulnerable people who cannot represent themselves must be able to have some representation.

Another benefit of having agencies work with those clients is that they can recognise when there is no case. If we allow individuals to represent themselves entirely, some will clog up the tribunals. The agencies are very effective at discouraging people who do not have a case from progressing with it, so only the cases that merit the sort of attention that the clients are seeking actually get it. In Hastings, for instance, the consortia to which I have referred have not lost an appeal for a client for employment support allowance or incapacity benefit since last April, which is testament to their right choice of clients and their professionalism. Last year they provided a service to around 20,000 clients in my area, and collectively they have more than £270,000-worth of contracts, which represents more than half the advice sector in Hastings.

We all know that local government funding is under pressure, and a key element of the funding it provides is to citizens advice bureaux. Given the cuts to local funding and the proposals for legal aid, I am worried about the future viability of the agencies that do so much work and whose advice is critical in a town with above-average needs. The social welfare contracts account for only 4.5% of the total legal aid bill. The early intervention that they provide is critical; if the advisers get involved early, they can stop things escalating and stop individuals getting to the stage where they might lose their houses.

I urge Ministers to consider the costs and consequences of the proposed changes to legal aid. We need to find alternative sources of funding to support the agencies if they are no longer to receive funds from that source. I associate myself with the argument made by other Members that, unless we find alternative funding, those of us who, like me, are not lawyers will have to train up pretty quickly because of the size of casework that we will receive.

17:13

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

I congratulate my hon. Friend the Member for Makerfield (Yvonne Fovargue) on bringing forward this important topic for debate. For as long as I have worked in the community, legally aided lawyers and law centres have often been at the forefront of the fight for justice for marginalised groups who could not otherwise have made their voices heard. Those were often groups of people who were not necessarily getting help from their trade union, their councillors or their MP, because lawyers can often pinpoint issues, because of the cases coming to them, before they come to the attention of politicians. Because I know that so many legally aided lawyers and practitioners who work in citizens advice bureaux and law centres are often extraordinarily dedicated, I deprecate the tendency of Governments of all colours—my Government were just as bad—to talk about legal aid just in terms of the money going to lawyers. On the tendency to slide into talking about fat cat lawyers, I can say with confidence that, since the Carter reforms, nobody has made a fortune in legal aid law practice. [Hon. Members: “Hear, hear!”] I can hear hon. Members from both sides supporting me on that point.

[Rehman Chishti]

Prior to becoming a Member, I was a criminal barrister for a number of years, and, to confirm what the hon. Lady says, I must say that as a barrister at Crown court one would earn £40 for a mention and could be there all day. The idea that barristers or lawyers are fat cats is completely wrong, and I fully support what she says.

[Ms Abbott]

But sadly, when Governments of all colours consider legal aid, they seem to zero in on the lawyers and the money that they make, rather than the millions of people whom they help.

I repeat what Opposition Members have said about the potential of the reforms to undermine totally the law centre movement. Nobody who has seen people queuing outside their law centre for help could support any action by any Government which undermined that movement. I must add, however, that the legal aid reforms will also undermine the practice of many high street solicitors, who are often close to and help their community. A disproportionate number of them are black and minority ethnic solicitors, and I do not believe that the Government have fully considered how the reforms will undermine the structure for providing the legal advice, help and support on which communities rely.

Earlier, a Member said that one reason why people have recourse to lawyers is the inefficiency of the Department for Work and Pensions, to which I should add the inefficiencies of local councils and the immigration service and the inefficiencies and, sometimes, unfairness of education authorities. But what are we to do? We acknowledge the systemic inefficiencies in many parts of the public sector, but are we going to leave tens of thousands of people to suffer injustice and unfairness in order to save money in the short term on the legal aid budget?

I also want to address the limits of phone advice. Talking down a phone might be all well and good for people in wealthier areas, but in the inner city many people do not have English as their first language, and if English is their first language they might be inarticulate, afraid and inhibited. In 20 years as a Member, I have had to advise hundreds of thousands of people. Often, they come in and mumble about some issue or other, and only after carefully questioning them, looking them in the eye and showing them my sympathy do they tell me their real problem. If we submit such people to talking down a phone, we will find that their issues are completely lost. They will put the phone down, never having explained what they really wanted to talk about.

[Mr George Howarth (Knowsley) (Lab)]

My hon. Friend’s constituency and mine are different in many ways, but one similarity has been commented on repeatedly over the years: they both have high levels of deprivation. Does she agree that, if we take away access to organisations such as Kirkby Unemployed Centre, Merseyside Welfare Rights and Knowsley citizens advice bureau, those levels of deprivation—in her constituency and in mine—will go up?

[Ms Abbott]

There is no question but that they will go up, because we are talking not about frivolity, serial litigants or people who litigate for fun, but about people who have to go to law to obtain the basic rights and fairness that we in the Chamber take for granted. On the idea of people in communities in the east end of London picking up a phone, Ministers are not being realistic. They must not understand what happens in some parts of the country if they think that going on the phone is a substitute for dealing with somebody who is skilled, looks a person in the eye, can see that they are nervous, knows how to put them at ease and can really draw from them the issue at the heart of their problems.

Opposition Members understand the need to consider the whole administration of justice budget, and there is a lot to be said for encouraging people with marital disputes to try mediation first, rather than going to law. Indeed, I have never heard of a divorce case in which tempers were sweetened by the involvement of lawyers. I do not reject out of hand the notion of encouraging people in marital disputes to go to mediation, but there are other ways of saving money in the Ministry of Justice budget, notably the organisation of the courts. Hundreds of thousands of pounds are wasted every year when cases collapse because people do not turn up and things have not been organised properly. Let us consider saving money through the organisation of the courts before considering these ill-thought-out cuts in legal aid. Government Members have referred to the NHS. It is better to identify liability earlier and save all the costs in contesting cases where people know perfectly well that in the end they will have to settle in some form or fashion.

It is not enough for Ministers to say, “Labour’s spent all the money and that is why we’re doing this.” They have to understand that if we are serious about a big society and the role of Government, we have to ensure that the most deprived and marginalised communities have minimal protection, and part of that, in my mind, is access to justice and the rule of law. I sincerely hope, on behalf of my constituents and Hackney law centre, which is a tremendous organisation, that this is a genuine consultation and that Ministers will listen to some of the things that they hear in this Chamber this afternoon.

17:21

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

I echo the comments of the hon. Member for Hackney North and Stoke Newington (Ms Abbott) in her very proper analysis of the issue. This is not about lawyers; it is about access to justice. I am glad to see the Minister agreeing with those sentiments in the sense that the Government are not indulging in character assassination as regards practitioners in law.

There have been some excellent speeches. I pay tribute to the hon. Member for Makerfield (Yvonne Fovargue) for getting this debate the time that it deserves. I was happy to support her in her bid. I wish there were more time, as five minutes can hardly do the subject justice. It was a pleasure for me to take part in the Westminster Hall debate sponsored by the hon. Member for Westminster North (Ms Buck), who took part earlier. I do not propose to reiterate the points that I made in that debate.

I put on record my thanks to the Department for having answered some of the questions that I have been tabling about the breakdown of the costs of civil legal aid for the last year for which figures were available—2008-2009. The figure of £24.7 million in legal help for welfare benefit cases, as alluded to by my hon. Friend the Member for Broxtowe (Anna Soubry), is startling, and we should pay close attention to it. There is no doubt, as other Members have said, that there are serious deficiencies in the decision-making processes as regards benefit entitlements. I am utterly convinced that that large amount of money could have been saved if that system were more sound. I urge the Minister to work as closely as he can with the Department for Work and Pensions to ensure that it starts to take a share of the burden of the cost of representation.

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

Will the hon. Gentleman give way?

[Mr Buckland]

I am sorry, but I cannot take interventions on this occasion because I want to ensure that other speakers have their say. As I said, so much to talk about, so little time.

Let me pray in aid Wiltshire law centre in my constituency, which carries out debt, welfare and housing work. To put it bluntly, it is set to lose the vast majority of its income if these proposals are implemented. May I put in a plea to the Minister to work as hard as he can with all agencies of Government to ensure that places like Wiltshire law centre get some form of block funding to ensure that its valuable work continues? It is as fundamental as that. I am worried that if we lose that service, my constituents will have to travel a very long distance to get legal aid, because most private firms in Swindon now do not offer the services offered by the law centre.

I have spoken in the past about special educational needs and education law. I reiterate my plea to the Minister to ensure that when the education Green Paper is published in March the forms of alternative dispute resolution, whether it be mediation or other forms of ADR, are properly explored and set out so that the need for legal representation in those cases becomes a thing of the past.

I have drilled down as far as I can to find out why this country spends more per head on legal aid than other country. The National Audit Office paper on the procurement of legal aid observed that during its control period in the latter part of last decade, England and Wales prosecuted more than a million more people than any comparator country. We have to look at why we spend a lot on legal aid. I do not think that it is a problem. I think it shows that we take prosecution seriously. The only real comparison we can make is with other common law countries, and they do not prosecute as many cases as England and Wales. Comparisons with France are utterly irrelevant. The French spend five times more on the judicial system than us because of their inquisitorial process. We must focus on comparisons with other common law countries. The simple fact is that we litigate more in England and Wales. As I said, I make no apology for the fact that this country brings more prosecutions than any other country. That issue should be dealt with in other debates. It is a causal issue, rather than being about the symptoms that legal aid has to deal with.

On domestic violence, my plea to the Minister is that we work hard on getting the definition right. I suggest that it is not right in the Green Paper. We should be considering courses of conduct rather than individual incidents. I would be happy to work with him on that matter.

17:26

[Julie Hilling (Bolton West) (Lab)]

I join in the congratulations to my neighbour, my hon. Friend the Member for Makerfield (Yvonne Fovargue) on securing this debate on an issue that will adversely affect so many of our constituents.

Before Christmas, a woman came into my surgery in desperation. She was trying to extricate herself from a violent relationship. As is normal with such relationships, although she is now safe, her ex-partner continues to manipulate her and to exert his power by agreeing to things and then going back on his word. Even though she earns only about £20,000, she had been turned down for legal aid and was in a terrible situation. She was paying for a solicitor, but it had reached a point where she could not ask them to do anything else because she could not afford to pay them. As an ordinary person, she was terrified of running up debt, so she made sure that she paid all her bills immediately, even though that meant that she frequently did not have enough money to be able to eat. Of course, celebrating Christmas was out of the question. If the Government go ahead with their plan to reduce civil legal aid, my surgery will be full of people like that.

Bolton citizens advice bureau sent me a snapshot of an ordinary day at its drop-in service. On 11 January, its social welfare law drop-in service was open for six hours. Sixty-three new clients walked in off the street. That does not include the 31 people who went in for return appointments. If the proposals to reform legal aid had been implemented and if the Citizens Advice financial inclusion fund had been withdrawn, it would have been able to deal with only five or six of those people.

The stories of many of those people are heartbreaking and many of their cases involved an element of benefits, with claims being refused, delayed or wrongly calculated. Many of them did not have enough money to feed themselves or their children, such as the lone parent with three children who was receiving only £47.50 a week, or the lone father who had received no benefit for his 18-month-old and was told he would have to wait another four weeks for any money. A number of them were in imminent risk of losing their homes because of failed businesses. Some had employment issues and others had immigration issues. Whatever the issue, the common thread was that they went to Citizens Advice because they had nowhere else to go. They could not afford to buy legal support, unlike the people who were pursuing them. Their cases involved debt, wages that had not been paid and the refusal to pay benefits.

Surely, it is a mark of a civilised society that all people have access to legal justice. Surely, in 2011 we should not be returning to olden days when the poor simply had to accept what the rich and powerful did to them. Of course, the equality impact assessment states that females and black or minority ethnic people will be more adversely affected, and it cannot rule out a disproportionate effect on the disabled. The Government do not appear to be taking action to redress that.

My hon. Friend the Member for Makerfield talked about the financial cost of removing legal aid, but what about the other costs? What will happen to the lone father who is getting no benefit? Will his child go into care? What will happen to the person who loses their house? Will they go into emergency accommodation and have to be rehoused by the state? What about the long-term trauma of children caught up in the problems? Will they then fail in school and in their future life? The Government’s proposal is wrong, morally, ethically and financially.

Citizens advice bureaux and community law centres are the Government’s big society in action—a combination of volunteers and professionals working in partnership to provide a service for their communities. It is often the only service for those who are the most disadvantaged. Like every other voluntary group, however, the service costs. Even if projects are run entirely by volunteers, they still need funding for training and resources, premises and running costs.

I will not argue that legal aid needs no reform, but the proposed reform is supported by no one. Even the most commercial firm of solicitors says that it will have a detrimental effect on the most vulnerable in society. I say to the Government, please do not send us back to the days when justice was just for the rich and the privileged. I plead with them to rethink their proposals.

17:30

[Mr Brian Binley (Northampton South) (Con)]

I had hoped to speak for about 25 minutes, but I find that I have to cut my speech down to four minutes, so I shall be to the point and abrupt.

I wish to make a plea to the Minister about lawyers who fight against corporate, local government and Government bodies that are under serious pressure to make serious cuts and sometimes get things wrong to the detriment of the most vulnerable in our communities. I wish to set out a particular case to the Minister, because I believe that the Legal Services Commission is already taking action to cut expenditure sizeably, but should not be doing it in quite the way that it is.

I wish to talk about a company called Hossacks Solicitors, which is one of the 78 legal companies that fight on behalf of community services. It has done a tremendous job—I have been on the wrong end of it on occasions in the past. However, in 2010 the LSC, which had granted a contract to Hossacks to fight a legal matter, said that it had issued the contract in error. The company disputed that fact on the grounds that it had entered into a binding legal contract with the LSC. The LSC replied on 6 January this year, terminating the contract in its entirety. The company appealed and was told that the appeal would be heard within two weeks. It has now been told that it will not be heard until the end of March, by which time many of the budgets will be set and many of the cuts will be beginning to bite. That is too late for the vulnerable people Hossacks was going to represent.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Is the hon. Gentleman talking about a live case?

[Mr Binley]

No, I am not, because it has been stopped by the LSC.

I simply want the Minister to look into the matter to see how many more vulnerable people are being affected by decisions taken by the LSC that are premature given the debate that is currently going on.

[Anas Sarwar (Glasgow Central) (Lab)]

Will the hon. Gentleman give way?

[Mr Binley]

I really do not have the time.

I ask the Minister to come back to me on this matter, because it raises a matter of considerable concern that affects many people throughout the country. If the LSC is acting prematurely, it should be stopped until the debate is over and the consultation is finished.

I have finished within the time you wished, Mr Deputy Speaker.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

I call Karl Turner, who can take two minutes. You have to sit down at 5.35 pm, please.

17:33

[Karl Turner (Kingston upon Hull East) (Lab)]

Thank you very much, Mr Deputy Speaker. I start by congratulating my hon. Friend the Member for Makerfield (Yvonne Fovargue) on securing the debate.

In the two minutes that I have, I shall concentrate on the citizens advice bureau in my area. I met the chief executive, Lesley Thornley, on Tuesday, and she highlighted the real problems that she thinks the CAB will suffer from. There seems to be a triple whammy. First, the financial inclusion fund will be gone. Some 50% of the advice that the CAB in my area provides is debt management advice, and she is concerned about what will happen to the people affected as a result of that cut. Secondly, there are the real-terms cuts to legal aid, and thirdly there are the cuts to the local authority, which she tells me will lead to 42% cuts to her CAB. She highlighted the fact that the Birmingham CAB is closing as a result of cuts, and she is very worried that the CAB in my area will also close.

I have spoken on numerous occasions to solicitors in my area, including very recently to Mr Waddington of Williamsons solicitors. He tells me that this issue is about access to justice. Publicly funded lawyers do not go into the job to earn big sums of money, just as teachers do not go into teaching to do so. Will the Minister ensure that he looks very seriously at the proposals? Vulnerable people will suffer as a consequence of the Government’s programme.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I will ask that your short speech does not count against you in relation to the number of times that you have spoken.

17:35

[Mr Andy Slaughter (Hammersmith) (Lab)]

I congratulate my hon. Friend the Member for Makerfield (Yvonne Fovargue) on securing this debate, which has been an excellent example of Back-Bench debates focusing on an issue that is causing great concern in constituencies around the country. We have heard many good speeches from both sides of the House.

It is appropriate that Members on both sides of the House speak in defence of legal aid, because it was on the recommendation of a Committee headed by a Conservative peer Lord Rushcliffe that legal aid was first proposed in 1943, and it was a Labour Government and a Labour Attorney-General, Sir Hartley Shawcross, who piloted the Legal Aid and Advice Act 1949 through Parliament. The Secretary of State for Justice says that he wishes to return to the original intent of legal aid, but the original intent of legal aid is captured in paragraph 40 of Magna Carta:

“To no one will we sell, to no one deny or delay right or justice.”

Those were the very words that Sir Hartley Shawcross had in mind when he said on Second Reading of the 1949 Act:

“It is a Bill which will open the doors of the courts freely to all persons who may wish to avail themselves of British justice without regard to the question of their wealth or ability to pay.”—[Official Report, 15 December 1948; Vol. 459, c. 1221.]

The Government’s Green Paper presents their plans as a return to the founding intent of legal aid, but they are in fact the exact opposite. They will remove the average person’s ability to seek justice.

I wish to focus on the cuts that will cause most damage—those to social welfare legal aid—but that is not to say that there are no problems with other aspects of the Government’s proposals. The narrow definition of domestic violence cases will leave women and children vulnerable and less able to seek help; the failure sufficiently to address the costs of very high-cost criminal cases is a mistake and a missed opportunity; and taking clinical negligence out of scope, alongside proposed changes to civil litigation funding, will end the ability of many people to challenge negligence and malpractice. However, it is the cuts to social welfare legal aid that we find most unacceptable. They will result in the complete collapse of the social welfare advisory sector, and do so, ironically, at huge cost to the state.

In the short time that I have, let me give five reasons why those cuts are wrong. First, the advisory sector will all but disappear. The Government propose to eliminate almost all legal aid for social welfare, including legal aid for debt, housing, education, welfare, employment and immigration cases. They will cut funding for many advisory services, such as citizens advice bureaux and law centres.

[Jeremy Corbyn (Islington North) (Lab)]

Is my Friend aware that the High Court this week found in favour of the Mary Ward centre and other voluntary organisations that were threatened with a huge cut by London Councils on the ground that inadequate equality assessments were made in advance of the proposed cuts? That is a taster of what is to come if the Government try to put those cuts through.

[Mr Slaughter]

Absolutely. I pay tribute to the Mary Ward centre, which I visited recently with Lord Bach, and to many other law centres around the country that do such sterling work.

The cuts to law centres and citizens advice bureaux come alongside cuts to the financial inclusion fund and local authority funding. Hammersmith and Fulham community law centre, where I have been a member of the management board for 20 years, has lost all its local authority funding, and will, if the Government’s equality impact assessment is to be believed, lose 90% of its Legal Services Commission funding. Most law centres around the country and many citizens advice bureaux and private firms will be forced to close. Remaining citizens advice bureaux will find their ability to provide services considerably diminished, particularly those in areas of greatest deprivation. The knowledge, talented advisers and high-quality service that are provided at far below the market are irreplaceable.

The second point is that the most vulnerable will be hurt at a time of great economic turmoil. Let us consider the people served by those organisations I have just discussed. The Ministry itself estimates that 85% of legal representation and 80% of legal help is for individuals within the bottom income quintile. People with mental health problems and other disabilities experience much higher rates of unemployment, debt, homelessness and discrimination and will therefore be disproportionately affected. The disabled are twice as likely to live in poverty as the non-disabled. According to Mind, many callers are profoundly distressed and unable to explain their problems clearly. They find it traumatic to discuss those problems with a stranger over the phone and need face-to-face contact.

Thirdly, the Government overstate the ability of people to navigate the legal system without advice or guidance. The Green Paper misrepresents the reality of tribunals, and ignores the fact that the law is ever changing and highly complex. Without specialist advice, many claimants would be unable to prepare a case for first-tier, let alone upper tribunals. Representation before court and in court streamlines the legal system and makes it more efficient. These cuts will deepen the existing inequalities of arms and lead to injustice—and also to great inefficiency in the civil legal system. Without representation, appellants are more likely to request an adjournment, get things wrong, achieve less fair outcomes and therefore go on to appeal—all of which cause delays and costs.

Fourthly, the alternatives suggested by the Government are inappropriate or inadequate. The Minister says that people should seek advice from tribunals, respondent organisations themselves or the pro bono sector. The first two options have been greeted with incredulity. As for the last, the Free Representation Unit—the largest pro bono organisation in the UK—said in response to the Green Paper that it

“gives a misleading impression. It wrongly uses the role of FRU to support its conclusions. The work that FRU does can…be no part of the justification for withdrawing Legal Help in this area. FRU is in no position to replace the invaluable work of publicly funded solicitors, law centres and Citizens’ Advice Bureaux in giving initial advice.”

That is right. The pro bono sector cannot exist in its current form without the infrastructure of the advisory sector.

The fifth and final reason why these cuts are wrong is that the Government’s sums do not add up. People who cannot resolve their problems often accumulate more problems and end up in cycles of decline, including social exclusion, eviction, unemployment, stress and depression, relationship and family breakdown. Children whose families are experiencing social problems are more likely to become involved in truancy, exclusion and offending. Early resolution saves time and money in identifying meritorious cases to take to court and preparing clients appropriately, and settling out of court where possible. Once someone is already homeless it costs the state tens of thousands of pounds to get them out of that situation. Just at first-tier tribunal stage, Government figures show that had the proposed cuts been in place last year, more than 51,000 cases that were successful would not have been, due solely to a lack of advice and representation.

The Green Paper is filled with inaccuracy, imprecision and outright fallacy. The sums do not add up, and it will lead to the disastrous loss of many of the CABs and law centres that are—to quote the excellent article by the hon. Member for Maidstone and The Weald (Mrs Grant) in today’s Guardian—the “last line of defence” against catastrophe for the tens of thousands of people they help every year.

Yesterday, someone who has spent much of their professional life providing legal assistance to those who cannot afford it asked me why no one has yet put this question in terms of the rule of law. A civilised society is one that encourages its decisions to be challenged and that understands that no decision can be beyond reproach. The legal aid system ensures that citizens can seek and gain justice, and that their lives are not placed into turmoil simply because they lack the means to challenge the decisions of large public and private corporations. That is the question that should haunt anyone who seeks to make such devastating cuts to a service that rightly makes us proud.

As for those outside this Chamber who have dedicated themselves to helping the most vulnerable navigate an often bewildering legal system, I join many of my colleagues in thanking them for all that they do for our country. They are the embodiment of the kind of civil society in which Labour has believed for so long. Many give their time for free. Others have accrued decades of valuable experience, with unique insight into the communities they serve, and I encourage them to make their voices heard. If their voices are not heard now, and if the stories of those whom they help are not heard, this Government intend to silence them for ever. They should be assured that we will stand alongside them, our voices will join with theirs, and together we will resist these acts of sheer vandalism.

17:44

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

I congratulate the hon. Member for Makerfield (Yvonne Fovargue) on securing this important debate, in which we have heard many excellent contributions.

It has been helpful to hear first-hand from those who have contributed today, but before responding to some of the specific issues raised, of which there were many, I would like to reiterate the rationale and context of the reform proposals. I should say at the outset that the Government strongly agree with the views expressed by many Members today that access to justice is a hallmark of a civilised society, and that the provision of legal aid, in a targeted, focused and sustainable way, is a key part of ensuring appropriate access to justice. So I say to the hon. Members for Dwyfor Meirionnydd (Mr Llwyd), for Hackney North and Stoke Newington (Ms Abbott) and for Bolton West (Julie Hilling) that our aim is to direct our scarce resources towards helping the most vulnerable.

As hon. Members will know, the Government have pledged to reduce the budget deficit to deal with the acute financial crisis and encourage economic recovery. The Department has to reduce its budget by £2 billion by 2014-15, and legal aid, being one of just three big areas of spending in the Ministry of Justice, needs to make a substantial contribution of £350 million to that reduction. However, the need to make savings gives us the impetus and urgency for change and provides us with the opportunity radically to reform a system that, in many cases, needed reform anyway. To that extent, I agree with the right hon. Member for Exeter (Mr Bradshaw) that our policy cannot simply be determined by how we deal with the deficit.

In June, we announced that we would be taking a fundamental look at the legal aid system. Our aim was then, and remains now, to create a stable and sustainable system that ensures access to public funding in those cases that really require it, the protection of the most vulnerable in our society and the efficient performance of our justice system. This also reflects the aim of creating a more efficient legal aid system as set out in the coalition Government document. Since the modern legal aid scheme was established in 1949, its scope has been widened far beyond what was originally intended. By 1999, legal aid funding was available for virtually every type of issue, including some that should not require any legal expertise to resolve.

[Mrs Grant]

Will the Minister give way?

[Mr Djanogly]

I would love to give way, but with so many points having been made, I cannot. I apologise.

I believe that that has too often encouraged people to bring their problems before the courts even where the courts are not best placed to provide the best solutions, and discouraged them from seeking simpler, more appropriate remedies. I would like to take this opportunity to congratulate my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) on her excellent article this afternoon.

Indeed, the scheme now costs more than £2 billion a year, making it one of the most generous schemes in the world, even taking jurisdictional differences into account. We need to understand that, even after the proposed reforms, we are still going to have one of the most expensive schemes in the world. The previous Government made many attempts to reform legal aid, conducting more than 30 consultations since 2006, but the changes were of a piecemeal nature and failed to address the underlying problems. Rather than continue with this “cut and come again” approach, we have gone back to basic principles to make choices about which issues are of sufficient priority to justify the use of public funds, subject to people’s means and the merits of the case.

The Opposition’s general position on legal aid is staggeringly inconsistent and opportunistic. Labour appears to be backing down on its commitment to support legal aid reform. In an article on Left Foot Forward, the shadow justice Minister, the hon. Member for Hammersmith (Mr Slaughter), wrote:

“It is nonsensical…to cut these long established public services.”

The article seems to reveal a split between the shadow Justice team and its party leader, who said at a recent press conference that with regard to the reductions in legal aid

“Labour has shown it is ready to make difficult cuts which we believe are necessary for the long term health of our economy.”

Its leader was, of course, reiterating the promise made in the 2010 Labour manifesto:

“We will find greater savings in legal aid”.

It also contradicts the statement of the right hon. Member for Tooting (Sadiq Khan) offering support to the Government when the reforms were announced last year. He said:

“Let me be clear: had we been in government today, we, too, would have been announcing savings to the legal aid budget. That is a reality that we all have to acknowledge.”—[Official Report, 15 November 2010; Vol. 518, c. 663.]

[Mr Slaughter]

Will the Minister give way?

[Mr Djanogly]

I think I do have to give way on this one.

[Mr Slaughter]

I think the Minister does, now that he has read out the central office briefing. I urge him either to read the shadow Lord Chancellor’s article in the Solicitors Journal today, or even my speech in Westminster Hall before Christmas, which he would have heard had he turned up for it. If he does, he will see exactly where we would make the cuts and that we have made it clear throughout that we would not cut essential social welfare legal aid.

[Mr Djanogly]

I am pleased to hear some clarification of what the Opposition are not going to do; perhaps the hon. Gentleman will come back to the House to tell us what they are going to do, so that we can take a view on where they are coming from on this issue, because they have been thoroughly unimpressive to date.

[Jeremy Corbyn]

Will the Minister give way?

[Mr Djanogly]

No, I will not.

The proposals in our consultation paper take into account the importance of the issue at stake, the litigant’s ability to present their own case, the availability of alternative sources of funding and alternative routes to resolving the issue, as well as our domestic and international legal obligations. I should also point out that the consultation is still open, and that I am therefore here to listen to hon. Members’ views rather than to agree or disagree with any particular view.

We propose to focus financial support, and legal advice and representation, on those who need it most. The proposed reforms involve significant change to the scope of legal aid funding. Having said that, I should make it clear that we are not proposing any changes to the scope of criminal legal aid, and that legal aid will also still routinely be available in civil and family cases in which people’s life or liberty is at stake, or in which a person is at risk of serious physical harm or immediate loss of their home. For example, I can confirm to the hon. Member for Westminster North (Ms Buck) that we plan to retain legal aid for asylum cases, but not for immigration cases, except when the person is in detention.

Legal aid will also be retained for debt and housing matters when someone’s home is at immediate risk, and for mental health cases. It will still be provided when people face intervention from the state in their family affairs that could result in their children being taken into care, and for cases involving domestic violence, child abduction or forced marriage. We also propose that legal aid should remain available for cases in which people seek to hold the state to account by judicial review for the most serious claims against public authorities. We shall also keep it for cases involving discrimination that are currently in scope, and for community care cases where the recipients are often very elderly and vulnerable.

Many hon. Members raised the question of telephone advice. Although that will provide a gateway, it will not stop face-to-face advice being given when that is appropriate. It will facilitate the more effective sourcing of services and help the disabled. People will be able to ask to be called back, as is currently the case, so the cost would be low. I should like to tell my hon. Friend the Member for Aberconwy (Guto Bebb) that we believe the telephone advice will assist people in rural areas, and that language translation will be catered for, particularly for Welsh speakers. The service currently has a satisfaction rating of more than 90%, so we see it as a very good service.

We recognise that there will be some cases, even within the areas of law that we propose to remove from scope, that international or domestic law will require to be funded by the taxpayer, or inquest cases where there is a significant wider public interest in funding legal representation. We therefore propose a new exceptional funding scheme for excluded cases. We also consider that the long-drawn-out, acrimonious nature of court proceedings too often exacerbates disputes rather than solve them. Alternatives often exist that are not only cheaper than rushing to court but faster and less contentious. So we will continue to provide funding for family mediation, to encourage people to use this more effective method to resolve issues between themselves, rather than using up precious taxpayers’ money and the courts’ time.

Of course, mediation is only one alternative to court proceedings. Work is going on across government to change our litigation culture and encourage alternative and less acrimonious dispute resolution. For example, the Government are currently seeking views on measures to achieve more early resolution of workplace disputes through ACAS conciliation, so that all parties have a chance to resolve their own problems in a way that is fair and equitable for both sides, without having to go to an employment tribunal.

Likewise, the Department for Education is looking into involving parents in early discussions and decisions about the special educational needs support that they need, so that they do not have to battle through the tribunal process. I think it was the hon. Member for Westminster North who said that 82% of appellants in SEN matters succeeded in their appeals. I should point out to her, however, that just 18% of parents are currently legally represented in those appeals.

On eligibility, we are not changing the criminal means-testing introduced by the previous Government. In civil cases, however, we believe that those able to pay for or contribute to the costs of their case should do so. This will help to ensure continued access to public funding, in those cases that really require it, for those who have little or no funds of their own. The consultation paper therefore includes the proposal that all clients with £1,000 or more of disposable capital should make a minimum £100 contribution to their legal costs, and that the capital of any prospective legal aid clients is taken into account when considering eligibility. We believe that this will encourage a greater sense of personal responsibility by giving clients a greater financial interest in the conduct of their case, as well as helping to discourage unnecessary litigation at taxpayers’ expense.

Many Members, including the hon. Members for Makerfield, for Westminster North, for Kingston upon Hull East (Karl Turner) and for North Tyneside (Mrs Glindon), the right hon. Member for Exeter and my hon. Friends the Members for Hastings and Rye (Amber Rudd) and for South Swindon (Mr Buckland), made points about the highly valued not-for-profit sector. Having frequently met the CAB, Shelter and other voluntary groups, I appreciate that the not-for-profit sector has particular concerns, but the important point is that this issue goes way beyond legal aid. Indeed, funding from legal aid represents a minority of many CABs’ income—we believe only about 15% of CABs’ income comes from legal aid—and many do not receive any legal aid income at all; the three CABs in my constituency receive no legal aid money, for example. That is because the basic role of CABs is to give general advice, not necessarily legal aid advice, as they have been allowed to do only for the past 11 years. The problem, however, for those that do give legal advice is that legal aid funding will often merge with other funding streams. CABs are funded mainly by local councils and the Department for Business, Innovation and Skills centrally, and removing one stream could have a knock-on effect, but that does not make it wrong for us to be unwilling to pay legal aid for general advice.

The reality is that the funding streams have been in conflict for years, and effort and services have been duplicated and resources wasted, although the previous Government never sorted this out while their money machine was pumping away. We have recognised this problem, and I am pleased to be able to say that we are working closely with the Cabinet Office-based Office for Civil Society, which will look at this important issue across Government. To answer a question from my hon. Friend the Member for Carshalton and Wallington (Tom Brake), I should say that transitional funding may be available.

We certainly see an important role for not-for-profit organisations in the advice sector. The coalition Government support such organisations, including CABs, and as my hon. Friend the Member for Broxtowe (Anna Soubry) said, we hope that local government will share our view that they play an integral part in civil society. I am also happy to look at the issue raised by my hon. Friend the Member for Northampton South (Mr Binley).

The hon. Members for Makerfield and for Westminster North, my hon. Friend the Member for Hastings and Rye and others spoke about welfare benefits. We recognise that some people find publicly funded legal advice and advice on welfare benefit matters helpful. However, the user-friendly nature of the tribunal means that appellants can generally present their case without assistance. More particularly, the issues raised are normally ones that should be dealt with by general advice, not legal aid. When I visited a law centre recently, I was shocked to hear that local benefits officers were sending people to the law centre for advice on what benefits they could claim. This is a bizarre situation, and it is not going to be solved by throwing legal aid money at the problem.

[Several hon. Members]

rose—

[Mr Djanogly]

I am afraid to have to tell hon. Members that I have run out of time.

This debate will continue, as will the consultation. I can honestly say that we are looking forward to receiving the consultation responses of Members and all other respondees.

17:58

[Yvonne Fovargue]

I thank all the Members who contributed to the debate. Some good and passionate points were made on both sides of the argument. Legal aid has been called the fourth pillar of the welfare state, and I urge the Minister to listen and take on board some of the points that have been made, and not to cut into the legal aid budget so deeply that the whole building collapses, leaving Members to pick up the pieces in their surgeries.

Question put and agreed to.

Resolved,

That this House has considered the matter of the reform of legal aid.

[Bob Russell (Colchester) (LD)]

On a point of order, Mr Deputy Speaker. The Independent Parliamentary Standards Authority, whose leadership heads the most incompetent quango in the country, has today published a “name and shame” of Members of Parliament who, in its mind, have made claims to which they were not entitled. Among those names is mine, but I have to tell the House that the payment was made to me in full on 13 December. IPSA knew that. Admittedly, it took two months to pay, but it acknowledged that the claim was legitimate and it was paid. However, my name appears in a list of those who had a claim refused. What action can be taken by Members who have been maligned—one could argue libelled and slandered—by this incompetent organisation?

[Mr Deputy Speaker (Mr Nigel Evans)]

I believe that the hon. Gentleman is a member of the Speaker’s Panel on IPSA, and I am almost tempted to ask him to refer this matter to himself, but I will not do that. He knows that the matter that he has raised is not a procedural point for the Chair, but he has put his views on the record and he knows that there are other ways of taking the matter further.

STV

Thursday 3rd February 2011 Commons Chamber

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

18:00

[Anas Sarwar (Glasgow Central) (Lab)]

I am grateful for the chance to speak about an issue that is of great importance to the city of Glasgow and to Scotland. The challenge of jobs and growth will be a defining political issue in the coming year. People want to know where new jobs and future prosperity will come from. Those in the private sector, who must create the jobs and wealth that Britain needs, will want to know whether everything that could be done is being done to support their efforts. They will want to know whether our Government are making the right choices on jobs and growth, and the right choices for the future of Britain.

One such company already asking those questions is STV Productions in my constituency. STV Productions is one of the few businesses of scale in the Scottish television production sector. It is a hugely important part of the Scottish creative industries cluster and a key employer in Glasgow’s thriving media hub on the banks of the River Clyde. The growth of STV Productions can help to secure and develop a thriving, sustainable television production sector in Glasgow and throughout Scotland, delivering significant economic, social and cultural benefits. The growth of STV Productions will also secure and create much-needed private sector jobs.

The Chartered Institute of Personnel and Development says that the impact of Government spending plans will mean a 200,000 drop in employment this year. Under those headlines are larger numbers of job losses. PricewaterhouseCoopers calculates that public sector cuts will lead directly to around 500,000 private sector job losses over the spending review period. The CIPD has previously said that 1.6 million jobs could be lost, with the increase in VAT estimated to cost 250,000 jobs. Jobs will be created in the recovery, but the challenge to replace all the jobs lost through public spending cuts, as well as those lost as a result of the unemployment remaining after the global banking crisis and the impact of VAT, will be huge. The jobs that Britain needs can be created only by successful and growing private companies. They need the confidence and certainty that will justify their investing. Public policy must be focused relentlessly on creating the conditions for growth. Today the Government are making a series of wrong choices that will hamper the ability of private companies to grow.

Last November, the Secretary of State for Culture, Olympics, Media and Sport made a choice that denied STV Productions the independent status that it sought. Officially classifying STV as an independent television production company would have allowed it to compete for programme commissions under production quotas reserved for independents by broadcasters such as the BBC and Channel 4. In short, independent status would have offered STV Productions the chance to create employment opportunities in Glasgow. Ofcom broadly welcomed STV’s aspirations, saying that independent status would encourage greater access to network commissioning by external producers. Meanwhile, Ofcom’s advisory committee for Scotland endorsed the broad policy position of ensuring that television production be enhanced in the nations. The Secretary of State decided to overlook that advice and to deny STV independent status.

STV Productions currently supports 305 full-time equivalent jobs. The company’s combined direct, supplier and income impacts stand at £15.3 million of gross value added in the Scottish economy. If STV Productions maintains its current market share in 2016, its economic impact will increase to 317 jobs and £15.9 million in GVA.

[Ian Murray (Edinburgh South) (Lab)]

I congratulate my hon. Friend on securing this important debate on Scottish television. It is a shame that we could not have a motion of no confidence in the Government right now, given that there is nobody on the Government Benches, but I know that that is not the way procedure works. My hon. Friend is eloquently outlining STV’s contribution to the economy. Independent producer status would allow that contribution to grow even further, leading not just to STV’s growth, but to the growth of the entire production sector in Scotland, helping it to branch out from its hub in Glasgow to many other parts, including my constituency.

[Anas Sarwar]

I thank my hon. Friend for staying for the debate. I agree wholeheartedly with his comments. Independent status would not only benefit STV, create jobs in the company and create growth in the city of Glasgow, but help other independent production companies in Glasgow and throughout Scotland to branch out in many of the sectors involved.

Had STV Productions gained independent status, its competitiveness would have increased in the BBC market and other domestic and international markets. By 2016, such an increase in competitiveness could have increased its economic impact by 30% to 396 jobs and £19.8 million in gross value added. However, as a result of the Secretary of State’s decision, the economic impact of STV Productions in 2016 is expected to be £3.9 million less than it could have been.

The provision of 79 full-time equivalent jobs would have been great in itself, but as was pointed out by my hon. Friend the Member for Edinburgh South (Ian Murray), independent status for STV Productions would also have had an effect on the economic impact of the wider production sector in Scotland. The growth of a company of scale would have led to an increase in the competitiveness of the sector as a whole., and that increased competitiveness could have allowed independents with Scottish headquarters to compete against international production companies with a presence in Scotland. By 2016, the resulting growth could have increased the economic impact of the sector as a whole to £98 million and supported 1,847 jobs. That is private sector growth on a scale that the Government cannot afford to ignore.

The Secretary of State could have secured a bright future for the independent production sector in my constituency and beyond. Instead, his decision will allow independents with headquarters outside Scotland to gain at the expense of the growth of STV Productions and those with headquarters in Scotland. The overall effect will be a reduction in the future economic impact of the television production sector in Scotland. The decision fails to recognise that STV is perhaps the only Scottish company with sufficient capacity to take on such large-scale productions. It fails to show a full understanding of the measures needed to secure a viable and sustainable broadcasting industry in Scotland. Above all, it fails to encourage private sector job creation in my constituency and throughout Scotland.

The creation of a strong and competitive private sector must be central to the society that we are trying to build. We must support people who are in business and leading businesses. We need growth and job creation over the next year, but we also need to lay the foundations for a stronger, better balanced economy in the future.

I recognise the concerns of smaller independent production companies in Glasgow and in Scotland as a whole, and I accept that STV Productions will have to address many of those concerns if it wants independent status, but I genuinely believe that all independent production companies—including STV, if it could acquire its licence—would benefit from the resulting growth in the sector.

I want to see companies such as STV Productions grow, create more profits and create more jobs. With that in mind, I invite the Secretary of State, along with his colleagues, to visit STV Productions in the beautiful city of Glasgow, on the banks of the River Clyde, and to review his decision. That would benefit my constituency, the city of Glasgow and Scotland as a whole.

18:08

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)]

Let me begin by apologising for the absence of the handsome and talented Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), who is responsible for culture, communications and creative industries, whose portfolio is relevant to the debate, and whom Members may have expected to see this evening. Many Members will be delighted to learn that the reason for his absence is the fact that he is in Scotland as we speak. He has been in Edinburgh to discuss broadband, and then in Dundee to discuss the video games industry. However, I welcome the opportunity to debate this issue with the hon. Member for Glasgow Central (Anas Sarwar) in his stead.

[Anas Sarwar]

Will the Minister give way?

[John Penrose]

I will, although I have hardly got started.

[Anas Sarwar]

Given that the other Minister is currently in Scotland, he might like to extend his visit to Glasgow. I am sure that I could hastily organise a visit to STV Productions tomorrow, or even late this evening, if he so wishes.

[John Penrose]

I am sure that that is a kind and heartfelt invitation, but I suspect that it may have come rather late in the day, given the state of the Minister’s diary. None the less, I will make sure that he is aware that the offer was made. In addition, an earlier intervention claimed that nobody was on the Government Benches, but given that I was sitting there large as life feeling like chopped liver as I was stared through by the hon. Member for Edinburgh South (Ian Murray), may I put on the record the fact that there were people here listening very intently to the comments that the hon. Member for Glasgow Central (Anas Sarwar) was making?

One of the key strengths of UK broadcasting comes from having a TV production base spread out across the nations and regions of the UK. That ensures that a more diverse collection of views and voices are reflected back at all aspects of the audience through their TV screens. As well as the considerable cultural and social benefits to the population, the arrangement enhances national, regional and local economies. The Government recognise that much of the country’s best television comes from the nations and regions, and we welcome the contribution that STV, in particular, makes towards public service broadcasting in the UK. STV’s local news, in particular, is extremely strong and we welcome STV’s recent announcement of a pilot to deliver more local TV news for the west and east of Scotland. That builds on the launch of its STV Local sites and shows a real commitment to serving audience demand for more localised and relevant content.

On a related note, hon. Members will be aware that the Government published their local media action plan in January. I wish to reiterate that the Government are keen to hear the views of industry and the public on our proposals, and to receive expressions of interest from organisations interested in running a new network channel to support local television services. Local media is a vital part of local democracy and I encourage everyone with an interest to respond to the public consultation.

I now return to the meat of today’s debate. STV is important but of course so too are the independent producers in Scotland. As the hon. Member for Glasgow Central mentioned, the Secretary of State considered thoroughly last year the matter of the potential reclassification of production companies owned by Channel 3 licence holders. That consideration took into account the responses from 29 organisations, including the Producers Alliance for Cinema and Television, Ofcom, the Scottish Government, STV, Channel 4 and several Scottish independent television producers. The responses covered a variety of viewpoints, but the voice of the existing Scottish independent sector was loud and clear in opposing the reclassification of STV’s production companies as independent producers.

The consultation closed on 2 February 2010 and the Department for Culture, Media and Sport announced the Secretary of State’s decision on 10 November 2010. I believe that the hon. Gentleman understands that the delay occurred because once the Secretary of State took office in May 2010 he wanted to look afresh at the proposal in the “Digital Britain” White Paper and the responses to the public consultation. It is important to make it clear that this decision was not taken in isolation and was not taken lightly. As we have seen in today’s debate, there are genuine and valid opinions on both sides of the argument. The Secretary of State concluded that, on balance, the potential benefits of implementing the proposal did not outweigh the likely negative effects, particularly on the existing Scottish independent production sector.

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

I realise that this is not the Minister’s direct brief, but does he appreciate that the point made by PACT in response to the consultation misses the fact that if STV does not have this status, there is not the scale for the large-scale independent production to take place in Scotland? STV getting this status would actually help the other independents, rather than hinder them.

[John Penrose]

I plan to deal with some of the remarks made by PACT later in my speech. I am sure that the hon. Gentleman is right about part of its remarks, but we have to take into account not only its remarks in their totality, but all the other remarks and consultation submissions made in response to the Government’s request.

The Secretary of State believed it inappropriate to consider this matter in isolation, given the wider and more comprehensive review of public sector broadcasting and regulation that the Government are undertaking over the term of this Parliament. On that basis, he concluded that the proposal should not be taken forward. The Government appreciate that this decision will not be welcomed by everybody. Implementation of the proposal was not, however, in the interests of the Scottish economy as a whole, nor was it likely to promote competition or diversity of production in the long run.

The responses to the public consultation are published on my Department’s website, but I wish to highlight some of the specific points raised by the existing independent production sector. They perhaps deal with some of the interventions that have been made, and they highlight the concerns raised and give some background to the decision.

Many respondents were concerned about the displacement of commissions from the existing Scottish independent production companies to STV. PACT said:

“There is significant risk that the proposed change in the definition would potentially severely damage the Scottish production sector by displacing commissions from other Scottish producers”.

Its contribution expanded on this by saying that

“our main concern, though, is that STV will displace commissions not from London companies but from other, typically smaller Scottish independents, with the resulting damage to the Scottish production sector. The last five years have seen the growth of larger, typically London-based independent companies. However, with a few exceptions, Scotland remains characterised by small companies specialising in one or two genres. A 2008 report, for example, indicated that average turnover for an independent company in Scotland was just £1.33m per year.”

[Ian Murray]

On PACT’s point about the sector in Scotland being characterised by small production companies, the issue for Channel 4 in trying to commission more programmes from Scotland to try to get its percentages up—everyone in Scotland is keen that that should happen—is that there is not sufficient critical mass up there to produce something that Channel 4 could do on a returning basis to achieve that. The only organisations that could do that are the BBC, which cannot do it for licensing reasons, and STV Productions, which cannot do it because it does not have independent producer status, so there is a bit of circular argument on this issue.

[John Penrose]

I appreciate the hon. Gentleman’s logic, but the burden of what PACT has said is that the danger of giving STV independent production status is that it would cannibalise existing Scottish independents and we would end up with a much smaller number of larger producers, with STV massively in the lead. That is a possible outcome, but clearly the Secretary of State, in balancing what he was asked to consider, did not view it as strongly as some of the alternative outcomes.

[Anas Sarwar]

In our discussions with Channel 4, we found that it has set a target of increasing its spending on the independent sector in Scotland from 3% to 9%, but it has emphasised that it feels that only STV is currently able to provide the required quality of programming and expertise. Does the Minister recognise that it is a bit of a myth that STV would be the largest independent production company in Scotland if it were to get independent status, given that there are independent companies in Scotland that were previously owned by Warner Bros. and are now owned by Endemol—an independent-sector producer that is even larger than Channel 4?

[John Penrose]

The hon. Gentleman advances the argument that only STV has the scale to achieve the kind of programming status and quality that everybody wants, but surely, the existence of other very large independents must undermine the logic of that position in the first place.

Let me make some more progress on other comments in the consultation. La Belle Allée Productions considered that there would be

“a real and significant danger of STV displacing commissions from other Scottish companies”.

IWC Media believed that there is a “significant risk” that the proposal

“would damage the Scottish production sector, by removing work from the companies that need it most”.

Matchlight said that the proposal would

“substantially harm other, smaller Scottish producers by displacing jobs and network productions from them in favour of STV and the overall effect will be a zero sum game for Scotland—no new jobs created, no new work attracted”.

Tattiemoon also disputed that the reclassification would create any jobs. Its response said:

“To believe the claims that this change in status would result in the creation of more jobs for our industry would be a terrific mistake and one that we cannot afford to make. STV are aiming to adjust their position in order that they can have more control of our industry and compete in an incredibly unfair manner with other programme makers”.

Doubt was also expressed about the overall cultural benefit to Scotland. Tattiemoon said:

“Here we have STV as a broadcaster breaking all the rules to become an independent for fiscal gains and not for the overall cultural well being of the nation”.

Turmeric Media focused on funding, training and development opportunities and asserted that STV would

“exploit many of the excellent funding, training and business development opportunities that exist in Scotland that help small indies survive, again to the detriment of the small indie”.

Many independent producers made general comments about the potential negative impact on the industry generally. Bees Nees believes that

“The granting of independent status to STV...would be to the detriment of the independent production sector in Scotland.”

Matchlight believes that the proposal

“seems more likely to frustrate the Government’s stated objective of protecting Scotland’s sustainable production base than to promote it.”

I will add one more quote, if I may, Mr. Deputy Speaker. Mike Bolland, a former chair of PACT, told us the proposal

“would upset the delicate ecology of television production in Scotland”.

[Anas Sarwar]

The Minister is rightly quoting those who participated in the consultation process, but is he willing to quote also what Ofcom said in its response—it agreed with the proposal for independent status for STV—or what the Scottish Government said about STV Productions having a role to play in the Scottish economy?

[John Penrose]

I do not deny that there were consultation submissions in favour—that is absolutely correct. What I am trying to illustrate is the strong tide of opinion against the proposal. Clearly, the Secretary of State had to take all sides of the argument into account. It is because the hon. Gentleman and his two colleagues strongly put the case in favour of the proposal that I am trying to ensure that we have a balance in the debate. It is important to remember that there are two valid sides to the argument—the decision was a difficult one that required a degree of care on the part of the Secretary of State—and I hope that I have managed to illustrate that, given that the hon. Gentleman made the other side of the case so strongly in his speech.

PACT in particular raised some further interesting points. It considers that STV is already well placed to take advantage of the predicted growth in the Scottish production sector—the hon. Gentleman mentioned that—even without qualifying as an independent. Furthermore, PACT noted that STV Productions and STV’s wholly owned subsidiary Ginger Productions are already winning commissions from the full range of network commissioning broadcasters, including all public service broadcasters.

It was also pointed out by respondents that the benefits accruing to STV, which STV itself provided to the Department for the purposes of the consultation, were minimal. As was noted in the published impact assessment, STV estimated that if its production arms were reclassified as independent under the proposal, it would experience an increase in production revenues of £400,000, to £1 million per annum. That represents an increase of just 15 hours of production and, STV estimated, would create five full-time jobs.

Those were not the only viewpoints. Other contributors to the consultation were in favour of the proposal, as the hon. Gentleman mentioned and as I acknowledged in our last exchange. STV was, of course, strongly supportive of the proposal. The Government carefully considered the arguments put forward by STV for the benefits that would accrue both to STV and to the industry. STV believes that there would be a benefit to the Scottish economy arising from a greater dispersion of production throughout the UK. In particular, we noted STV’s view that it was currently prevented from competing on a level playing field due to its minority role within the ITV network. STV told us it has no influence over commissioning decisions, is disadvantaged by its regulatory status and cannot compete for the independent quota.

Ofcom, as the hon. Gentleman said, provided a valuable contribution and set out its reasons for broadly supporting the proposal. It did so on the basis that reclassification would encourage greater access to network commissioning by external producers, with potential associated benefits for the development of the production sector in the nations. We also noted Ofcom’s reference to the conclusion of its advisory committee for Scotland, which suggested that the benefit to existing Scottish independents, in the form of a larger number of commissioned co-productions between STV and other producers, is unproven.

I hope that I have provided a useful and, in the light of my last couple of points, at least reasonably balanced summary of some of the contributions to the consultation. I encourage hon. Members to read the full responses on my Department’s website, although I think it is clear that the hon. Gentleman and his colleagues have conducted a fairly extensive trawl of the submissions and are already possessed of a high degree of familiarity with them. For the record, however, and for anyone else who is interested, I just wanted to point out that the responses are there for anybody who wishes to see them.

Some hon. Members may be aware of the recent evidence provided by STV in the Biggar report, which indicates a rather larger financial benefit than was originally projected in the impact assessment. We have seen that report, but it was received six weeks after the decision had been announced and 10 months after the consultation closed. The point remains that the voice of the existing independent sector is loud and clear: it does not want this to happen. As I have mentioned, in making his decision the Secretary of State also concluded that it is inappropriate to consider the matter in isolation. He announced in January that we are embarking on a major review of the communications sector. It will be a wide and comprehensive review leading to a new communications Act before the end of this Parliament.

I should make it clear that we do not intend to review again the specific issue of the potential re-classification of production companies owned by Channel 3 licence holders, but the review will include an assessment of public service broadcasting and regulation, and the broader issues of independent production are almost certain to be part of that.

Question put and agreed to.

18:25

House adjourned.

Westminster Hall

Thursday 3rd February 2011 Westminster Hall

Thursday 3 February 2011

[Mr Joe Benton in the Chair]

backbench business

Thursday 3rd February 2011 Westminster Hall

Parliamentary Reform

Thursday 3rd February 2011 Westminster Hall

[Relevant documents: Early Day Motion 1372, Parliamentary Modernisation and Reform, and the First Report of the Procedure Committee, Ministerial Statements, HC 602.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Miss Chloe Smith.)

14:29

[Mr Joe Benton (in the Chair)]

A lot of people have requested to speak and we want to allow as many as possible to do so. I appeal to hon. Members to be as brief as they can, and we will do our best to get everybody in.

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

It is a pleasure to hold this debate under your chairmanship, Mr Benton, and I thank you for your guidance on how matters should proceed. No doubt that was appreciated by all hon. Members in keeping within the spirit of the debate. I am also grateful to the Backbench Business Committee for providing the opportunity for an initial debate on parliamentary modernisation and reform. I look forward to hearing about the experiences of other new Members, and to learning from those who have been MPs for longer.

This debate is part of a call for more open and efficient politics. If we do not continue visibly to modernise the way in which we work, I worry that the public will—rightly—fail to be convinced that politics has changed for the better. It is more vital than ever for Parliament to ensure that its work is efficient, transparent and accountable. Following my first six months in this place, those are not the first three words that come to mind as I consider the way we conduct ourselves.

Our political process is still struggling to regain its legitimacy and credibility in the eyes of the public. Following the expenses scandal, 232 new MPs entered Parliament in 2010. It is now time to shake off the image—and in some cases the reality—of the “old boys club” and move Westminster into the 21st century. I pay tribute to the extensive work that has already been done. In particular, the work of the Wright Committee led to important changes in the management of the business of the House, not least with the establishment of the Backbench Business Committee, which has allowed this debate to take place.

There is still a long way to go. Following the expenses scandal, public suspicion about the behaviour of MPs has not gone away, and many people seriously ask what exactly it is that MPs do. How does Parliament work on a day-to-day basis? How can we better scrutinise legislation and serve our constituents with maximum efficacy and efficiency? In years gone by, MPs were accused of being too Westminster focused and of not working enough in their constituencies. Now some suggest that the pendulum has swung in the other direction, and that some MPs spend too much time in their constituencies, and not enough time properly scrutinising the legislation for which they are responsible. Now is a good time to take stock of that, and discuss what the balance should be between time spent on constituency casework and scrutiny of legislation.

Our constituents want us to have the time to know what we are voting on and to hold the Government to account, but they also want us to deal with constituency work and to know about their concerns. How much time a week should MPs spend in understanding what they are voting on in Parliament, and how much time should they spend in their constituency? We will all hold different views on that. It strikes me that it might be interesting to see an official job description for the role of MP. That is not something I have ever seen, but if it existed it would be interesting, and people would probably have different views about the different clauses in it.

We all have our own views about the way that the procedures in this place could be improved, and I look forward to hearing from others during the debate. I have published some of my own ideas in a report entitled, “The case for parliamentary reform”, which I circulated to colleagues last November. Today, I make the same suggestion as in the report: the procedures and processes of the House of Commons are in urgent need of reform. That is hardly a new or novel observation. However, in a time of austerity when the rest of the country is urged to be more efficient with scarce resources, perhaps we should look at our own practices and at how efficient we are being with taxpayers’ resources in using our time in Parliament.

Some of the reforms in my report build on previous proposals by the Wright Committee and the now disbanded Select Committee on the Modernisation of the House of Commons. A few of the new proposals draw on experiences from other legislatures, while others were—I admit—rejected by previous Parliaments at a different time. However, that is no reason why a new Parliament in new circumstances should not examine those proposals again.

[Kevin Brennan (Cardiff West) (Lab)]

I have read the hon. Lady’s paper; it contains some interesting and good proposals. Past reforms covered the hours in which the House sits, which were changed in 2001-02. One of the proposals in her paper is to change sitting hours on a Tuesday, but that is distinctly un-family friendly for people who want to do the school run in London. At times, some of the proposals have the feel of being not so much family as London friendly.

[Caroline Lucas]

The issue that the hon. Gentleman pinpoints is important. The perspective of family friendliness depends on where someone happens to sit, be that in London, the north or the south-west. However, the issue is broader than that; it is about what kind of symbol and signal we want this place to convey. I hope we want to give a signal that it is right for people to be able to work within set hours on a given day. People, including our staff, should be able to do that.

[Kevin Brennan]

I will not intervene again after this remark. However, on some occasions, it was extremely difficult for hon. Members to see their staff before Wednesday afternoon, because there was no thinking, preparation or meeting time when a Committee meeting started before 9 am on a Tuesday. My researcher wanted to work a 2 pm to 10 pm shift, so that she could do her job properly when those hours were introduced. The House changed its mind and went back to the previous hours a year later.

[Caroline Lucas]

The hon. Gentleman’s intervention indicates that changing the sitting hours alone is not enough. We must change what we do within those hours. I am sure that it is not beyond the wit of this Parliament to arrange our sitting hours so that people can do enough preparation for their Committees, and so that officials have time to prepare the speaker for urgent questions, or whatever. Do we want this House to set an example by working relatively family-friendly hours or not? If we do, other things will fall into place.

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

I praise the hon. Lady for securing this debate, and for her reforming zeal. I agree with her on matters such as voting, and I think we should look at the shape of the Chamber. However, can we stop the myth of family-friendly hours? It is not a family-friendly job. When we talk about family-friendly hours, we are talking about not only MPs from London and the south-east, but those whose constituencies are outside London, but whose families live down here. I want to take my daughter to school, and that should be part of the debate. I want to cram things in as much as possible so that I can get home to my family.

[Caroline Lucas]

I do not think that family friendliness is a myth. The way this House works ought, where possible, to give some kind of signal about what we hope for and aspire to for those who work in the rest of the country. If we rearrange the way we work, it should be possible to sit on a Tuesday morning, for example, and get much of the work done. We would not then need to sit late into Tuesday night. If hon. Members want to have meetings at that time, that is up to them, but I do not see why that process should hold everybody else hostage.

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

There is also the consideration of people’s mental and physical health, and their general sense of well-being. Most of us function better during the reasonable hours of the day, such as those proposed by the hon. Lady, than we do very late at night. When I came to this House, 70% of sittings went till midnight or beyond. People died and were ill. We have to get a grip on the issue, and look at what will be best for most people’s health. We must also accept that some people will make choices. They will take their children to school, but they could still be here by 10.30 am or 11.30 am.

[Caroline Lucas]

I thank the right hon. Lady for her intervention. It points to the fact that one of the things that we are battling is something of a macho culture. Many people have asked, “If you’re not ready to sit till midnight and 1 o’clock in the morning, why are you doing the job?” That is not a good response.

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

I apologise to the hon. Lady because I will not be here for the whole debate. As well as an interest in this issue, I have a long-standing commitment to and interest in affordable credit, which is being debated elsewhere. I have something of a reputation in the north for being macho, but on this occasion I agree almost wholeheartedly with the hon. Lady and want to encourage her, not necessarily to pin down specific hours, but to look to provide certainty and to avoid what my right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) described—by-elections every three months, which is what happened 24 years ago, when I came into the House.

If I may, I will encourage the hon. Lady not to get bogged down on hours, because other changes in this place could get us into at least the 20th, if not the 21st century, and allow us, with discretion, to vote more sensibly, provide certainty and, above all, demonstrate that we have understood the changes that have happened because of devolution to Scotland, Wales and Northern Ireland and our relationship with the European Parliament, all of which have taken shape since I came—

[Mr Joe Benton (in the Chair)]

Order. I remind right hon. and hon. Members that interventions must be kept as terse as possible. An awful lot of Members want to speak this afternoon, and I want to be as fair as I can.

[Caroline Lucas]

I thank the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) for his intervention, which was incredibly valuable. He rightly reminds me that the Procedure Committee is examining sitting hours. I am very glad about that. I hope that this debate can produce some agreement that at least there should be a mechanism whereby we can consider all these issues again. We may disagree about the details of family-friendly hours or exactly when different debates should happen, but I want to gauge how much interest there is for some types of change and, if there is some interest, how we can make progress.

[Jo Swinson (East Dunbartonshire) (LD)]

I, too, apologise, because I will be going to a conference later. It is about political engagement, so it is very much on the same theme as the debate.

I want to pick up on the point about the Procedure Committee conducting an inquiry on the sitting hours and the turnout today. Does the hon. Lady agree that there is perhaps an argument for another vehicle for pursuing the cause of parliamentary reform? We do not want it to stall after the Wright Committee, and the Procedure Committee has limited time. In fact, although it is conducting an inquiry on sitting hours, it has not begun that yet, and we do not want the issue to be delayed and put on the back burner. Should the House not find some way to take it forward, given the clear level of interest in doing so?

[Caroline Lucas]

I thank the hon. Lady for her intervention, which was incredibly helpful.

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

With great respect to the hon. Member for East Dunbartonshire (Jo Swinson), the Procedure Committee has in fact started its work and we had a very useful opening seminar in Portcullis House last week to take evidence from a variety of sources. The work is under way.

[Caroline Lucas]

I thank the hon. Gentleman for his intervention. Having been at the seminar, which was very useful, I completely agree with him that that work by the Procedure Committee has started. I want to make it clear that nothing that I say this afternoon is in any way critical of what the Procedure Committee is doing—it does fantastic work. As we know, just this week it published findings of an inquiry into the release of information by Ministers, with a set of recommendations with which I wholly concur. My point is that the amount of work that we are potentially talking about in terms of the reforms that we need cannot be tackled by the Procedure Committee alone, so I completely agree with the hon. Member for East Dunbartonshire (Jo Swinson) about considering a mechanism complementary to the Procedure Committee—something that would run alongside it but would have more capacity to deal with some of the wider issues that we are talking about.

[Sir Peter Soulsby (Leicester South) (Lab)]

I congratulate the hon. Lady on securing the debate. May I take this opportunity to apologise for the absence of the Chairman of the Procedure Committee, the right hon. Member for East Yorkshire (Mr Knight)? As the hon. Lady may know, he had all the symptoms of flu yesterday afternoon. For his sake and for ours, he has wisely gone home, but he asked me to stand in for him. As she will have noted, other members of the Procedure Committee are present, and the right hon. Gentleman asked me to respond at the end of the debate on behalf of the Committee.

[Caroline Lucas]

I thank the hon. Gentleman for that clarification.

Let me say a little about some of the specific proposals that I would like us to consider, not in the expectation that all hon. Members will agree with them, but just to put some ideas out there about how things could be changed. One change could involve electronic voting. I know that there will be a sharp intake of breath as I say those words. I have looked back at previous times when we discussed the issue in the House, so I do not expect an easy ride on it, but this is a time when we could consider it again, not least because it has been estimated that £30,000 of salary could be saved every week because of the amount of time that MPs waste while waiting to cast votes. We are talking about an hour and a half or more extra because of the way we vote. To put it another way, if a vote takes about 15 minutes and if, in the previous Parliament, there were about 1,200 votes, that means that an MP with an 85% voting record would have spent 250 hours just queuing up to vote. Those are hours that taxpayers have paid for, and I argue that they could be better spent studying amendments, scrutinising Bills or helping constituents.

[Dr Sarah Wollaston (Totnes) (Con)]

We also waste a great deal of time—certainly I do—running from the chilly outer reaches of Norman Shaw North and back again. That causes disruption to meetings with colleagues and constituents.

[Caroline Lucas]

As a fellow inhabitant of Norman Shaw North, I share the hon. Lady’s pain. At least it gives us a bit of exercise.

[Mr Peter Bone (Wellingborough) (Con)]

The hon. Lady is making a powerful speech, but is she really saying that we should press a button to vote? It is difficult enough at the moment to get people into the Division Lobby with any idea of what they are voting on. They would be pressing a button because the Whips had told them to, and parliamentary democracy would be destroyed.

[Caroline Lucas]

I am delighted that the hon. Gentleman raised that point because I have another proposal, which I will come to in a moment, that against each amendment there should be an explanatory statement that explains what it is about. That would mean that far more hon. Members had a better idea of what they were voting on. In terms of electronic voting devices, I am suggesting not that such voting should be done in the isolation of one’s office, but that there should be a particular time when we vote each day. That would deal with the point made by the hon. Member for Totnes (Dr Wollaston) about not knowing when to start running over from Norman Shaw North. We would have a particular time when we would vote. It would be done by hon. Members either sitting in the Chamber or, because there is not room for everyone, in the Lobbies. People would still get the chance to lobby Ministers, but there would be a fixed time in the day when we could vote electronically. I will explain why we would have a better idea of what we were voting on shortly. From my experience in the European Parliament, I can tell hon. Members that six votes take a minute and a half with electronic voting. Six votes in this place take at least an hour and a half. I find it hard to justify that.

[Joseph Johnson (Orpington) (Con)]

Parliamentary democracy has not been destroyed in a large number of other parliamentary democracies where electronic voting works very well. The Indian democracy, for example, is one of the most vibrant in the world. In the US, people manage to vote in that way in both Houses very successfully. There is plenty of evidence to show that it can work well.

[Caroline Lucas]

I thank the hon. Gentleman for making that point. The Scottish Parliament, the Welsh Assembly, the French Assembly and the US Congress all vote using elements of electronic voting, and I see no reason why we should not as well.

[Mr Mark Williams (Ceredigion) (LD)]

Does the hon. Lady agree that one of the good practices in the Welsh Assembly is having a block voting period at the end of the day? Rather than the constant disruption of meetings and all the rest of it, we could designate a part of the day specifically for voting.

[Caroline Lucas]

I absolutely agree. It would allow us to organise our business and our timetables much more effectively. I do not know what happened in days gone by. Perhaps MPs did not have so many meetings with outside bodies but I know that it is embarrassing, in the middle of a meeting with quite important people, suddenly to have to say, “I’m really sorry, I’m going to have to go. I have no idea how long I will be. I hope to get back to you some time soon.” That is not a good way to do business.

[Ann Coffey (Stockport) (Lab)]

The hon. Lady asked what happened in days gone by. Perhaps I can try to answer that. One of the proposals of the Select Committee on Modernisation was to introduce programme motions. Those were introduced following a recommendation of that Committee. The idea of such motions was to give more certainty to MPs about when votes would take place, so that they could better organise their day.

[Caroline Lucas]

rose—

[Mr Joe Benton (in the Chair)]

Order. Before the hon. Lady continues, may I point out that she is about 18 minutes into her speech, but that so far there have been at least 10 interventions. It is entirely a matter for the Chamber, but I suggest that to enable the hon. Lady to make her points we minimise interventions.

[Caroline Lucas]

It is probably out of order for me to reflect upon that, Mr Benton, but I would argue that one way to improve our debates would be to have more interventions and fewer set pieces. I hope that I am not being disrespectful.

I want to make one last point about electronic voting. If we make the process of casting votes less time-consuming, MPs could vote on more aspects of Bills. As a result, the public would have a clearer record on which to hold us to account. A system that inherently discourages voting on the specifics of Bills because it takes too long to vote is a problem. It also requires less thought from those charged with passing legislation through the House. Speeding up voting would enable us to be better legislators by giving better scrutiny.

[Greg Mulholland]

I share the hon. Lady’s desire to speed up voting; I was using electronic voting when a member of Leeds city council. To make it work in the House, do we not need to consider the reality of the Chamber? In most Parliaments that have electronic voting, Members have an assigned desk with a voting button, and many Parliaments use laptops, but we could not possibly do those things in the present Chamber.

[Caroline Lucas]

I thank the hon. Gentleman for his intervention. I passingly considered how radical it might be to propose that we do not sit in the Chamber, but decided that I should probably wait for a few more years before making such a proposal.

I discussed the matter with a company that specialises in the manufacture of electronic voting devices. It said that we could make them operable in the Chamber and in the Lobbies on either side—there is not enough space for all Members to be in the Chamber, as has been pointed out—but they could be made to work only within that area, so there would be no danger of people going to the pub with one in their pocket, with all the disrepute that would involve. There are ways of getting around the problem. I would be the first to admit that it would be much easier if each of us had our own place in the Chamber, but I believe that it is still possible to get around the problem.

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

Will the hon. Lady explain why it would be better to have people sitting in specific places?

[Caroline Lucas]

One reason is that it would make electronic voting an awful lot easier. Another is that it would make the Chamber more orderly than the sort of crush that we have when everybody rushes in. I know that it looks good on TV screens, but if Members have to stand they may not be able to follow the debate as closely; they certainly find it harder to take part in the debate if they are crushed at the back of the Chamber, far from the Speaker’s Chair. However, that is rather theoretical, because we cannot get away from the Chamber that we have.

I am aware that there was a consultation paper on voting methods back in 1998. I admit that at the time, 64% of MPs preferred to stay with the present system, but one reason given for that was that they did not want to lose the opportunity to speak informally with Ministers in the Lobbies. My proposal for a set time for Members to go to the Lobbies to use their electronic voting devices would still enable them to lobby Ministers.

[Joseph Johnson]

That advantage belongs only to Members of the governing party; it is not shared by MPs from Opposition parties. That argument cannot be used to justify a continuation of the Lobby voting system.

[Caroline Lucas]

The Government are by definition the majority. It struck me that, when trying to get measures passed, I could perhaps be kinder to the majority in addressing their concerns. I agree with the hon. Gentleman; I have not nobbled many Ministers during my time here.

I return to the subject of having votes held over to a certain time of day. The Modernisation Committee noted:

“Members seem interested in the possibility of holding divisions over, so that all votes could be taken after one another at a convenient time, instead of holding divisions immediately at the end of each debate.”

That was back in 1998, but despite the fact that a majority were interested, little has changed. Although 2004 saw the introduction of the so-called deferred Divisions, when some votes that would otherwise have taken place at the end of the day’s sitting would be conducted in writing on Wednesday morning and early afternoon, the option is seldom used.

I acknowledge that there will be occasions—the votes on tuition fees for example, or the vote on the Iraq war—when it will be appropriate to vote straight away, because of the significance of the vote and the public’s interest in it. However, the fact that there are certain exceptions to such proposals does not undermine the direction of the proposals themselves. I still believe that they are worth considering.

I shall talk briefly about abstentions. I got myself into trouble when talking about abstentions in the past, with people telling me, “Well, if you can’t make up your mind you shouldn’t be in Parliament.” Abstention does not mean that we cannot make up our minds. It does not mean that we do not know. Abstentions are often the result of being presented with two opposing ideas, but being asked to vote on them as one amendment. One may agree with one part of an amendment but not the other, yet there is no way in this Parliament of taking amendments in parts. I note in passing that in the European Parliament, which uses 20 languages, it is possible to take an amendment in parts, but we cannot do that here. We might then think to ourselves, “What shall I do? I know, I’ll abstain.”

It is difficult to abstain in this place. In 1998, a majority of MPs indicated strong or general support for an option to record abstentions, but 12 years later nothing has happened. Richard Taylor, the former Independent MP for Wyre Forest and the late David Taylor, the independent-minded former Labour MP for North West Leicestershire, were both known for voting yes and no. Of course, the media made much fun of them, making it seem that they were not able to make up their minds.

[Fiona Mactaggart (Slough) (Lab)]

A point of order was raised in the Chamber today about that precise point. Members were reminded that the Speaker has ruled that it is unparliamentary to vote both yes and no.

[Caroline Lucas]

I thank the hon. Lady for that intervention. What she says reiterates the fact that we need a formal way of registering an abstention instead of not voting; if we do not vote, those helpful websites that record how often we are in the Chamber will make it seem that we were not there.

[Mr Mark Williams]

I plead guilty; I was one of the four who did precisely that—to go through both Lobbies. We were unable to support a Labour motion referring to the record of the previous Labour Government and we were concerned about the Government’s policy, but there was no third way. Sitting on our hands could have been construed as our being absent from the House. The case needed to be made that we were there, but that we were concerned about both the Opposition’s line and the Government’s. For a third party that has sometimes not been in government, that is most important.

[Caroline Lucas]

I completely agree with the hon. Gentleman.

[Mr Douglas Carswell (Clacton) (Con)]

Although the hours that MPs might keep are important, and although the technical means by which they may vote is certainly important, does the hon. Lady not agree that when it comes to restoring purpose to Parliament, to getting this House off its knees and ensuring that the legislature can once more hold the Executive to account, there are bigger and more profound matters than those that she has mentioned so far?

[Caroline Lucas]

I completely agree with the hon. Gentleman that there are more fundamental matters to do with the power of the Executive. I am starting modestly, but shall come to those in due course. There are bigger issues, but after six months here, and with a degree of humility, I was trying to see whether there are ways in which the efficiency of this place could be improved. The hon. Gentleman is absolutely right to say that there are bigger issues, and I know that another hon. Member will talk about those shortly.

I return to some of the smaller points. Because they are smaller, it ought to mean that they are not resisted so much. We ought to be able to speed things up and get some of this stuff done. We would then have the time and space to get our teeth into the bigger, more fundamental issues. One of the small things that we could do is to include an explanation of the design or purpose of an amendment. It is particularly difficult for people outside Parliament, and sometimes for Members themselves, if they are not following the legislation in minute detail, to understand the implications of an amendment that states “clause 1, page 1, line 5, leave out subsection (1)”. It takes a lot of time to unpack what it really means; we need the Bill and the amendment, and we need to know some of the background. A simple explanation of two or three sentences would substantially increase transparency. MPs themselves would also have a better idea of what they are voting on, which might not please the Whips very much, but it would increase democracy and accountability.

It is a modest proposal and one that has been made before, but providing explanatory notes would, none the less, make a significant difference. It would give more power to Back Benchers and take a little more from the Whips, and enable constituents to follow better the proceedings of the House.

[Zac Goldsmith (Richmond Park) (Con)]

I echo what the hon. Lady says about explanatory notes. More often than not, Members have no idea what they are voting on. If the first 20 MPs leaving the Lobby later on today were asked what they had just voted on, I suspect that 19 of them at best would have no idea at all. Nevertheless, the big issue is not lack of knowledge about what we are voting on but, as my hon. Friend the Member for Clacton (Mr Carswell) has pointed out, the fact that Parliament itself absolutely fails to hold the Government to account. I hope that we will cover that issue later on in the debate.

[Caroline Lucas]

I completely agree, and I look forward to having another debate on exactly that subject. Let me raise a few more issues before other Members speak. Obviously, this is a well-subscribed debate.

I want to say a few words about the talking out of private Members’ Bills. The Bills, which are introduced by MPs who are not Ministers, are relegated to Fridays, the day when attendance at Westminster drops as most of us go back to our constituencies. Why not move private Members’ Bills to a mid-week slot so that they are better attended? We could then consider the implications of making Fridays a formal constituency day. I do not accept that it is beyond our wits to find adequate time for private Members’ Bills earlier in the week without displacing other legislation. Hon. Members will be well aware that our current system allows Back Benchers deliberately to waste the time allotted for debate on a private Member’s Bill in order to delay it. The vote takes place when there are likely to be far fewer Members present to support it as people leave to get to far-flung parts of the country.

The talking out of private Members’ Bills is an insult to other Members who want seriously to debate the Bill, to the Speaker and, most important, to the electorate who do not want to pay to run a debating chamber that is being mocked by its participants. There should be explicit rules that prevent the practice of talking out a Bill. The Wright Committee stated that “merely procedural devices” should not be able to obstruct private Members’ Bills, but again, we have not seen much change in that respect. That Committee also referred to the popular proposition that a maximum of three hours should be given for the Second Reading debate on any private Member’s Bill, which should be in cumulative and successive sittings, after which the question would be put to the Chamber on whether the Bill should receive Second Reading. In a sense, that would render pointless the act of filibustering. I shall take the fact that there was no intervention on that point as agreement, and I shall proceed with great speed.

[Joan Ruddock]

I support the hon. Lady. One of the easy things that we could do is make the Tuesday sitting compare with the Wednesday sitting, so that we start the day three hours earlier. We could then accommodate private Members’ Bills in the evening, which would give Members the choice on whether to stay. All House facilities would be kept open. That would be an ideal way. If Ministers, and I have been one, need to defeat a Bill, they must defeat it on the issues and its merits and not by procedural means.

[Caroline Lucas]

I completely agree.

[Mr David Hanson (Delyn) (Lab)]

I support the hon. Lady. Such a reform would also help with the House’s family-friendly policies. I make no complaint about that. I have not seen my seven-year-old son since Sunday night, and I will not see him until I get back at 9 o’clock tonight. I do not always want to stay on Fridays, not only because of constituency duties but because it is the only day of the week when I can take my son to school. My constituency is 225 miles away. The opportunity for a deferred vote on a private Member’s Bill on a mid-week day or consideration on another day would be ideal for both purposes.

[Chris Bryant (Rhondda) (Lab)]

The hon. Lady has unanimous support.

[Caroline Lucas]

I shall proceed while I am on a roll. Another issue, albeit small, is the adoption of more accessible language, which would increase the transparency of this place and give some indication that we want people to understand what we are doing. All too often it looks as though we are deliberately mystifying what we do here to create the illusion that it is even more special than it is. There is a strong case for a systematic overhaul of the language to make it more self-explanatory. If the language of the Commons was made easier to understand, more people, especially younger people, would be more attracted to politics. MPs should be able to use each other’s names. We should drop phrases that, to the public, look at best like arcane jargon but at worst make Parliament seem inaccessible, distant and remote. Why should MPs not refer to each other in debate as Mrs Smith or John Jones? That would make proceedings more intelligible without reducing the necessary formality and without changing the practice of speaking through the Chair. A methodical overhaul of the language of the procedures and offices of the House based on the principle that it should be self-explanatory and easily understandable for the public should not be beyond something on which we can all agree.

In conclusion, we will all have many ideas about how we can improve the way in which this House works. The early-day motion to which this debate has been tagged is suggesting not specific changes but the idea that there should be some mechanism whereby a range of different ideas can be discussed and taken forward. I recognise that the Procedure Committee is doing excellent work, but it is already stressed in terms of its capacity to take on some of the very big issues that it is dealing with, such as sitting hours.

I hope that I have demonstrated not just my own wish list but also that other Members have ideas that need to be considered. I am passionate about the subject; Parliament has to become more effective so that it can better serve the nation. It cannot continue to be seen to waste taxpayers’ money and MPs’ time on antique processes that are not fit for purpose. Even where there is disagreement on the details, I hope that hon. Members will accept that my underlying concern is that much more can be done so that MPs are more efficient and more easily understood. Given that, we have a duty to be more effective about the way in which we work.

During the past couple of years, the public have heard a lot of warm words about a new politics. In the wake of the expenses scandal, hon. Members will recall the words of the right hon. Member for Witney (Mr Cameron) before he became Prime Minister. He said that

“this political crisis shows that big change is required. We do need a new politics in this country. We do need sweeping reform.”

Last year, the Deputy Prime Minister told the House:

“Every Member of this House was elected knowing that this Parliament must be unlike any other—that we have a unique duty to restore the trust in our political system that has been tested to its limits in recent times.”—[Official Report, 5 July 2010; Vol. 513, c. 23.]

In 2009, we heard similar things from senior Labour figures. The right hon. Member for Doncaster North (Edward Miliband), now Leader of the Opposition, said:

“Out of a set of terrible issues, this is a moment for big reform and government must take advantage of it. We need a more pluralistic political system where power is shared in different ways.”

The former shadow Chancellor, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), was right when he said with characteristic colour:

“The current public mood of anger and disquiet... demands a response. We need to overhaul the engine, not just clean the upholstery.”

I hope that my points this afternoon are not simply seen as “cleaning the upholstery.” The upholstery needs cleaning; we can make the way in which we work more efficient, but there are other more fundamental issues about how we hold the power of the Executive to account. I know that several other hon. Members will raise those issues as well, and I look forward to the debate.

15:07

[Sir Alan Haselhurst (Saffron Walden) (Con)]

I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) for sparking this debate, which is obviously of great interest to colleagues judging by the attendance.

We should be careful about supposing that we are completely beneath public contempt. The excellent paper produced by the Hansard Society mentions public perception. It states that

“60% believe that Parliament is a worthwhile institution and 75% that a strong Parliament is good for democracy.”

What the public do not like are MPs who fiddle their expenses, and half the public at any one time dislike the decisions taken by Parliament, which may be for political and personal reasons. We will not easily get over those difficulties, and I do not think that the prescription being offered by the hon. Lady necessarily meets the real needs of Parliament today, if we are to improve ourselves as a legislature controlling the Executive.

To contribute to a debate on reform and not endorse every single point made by the initiator of the debate risks being branded a reactionary. I realise that if I allude for one moment to the experience that I have had in this House, I shall equally be condemned as an old fogey. I am taking a risk by even speaking in this debate.

[Tessa Munt (Wells) (LD)]

I do not think that anyone thinks that, bearing in mind that the right hon. Gentleman has accepted that we should trial iPads in Committee. I understand that he is an enthusiast on that front, which is absolutely marvellous.

[Sir Alan Haselhurst]

My hon. Friend is in danger of stealing my thunder, because I was about to say that I regard myself as a reformer. If hon. Members look at the evidence that I have given to the Modernisation Committee over a period of years, they will appreciate that I have fizzed with ideas as to how we might change our procedures and practices. However, I remain a conservative with a small “c” as far as our institutions are concerned. Change should not be rushed—if it is, we tend to recant very quickly, as in the case of the Tuesday sitting hours, when we went one way before going back the other. We have introduced topical debates, but we do not think that they are a particularly great idea, and we have gone for topical questions, which we think are a good idea. We should think things through before we rush into them. The stability of our Parliament, in contrast to many others, is testament to the way in which we have gone about things.

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

Does the right hon. Gentleman agree that our absolute purpose, as the hon. Member for Brighton, Pavilion (Caroline Lucas) has said, is to hold the Executive to account and to debate matters fully and properly, but that the way in which business is scheduled in the House militates against that? In that respect, I apologise for not being able to stay for the end of the debate, because two other debates, in which I am also keen to participate, are happening simultaneously. We have to look at allocating time, so that we can debate issues properly, because that does not happen now.

[Sir Alan Haselhurst]

I am going to be slightly meaner in my disposition towards interventions; otherwise I shall never get through my argument. The hon. Lady’s point is absolutely relevant to something that I will say later in response to the proposals by the hon. Member for Brighton, Pavilion.

The House has renewed itself, and the fact that we are in this Chamber is one symbol of that. The fact that we are here at the behest of a Backbench Business Committee is further testament to the fact that we are capable of doing things differently. At first, this Chamber was greeted with suspicion, but it is now readily embraced and is ripe for further exploitation—a point that is also made in the Hansard Society paper. Why not use this Chamber for uncontentious Second Reading debates? Why not repeat the experiment with cross-cutting question sessions, which was cast aside too lightly? Why not table questions to the person representing the House of Commons Commission or the Church Commissioners in this Chamber, rather than in the main Chamber? We might also bring into the sequence the Chair of the Finance and Services Committee or the Chair of the Administration Committee—I mention the last of those modestly. The fact is that such things should be open to more questioning by hon. Members.

[Chris Bryant]

Will the right hon. Gentleman give way?

[Sir Alan Haselhurst]

I want to press on, because many hon. Members want to speak.

A lot of change has taken place in my time. Radio and TV have come in, and broadcasters have progressively achieved more flexible access. All-night sittings have almost been expunged, and sittings beyond 10 pm are now rare. The programming of legislation is now the norm. Departmental Select Committees were only set up in 1981. Notice for questions is now shorter, and topical questions have been introduced. Deferred Divisions have been set up. New technology is being cautiously embraced. Time limits have been introduced on speeches, and we could go further with that in Committee, on Report and during discussion of private Members’ Bills. The Backbench Business Committee has been established. Elections are now rife, giving more power to Back Benchers. The Standing Orders are continually being changed—the ink is hardly dry on the paper, such has been the pace of reform.

The Hansard Society paper has a great many good ideas in it, particularly regarding the legislative process. I do not want to go into that in detail, but I commend the paper as a subject for further discussion. Let me be up-front, however, about where I caution against change. This Parliament is a debating chamber—that is what distinguishes it from many other Parliaments—and our performance is of high quality. We should keep away from the idea of written speeches, which kill debate.

I would keep the indirect form of address. Having watched the Parliament and, worse, the state Parliaments in action in Australia, I have seen abuse to which the direct form of address gives rise, which is shocking. Our system acts as a filter, ensuring that debates are conducted in a civilised manner. The fact is that we also forget the names of colleagues across the Floor half the time, so referring to them as “the hon. Member” is a good cover.

The House should not press for the list of speakers in a debate to be published. Having spent 13 years handling such situations, I know that hon. Members are not entirely reliable in their relationships with the Chair. The Chair tries to make up for that by being considerate and juggling lists to enable hon. Members to go off and do things that suddenly arise. Under the list proposal, however, the hon. Member who did not turn up— unfortunately that happens quite a lot—would then find that the local press were on to them to ask why they had not been present for a debate. The proposal is not, therefore, quite the obvious solution it might be thought to be. Furthermore, someone who thinks that they know when they will speak in a debate might absent themselves for rather more of the time, so I am not sure that the proposal is entirely forward-looking.

I am very suspicious about electronic voting at a single time of day. There is the question of amendments being contingent one on another. If we want a process that increasingly divorces debate from decision, that is the way to go, but there are times when we have to dispose of one amendment before we can logically go on to the next, and that has not been sufficiently thought through.

[Caroline Lucas]

We have discussed that extensively with the Clerks, who have pointed out that it is perfectly possible to have a mechanism whereby the Chair could indicate which votes are contingent on other amendments. It is not beyond our wit to work out a system whereby we can vote electronically and in sequence, with the votes the way they have been put down.

[Sir Alan Haselhurst]

I take that point, but the hon. Lady possibly overestimates the skills of Members when they are suddenly asked to look at complicated things. For all the explanations that might be available, it is sometimes difficult for us to get our ideas straight, particularly when we have to vote instantly, rather than having a couple of minutes to think carefully about an issue.

I am not against private Members’ Bills staying on Fridays. The fact that a proposal is a private Member’s Bill does not immediately invest it with merit, and some pretty ordinary ones come up. It is interesting that the hon. Member for Brighton, Pavilion has suggested a mid-week slot, when the rest of her argument about the timing of sittings goes against spending time on such things in the evenings after a full day’s debate, which seems inconsistent. I would keep private Members’ Bills on Fridays. One argument is that if hon. Members cannot get 100 colleagues into the House to support them, their proposal may not be worth supporting, but I will not go down that line. I will go halfway towards what the hon. Lady has said by suggesting that private Members’ Bills should be on Fridays, but that there should be a specific three-hour slot for debate, with a deferred Division, at another time in the week. That would be a useful way of looking at the issue.

On the sitting pattern, it is important that we get the balance right between our duties in our constituencies and our duties in Westminster. The balance has moved too far, to the point that we are overly obsessed with what happens in our constituencies while we are away in Westminster.

We also have to decide whether we want predictability or an element of spontaneity as our guideline. If this place is to keep up with topical issues, we may need to adjust the Order Paper to take account of that. At the moment, the only person, beyond the Executive, who has the power to do that is the Speaker. Our Parliament treats the Speaker with greater puritanism than any other Parliament in the world. We say that someone becomes independent from the moment they become the Speaker and that they never go back to party political association. That being the case, we are telling every Member, even if they are the only Member representing a party or independent minority group, that they can trust the Speaker to give them a fair deal, because the Speaker has no axe to grind. If we accept that, do we want the Speaker to grant urgent questions or even Standing Order No. 24 emergency debates, which will simply shatter the business for the following day? Alternatively, are we content, as has happened in my experience, to have two Government statements and an urgent question take an absolutely huge chunk out of the time, when an important debate would otherwise have been scheduled for that day? We must think about that and get the compromise right.

I declare an interest as Chair of the Administration Committee, because in a sense that shows me another side of the practice of the House, which is keeping the turnstiles turning and the cash registers ringing. I have also been a distant Member of the House as well, having represented, for a period of years, the north Manchester seat of Middleton and Prestwich, so when I discuss family-friendly arrangements, I understand them from two different angles. We should not only discuss arrangements that are family-friendly for hon. Members who live in London, as the hon. Member for Leeds North West (Greg Mulholland) has mentioned in an intervention. If we think only from that point of view, what we decide will be self-fulfilling, and we shall put more pressure on hon. Members to live in London and visit their constituencies, and I am not sure whether the Selection Committee would be entirely enamoured by our doing that.

A Member who finishes at 6pm will not get to Manchester in time to tuck up the children in bed, and they will have to get up jolly early to be here by 9 am the following morning—or 8 am to put in a prayer slip to reserve a seat for that day. Mention has been made of a parent in London wanting to take the children to school, who might have difficulty getting here by that early hour. We should also think of our staff. Members should not forget the amount of preparatory work that must be done from the lowliest level up to the Clerks, to ensure that our business can start at the hour when it does. We may be forcing staff to get up terribly early— 4 am or 4.30 am—to get here to do the jobs they must do for us to function. We should take their welfare into account, too.

What is friendly in terms of making this Parliament operate more effectively? The Chamber is the heart of our system and at the moment other activities partly overlap with the sittings of the Chamber. If we go to a 9 am to 6 pm arrangement, as the hon. Member for Brighton, Pavilion has proposed, there will be a complete overlap for every other activity in the House, including Select Committees, Public Bill Committees and all-party groups. If hon. Members cast an eye over the “All Party Whip” they will see the wide range of all-party groups—scarcely a condition of the human body is not covered by one. Those are legitimate activities, and there are deep interests at stake for small groups of Members, who must be accommodated. There are also lobby events, where hon. Members want to hear from particular groups. Ad hoc meetings crop up, outside visits must be undertaken and there must be contact time with Departments of State, councils and other bodies to which Members are making representations on behalf of their constituents. How will all that fit in satisfactorily in human and logistical terms? Will all the rooms be available at the right time? It is difficult enough now to get attendance at Select Committees, but if they are to be effective and their reports are to be valid, attendance must be constant.

The competition for hon. Members’ time is intense, and fitting everything into a shorter period of time will, I suggest, be very difficult. It would create a risk that the Chamber would become even more sparsely attended than it sometimes is today. Alternatively Members will multi-task in the Chamber. That is part of the justification for having BlackBerrys and other devices in the Chamber. Members of the public are beginning to dislike that as much as the absence of Members from the Chamber, and Mr Speaker gets letters on the subject. The right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), who left his place earlier, has also received representations from his constituents about that.

[Mr Carswell]

Is my right hon. Friend suggesting that many of the people who follow me on Twitter and who follow blogs written in the Chamber take exception to what I am doing? Is not the practice a good thing, which allows me to connect with people who do not sit and watch TV?

[Sir Alan Haselhurst]

I am sorry to disappoint my hon. Friend, but the public are beginning to notice and believe that Members should not have their heads down looking at those devices while they are meant to be listening to a debate. That is their opinion—it may be wrong but it is their opinion and they do not like it. [Hon. Members: “He’s twittering.”] My hon. Friend may find that there is a ruling yet from the Chair dealing with Twitter as distinct from other things. [Interruption.] It is difficult to silence the hon. Member for Rhondda (Chris Bryant).

A point that has not been discussed so far is the fact that we make this place available for members of the public to tour in the mornings. Many hon. Members like the opportunity for their constituents to be here—schools in particular—and Parliament is conducting a big outreach programme. That would become much more difficult under the regime that the hon. Member for Brighton, Pavilion has put forward.

[Jo Swinson]

On tourists, does the right hon. Gentleman accept that it is difficult for most members of the public to visit Parliament on weekdays? It would be helpful if Parliament were open at weekends for people to come and have a look round.

[Sir Alan Haselhurst]

I am very interested in the question of access, but do not want to go too far into it now. I am happy to receive representations in my capacity as Chair of the Administration Committee. The House is, of course, open on a Saturday, but I am not sure whether it is entirely suitable for school parties to come then. I just mentioned that point as another thing to be factored into the equation.

We have changed over the years. The pace may not be fast enough for some, but we can speed up the process of examining all the new ideas. I do not, however, believe that we need another Committee. We have had the experience of the Modernisation Committee and, frankly, to have it running side by side with the Procedure Committee was unsatisfactory. The Procedure Committee should be invested with the relevant responsibilities and, if necessary, it should be geed up to work faster, if the House believes that the issues are important ones and need to be examined. Perhaps the right expression—which would be appreciated by the Chair of the Procedure Committee, my right hon. Friend the Member for East Yorkshire (Mr Knight), as a motoring man—is that we need to change gear and move a little faster. That would help to satisfy those who feel that some things have been ignored for too long.

The real challenge is how we are to make the House more effective. I think that the content of the Hansard Society paper that has been circulated is perhaps more relevant than what the hon. Member for Brighton, Pavilion has said, because concentrating on the cutting or rearrangement of hours is not the main priority or the best route towards a more effective Parliament.

15:27

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

It is a great pleasure to serve under your chairmanship, Mr Benton. I am not going to read out a speech; I have just scribbled some notes and cannot read what I have written. I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) for bringing us this debate. The number of hon. Members here is testament to how important it is. She is keeping the fires of reform burning. I do not think that she needs to worry that we are at the end of reform; this is the beginning of a continuing process.

It is nice to see so many new Members in this Chamber today, because it is important to get the views and ideas of people who have come from outside, and who are much more normal than those of us who have been here a while. We must not forget that being here for even one Parliament has already made some of us accept as normal things that clearly are not, to the outside world.

As the Chair of the Backbench Business Committee I want to say that its very existence has made a real difference in terms of reforming Parliament and the difference between then and now. Two debates are being held in the Chamber that are massively oversubscribed. All the debates that we have timetabled so far in the Chamber have had speech limits. Today the limit is five minutes per speaker. I shall try to speak for 10 minutes or less; as has been said, what cannot be said in 10 minutes is not worth saying. It is worth noting that when Back Benchers take responsibility for their own time they use it wisely and well, and take an interest in what is being debated. That is something for the Government to consider. They should recognise that, through the Backbench Business Committee and Select Committees, Back Benchers are doing what we were sent here for—to hold the Executive to account better.

The hon. Member for Brighton, Pavilion has single-handedly contributed to raising the status and profile of Westminster Hall. It is such a shame that we have this Chamber and underuse it, as the right hon. Member for Saffron Walden (Sir Alan Haselhurst) said. Along with the Procedure Committee, the Backbench Business Committee will be considering the use of Westminster Hall, and providing another forum for debate that is more interesting than just having an Adjournment debate with one Member and a Minister responding. This debate really shows what we can do with Westminster Hall.

[Chris Bryant]

I wonder whether my hon. Friend would consider an idea that was suggested earlier, which is having Second Reading debates of private Members’ Bills in Westminster Hall with the vote subsequently, at a fixed time, as a deferred Division in the main Chamber.

[Natascha Engel]

Absolutely. To widen that point, I want to see Westminster Hall being used as a more experimental Chamber. As the right hon. Member for Saffron Walden said, some of the experiments that were conducted in the past worked and some did not. That is what experiments are all about, to see whether or not they work, and unless we actually have a go at them we will not find out. Westminster Hall seems to be exactly the type of forum where we can conduct those experiments. I would have ministerial statements and any number of things taking place in Westminster Hall that currently we may or may not do in the main Chamber.

I want to make a very broad point before I make my one suggestion for parliamentary reform. That broad point is about being very clear what we as parliamentarians do and to make that our starting point for reform. I was with the hon. Member for Brighton, Pavilion when we were giving evidence to the Procedure Committee on reforming sitting hours, in a pre-inquiry seminar, and one of the points that emerged is that every MP is different. There are different parties, but MPs are also different as individuals. They have different lives, different backgrounds and different experiences that they bring to Parliament. No one way of doing things will suit everybody, but we have come quite far from there being a clear idea of what we do in Parliament. The increasing focus that we have given our constituency work, which is something that has been happening over a long period, not only undermines the work that used to be done by local councillors and local authorities—work that they should be doing—but there has been a direct correlation between the amount of time that we spend doing very local constituency casework and the amount of time that we do not spend scrutinising legislation in Parliament and holding the Executive to account. I wonder whether the Hansard Society would like to carry out some proper research into that issue. It is a very important case that we need to make.

[Mr James Gray (North Wiltshire) (Con)]

The hon. Lady is making an extremely good point. Does she agree that there is a direct correlation between the increasing power of the Executive, which we have seen over the last 20 years, and the increasing quantity of time spent by Back Benchers doing stuff that should be done by somebody else in their constituencies? What we want is people here in Parliament, working hard, holding the Government to account and getting a grip of the Executive.

[Natascha Engel]

Yes. I would not like to say that we should never go back to our constituencies, but the hon. Gentleman makes an absolutely fair point.

[Fiona Mactaggart]

One thing that the hon. Member for Brighton, Pavilion (Caroline Lucas) did not speak about—unsurprisingly, because she is a one-Member party in this place—was the way that the Whips operate. One of the things that I found when I first entered Parliament was that the infantilising impact of Whips on Members of Parliament was quite damaging and it shows in some of the issues that my hon. Friend is raising. Every Member of Parliament is different. Every Member of Parliament brings different experience and represents a different type of constituency. We need to find mechanisms whereby those differences, within the context of party agreement, can effectively be aired so that we get the best legislation that we are capable of making.

[Natascha Engel]

I agree. Sometimes, however, we are in slight danger of overplaying the idea that Whips infantilise Members and sometimes we should just be big enough to stand up to them, if we have an issue.

[Mr Bone]

rose—

[Natascha Engel]

As the hon. Gentleman has frequently done.

[Mr Bone]

I congratulate the hon. Lady on making a very powerful speech. I want to bring to the attention of the House my private Member’s Bill abolishing the Whips Office. I have tabled it for a Wednesday night—7 September 2011. All things come if we wait.

[Natascha Engel]

I look forward to taking part in that debate. In fact, that brings me to the end of my general points. There is one thing that I consider would be a really good piece of parliamentary reform and it relates to Select Committees. Select Committees are the thing that we as a Parliament do really well. They are possibly the only forum where Members of Parliament, after they are elected, learn, gain in expertise and develop. It is an absolute privilege for MPs to be members of Select Committees. Being a member of a Select Committee is not open to everyone. In fact, it is only open to a minority of MPs. We have taken away the ability of Whips alone to appoint people to Select Committees and we now have elections across the House, and that has worked really well.

I do not see why the Select Committee principle cannot go much wider. Initially, I thought that every MP should be allowed to be a member of a Sub-Committee of a Select Committee that looks in greater detail at individual issues that may be cross-departmental, and that we should also have departmental co-ordinating Committees. However, I think that we should go even further and invite Members of the House of Lords to take part in that process.

We massively neglect the House of Lords. Regardless of whether we believe that Members of the Lords should be elected, or even if we do not believe that they should be there at all, there are people in the Lords who are specifically there for their expertise; indeed, it is their only reason for being in the Lords. Sometimes, we have people who are very expert in the House of Commons, but in the House of Lords there is a group of people who are expert in a certain subject. I would love to see Select Committee membership widened to include absolutely everybody.

For example, instead of a Select Committee on Energy and Climate Change, or on Environment, Food and Rural Affairs, we should have a Select Committee that examines the issue of waste management and incineration. In almost every single constituency, the issue of where an incinerator is placed is a massive one. It involves planning laws, waste management and the local authority; all these different aspects of the issue need resolving.

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

Is that not the role of the all-party groups? Although I respect their lordships in the other place and there are a couple of Joint Committees, having the House of Commons shadowing Departments is the right way forward.

[Natascha Engel]

I disagree and I will develop my point very briefly, because I have already spoken for my 10 minutes. I would like to see smaller Select Committees going out into the country and taking evidence from people rather than just sitting in this place.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I am grateful to my hon. Friend for giving way, especially as I know that she wants to speed up and finish her speech. Does she agree that there is much to be learned from the example of the Scottish Parliament, particularly from its Public Petitions Committee, which can refer particular items that have been brought by members of the public to other Committees of the Parliament for them to examine in more detail? Perhaps that is something that could be looked at.

[Natascha Engel]

Absolutely. I would throw all these ideas into the pot. I simply repeat that Select Committees are the thing that works best in this place and I would love to see their role expanded, not only because they work so well and because they develop the expertise of individual MPs but because they could become a forum for us to be, as the Speaker always says, “ambassadors for Parliament”, by going out and engaging with people on individual issues that are not party political, just as Select Committees are not party political. We could go out there and really engage with individuals.

[Ann Coffey]

May I make a quick suggestion? One way that Select Committees could engage Back-Bench Members more would be to accept oral evidence from us more often.

[Natascha Engel]

Absolutely. The Backbench Business Committee is a perfect case in point. We receive oral evidence from Members every week. My hon. Friend is absolutely right to make that suggestion. In that context, I would also love to see the work of the Procedure Committee develop now that it has taken on so much extra work, especially after the Modernisation Committee was effectively merged with it. What the Procedure Committee does, in terms of parliamentary reform, is interesting to most people, not only to those in this room but across the rest of the House. I would love to see that kind of work much more widely debated and extended, and for people to be given the opportunity to participate, especially the people we represent in this place. That is my one little suggestion: looking at widening the role of Select Committees within parliamentary reform.

I really hope that this is not the end, but rather just the beginning of developing ideas on how we can reform this place to make it work better, and on how we, as individual Members, can much better represent the people out there who send us here.

15:40

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

I join the many speakers who have congratulated the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this debate. Having read her paper, I thought that I would come here struggling to agree with any of it, but I stand here convinced by much of what has been said, and that has shaped what I am about to say.

I want to home in on two distinctions. There is a developing theme here about what we do as opposed to how we do it, and that is reflected in the other distinction, which is between public attitude to what we do and public interest in how we do it. Those two things can get confused, and sometimes the political and public reaction to circumstances further blurs the issue.

I shall dwell, to begin with, on what we do. What lies at the heart of this is something that other speakers have mentioned: credibility—our credibility, Parliament’s credibility and Members’ credibility in the eyes of the wider public, which goes back a lot further, I suggest, than The Daily Telegraph expenses scandal last year. Looking back—some would argue over generations—there has been a gradual decay in the wider public’s confidence and trust in the parliamentary system and, indeed, in parliamentarians. However, that cannot necessarily be pinned—as some people have suggested—on the style in which we do things in this House. I suggest that it is more often than not all about what we do, and about whether what we do is relevant to voters—rather than to MPs—and relevant in the 21st century rather than in any other context. Perhaps the political reaction, by all parties, to one or two of the dramas of the past few months—namely, expenses—simply serves to illustrate that.

As a mere candidate, I read about how the parties reacted to the expenses scandal and was depressed by the fact that we seem to get obsessed with the cost of politics rather than its value, with thinking that the cure to all this is simply to introduce a new system, to start talking about Lords reform or about new voting mechanisms. I am not absolutely sure whether that was a mistake, or simply an attempt to distract people from what was going on, but with such measures, for example voting reform—enthusiastically supported by some but not by others—AV referendums or, as in my case, the referendum on further powers for the Welsh Assembly, the public reaction is pretty lukewarm at best, whichever side of the fence people sit on. They are shaking their heads and thinking, “This is not what we were concerned about. We were concerned about something much more fundamental—relevance, rather than self-indulgent activity by politicians.”

If there was a refrain on the part of voters during the election campaign, I would suggest—although I might be alone in this—that it was far more often about good government than cheap government, and that lies at the heart of this distinction. Good government is relevant government—relevant to voters rather than to MPs. We have been, and continue to be, punished for what is occasionally portrayed as self-indulgent activity. We are punished in two ways: either by a really angry reaction, which is manifest in several ways on a day-to-day basis; or, worse still, by people saying, “A plague on all your houses. We are simply turning our backs on the parliamentary system and on politicians, because we don’t think you represent our interests any more.” That reduced confidence in our systems is a much more serious problem perhaps, than some of the issues about the way in which we do things.

I argue, therefore, that how we do things is less important than what we do, but that does not mean that that is not important at all. When I stood up, I mentioned to the hon. Lady—may I call you Caroline, perhaps, after today?—that I sympathise with the suggestion of amendment explanations. It is a great idea. When we put forward amendments from the Political and Constitutional Reform Committee, they came with a paragraph that explained to people on that very Committee what we were seeking to achieve. That was a great move.

The point about pre-legislative scrutiny is crucial. We had an argument with the Executive at the beginning of this Session because we had not had sufficient time to afford pre-legislative scrutiny to one or two of the constitutional reform Bills, and the Government’s response was, “We can’t give the 12-week minimum pre-legislative scrutiny all the time because we’d never get anything done.” I do not buy that—nor, I suspect, do many other people—because all that happens is that we do nothing for 12 weeks, and we have seen with the Parliamentary Voting System and Constituencies Bill that what the Government gained in the first 12 weeks by not affording pre-legislative scrutiny has caught up with them now in the form of the blockage in the House of Lords. I therefore accept, although I did not think that I would, the points being made. Committee stage, which the right hon. Member for Oldham West and Royton (Mr Meacher) mentioned in an e-mail earlier today, provides a bit of certainty and additional scrutiny, and we should recommend it.

I have two further points, which, one might argue, are even less important than the ones I have made so far: language and tradition. In my distant outpost in west Wales, of all the complaints that I might have received about parliamentarians and Parliament in general, tradition and language have not been mentioned often, if at all. In fact, I think that we have to tread carefully when it comes to destroying, or dismantling, some of the theatre of this building and the system that we use. I disagree with the notion that standing in a Lobby for 15 minutes every so often is time entirely wasted or that tradition is always to be interpreted as a dirty word, and I urge a bit of caution. Of course modernisation is the direction of travel that we should be going in, but let us take it at a steady pace, because it does not lie at the heart of the problems that we seriously need to address.

I say all that after an informative visit to the Scottish Parliament with our Select Committee only last week. I also have a little experience—I would not put it any stronger than that—of how business is conducted in the Welsh Assembly. I attended, with other hon. Members, First Minister’s questions in the Scottish Parliament and, with no disrespect to our hosts, it was arguably a rather soulless affair. There was lots of button pressing and lots of individual desks and laptops with people situated behind them. There was no interaction, theatre or energy. Even though the contributions were powerful and relevant, there was not the degree of theatre that I think, up until this Wednesday at least, we enjoy here.

[Dr Wollaston]

Would my hon. Friend accept the word “pantomime” instead of “theatre”?

[Simon Hart]

On the basis that the First Minister was sitting at the front and everybody was behind him, I suppose that there was a connection with that word. However, I felt that this week’s Prime Minister’s questions was a bit like going to the Oval to watch the cricket, only to find that it had been rained off and having to sit under an umbrella waiting for something to happen.

[Chris Bryant]

Will the hon. Gentleman give way?

[Simon Hart]

I would be delighted to give way, as always.

15:48

Sitting suspended for a Division in the House.

16:05

On resuming—

[Simon Hart]

All that activity for the Division probably reinforces the argument that the hon. Member for Brighton, Pavilion was making earlier. I was coming to a conclusion and waiting with great excitement for an intervention by the hon. Member for Rhondda (Chris Bryant); I hope he will come back to make it before too long.

I was about to praise one aspect of the devolved Parliaments. I suspect that I came across as a little unconvinced by the vibrancy of their proceedings, but if there is something with which to credit the Welsh Assembly in particular, it is the fact that increased accessibility for members of the Welsh public—constituents who are served by both an Assembly Member and a Westminster Member—has led to increased confidence, which we might reflect on. Many of their procedural matters may mirror what we do, but the feeling that someone can get to a Minister more quickly and discuss their problems at greater length has led people to believe, often reluctantly—they would have taken a very different view a few years ago—that it is a good thing and a lesson that we could work on here.

The word “balance” has been mentioned by many Members this afternoon. It is not just the balance of our work and family life, although that is absolutely vital. I am one of the Members who will leave here at 7 or 8 o’clock tonight and will be lucky to get back to west Wales before midnight, and I shall probably not see my children until tomorrow afternoon. This is not a sob story, because I knew that was the lifestyle I was entering when I came here—my eyes were wide open; but I accept that we can improve some areas. Although it may just be a rumour, it is a pretty depressing statistic that 40% of the married Members of Parliament who entered the House in 2005 have separated from their partners. That is 10% higher than the national average, so we need to reflect on that as we develop—slowly and sensibly, I hope—the proposals that have been made this afternoon.

I came to the debate expecting not to be convinced, but I have been semi-convinced by some of the arguments made by the hon. Member for Brighton, Pavilion. She makes some sensible proposals that do not compromise systems that have been honed over generations and that serve the nation well. Nor do they compromise some of the important theatre, drama, energy and passion of this place, which I have not seen reflected at the same level in our devolved Parliaments. One or two frivolous suggestions have been made, and although we should take them seriously, I do not think we should advance them with any great enthusiasm.

In conclusion, let us not lose sight of the fact that the relevance of what we do—its relevance to 21st-century Britain, our constituents and all corners of the earth—is of far greater significance than the means by which we so often do it in this building.

16:09

[Mr Mike Weir (Angus) (SNP)]

I am pleased to speak under your chairmanship this afternoon, Mr Benton. I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this important debate.

There are two aspects to the debate: how Parliament is perceived, and the procedures of Parliament. Parliament is, frankly, often its own worst enemy in terms of how it is perceived. I draw hon. Members’ attention to the fiasco over the resignation of Gerry Adams from the House. Leaving aside the undoubted entertainment value of the UK Government and an Irish republican arguing over an ancient Crown title so that he can resign from a Parliament in which he has never taken his seat, does it not illustrate the fact that it is absolute nonsense that the only way a Member can resign is to be appointed to a non-existent title? Incidentally, it was reported that the Chancellor conferred the title on Mr Adams without him applying for it or agreeing to accept it. Is it really the constitutional case that the Chancellor can appoint someone to an office that disqualifies them from sitting in the House without them specifically applying for it? If that is the case, perhaps some potential Tory rebels should consider their position.

However, there are much more important issues to consider in terms of how we carry out our day-to-day procedures. The hon. Member for Brighton, Pavilion has produced a paper, which I read with great interest, and I agree with a great deal of it. However, there are one or two things I do not agree with. The whole business of family-friendly hours is a red herring. I come from north-east Scotland, and either I am here or I am there. I cannot be here and go home at night. I would like to see how the Independent Parliamentary Standards Authority dealt with the travel expenses that would arise if I tried to do so. That simply cannot happen. As the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) rightly put it, when we were elected to the House, we accepted that we would spend much of our lives here. It does not matter to people from the north of Scotland whether we finish at 6 or 10; we are not going home. From my point of view, if we could squeeze the parliamentary week into two or three days and spend more time in the constituency, it would be perfect.

That brings me to the point that there are two visions of Parliament. I suspect that some Members see Parliament as being about dealing with the big issues and holding Government to account, as has been noted. However, another, competing, issue is that many of our constituents want us to deal with problems on their behalf. We all talk about how we must be more accessible and make Parliament more accessible. That is not done by being unavailable to our constituents because we are here discussing the big issues of the day. We have to deal with the issues that affect everyday life. It is true that many of the people who come to our constituency offices come to us with problems that are not strictly to do with Parliament. However, many of us are then faced with the question of what to do. We can try to say, “You need to go and see somebody else,” but that often only results in the person going away dissatisfied and saying, “Well, they wouldn’t do anything for me.” We all make such decisions daily.

I have put my pen through great screeds of this speech to try not to take up too much time. A lot has been said about electronic voting. There is a huge case for electronic voting for the reasons given by the hon. Member for Brighton, Pavilion, the greatest of which is being able to abstain. As a member of a smaller party, I often look at motions tabled by the Government and the official Opposition and say, “A plague on both your houses.” I would love to be able to abstain and be recorded as abstaining, but often we simply do not vote. That is an issue and a lot of hon. Members will feel that way.

I would go further than the hon. Lady. She made the case—possibly to try to engender support—that we should have electronic voting in the Chamber or the Lobby. I disagree. There is no reason why, in the 21st century, when we are wirelessly connected—or not connected, in many cases—to smart phones, iPads and everything else we cannot design a system that is secure enough to allow, although perhaps not on every occasion, people to vote remotely if it is appropriate. I say that because towards the end of last year when we had the dreadful snow, I could not get to London for two whole weeks. I was a member of the Postal Services Bill Committee at the time and missed several sittings—to my great frustration because I had several amendments tabled for debate. I also missed votes in the House. In those circumstances, I do not understand why remote voting cannot be allowed.

We may all kid ourselves that every hon. Member sits and listens to the debate and makes a decision on how to vote, but we all know it is not true. We choose which way to vote for various reasons. Remote voting should be allowed on some occasions, although not in every instance. We have moved a long way from the days when seriously ill people were carried through the Lobby in the middle of the night, but we still queue up for 15 minutes to vote. There is much to be gained from electronic voting. I agree with the point that the design of our Chamber makes it difficult to have voting within the Chamber. It is much easier in, for example, the Scottish Parliament, which is a much smaller Parliament of 129. For a Parliament of 650, the same lay-out is impossible. As I said, in the age of wireless connection, I see no reason why we cannot find a way in which electronic voting can be done. Let us move towards the 20th century, if not the 21st.

The second point I want to consider relates to petitions and making Parliament more relevant to our constituents and giving them a bigger say in what we are doing. Again, the issue has been considered by the House in previous modernisations. Originally, the system was that a Member had his or her 30 seconds in the sun presenting a petition in the Chamber, and they then placed the petition in the bag behind the Speaker’s Chair. Sometime later, they would get a brief response from the Department and that was that. As part of the previous modernisation, petitions are now reported to a Select Committee. However, the process never seems to go any further than that and the petition is simply noted by the Select Committee.

If we want to make Parliament more accessible to constituents, we need to consider a much greater forum to allow genuine concerns to be more fully canvassed by Parliament. For example, in my constituency, there is a threat to close driving test centres. I have raised that matter and debated it in this Chamber with the relevant Minister. However, in my constituency, the campaign has gathered a huge number of signatures on a paper petition and there has been a Facebook petition. It will reach the point when people ask, “What can we do with the petition?” The answer is that they can send it to the Driving Standards Agency to be filed there, they can send it to the Minister, probably to be filed in the Department, or they can give it to me to present to Parliament and it will presumably be reported to the Select Committee on Transport. However, again, no action is likely. We desperately need to look at ways that such petitions can be considered in more detail.

In closing down the No. 10 petition website, the Government announced that they will be introducing a new system whereby, if I understand it correctly, the most popular petitions will be converted into private Members’ Bills—although that opens up the difficulty of how those Bills are dealt with. That is an interesting idea but, if it has been reported correctly, the numbers needed mean that only the most controversial matters or the most organised national campaigns will ever get to that stage. I suggest that we consider a petition system that is more akin to the one that operates in the Scottish Parliament. In Scotland, anyone can present a petition to the Scottish Parliament. It only requires one signature and it can be submitted in any language. The petition must, of course, relate to a devolved issue and be relevant on a national level. It is important to note that it does not preclude a local issue where there may be a national angle. To take the example of the driving test centres in my constituency, the issue could relate to how the DSA is dealing with driving tests in rural areas.

In Scotland, a local health issue has been raised on the basis it has been alleged that health boards are not following national guidelines. The Scottish Parliament has set up a Public Petitions Committee that consists of nine MSPs to consider every admissible petition lodged—obviously not all petitions are admissible. That Committee writes to the bodies affected, whether it be the Scottish Government, health boards, police forces, local authorities or whatever, with questions to seek information on the matters raised. It asks the petitioner to comment on them.

[Margaret Curran (Glasgow East) (Lab)]

If I am called to speak, I will make reference to my experience in the Scottish Parliament. May I draw to the attention of the House the effectiveness of the Public Petitions Committee in the Scottish Parliament, and not just in the processing and engagement that it represents? It has led to significant changes in law, most recently on the health service and access to blood. People had been prohibited from getting blood through the NHS and significant laws were changed. That was initiated by the experience of a constituent, through the Public Petitions Committee, so it is effective in changing the law.

[Mr Weir]

I was just coming to that point. The hon. Lady is correct. The whole point about the petitions procedure in the Scottish Parliament is that by raising a petition, the public can instigate action in the Parliament. The petition is not just something that is filed away as of interest to somebody; the Committee considers how it should proceed. It may hold a hearing at which the petitioners can put their points in person, or through representatives, and it may call, and has often called, Ministers to give evidence on the issue. The Committee does not have the power to impose a solution, but as the hon. Lady said, it can recommend to other Committees and to the Government that action be taken.

Constituents and members of the public who have a valid point have an engagement with the Parliament to get their point across directly. They can be assisted by their MSPs, but their MSPs cannot deliver the petition; it has to done by members of the public. It is a way of making sure that there is engagement with the citizen. That could also be a way for this Parliament to have that engagement. That need not be an exact example; this Parliament deals with a much larger population, and there is a much larger number of MPs and constituencies, but it is not beyond our wit to look at ways to have that engagement with the public. Everything does not need to be channelled through a Member of Parliament. The public will respect this Parliament much more if they can have direct access, and there are ways to do that.

A point was raised about explaining the meaning of an amendment. It is already possible to do that in a Committee, so MPs need to look at their own actions sometimes, but I ask Members who have sat on Public Bill Committees, how often is it actually done? It is rare now, in my experience. It was introduced in the previous Parliament as a trial, at the same time as laptops, if I remember correctly. MPs do not seem to be using the procedure, so we have to look at that. If we are serious about modernisation, and if these issues are raised, let us use them and show that we are interested in pushing forward with modernisation; otherwise, debates such as this are utterly pointless.

Parliament has, in recent years, through the expenses scandal and other things, lost a lot of its reputation. It may seem strange for me to make such points, as someone who wishes to get out of this Parliament, but while we are here it is important that we engage with the public and find ways to enable them to see us as relevant to their lives. If we fail to do that, it will increase the democratic deficit and will prove a grave danger to our future.

[Mr Joe Benton (in the Chair)]

Before I call the next speaker, may I point out that the proceedings will now finish at 5.45 pm? I propose to start the wind-ups at 5.5 pm and there are still a lot of Members indicating that they wish to speak so I again appeal for brevity.

16:24

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

Thank you, Mr Benton. I will take careful note of what you have said and restrict my comments by not repeating many of the points that other Members have raised. However, it would be remiss of me not to start by congratulating the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing the debate.

I repeat the fact that I am a member of the Procedure Committee, and I have listened carefully all afternoon to the points everyone has made, and will continue to do so for the rest of the debate. I do so with an open mind. It is important that matters of parliamentary reform be considered from the basis of how we can best do our job most effectively. What is the best way that we can conduct our affairs for the benefit of our constituents?

One major problem is not so much the quantity of legislation that Parliament produces, but its quality. I am obliged to the Hansard Society for drawing my attention to the increasing volume of legislation that has been passed by Parliament over the years:

“In 1950 Parliament passed 3,690 pages of legislation. By 1970 this had grown to 5,990 pages and by 1990 to 8,940. But just over 15 years later the number of pages had almost doubled to 16,031.”

Looking just at criminal offences, it states:

“All criminal offences passed between 1351 & 1988”—

a period of 637 years—

“are contained in one volume of Halsbury’s Statutes of Criminal Law encompassing 1,382 pages of law. The offences for the 19 years between 1989 and 2008 are contained in three volumes encompassing 3,746 pages!”

There is plenty of evidence that whatever else Parliament may be criticised for, it certainly cannot be criticised for lack of productivity. Whether we are producing legislation of high quality is another matter. One idea, if I could throw my six penn’orth into the reform idea pot, is for more pre-legislative scrutiny and the improvement of the legislative process. That would have a virtuous effect. The biggest problem, which I think sums up the whole debate, is how best to use our time. To solve the problem of defective legislation would in itself be an enormous boon, because we would then spend less time sorting out the problems created by poor, inadequate and inefficient legislation. I hope that is one area that we will be able to look at in the course of proceedings.

Finally, I caution Members that before we go down any road of reform we look at the procedures that are already available to us and ensure that we are already using them to full capacity. For example, the hon. Member for North East Derbyshire (Natascha Engel), who I congratulate on her tremendous work as the Chair of the Backbench Business Committee, made mention of the work of Committees. I entirely agree that Committees are a useful tool for the House, but I wonder whether we are using them as effectively as we could. As evidence, I would cite the one power that all Committees have, except a very few dealing with private Bills, which is the power, almost never used, to take evidence on oath under the Parliamentary Witnesses Oaths Act 1871. It is a rare power, but it already exists and may be something that we could use.

[Chris Bryant]

The hon. Gentleman is right. In fact, I would make it standard for all Committees to take evidence on oath. It is extraordinary that often Committees want somebody to give evidence but never go through the process of forcing them to attend, which is still technically possible. For example, Rupert Murdoch is one of the most significant players in British media and in British society, yet he has never appeared before a Select Committee of this House, nor has any member of the Murdoch family. That is extraordinary.

[Mr Nuttall]

I thank the hon. Gentleman for that intervention. As my vicar reminds us every Sunday morning, Parliament is the “high court” of Parliament. Perhaps through our Select Committees we could take such matters more seriously and ensure that witnesses do attend when they are asked to appear to give evidence before Committees. At this point, I thank the first three speakers in this debate, all of whom appeared before the Procedure Committee last week to help in our deliberations on the reform of sitting hours.

I am conscious of the fact that many have spoken but that many still wish to speak, so I conclude with a final comment from the Hansard Society’s report, which is worth our bearing in mind. It said that new measures may destabilise existing procedures and create inconsistencies and unintended consequences that undermine the coherence and rationality of the process as a whole. I caution all Members that we must be wary of the unintended consequences of any reform that we propose and upon which we embark.

16:29

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this important debate on parliamentary reform. The subject cries out for discussion and debate. She focused largely on the admittedly archaic procedures of this place, but I want to concentrate on power and accountability. I shall try to be brief.

At the nadir of the expenses scandal, it was finally agreed by all three political parties that the rock-bottom reputation of Parliament could best be salvaged by a new, forceful, democratic role for Parliament and an effective scrutinising and decision-making Chamber for the nation’s business. The Wright Committee—the Committee on Reform of the House of Commons—was set up. It was given little time but it reached its conclusions in rapid order and produced an excellent, well-argued report which ushered in two important changes, as we all know.

The first was the Backbench Business Committee, which has been successful under the chairmanship of my hon. Friend the Member for North East Derbyshire (Natascha Engel). It wrested some limited control of the parliamentary agenda from the Executive, which had monopolised it for decades, although—I say this in the presence of the Leader of the House, whom we are glad to see here—we look to the conclusion of that process by the setting up of a House business committee at an early stage. The other important change was to secure the election, as opposed to the selection by Whips, of the Chairs of Select Committees who, as we all know, are by far the most effective mechanism for holding Ministers to account. Both innovations have worked extremely well.

However, valuable as those reforms are, they scarcely begin to redress the balance of power that has subordinated Parliament over the past several decades. Its power has drained away through the increasing concentration of power in No. 10. It continually seeps away to Brussels as the European Union mandate spreads ever wider, and the judiciary increasingly encroaches on the parliamentary prerogative, presumably prompted by the judges’ view that if Parliament cannot hold the Executive to account, they will.

A parliamentary revival needs to be tackled at several levels. At one level, we drastically have to overhaul our existing procedures. I want to give a few examples. Bills in Committee—the stage at which they should be seriously scrutinised—can often emerge after dozens if not hundreds of hours of scrutiny with minimal changes. I have even known them to emerge with no change. Why? Because a Whip-chosen majority of the governing party can simply block amendments. We should look at the Scottish system in which Bills no longer go to a Standing Committee but to the appropriate Select Committee, which has a track record of expertise. Of course, that would require considerable strengthening of Select Committees in terms of resources, the number of Sub-Committees and also time, but it would be a serious and much better alternative.

Report is the one stage at which Members of this House can make important changes to Bills through votes of the whole House. One abuse is that the Government can all too easily prevent later amendments. Of course, amendments are often not wanted by Governments—that is hardly surprising—and they can ensure that they are not even reached by talking out earlier amendments. One recent example of that, of course, is the European Union Bill, but there are many others.

Another problem, which has been mentioned, is not the fault of either the Whips or the Government but of Members. How many Members vote at the suggestion of their Whips as they approach the lobby without actually knowing what they are voting on? It is a serious abuse, and one of the reasons it is problematic is that most people cannot understand what the amendment is actually about. I have had that experience many times when looking at the amendment paper. A proposal, which I believe has the support of the Government, is that there should be a short explanation—two or three lines, for example—of the purpose and nature of every amendment on Report so that people can more easily make a judgment.

[Chris Bryant]

Will my right hon. Friend give way?

[Mr Meacher]

I realise that many people wish to speak, but I shall give way very briefly.

[Chris Bryant]

When a knife or a guillotine come in, the Government Whips are happy for amendments to be talked out because they know that the rules of the House specify that the Government amendment will still be taken. If we were to abolish that rule, some of their power over time would disappear.

[Mr Meacher]

That is a fair point, and I entirely agree. I do not have time to suggest ways of dealing with all the problems, which are extensive. This House is meant to be a serious, scrutinising body, but it simply is not so at present.

The third issue that I wish to raise briefly is about the public, who are involved in this—their lives are controlled by the Bills that we put through. There should be a pre-legislative stage for Bills at which outside experts can be brought in to give detailed evidence, and where members of the public and, indeed—I agree with my hon. Friend the Member for Stockport (Ann Coffey)—Members of Parliament have an opportunity to make representations.

That is all about existing procedures. I want to say something very quickly about a further range of reforms whereby Parliament could and should assert its authority as the elected voice of the people. On matters of overriding national importance—the obvious example of the past decade was the Iraq war; it took 15 months before this House even had a debate on it—Parliament should have the right to set up its own commissions of inquiry and not simply depend on the Executive or No. 10 to do so, because, of course, it is usually their actions that are the subject of the investigation. That is not a particularly novel suggestion or innovative proposal—it is exactly what our Victorian predecessors did quite regularly.

Secondly, when committees of inquiry are set up by the Prime Minister, which will probably remain the normal practice, the House should be empowered to scrutinise the terms of reference and approve the appointment of the chair and members of those bodies, because the choice of personnel and the terms of reference can significantly skew the final report in a particular direction. Many of us know that all too well.

Thirdly, on patronage, Select Committees should routinely carry out confirmation hearings. Again, there is nothing original about that—that is exactly what happens and has happened for years in the United States Congress. That should be done, obviously, for persons who are appointed to leading quango posts but also, perhaps, for some ministerial appointments. People from outside who have never been elected to Parliament are brought in by Prime Ministers and suddenly appointed to important posts. Parliament has a right to call them for examination, and to vote to approve their appointment at the end.

Fourthly, there are often obscure and complex legal issues in many of these matters. Parliament should be served by its own legal counsel if it is to be an effective check on Executive power.

I will make three further quick points. One is the control of expenditure, since the annual Government expenditure of £650 billion is a key exercise of power. Parliament should establish a framework for the contemporaneous monitoring and cross-examination of major expenditure programmes—not just the ex post facto examination by the Public Accounts Committee, though that is valuable and I would want to keep it. It should be aided by a cadre of expert external advisers. Whether that is done through Select Committees—which might be the best way—or through a new specialist estimates Committee, is for discussion. The allocation of huge quantities of public money and the whole question of value for money are of legitimate interest to Parliament, at the time that the decisions are still in the making.

Secondly, professional lobbyists are a very serious issue. They have now hugely increased their influence over the political process. Parliament should require that a public register is kept, including the scope of their activities, their source of funding and their meeting with Ministers. If there is to be the transparency that democracy demands, that murky area needs to be cleaned up.

Thirdly, several hon. Members mentioned petitions. I agree that where a very high—and the bar should be high—threshold number of electors have signed a petition, there is a case for saying that it should be debated and voted on in the House. We need a new constitutional settlement if we are to get off our knees and be an effective check on Executive power. Many of those proposals, as well as others, need to be looked at seriously.

16:42

[Martin Vickers (Cleethorpes) (Con)]

I join in the congratulations to the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing the debate. I offer no special insight, merely the random thoughts of a relative newcomer to the House.

We must be mindful of the balance between effective scrutiny of Government and allowing Government to achieve their business. I was elected not because the people of Cleethorpes were sure that I would be a good and effective scrutineer of what the Government are doing. They voted for a Conservative Government—or perhaps against a Labour Government. There has to be an effective balance.

After the hon. Member for Brighton, Pavilion had first circulated her thoughts on this matter, I recall saying to her when we were corralled on a tube train that I never thought that I would be a moderniser. In fact, my first few months have edged me towards the obvious need to act. Before being here, I served for 15 years as a constituency agent, and I am mindful of how the confidence of the public in this place was dented by the revelations of the expenses scandal. Some, of course, have done things they ought not to have done. However, the public perceived us all as guilty. We have moved some way to recreate the required confidence.

The question has been put about how to use our time more effectively. I know that I am treading on dangerous ground, but I rather support the hon. Lady and those who have spoken in favour of electronic voting. The argument goes that voting is one of the few opportunities to rub shoulders with Ministers and bend their ear about one subject or another. I draw a parallel with our constituents who come up to us in the supermarket and say, “I am glad I have seen you. Can I draw your attention to the street light that has gone out?” One hopes desperately that once home one remembers and does something about it. When Cabinet Ministers are harangued by half a dozen people in the space of 10 minutes through the Lobby, I am sure that they are extremely conscientious and do their best, but I suspect that they do not always remember what has happened.

My hon. Friend the Member for Wellingborough (Mr Bone) spoke about people not knowing what they are voting for on every occasion. I am sure that “on every occasion” we would all plead guilty to some extent. He mentioned the Whips, but I think electronic voting would weaken the role of the Whips. If one was not being pushed and edged into a particular Lobby—if one was voting by merely pushing a button—one might feel a little freer from their pressures.

When I came to the debate, I thought I would insist that an hon. Member should be physically present to vote. However, the hon. Member for Angus (Mr Weir), who was stranded for a couple of weeks, made a valid point. If he has followed debates word for word—as I am sure he would on the Parliament channel—and has read his briefings and knows the subject, there is an argument for saying that he should vote. He would actually be helping the representation of his constituents if he did so. Again, I thought I would say that new Members would be slightly more objective in their thoughts, as people can become a little institutionalised in this place. However, having heard the right hon. Member for Oldham West and Royton (Mr Meacher) and my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst), who have been here for many years, it is clear that serious thought has been given and change has been made over time. A balance with the thoughts of newcomers—even aged ones such as myself—will perhaps help.

Regarding the debate about private Members’ Bills, we waste an awful amount of time—let us be honest—on progressing those Bills which, we all know from the outset, are going nowhere. A system of debate and pre-legislative discussion of those measures would be helpful.

Despite the fact that I have followed politics and parliamentary procedure closely for many years, I thought that Third Reading debates were more serious than they are. Serious is the wrong word: they are somewhat brief. The point has been made that when a Bill comes back with considerable amendment perhaps the Third Reading debate should be longer and more detailed, to give more Members an opportunity to take part.

I am a great supporter of the moves suggested by my hon. Friend the Member for Richmond Park (Zac Goldsmith), who was here earlier, such as increasing the use of referendums and so on. Perhaps there could be a way for the public to trigger referendums, by having a debate in this place and allowing them to take part, before the trigger was pulled and a referendum seriously considered.

I will finish there. The other points that I wanted to make about confirmation hearings and so on have already been eloquently made. Time is short and I shall conclude.

16:49

[Margaret Curran (Glasgow East) (Lab)]

I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing the debate. I was not sure about her constituency name, and I will refer to my lack of recall in such matters.

I hesitated before taking part in the debate, because we, as politicians, must always be wary of talking about ourselves, our experience and our institutions, when we do not perhaps connect them properly with our representative role. The hon. Lady has put the matter in a proper context, because this is about effective governance. As has been said by my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), there have been many shifts in the governance of Britain over the past 10 to 15 years, such as devolution. It is therefore appropriate that we consider how effectively we operate.

Many hon. Members have mentioned how pertinent the expenses scandal is, and how parliamentarians must rise to the challenge. If we look at what is happening in the middle east, and at how far people are prepared to go to fight for democracy, how we operate our democracy becomes significant.

I hope that my contribution this afternoon will reflect my experience in the Scottish Parliament, where I continue—just about—to be a sitting Member. I have been in that Parliament since its inception 12 years ago. When I go back, I will return the fraternal greetings of the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), who I am sure will be welcomed back for more vibrant and lively debate. The Scottish Parliament has not been without its controversies, and I do not give it an unequivocally positive response. In my experience, there have been strengths and weaknesses along the way, and it is important to draw that to the attention of the House.

In a sense, the Scottish Parliament was created to address the democratic deficit that was felt strongly in Scotland, because of the United Kingdom’s governance structures. When it was established, we did not want the Scottish Parliament to be a repeat of the Westminster model—we wanted it to be different. Three fundamental strands were embedded in that Parliament. One was accountability, which I shall return to, because the point about Executive power and how it is held to account is important. The other two strands were transparency and accessibility.

Since I came to the House of Commons, I have had some interesting experiences and drawn some comparisons. I cannot imagine what would happen in Scotland if an institution was created where Members were given priority in the queues or had special lifts assigned to them. There would be violent uprisings if that were the case and we considered ourselves so grand that we had to go ahead of others in the queue.

[Thomas Docherty]

(Dunfermline and West Fife) (Lab): Perhaps my hon. Friend will wait for the outcome of the Administration Committee’s forthcoming report on catering. She might be interested in some of its conclusions.

[Margaret Curran]

I look forward to that, and I hope that things improve. I wish to make some more substantial points about issues that have been raised in the debate. Obviously, as a Scottish Member, the hours are of great significance to me. I am torn on the issue of family-friendly hours, but I am not sure it is a sound enough argument to say that since hours cannot be family-friendly for all, they should be family-friendly for no one. We should perhaps look at ways in which we can make the hours more family-friendly. I am also disturbed by the argument that states, “I came into this Parliament with my eyes wide open. I knew the hours and I knew I would have difficulties getting back to my family.” That inhibits some people from standing for Parliament in the first place, and the way we work excludes a lot of people, particularly women, which seems counter-intuitive to rational planning.

In my first week or fortnight in the House, there was a debate on rape anonymity, a subject in which I have a great interest and which have worked on in Scotland. The debate was held at about half-past midnight or 1 o’clock in the morning. That was utterly absurd, and anyone with any degree of common sense would agree. That is not a proper and rational way to hold that kind of debate.

Having said that, I think it is important not to throw out the baby with the bathwater. There is a lot that my colleagues in the Scottish Parliament can look to Westminster for and learn from, and some traditional ways of doing things are important. This Parliament has an authority and reach that other Parliaments could learn from. There is no doubt that the British people look to this Parliament as a platform for a national debate and a vehicle for certain views. It does not necessarily always have to reflect their views, but it should be a place where views can be tested and rehearsed, hopefully with great vibrancy or some degree of controversy. I do not say that everything in Westminster is wrong, or that because something happens in a devolved context it is, by definition, more modern or advanced.

My final point is about the accountability of Government. That is a critical matter, and it is an area in which the Scottish Parliament has been disappointing, and there are things that need to be thought through. For example, the current Scottish Government regularly lose votes in the Parliament and are reprimanded by Parliament for their actions. However, that is consistently ignored. There are all sorts of explanations and debates about that, but it is significant in and of itself when the Executive—the Government—do not pay attention to the voice of Parliament. We should think about that in Westminster. Urgent questions and topical questions are more advanced in this Parliament, and I respectfully say to the hon. Member for Brighton, Pavilion, who has made an enormous contribution, that the next stage of this debate should be about how we use Parliament to hold the power of Government to account. We have heard some interesting remarks on that.

I strongly support what has been said about changing the language of Parliament. I am more likely to remember someone’s name than their constituency. Terms such as “honourable”, “Friends” and “Members” are a barrier to common sense and communication, and I hope that the hon. Lady and the Procedure Committee will look at that matter.

My right hon. Friend the Member for Oldham West and Royton (Mr Meacher) made some significant and substantial points about how we hold Government—and the power of Government—to account, which is a vital debate. We must link the debate to the experience of our constituents and make it about their lives. Somehow along the way, we are beginning to get there.

16:55

[Dr Sarah Wollaston (Totnes) (Con)]

I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas)—who is, of course, much better known as Caroline Lucas—on her excellent debate. I do not wish to repeat the many points that she has made, and instead I will refer to a few things such as creeping patronage, new politics and the role of the payroll vote. I agree with the right hon. Member for Oldham West and Royton (Mr Meacher). What is a Back Bencher for? We exist not only to represent our constituents, but to hold the Executive to account. It is disturbing that about 235 hon. Members out of 364 coalition MPs are on the payroll vote, and there are a floating number of Parliamentary Private Secretaries—around 45 because the number varies.

I want to share my experience. I was elected by an unusual process because I came to this job through an open primary. I have no doubt that I was selected because I have no track record in politics. I have 24 years’ experience in the health service, and I have experience in education and as a police surgeon treating female victims of domestic and sexual violence. That is why I am an MP, and I promised that I would come to Westminster to stand up for the NHS.

Shortly after I arrived—I am probably not allowed to say this—I was approached and asked whether I would like to become a PPS. I went to the Library and asked for a briefing on the job description, because there are no job descriptions in this place. I was told that I would have to leave the Health Committee, never speak on health matters and always vote with the Government.

How could I justify that to my constituents in Totnes? How could I look them in the eye if I chose my own professional advancement? It is a Faustian pact. I would have welcomed the opportunity to spend more time quietly behind the scenes, perhaps with Ministers, influencing policy, but in reality that does not happen. I had to make a decision, which is wrong. I have no objection to the principle of a PPS, because one can see how a Minister might lose touch with what is happening on the Back Benches. However, I profoundly object to the fact that people have to make a choice and always vote with the Government. I believe—I hope that hon. Members agree with this—that there is something profoundly toxic in that.

Now that I have committed career suicide, I may as well go in for a penny as in for a pound. One of the more bizarre experiences I had when I arrived as a new MP was the call from the Delegated Legislation Committee. I had a call about an exciting Committee that was discussing double taxation in Oman. I know nothing much about single taxation, let alone double taxation—my constituents can rest assured that I shall not be applying for the Treasury Committee or called to the Treasury. I sat through that Committee, and I sent a worried note to the Whip in charge, wondering whether I had been put on the right Committee. I received a note to say that my only duties were to turn up on time, say nothing and vote with the Government.

Hon. Members can be confident that nobody died as a result of my knowing nothing about double taxation in Oman. However, could the same be said for the Health and Social Care Bill? I would have liked to have been on the Health and Social Care Bill Committee, because I genuinely feel that one of the reasons why I was elected to the House was to apply my experience in medicine and medical education to the scrutiny of that Bill. The thing that I have found most enjoyable and most useful in this place, apart from representing my constituents, has been serving on the Select Committee on Health, which provides an opportunity for a real cross-party, close examination of the issues, and I would like to think that that would be the same for Public Bill Committees.

When I suggested to the Whips that one reason why I wanted to be on the Health and Social Care Bill Committee was so that I could table a few amendments, I effectively—[Laughter.] I examined the list for the Bill Committee and saw that my name was missing. Many members of the Committee have a genuine interest in health matters, which I welcome, but I regret to say that several members have no experience in, and have never expressed any interest in, health or social care. The country should be concerned about that. I put it to the Procedure Committee that we not only examine the role of Parliamentary Private Secretaries and remove them from the payroll vote while retaining their only important role, but examine Public Bill Committees. Our legislation would be much stronger if the people examining Bills—

[Mr Carswell]

Does my hon. Friend agree that the solution to the problem is to ensure that all sitting Members of Parliament, particularly those in the Whips Office, are subject to open primaries, if they want to be the party candidate at the next election?

[Dr Wollaston]

What a marvellous idea! Obviously, I say that open primaries are a good idea, and they have an important role in establishing a bit more credibility for the House. Yes, the process is expensive, and my selection was criticised, but I see no reason why we cannot combine open primaries, perhaps for several candidates and parties at the same time, and why that cannot be done through secure electronic voting or a series of public meetings. The process does not have to be vastly expensive, and it would certainly improve our accountability. Of course, I have to play the role that I set out on the tin. I stood as a Conservative, and that means that on the vast majority of occasions I will vote along Conservative lines, but with the important proviso that I have to represent a broader constituency. I have to take into much greater account the feelings of my constituents from across the board. What has been suggested would be a very valuable way forward. That is a little vote from me for open primaries, but as I have said, I must declare an interest.

Returning to Public Bill Committees, I do not think that the job description for a member of a Committee should be to turn up on time, say nothing and vote with the Government.

[Several hon. Members]

rose—

[Mr Joe Benton (in the Chair)]

Order. I will call one more speaker, but there are only a couple of minutes left before the start of the winding-up speeches. I call Joseph Johnson.

17:02

[Joseph Johnson (Orpington) (Con)]

Thank you, Mr Benton. I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing the debate. My speech will be very short, and I will not dwell on any points that have been made before.

There is one proposal that has the potential, if adopted, not only to save time but to improve the image that we project, both internally and externally. It is rather controversial, but we could save three or four minutes every day by not having Prayers in the main Chamber. If we want to have Prayers, let us shift them into the secondary Chamber—Westminster Hall. There are various reasons why we should make that move. First, it is important that Parliament reflects the country as it is today. It is increasingly not a monotheistic country —we are not an overwhelmingly Christian country any more.

[Mr Bone]

My hon. Friend is making a hopeless point, but in a very good way. Is it not correct that, in a recent poll, 75% of British people thought that they were Christians?

[Joseph Johnson]

That is as may be, but institutionalised prayer and congregational worship have fallen out of practice in this country over the past century, as people may notice from the attendance at their local church. I am not against going to church, which is something that people should feel free to do, but it is something that MPs should be encouraged to do in their own time. There are plenty of places of worship in the Palace of Westminster for them to go to if they want to be put in a God-fearing state of mind at the start of play. I can recommend the chapel of St Mary Undercroft. It has some fine—

[Chris Bryant]

It is hideous.

[Joseph Johnson]

It has some fine depictions of the fates of those who are not sufficiently respectful of others in their daily activities. There are plenty of ways for MPs to put themselves in the right frame of mind—a selfless frame of mind—at the start of play. Institutionalised worship in the main Chamber is not a good use of everyone’s time.

17:05

[Hilary Benn (Leeds Central) (Lab)]

I join other hon. Members in congratulating the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing for us this debate, with the support of the Backbench Business Committee. The turnout shows how many hon. Members want to discuss the subject. For me, what ran like a thread through all the speeches this afternoon was a passion for this place because of what it can do for the people whom we represent. That is why this issue matters.

Like others, I pay tribute to those who have worked to bring about reform, including, certainly in the past year or so, the Wright Committee. I pay tribute to the former Leader of the House, my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), and to the current Leader of the House for the work that they have done to improve the way in which Parliament operates.

The other thing that has been striking about today’s debate is the number of hon. Members who have come along and said, “My mind has been moved by my experience in the House.” It is very encouraging to see so many newly elected Members here. People’s minds have also been moved by the quality of the argument and the force of the case that has been put. We owe a lot to the hon. Member for Brighton, Pavilion for the cogent and forceful way in which she has argued the case.

The hon. Member for Angus (Mr Weir) referred to recent events surrounding the resignation of the hon. Member for Belfast West. The Leader of the House has been so good as to come and listen to the debate, although he is not winding up. When I suggested a change in the system, because I believe that if a Member wants to resign, they ought to be able to write to the Speaker and say, “I hereby resign from the House of Commons,” the Leader of the House chided me slightly by saying that our procedure for the Chiltern hundreds had stood us in good stead for, as I recall, some 260 years and the Government were not inclined to change it. His reputation as a reformer goes before him. I trust that that is not an argument that we will hear deployed too often when we come to debate some of the other changes that have been discussed this afternoon, because the response to any proposal put forward by hon. Members should be that it will be considered on its merits. We certainly should not argue, “Well, we’ve always done it this way.” We should argue the case, listen to the different views—we have heard a very wide range of views this afternoon—and make a decision.

The work of the Wright Committee and others has meant that real change has happened. The election of Select Committee Chairs and membership has been a very important step in taking those positions away from the power of Governments and Whips and putting them in the hands of hon. Members. Select Committees are a very powerful force in the House. The change has been an important assertion of the principle of independent scrutiny of what the Executive do.

More urgent questions have been granted. I pay tribute, if one can without breaching parliamentary order, to Mr Speaker, because he has certainly increased the number that are granted. The fact that more Back Benchers are now called to ask questions—business questions and others—has helped to re-energise the Chamber.

For me, however, the most significant change of the lot has been the creation of the Backbench Business Committee. In fairness, a reading of history would probably suggest that the Executive really grabbed control of time at some point in the 17th century. The creation of the Backbench Business Committee has wrested back for Back Benchers the opportunity to determine what we debate, how we debate it and whether it is put to a vote. I pay tribute to my hon. Friend the Member for North East Derbyshire (Natascha Engel) for the skill with which she has chaired the Committee and for the really open way in which she and the other members of the Committee meet every week and say to hon. Members, “Come and tell us what you want to discuss.”

The salon, so christened by the Leader of the House, is an open and transparent way for Members to have the chance to say, “This is what we would like to discuss.” It is a profound change, and we are still getting to grips with it, but one occasion crystallises the force of the change in my mind. That was the first of the Backbench Business Committee’s debates, on contaminated blood, which included a vote. I have never encountered such a thing in my time in the House. We have seen that same force in this afternoon’s debates, and there will be another example next week with the debate on voting rights for prisoners.

[Mr Bone]

The right hon. Gentleman has made an interesting point. On transparency—he was discussing votes—does he share my desire that, in order for people to see what is really going on in Parliament, if voting is organised by the business manager, in other words it is whipped, it should be displayed in public and recorded in Hansard? If the party is whipping people to vote in a particular way, those outside should be able to see it.

[Chris Bryant]

They could tweet it.

[Hilary Benn]

From a sedentary position, my hon. Friend the Member for Rhondda (Chris Bryant) suggests how it could be done.

I am not convinced that that is the most urgent of the reforms that is needed. The truth is that there is a tension here. On the one hand, we are members of parties; some are on their own and others have more around them, but that is part of the reason why we are elected to this place. We may or may not have great qualities as individuals, but we are elected because of what we represent, but that bringing together enables Parliament to do business. The other part of the tension is how that impinges on Members exercising their independent judgment, a point that I shall return to in a moment.

I welcome the Procedure Committee’s report on ministerial statements, and its inquiry into sitting hours. I sense that we have a moment for further reform. Today’s debate demonstrates that, not least because there are long-standing Members here today who have expressed an interest and shared their views with us, and there are many new Members here—a large number of new Members. That is why the hon. Member for Brighton, Pavilion has done us such a great service. One thing that struck me today, which is not always the case in all debates, was that as the hon. Lady spoke—indeed, as all hon. Members spoke—every one of us was listening intently to what was being said, which is how it should be. That is a characteristic of Westminster Hall, and sometimes—and sometimes not—it is a characteristic of the main Chamber, which tells us something about the importance of our discussion.

Turning to the specific proposals, I agree that we should consider ways to provide greater certainty about when votes are taking place, and I am all for considering ways to speed up the process. However, the chance for Members to come together collectively is important, and it is the reason for the proposed change. On sitting hours, I am in favour of returning to 11.30 am to 7 pm on Tuesdays, and I am in favour of moving private Members’ Bills to Tuesday or Wednesday evenings. It is wrong that Members should have to make a choice on a Friday between their constituency responsibilities—many choose to exercise them, myself included—and considering legislation. Like my right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock), I agree that Bills should be disposed of by a vote and not by trying to talk them out.

[Joan Ruddock]

I ask my right hon. Friend to confirm that when we sat three hours earlier on Tuesdays, it was possible for all Parliament’s business to function perfectly well, including the Speaker, the Committees, the staff and everyone else. Those hours have huge value, because they provide the scope for private Members’ Bills and the certainty of Friday being a constituency day.

[Hilary Benn]

I agree completely. The neatness to the solution of having private Members’ Bills on Tuesday or Wednesday evenings is this. One of the arguments against the old hours was that, “Well, the place is dead in the evenings,” but there would be plenty to discuss for those who wish to stay and take part. That would acknowledge the fact that we have responsibilities to our constituencies, which we all understand, and would not put us in a bind.

As for amendments and explanations, I am absolutely in favour of the recommendation. We had an experiment, but not everyone did so. A simple way to ensure that everybody does it is to say that those who want to table an amendment must offer an explanation or it will not be considered.

Turning to the broader questions, many hon. Members have mentioned balancing competing pressures on time, and we happen to be sitting in one of the solutions. The Adjournment debates that take place in Westminster Hall are hugely important for Back Benchers who want to raise issues and get an answer from Ministers. A number of ideas relating to that have been suggested by the right hon. Member for Saffron Walden (Sir Alan Haselhurst) and others. The Procedure Committee has recommended that we use this place to question Ministers on written ministerial statements, which is a most sensible suggestion that I hope the House will adopt. The other question is who should control the time, as we seek to expand it to deal with the competing demands.

The second matter is the fundamental one of the balance of power between the legislature and the Executive.

[Chris Bryant]

By convention, constitutional Bills are dealt with entirely on the Floor of the House. In practice, the process of going through them line by line means that we end up with fewer hours of debate. I wonder whether there is a means of having those debates in Westminster Hall, so as to allow a longer debate, more in the style of a normal sitting on the Committee corridor, but with the votes still being held in the main Chamber.

[Hilary Benn]

That would be one way of addressing some of the pressures that we have been discussing. I shall return in a moment to how we could take it all forward.

I was a local councillor for 20 years and, picking up on a point made by my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), when I was first elected to the House, I was astonished at the lack of scrutiny of expenditure, because councillors went through every year’s budget line by line. We have a lot of means by which to hold the Executive to account, if we choose to exercise them, and we can discuss ways to acquire more means. My right hon. Friend has made a number of suggestions on that point.

The third question is how Parliament is seen and covered by the media. I regret the fact that there is more commentary and sketch writing about what is said in Parliament than there is reporting of what parliamentarians say. It is a bit like “Match of the Day” having about five minutes of football and 55 minutes of analysis. We have to get the balance right, but it is up to us.

We should think back to the tuition fees debate, when a wide range of views was expressed. That day, the eyes of the nation were on Parliament. My son told me that he went to the bar at university and saw something that he had never seen before—students watching the Parliament channel on television. On that day, people were looking to us, because we were debating something important. When the bankers appeared before the Treasury Committee—those folk had contributed somewhat to the economic difficulties that we face—people were interested in the process.

The fourth question is how we legislate. I agree with the hon. Member for Bury North (Mr Nuttall) and others about the benefit of pre-legislative scrutiny. With the benefit of some ministerial experience, I can say that Governments of all colours do not draft perfect legislation. The notion that the Government should unveil legislation in the House and then repel all boarders, wherever they come from, is nonsense. The act of scrutinising legislation, both pre-legislative and in Committee, means that we end up with better legislation, which is what we want. That process tests the legislation, and things that have not been thought of are exposed. I agree with those who say that we should have the chance to vote on proposals, and not see them slip off the edge of the Order Paper. The Government should have the courage of the argument and respect the vote.

Turning to how representative we are, we have not touched on House of Lords reform, because that would have taken all of our time, but I am wholly in favour of the second Chamber being 100% elected. It should be part of the system of checks and balances while recognising that the first elected Chamber should ultimately have its way.

Where do we go now? We need a process to take forward the ferment of ideas that we have heard this afternoon, and we must not lose the moment—for reasons that many Members have mentioned. The Procedure Committee, which is ably chaired by the right hon. Member for East Yorkshire (Mr Knight)—I am sorry that he is not well and we have sent our best wishes to him—is the furnace from which the ideas should come. The ideas should be presented to us; we can debate them and then have a chance to vote on them. Completely different views have been expressed this afternoon, which is great. In the end, though, we have to have a mechanism for deciding whether or not we are going to do something. Voting is a wonderful way in which we can try to reconcile the apparently irreconcilable.

Finally, why does this all matter? My hon. Friend the Member for Glasgow East (Margaret Curran) expressed it on behalf of us all when she said that people look to this Parliament to be the forum for national debate. They want to see that their voices are heard. They want to see us solving their problems and they want their hopes and aspirations realised by what we do. In the words of the prayer, we seek

“to improve the condition of all mankind”—

I would change that to humankind—and it is good to reflect on that when we start the day. The truth is that our democracy is our best and only hope of doing those things; it is our Parliament, so let us make it work for the people whom we have the privilege of representing.

17:20

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

It has been a great pleasure to listen to this debate, and I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing it.

I am pleased that so many new Members have come along and contributed. The hon. Member for North East Derbyshire (Natascha Engel) hit the nail on the end when she said that there is a brief moment before we become institutionalised by this place where we actually see things as others see them. It is important that we have that perspective and make use of it.

I also say that this is a triumph for the Backbench Business Committee, and I am so pleased that the Leader of the House has been able to sit through the debate. I hope that he is here not to ensure that I do not say something completely out of order but because he, like me, shares a zeal for reform. The best thing that we have done so far in this House is create the Backbench Business Committee, which we argued for in opposition, which the Wright Committee proposed and which we now have doing its job. Without the Backbench Business Committee, we would not have had the two well-subscribed, relevant debates in the main Chamber today and this debate happening here. We can contrast that with the lacklustre, so-called topical debates that we had in the previous Parliament, which were chosen by the Leader of the House. Those debates were neither topical nor debates, because Members were not really interested in them, so we have made a huge stride in the way in which we work. Of course, there are many other things that have happened, such as the election of Committees and their Chairs, which is directly relevant to what the hon. Member for Totnes (Dr Wollaston) has said. She is able to be a member of the Health Committee because she has the confidence of her colleagues rather than the patronage of the Whips, which is an important distinction.

Two themes underlie our debate. One is how we make this House more efficient in the way in which it does its job, so that Members of Parliament can do their jobs better. The other—this picks up the point that was very well made by the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart)—relates to making this House fit for purpose, which is both relevant and a matter of good governance. I agree that we reached a nadir of parliamentary performance a couple of years ago. It coincided, as it happened, with the expenses scandal, and amplified it because the general public were saying, “These people are abusing the system, and what use are they anyway, because Parliament is not doing the job for which we elected it—holding the Executive to account?”

Making the House more efficient and improving good governance are not mutually exclusive. In fact, the situation is the reverse, because they are complementary. The key word—it has been used many times—is balance. There are countervailing balances all the way through the proceedings. For individuals, it is how they use their time—in their constituencies, in the Chamber and with their families, which we often forget as part of the equation. There are competing pressures on their time when they are actually in Parliament. There are Select Committees, Public Bill Committees, the main Chamber and this place. The hon. Member for Stretford and Urmston (Kate Green) had to leave this debate to be in another debate in which she has a keen interest, which demonstrates how we have to balance those pressures.

There is the further balance between legislation and scrutiny, which are both important. The key is time. Very often people make mutually impossible demands on the programme of the House. They say, “We want more time to scrutinise Bills.” At the same time, they say, “We want more statements before the House.” Then they say, “We want more opportunities to see Ministers in the Chamber, but we do not want the hours to be any longer, and we do not want the recesses to be any shorter. We want all these things to happen within the same short period that we have available as parliamentarians.” Sometimes, we have to strike a balance. Part of that balance is ensuring that legislation, which is a key part of this House’s work, is scrutinised effectively and that there is time for that to happen and for the Government to put forward legislation in a proper way.

[Mr Bone]

We are very lucky today to have the presence of three outstanding parliamentarians—the Leader of the House, the Deputy Leader of the House and the shadow Leader of the House. When we were in opposition, we were united in our opposition to programme motions and the reduction in time. I still hold that view, although I am not entirely sure whether the Leader of the House and the Deputy Leader of the House still do. Perhaps the answer to my problem is the introduction of a business of the House committee. What does the Deputy Leader of the House say to that?

[Mr Heath]

As the hon. Gentleman knows, we are committed to bringing forward a full business of the House committee. We will not do so until we have seen the way in which the Backbench Business Committee has operated, so that we can learn from experience. Certainly, the early experiences have been good. We should be able to move towards a sensible use of time in this Chamber even without such a Committee, but that needs a degree of co-operation and a bit of grown-up politics, so that when we provide more time for Bills it is used sensibly and not used exclusively by Opposition Front Benchers to the exclusion of Back Benchers. Such issues are important for the whole House. We should ensure that the issues that parliamentarians wish to address have sufficient time to be addressed properly. When we come to a sensible agreement, we should keep to it, because it benefits everybody. My plea is that we discuss these matters, both informally and formally, stick to agreements and try to find the right time for everybody to have their say.

I want briefly to deal with some of the issues that have been raised in debate. For many of them, I will simply say, “It is not a matter for Government.” I will be right, because it is a matter for the House. The House, in both my mind and the mind of the Leader of the House, has a key role to play. We have the Procedure Committee considering sitting hours. There are very strong views on either side of the argument. It is not a question of right and wrong, but a question of what is least bad for many Members. I am looking forward to the options that the Procedure Committee will produce for the House to consider.

As for electronic voting, when I was first elected back in 1997, we discussed whether the current voting system is sensible. The Modernisation Committee cogitated for six months before coming up with its conclusion, which was to do away with the two Clerks on high stools solemnly ticking us all off as we filed past and dramatically replace it with three Clerks on high stools ticking us all off, which was the extent of modernisation in this House. That was the decision of the House. The House wanted to keep to its system, because it was argued that that was the way in which Members could rub shoulders with Ministers. As an Opposition Member, I could never quite see when I would get to rub shoulders with a Minister. It is an issue that is perfectly proper for us to consider. I am struggling at the moment to persuade the Clerks of the House that they need to take a few people off the G to M section during a vote. [Interruption.] There are 20% more in our column than in the other two columns, so I have a partisan view on that.

[Sir Alan Haselhurst]

I refresh the Deputy Leader of the House’s mind that there was one occasion when the England football team were involved in a critical World cup match. A Division occurred in the middle of the match and it was accomplished in nine minutes. Where there is a will, there is a way.

[Mr Heath]

Yes, sometimes. Congestion is a problem—perhaps we should have a congestion charge in the Lobbies.

There are obvious arguments in favour of occasional deferred voting. However, there are also problems with sequential amendments, which were outlined by the right hon. Member for Saffron Walden (Sir Alan Haselhurst). We need to look at how that problem might be managed if occasional deferred voting is to proceed, but that is another matter for the House to consider.

Regarding abstentions, it has always struck me as odd that we have no way of differentiating between an abstention and an absenteeism. There is no way of knowing that a right hon. Member or hon. Member is here in Parliament but has chosen not to vote for the options before the House. Of course, the results of votes are now recorded electronically and are sent around the country. Constituents believe that their MP simply was not there rather than that they were there, had listened to the arguments made in the debate and were not persuaded by either of the positions that were taken.

I hope that we will make progress on private Members’ Bills. As has already been said, the Procedure Committee is looking at that issue.

Regarding explanations for amendments, we had the experiment in Committee and I am certainly happy, as far as the Government are concerned, for that experiment to proceed. Perhaps we ought to look at having such explanations on Report, too. I have argued that occasionally there is room for rubric on motions, including the type of business motion that appears late at night before the House that is completely inexplicable to most Members of the House but is actually entirely benign. I think that we can speed up our progress, but I have been told by the Clerks that we cannot possibly put a bit of rubric on the Order Paper to explain why we are doing it. I do not know why that is the case.

Parliamentary language is an issue that we could debate all evening and I will not enter into it other than to say that we have heard the arguments on both sides.

The additional use of Westminster Hall is an important issue. The right hon. Member for Saffron Walden was one of the pioneers of its additional use. He is not an old fogey. He pioneered real innovation in this House in helping to create this Chamber, and if we can use it more effectively we should do so. We ought to look at that issue.

Regarding the legislative process, pre-legislative scrutiny is important, and this Government are committed to it. By the end of this Session, we will have subjected far more Bills to a process of pre-legislative scrutiny than the previous Government did in the final Session of the previous Parliament. It has not happened yet simply because we are a new Government, and inevitably with new legislation one has to start somewhere, otherwise the whole system grinds to a halt. However, we are certainly committed to that process, as we are to the process of post-legislative scrutiny. Indeed, some of the levers for that are already there in the hands of the Select Committees, if they choose to use them.

The issue of commissions of inquiry was raised by the right hon. Member for Oldham West and Royton (Mr Meacher). He might remember that, before I was in my present not-very-exalted position, I introduced a Bill to allow commissions of inquiry. There is a strong argument for them, and I am engaging with Ministers to see whether there will be a legislative opportunity for doing exactly as he wishes.

Regarding scrutiny of expenditure, we have already had the clear line of sight programme from the Treasury, which is important and which has allowed a degree of co-ordination in scrutinising expenditure, but we can go further in allowing the House to scrutinise Government expenditure more effectively. Again, however, the Select Committees have an important scrutiny role, which they have not fully exploited. As for lobbyists, we intend to introduce legislation shortly to deal with their registration. I agree that that is an important issue, too.

I will start to wind up now, Mr Benton, because the hon. Member for Leicester South (Sir Peter Soulsby), who will speak for the Procedure Committee—I am so sorry that the right hon. Member for East Yorkshire (Mr Knight), the Chairman of the Committee, is indisposed today and is unable to be here—wishes to speak.

The problem that we had with the previous Government was their attempt to lead the House’s modernisation agenda themselves, by using the Modernisation Committee, chairing it and then effectively abandoning it in the final months and years of the previous Parliament. We are making real progress on a wide front in reforming Parliament, and where there is a need for legislation we will introduce it. The procedure and processes of the House are a matter for the House itself, and we are keen that the House takes the lead on those issues. We might have clear views, and we will express them, but as a Government we should not impose processes on the House.

[Ann Coffey]

Will the Deputy Leader of the House give way?

[Mr Heath]

Very quickly.

[Ann Coffey]

Part of the issue is that it is only business managers who can put motions before the House. Is the Minister saying that when the Procedure Committee comes up with recommendations, those recommendations will go to the House to be voted on?

[Mr Heath]

We have a new procedure that involves the Backbench Business Committee, which is why we are having this debate today and which is the really significant advance. However, I accept that there are different foci for reform in Parliament at the moment. There are the business managers, the Leader of the House and myself, the Backbench Business Committee, the Procedure Committee and the Liaison Committee. There are a number of people who have an interest in this issue, and there is a legitimate discussion to be had about whether the House has the right vehicle to take the debate about the issue forward. However, I am absolutely convinced that the debate needs to be taken forward and we, as a Government, will certainly make every attempt to support that view.

17:35

[Sir Peter Soulsby (Leicester South) (Lab)]

It is a pleasure to reply to this debate on behalf of the Procedure Committee. As the Minister has reminded Members, I do so because of the illness of the right hon. Member for East Yorkshire (Mr Knight), who is the Chair of our Select Committee but who had all the symptoms of flu last night. For his sake and for ours, it was felt best that he retired to his bed.

It is very evident, from the number of Members who have been in Westminster Hall for this debate today and the passion with which they have spoken, that a series of issues have been discussed that we undoubtedly need to take account of. The members of the Procedure Committee were here, along with a number of other Members, and I am sure that the other members of the Committee will correct me if I do anything other than express the views of the Committee. As I say, these are matters that we need to take account of and we will take account of them. We are very grateful to have had the opportunity to hear the debate.

I join others in congratulating the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this timely debate. Any person who listened to the debate but was not actually in the room with us would be heartened by the fact that it was virtually impossible to tell which party Members were from as they contributed to the debate. It has been clear that we are united in our passion not only to restore the reputation of the House but to enhance its effectiveness in representing our constituents, in holding the Government to account and in scrutinising legislation.

I pay tribute, very briefly, to some of those who have paved the way in the past for this debate. The right hon. Member for Oldham West and Royton (Mr Meacher) spoke very passionately. It is worth reflecting on the fact that he currently chairs an important cross-party group, Parliament First, which paved the way for much of the agenda that we have talked about today. Back in 2003, the group published a short but very influential paper called “Parliament’s Last Chance”, which is still available in the House of Commons Library. In that paper, the group set out an agenda for improving scrutiny and accountability, for direct engagement with the public and, most important of all and fundamental to what we have discussed today, about how Parliament—particularly those of us in the Commons—can regain control over our own affairs and thereby enable ourselves to do our job properly.

I also pay tribute to another Member who is not able to be with us today, my hon. Friend the Member for Nottingham North (Mr Allen). He wrote a very useful pamphlet that has helped to set the agenda, called “The Last Prime Minister”. It was somewhat apocalyptic in its title but none the less influential in the agenda that it set out.

Of course I pay tribute, as other Members have done, to Tony Wright, the former Member for Cannock Chase. While many of the rest of us were despairing of what was happening around us during the expenses scandal, he saw the opportunity of that crisis to set out an agenda for reform, including proposing the establishment of the Reform of the House of Commons Committee, a number of whose members are here today. He also pressed an agenda on that Committee for a menu of items for reform that have enabled us—both the last Government and the present Government—to do much of what has been achieved of late.

We have seen the establishment of the election of our Speaker and of our Deputy Speakers, and even more significantly than those two changes we have seen the establishment of the election of Select Committee Chairs and a proper, transparent system for appointing membership, which has taken those appointments beyond the reach of the patronage of party and Whip. That has undoubtedly continued to enhance the reputation of the work of the Select Committees, and enabled them truly to speak on behalf of Members across the parties, in holding the Government and others to account.

The Procedure Committee is very aware that it needs to take forward the changes that have already been made. In her introduction, the hon. Member for Brighton, Pavilion talked about us having a long way to go. We have achieved a lot, but she is entirely right. The Modernisation Committee is well aware that we have a long way to go, and knows that it picks up the responsibility of the Wright Committee to drive forward change and reform.

We already have on our agenda a number of matters that have come from the Wright report, and we have already looked at some of the issues raised by right hon. and hon. Members during this debate, for example the proposed explanatory statements on amendments. We have looked at the use of hand-held devices, and at issues raised by the Wright Committee that were not picked up by the Government of the time, such as the recommendation to have lay members on the Standards and Privileges Committee. Important as those issues are, a much more significant issue on our agenda is one that many Members have mentioned: the hours we sit, the days when we sit, and what we do when we are here.

A number of Members have touched on the difficulty of drawing up a job description for a Member of Parliament, and undoubtedly there is much to be discussed about the balance between what we do in our constituencies and what we do here at Westminster. However, all of us on the Procedure Committee are aware that there is a range of important issues that we need to discuss, concerning the options for the days when we meet, the times we meet, the places where we meet—whether the main Chamber or here in Westminster Hall—and, most important of all, the business that we conduct.

In taking forward our agenda—this was very much pressed on us by the House—the Committee issued just yesterday a timely report on ministerial statements. The report looks at how the House can ensure that it is the first to hear the detail of important Government statements, instead of them being released by the press, with us following far behind trying to pick up the pieces, and responding to the debate rather than setting it. Fundamental to that, and to the work of the Procedure Committee, is the principle that Parliament should be at the centre of the national debate.

I was pleased that the Deputy Leader of the House spoke again of the reforming zeal possessed by him and his colleague, the Leader of the House, whom I have been delighted to see with us throughout this debate, and I press on him once more the vital importance of the recommendation in the Wright Committee’s report, which we as the Procedure Committee will pick up, to take forward the House business committee. I think that we are all enormously impressed by the work that is being done by the Backbench Business Committee under the chairmanship of my hon. Friend the Member for North East Derbyshire (Natascha Engel), and by the difference that it has made to our ability to be effective in our jobs as parliamentarians and Members of the House of Commons. However, I think that we are all aware that although the Government have a right to get their business through the House, the House has a responsibility to ensure that that business is properly scrutinised. At the heart of guaranteeing that is the way in which time is allocated and the way in which we as Members of Parliament have the opportunity to ensure that business is properly scrutinised, whether it is in its early pre-legislative scrutiny stages or is passing formally through the various stages in the House. Part of that, and beyond the establishment of a House business committee, are questions about how Public Bill Committees are able to scrutinise legislation.

On behalf of the Select Committee, I want to give a reassurance that we are aware that the issue of how we restore the ability of the House to do its job properly is vital. I also reassure those present that the members of the Procedure Committee have been listening to this debate, even those who are not physically present, and that we recognise our responsibility to respond effectively to the concerns that have been raised and the suggestions that have been made, and to do so in a timely fashion.

Question put and agreed to.

17:44

Sitting adjourned.

Written Ministerial Statements

Thursday 3rd February 2011 Written Statements

Thursday 3 February 2011

Public Service Pensions

Thursday 3rd February 2011 Written Statements

[The Chief Secretary to the Treasury (Danny Alexander)]

Legislation governing public service pensions requires them to be increased annually by the same percentage as additional pensions (state earnings-related pension and state second pension). Public service pensions will therefore be increased from 11 April 2011 by 3.1% in line with the annual increase in the consumer prices index up to September 2010, except for those public service pensions which have been in payment for less than a year, which will receive a pro rata increase.

European Regional Development Fund (Revised Management Arrangements)

Thursday 3rd February 2011 Written Statements

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

My hon. Friend the Parliamentary Under-Secretary of State, Baroness Hanham, has made the following written ministerial statement:

I am today announcing a series of changes I will be making to the operation and delivery of the European Regional Development Fund (ERDF) in England.

ERDF is a key driver for economic growth and the sub-national agenda and I have seen for myself some of the benefits it has brought to local communities. The operation of ERDF is governed by complex European regulations and comes with stringent penalties if those are not met. As the Secretary of State outlined in a departmental press notice of 7 July 2010, the new Government inherited up to £150 million of potential liabilities from the previous Government due to financial and administrative irregularities. It is vital that taxpayers have confidence that their money is not being wasted.

ERDF is currently delivered by teams in the regional development agencies. Following our decision to abolish these agencies and encourage local communities to come together to form economic partnerships that make sense for them, I have concluded that in order to maintain compliance with the regulations and spending momentum, we should transfer the existing ERDF staff and functions into my Department by the beginning of July.

In London, the Greater London Authority is establishing a housing and regeneration division from parts of the London Development Agency and the London elements of the Homes and Communities Agency. So I have concluded that, in line with the steps we are taking in the Localism Bill to transfer power and functions to the Mayor of London, the Greater London Authority is well placed to continue to operate ERDF in the capital.

We want to encourage local communities to make use of ERDF. This is more likely to happen if ERDF teams continue to be located close to the places they serve so they are on hand to offer support and advice to projects. So I have decided that we must aim to locate the ERDF teams as far as possible in their existing towns or cities.

We are committed to giving localities and communities greater control and greater influence over the programmes and services delivered in their areas. To help achieve this, I have decided that we should restructure existing Programme Monitoring Committees as Local Management Committees which can ensure that, within the parameters already agreed with the EU, local people and businesses can influence the shape of the programme. These Committees give strategic direction to the operational programmes and ensure that they are delivered compliantly and that outputs are delivered. I will be looking to ensure that the local representatives from across the public, private, voluntary and community and local authority sectors are represented on the Local Management Committees.

I am committed to ensuring my Department plays a key role in ensuring that the delivery of ERDF remains compliant with EU regulations. To deliver that, I have decided that a DCLG director will chair the Local Management Committees. But to underline our commitment to localism, I have also decided that a significant figure from the local community should be appointed as a deputy chair of the Local Management Committee, to ensure that the ERDF programmes are overseen and shaped by local people. We will work with local communities to determine who should occupy this role.

We will be working closely with the existing membership of the Programme Monitoring Committees and other local representatives to determine the practical details of the changes I want to make. That will include the role of the Local Management Committees, how the deputy chair and membership will be selected and what underpinning arrangements they will need.

Finally, as we said in the “Local Growth” White Paper, we want to make it easier for local communities to access all elements of regeneration funding, so my Department is working with the Department for Business, Innovation and Skills to determine the scope to align the application processes for ERDF and the regional growth fund. We will also be looking to ensure that this new process delivers greater efficiency through limiting duplication.

Mental Health Act 1983 (Repeal of Section 141)

Thursday 3rd February 2011 Written Statements

[The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)]

Section 141 of the Mental Health Act 1983 sets out a process by which MPs are to vacate their seats if they have a mental health condition and are authorised to be detained under mental health legislation for a period of six months or more. The process involves the Speaker of the House of Commons receiving reports from registered medical practitioners. If the Speaker receives two such reports, six months apart, that the MP is in such detention, the Speaker lays both reports before the House of Commons and the MP’s seat automatically becomes vacant. Section 141 also applies in relation to the devolved assemblies with the presiding officer of each assembly performing the functions of the Speaker.

Although the provisions in section 141 have never been used, this section is symptomatic of an outdated attitude towards mental illness which is out of touch with the modern understanding of mental health. It treats mental ill health differently from physical ill health. It sends out the message that if you have a mental health condition, your contribution is not welcome in public life. That is a message this Government wish to change.

This Government agree with the all-party parliamentary group on mental health that section 141 should be repealed as soon as possible—a view endorsed by the Speaker’s Conference (on Parliamentary Representation) Final Report (2010) HC 239-1, paragraph 327.

We will introduce provisions to repeal section 141 at the earliest opportunity.

Parliamentary Written Question (Correction)

Thursday 3rd February 2011 Written Statements

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

I would like to inform the House that a written answer I gave on 13 December 2010, Official Report, column 523W to the hon. Member for Ogmore (Huw Irranca-Davies) contained some inadvertent errors in relation to the number of representations received on Sheffield Forgemasters.

The correct information is as follows:

We have received letters from 12 private individuals, one Member of Parliament on behalf of an unnamed constituent, one not-for-profit organisation and one private company on this issue. However, this does not include all representations where Sheffield Forgemasters might have been just one of the issues raised in a letter. To search all the correspondence that might contain a representation on Sheffield Forgemasters would incur disproportionate cost

I apologise to the hon. Member and to the House for this error.

EU Emissions Trading System Registries (Suspension of Transfers)

Thursday 3rd February 2011 Written Statements

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

On 19 January, following a number of successful cyber attacks on EU member states’ emissions trading system (EU ETS) registries, the European Commission suspended all internal and international transactions within all the EU ETS registries. These registries are the repositories for EU emission allowances and an important part of carbon market trading.

The UK agreed with the European Commission that EU member states should not be able to reopen registries until they had provided sufficient evidence to the European Commission that their registries meet a number of minimum security requirements. The UK registry is widely seen as one of the most secure registries in Europe with at least one market participant recommending this week its clients should use the UK registry. The UK’s registry administrator, the Environment Agency, earlier this week submitted the required evidence to the Commission. We have received confirmation this morning that the UK registry will reopen on Friday 4 February at 7 am.

While it is important to ensure a minimum level of security now to ensure the reopening of the registries, the UK will continue to press the European Commission to ensure that registry security across Europe is raised above this level. This is vital to ensure continued confidence in this growing market.

The temporary suspension of registry transfers has had an impact on the carbon market, though this has been concentrated in spot trading, (which allows for instant delivery of allowances bought on the secondary market), which represents only 10% of trading on the carbon market. The futures market, which is predominately based in the UK and accounts for the remaining 90% of the carbon market, has shown only a limited level of disruption. Trading here has continued at broadly the same volumes as before the registries were closed and the impact on the EU emission allowance price has been limited.

Jordan

Thursday 3rd February 2011 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

The Minister of State, Foreign and Commonwealth Office, Lord Howell of Guildford, made the following statement:



“Jordan is a close ally and we value the support they offer on regional issues such as the middle east peace process. We are watching closely the situation in Jordan following the disbanding of the cabinet. It is important that Jordan continues its programme of political and economic reform. We will work with the Jordanian Government to support that goal.”

General Affairs Council and Foreign Affairs Council

Thursday 3rd February 2011 Written Statements

[The Minister for Europe (Mr David Lidington)]

The Foreign Affairs Council and General Affairs Council were held on 31 January in Brussels. My right hon. Friend the Foreign Secretary and I represented the UK.

The agenda items covered were as follows:

General Affairs Council (GAC)

The GAC was chaired by the presidency, Hungarian Foreign Minister Martonyi. A provisional report of the meeting can be found at:

http://www.consilium.europa.eu/uedocs/cms data/docs/pressdata/EN/genaff/119Q37.pdf

Hungarian EU Presidency

The presidency presented the main themes of the presidency’s programme along the lines that I reported in my pre-FAC/GAC written ministerial statement of 27 January.

December and February European Councils

After a brief review of the December European Council of 16-17 December, Ministers discussed preparations for the 4 February European Council. On energy, views were exchanged on: integrating the internal energy market; achieving energy efficiency targets and promoting renewable energies; and improving the coherence of the EU’s external action on energy issues.

I proposed that the EU should look at developing its strategic energy partnerships with countries bordering the EU.

On innovation, a number of member states emphasised the need to be more ambitious on the digital single market.

European Semester and Annual Growth Survey

The presidency presented its roadmap for the European semester which is being implemented for the first time this year as part of a reform of EU economic governance. The European semester involves simultaneous monitoring of member states’ budgetary policies and structural reforms, in accordance with common rules, during a six-month period every year. Under the European semester, all other member states will send draft budgetary plans to the EU for consideration in the spring. However, because the UK’s fiscal year is different, and because the Government were determined to respect section 5 of the 1972 European Communities Act which states that the UK will only submit fiscal data to the Commission if it has already been presented to Parliament first, the Government secured in June 2010 a provision in the stability and growth pact code of conduct to say that we will present our final budget, not our draft budgetary plans, to the EU. The UK budget will therefore already be publicly available and have been presented to Parliament. The Commission and European Council will then provide policy advice and guidance to member states. The final decisions on national budgets will remain with national Parliaments for all member states. Moreover, the UK is explicitly excluded from sanctions under the stability and growth pact, as the taskforce report states: (para 18.ii) “strengthened enforcement measures need to be implemented for all EU member states, except the UK as a consequence of protocol 15 of the treaty.

On the annual growth survey, the presidency highlighted three themes:

enhancing macroeconomic stability;

structural reforms for tackling unemployment; and

measures to enhance economic growth under existing strategies.

Roma

The presidency said they planned to present a report to the GAC in May on integrating Roma. This should be forwarded to the European Council of 24 June.

Strategy for the Danube Region

The presidency and the Commission gave short presentations on their goals of improving co-operation and cohesion in the region in areas such as the environment and developing prosperity.

Foreign Affairs Council (FAC)

The FAC was chaired by Baroness Ashton. A provisional report of the meeting and adopted conclusions can be found at:

http://www.consilium.europa.eu/uedocs/cms_dataydocs/pressdata/EN/foraff/119045.pdf

Egypt

Discussion on Egypt took up a large part of the meeting. The adopted conclusions (see link) stress the need for a broad-based Government, an “orderly transition” and for “free and fair elections”.

Ministers took the opportunity to discuss the broader implications for the region and the EU’s neighbourhood policy. The Foreign Secretary emphasised the need for the EU to support Egyptian institutions, values and processes. The EU should also review its engagement in the region. UK initiatives like the Arab human development programme might offer a model. For more on the FCO’s projects in the Middle East see the following link:

http://www.fco.gov.uk/en/global-issues/conflict-prevention/mena/middle-east-peace-process1/

The Commission (Fule) briefed on existing EU support to Egypt: €145 million through the European neighbourhood policy instrument and €20 million planned from the European instrument for democracy and human rights. He added that the Commission was prepared to offer Egypt electoral support.

Baroness Ashton undertook to schedule future FAC discussion on the EU’s neighbourhood policy and to explore the possibly of sending an EU fact-finding mission to Egypt as soon as it was safe to do so.

Tunisia

Following on from the discussion on Egypt, Ministers agreed to adopt conclusions (see link) on Tunisia that support the transition to democracy and to offer assistance with elections. The conclusions also include measures to freeze the assets of those who have embezzled Tunisian public funds. In interventions, many emphasised the need to maintain Tunisian ownership of the election process and called for a review of the EU-Tunisia advance status negotiations.

Belarus

Ministers agreed conclusions (see link) imposing sanctions against the Belarusian Government in response to its post-election crackdown. There was broad agreement that the release of seven detainees over the weekend did not sufficiently address concerns to warrant stopping the sanctions. The Foreign Secretary said the EU had offered a positive approach to the Belarusian regime which had been rejected. So it was right to impose these sanctions. Additionally, the EU should keep open the prospect of economic sanctions.

Cote d’Ivoire

Ministers had a short discussion where they agreed conclusions (see link) that confirmed the EU’s support for President Ouattara and set targeted sanctions against former President Gbagbo.

Sudan

Conclusions (see link) welcoming the preliminary results of the referendum were agreed. Ministers discussed the post-referendum situation and the need to develop a long-term EU engagement plan for both south and north Sudan. Concern was also expressed about the humanitarian situation in Darfur.

Freedom of Religion and Beliefs

Ministers discussed recent attacks on religious minorities in the Middle East and how the EU might respond. There was general agreement that the EU should send a strong message of concern about these attacks. Baroness Ashton tasked that the Political and Security Committee to develop a set of conclusions for adoption at a future FAC.

Sahel

Conclusions were agreed (see link). During a brief discussion, some member states asked for the new strategy for the Sahel to be adopted quickly.

Albania

There was insufficient time to for Ministers to have a discussion on recent events in Albania. Baroness Ashton and Commissioner Fule stressed they were both actively engaged.

Iran

The Netherlands raised the execution of the Dutch/Iranian dual national Zahra Bahrami. The Foreign Secretary’s statement about his can be seen at the following link:

http://www.fco.gov.uk/en/news/latest-news/?view=News&id=542737582

Foreign Ministers' dinner with Baroness Ashton

Over dinner, Baroness Ashton led a discussion on the EU’s relationship with its strategic partners with a particular focus this time on its objectives for Russia. Ministers also reviewed developments in the Middle East ahead of the Quartet meeting of 5 February and discussed Lebanon. Finally, Baroness Ashton briefed on the Istanbul talks of 21-22 January on the Iranian nuclear programme.

Deputy Immigration Services Commissioner

Thursday 3rd February 2011 Written Statements

[The Minister for Immigration (Damian Green)]

I am pleased to announce Dr Ian Leigh’s appointment as Deputy Immigration Services Commissioner for the Office of the Immigration Services Commissioner (OISC). The appointment has been made in accordance with schedule 5 of the Immigration and Asylum Act 1999, and therefore this is a five-year appointment. Dr Leigh will take up the post on 7 February 2011.

Dr Leigh is a chartered physicist and a fellow of the Institute of Physics. He has extensive experience of working in the public sector having spent several years employed as a senior civil servant and several years in a senior role in an NDPB. Dr Leigh was a deputy director in the Department of Trade and Industry with responsibility for managing the National Physical Laboratory’s operating contract. In 2001 he was appointed as managing director and director of policy for Postwatch, an executive NDPB dealing with all consumer issues in the postal sector. Since 2008, Dr Leigh has been working as a consultant to the Irish Commission for Communications Regulation.

The appointment of a Deputy Commissioner to replace the previous post holder has been made with due consideration of the uncertain future of the OISC. The Cabinet Office announcement of reform to public bodies listed the OISC as one where future options, including a possible merger, are under consideration. A Deputy Commissioner remains a requirement for the current operation of the OISC and as any changes will take time to be considered and thereafter implemented, it is the case that substantial work at a managerial level will be required within the OISC.

Prevention of Terrorism Act 2005 (Lord Carlile's Report)

Thursday 3rd February 2011 Written Statements

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

I am pleased to say that in accordance with section 14(3), 14(4) and 14(5) of the Prevention of Terrorism Act 2005, Lord Carlile of Berriew QC has completed the report on the operation of the Act in 2010, which will be laid before the House today. Copies will be available in the Vote Office.

IPSA (First Year Review)

Thursday 3rd February 2011 Written Statements

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

The Independent Parliamentary Standards Authority is currently conducting its first year review of the parliamentary expenses scheme. IPSA launched a formal process for public consultation on 5 January 2011.

Under the Parliamentary Standards Act (2009), the Leader of the House is a statutory consultee of the scheme. Today, I am publishing the evidence that I am submitting to IPSA and I have placed copies in the Library of the House, in the Vote Office for Members and on the Leader’s website: www.commonsleader.gov.uk.

Although I am responding as a statutory consultee, it has not been my intention to respond on behalf of the House. I understand that party groups and individual MPs may be sending in separate submissions.

As I have set out in my evidence, I believe there are five key principles that should guide the regime for Members’ expenses. They are:

Independence—Members should not determine their own allowances.

Transparency—Public confidence must be maintained through transparent rules and publication of expenses data.

Professionalism—Members should be properly resourced so that they can effectively represent their constituents and perform their parliamentary duties.

Fitness for Purpose—Members from all backgrounds must be able to provide an equal service to their constituents; the system should not deter candidates from less affluent backgrounds from becoming or remaining Members of Parliament, nor adversely affect family life.

Cost-effectiveness—The system should minimise the cost to the taxpayer, both by limiting the amount Members may claim to what is absolutely necessary and by offering simple, cost-effective administration.

The public consultation closes on 11 February and I would encourage all Members who wish to raise issues with IPSA to do so before the end of the consultation period, so that IPSA is able to take account of the broadest range of views from within the House.

Drivers (Medical Standards)

Thursday 3rd February 2011 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

The Department for Transport has today published a consultation on proposals for changes to the driver medical standards on eyesight, epilepsy and diabetes.

The current driver licensing rules in the UK are based on the second European Council directive on driving licences (91/439/EEC). The minimum medical standards for the issue of driving licences are detailed in annex III of the second directive and the forthcoming third European directive on driving licences. Officials and medical experts from across the European Union reviewed the standards for eyesight, diabetes and epilepsy. Following receipt of their reports to the European Commission, amendments to the standards were adopted in 2009 in directives 2009/112/EC and 2009/113/EC, and came into force 15 September 2010.

The Secretary of State's experts on the honorary medical advisory panels for eyesight, diabetes and neurology have considered the medical directives and how these compare with existing UK standards. For the most part the medical directives relax, or more precisely define, existing EU minimum medical standards. While UK standards must be at least at the level of a minimum standard we are not required by EU law to relax existing domestic standards where these are higher than the EU standards. However, where the panel has advised that a relaxation is consistent with road safety we are recommending that this is adopted. The implementation of these revised standards is the basis of the consultation.

The consultation period will run until 28 April 2011. Copies of the consultation document have been placed on the Library of the House. Further copies are available on the DFT and DVLA websites at www.dft.gov.uk or www.dvla.gov.uk. Depending on comments received and the Department’s response, amendment for any change will be made to regulations or guidance issued to medical practitioners.

ATOL Scheme

Thursday 3rd February 2011 Written Statements

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

I am today announcing the Government’s “in principle” decision to reform the air travel organisers’ licensing (ATOL) scheme to improve clarity for consumers about its coverage and also to put the scheme’s finances back on a sustainable basis. There will be a full consultation on the details of the proposed reforms.

The ATOL scheme, operated by the Civil Aviation Authority (CAA), was introduced in the 1970s to provide financial protection for the purchase of package holidays in the event of travel company insolvency. Affected passengers are entitled to a full refund if they are yet to travel, or repatriation after completing their holiday if they have already reached their destination.

However, as a result of new ways of selling holidays and a recent Court ruling, the scheme no longer completely fulfils its intended purpose: the proportion of holidays with ATOL protection has fallen, and it can be difficult for consumers and the travel industry to know which holidays are protected and which are not. The proposed reforms will make it easier for everyone to understand which holidays are covered, and will restore protection to what looks like a package holiday but now falls outside the legal definition.

The Air Travel Trust Fund (the fund) provides the money for refunds and repatriation costs when a travel company becomes insolvent. For historic reasons the fund had no income for a number of years. As a result of this legacy, combined with travel company failures in 2008 and 2010, the fund’s deficit has increased significantly. Until it is back in surplus, it can only meet its obligations because of a Government guarantee, currently £42 million, in support of commercial borrowing facilities. Reform is needed to secure the sustainability of the fund so it can continue to provide financial protection for consumers, while reducing and eventually eliminating the exposure to taxpayers. It is envisaged that the ATOL protection contribution (APC) paid into the fund will remain at £2.50 per holiday sale until the fund is restored to health.

The last Government consulted on reforming the ATOL scheme in December 2009, and the coalition has continued work on developing these important reforms. In outline the proposed reforms would:

Create a new category of “flight plus” holiday in ATOL. This would cover holidays including a flight where the various elements were purchased within a specified short time period, and so look similar to package holidays, but are not packages as currently legally defined in the UK. New secondary legislation would be required to do this.

Ensure that where businesses sell holidays that look like packages, but where the travel agent has arranged matters so they are acting as an “agent for the customer” and so remain outside of ATOL, consumers are made fully aware of this, so that they can make an informed decision about their purchase. We are looking at using the Consumer Protection from Unfair Trading Regulations 2008 to enforce this measure.

Replace the current arrangements with clearer, standardised information for consumers that their holiday or flight is ATOL protected. The CAA has already begun discussions with the industry about a recognised document, the ATOL certificate, that would be both proportionate and fit for purpose. This can be done by CAA using its existing powers.

A consultation on the details of the proposals, including draft secondary legislation, is planned for the spring, with the aim of implementation by late 2011 or early 2012.

I believe there may also be a case for new primary legislation to address other issues in the ATOL scheme and will be considering that further in the course of this year.

Contracted-Out Rebate Rates (Quinquennial Review)

Thursday 3rd February 2011 Written Statements

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

Later today the Government will publish an order to set the contracted-out rebate rate for salary-related pension schemes for the tax years 2012-13 to 2017-18. The new rate will be 4.8% and will be shared in the following way: 3.4% for employers (secondary class 1 contributions) and 1.4% for employees (primary class 1 contributions).

Rebate rates for members of contracted-out pension schemes are reviewed at intervals of up to five years. It has been five years since the last review. The rebate is expected to reflect the cost of providing the benefits given up by individuals contracted out of the additional state pension.

The Government Actuary has produced a report presenting three possible approaches to setting the rate. The Government have adopted the rate that was calculated using the Government Actuary’s “best estimate” approach.

The full report of the Government Actuary will be published alongside the order, as will a report on the order by the Secretary of State for Work and Pensions in accordance with sections 42(1), 42B(1) and 45A(1) of the Pensions Act 1993.

Proposed National Assembly for Wales (Legislative Competence) (Highways and Transport) Order 2011

Thursday 3rd February 2011 Written Statements

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

I would like to inform the House that the proposed National Assembly for Wales (Legislative Competence) (Highways and Transport) Order 2011 was laid on 3 February, as Command Paper Cm 7999. Copies of this can be found in the Vote Office and are also available from the Library. I have written to the Welsh Affairs Committee and to the House of Lords Constitutional Committee to request that they undertake pre-legislative scrutiny.

Education Bill: Framework Powers Explanatory Memorandum

Thursday 3rd February 2011 Written Statements

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

I am pleased to inform the House that the explanatory memorandum explaining the Government’s proposal for framework powers in the Education Bill are available in the Vote Office, Library and the Printed Paper Office, and on the Wales Office website: (www.walesoffice.gov.uk).

House of Lords

Thursday 3rd February 2011 Lords Chamber

Thursday, 3 February 2011.

11:00

Prayers—read by the Lord Bishop of Guildford.

Introduction: Lord Gold

Thursday 3rd February 2011 Lords Chamber

11:07

David Laurence Gold, Esquire, having been created Baron Gold, of Westcliffe-on-Sea in the County of Essex, was introduced and made the solemn affirmation, supported by Lord Brittan of Spennithorne and Baroness Bottomley of Nettlestone, and signed an undertaking to abide by the Code of Conduct.

Introduction: Lord Storey

Thursday 3rd February 2011 Lords Chamber

11:13

Michael John Storey, CBE, having been created Baron Storey, of Childwall in the City of Liverpool, was introduced and took the oath, supported by Baroness Williams of Crosby and Lord Rennard, and signed an undertaking to abide by the Code of Conduct.

Congo: International Crisis Group Report

Thursday 3rd February 2011 Lords Chamber

Question

11:18

Asked by

[The Lord Bishop of Winchester]

To ask Her Majesty’s Government what is their assessment of the International Crisis Group’s recent report Congo: No Stability in Kivu despite Rapprochement with Rwanda.

[Lord Wallace of Saltaire]

My Lords, the International Crisis Group states that civilians are still suffering shocking levels of violence in the Kivus, but the Democratic Republic of Congo’s rapprochement with Rwanda significantly improves the prospect for peace. The UK has close relations with both the DRC and Rwanda. We support MONUSCO, the UN peacekeeping force, both politically and financially, and the United Kingdom is the biggest humanitarian donor in the Kivus.

[The Lord Bishop of Winchester]

My Lords, I thank the Minister for that reply, but I ask for a greater level of realism from him and from the Government. The report to which he refers—he may have been toiling with its French, but it is now translated—makes it clear that the ICG believes that that rapprochement has got nowhere. As he says, the level of violence continues, the minerals are still in the wrong hands, and a great many people are being killed or made insecure. Will he reconsider and agree with the report on those matters? Will the Government initiate with European partners, or anyone else they can find—and of course with the Congolese and other regional Governments—a fresh approach that will be non-military, whose terms will be known to the people, rather than kept secret, and that will grapple with the deepest causes of the conflict and give some hope of security, freedom from fear and even the most basic levels of economic development? Lastly, will the Government put an end to impunity for those who are causing the rape and mayhem?

[Lord Wallace of Saltaire]

My Lords, the report is indeed very depressing. The Government are not under any illusions about the enormous task there is to try to create order in the Kivus. Perhaps I might help Members by pointing out that North and South Kivu together have a population of about 11 million. It is estimated that there are nearly 2 million displaced people in the DRC, many of them in the Kivus, and there are about 20 militia groups operating outside the Congolese armed forces in the Kivu—and the Congolese armed forces leave something to be desired in terms of discipline and order. We do not underestimate the tasks ahead.

[Lord Alton of Liverpool]

My Lords, I welcome what the Minister said in terms of the practical help that is being given in the Kivus. Does he recognise the disarming of the militia to which he has just referred, in particular the Interahamwe genocidaires, who have used rape as a weapon of war throughout the Kivus, as well as the impunity that the right reverend Prelate mentioned? Will he say more about the flow of arms into that area and what we can do to halt it, and what we are doing to disarm these militia, especially the child soldiers who are involved in these depredations?

[Lord Wallace of Saltaire]

My Lords, again I must stress the sheer size of the DRC. There are 20,000 troops in MONUSCO. They operate across the entire DRC, which is roughly the same size as western Europe. At present, they have 24 helicopters. Unfortunately, the Indians withdrew their dozen helicopters some time ago. There are limits to what the international community is able to do in this area. As the noble Lord knows, some of the unofficial forces come from Rwanda and others from Uganda. Nevertheless, we are working with other members of the international community as actively as we can to try to build an effective administration in the area, which it currently lacks.

[Baroness Kinnock of Holyhead]

My Lords, has the Minister concluded that there can be no security in the DRC until there is security for women? Only this week, the UN registered that 120 women had been raped in east Congo in this year alone, and those are just the reported rapes. Is pressure being put on the Government of the DRC to push much harder on the issues of justice and impunity, and to put those issues further up the agenda? Is the noble Lord aware that only 0.1 per cent of the DRC budget is allocated to the justice sector at this time? We should surely ask what has happened to that idea of zero tolerance that the president of DRC has spoken about. Rape cannot be seen as collateral damage, cultural or inevitable.

[Lord Wallace of Saltaire]

My Lords, we are co-operating with other members of the European Union in providing assistance to improving the quality of justice in the DRC. We all recognise that the quality at present leaves a great deal to be desired. There is also an enormous task in improving the quality of training in the Congolese army. A number of countries, including Britain, are contributing in different ways to the training of the battalions. I should remark that the Chinese are also helping to improve the quality of training.

[Lord Chidgey]

My Lords, is my noble friend aware that the United States has recently committed increased funding and logistical support to the regional efforts to disband the LRA and to capture Joseph Kony and his commanders who are still operating with impunity in the region? Is he also aware that the scant intelligence available on the LRA severely constrains the effectiveness of these operations? Will the Government initiate a call at the United Nations for a panel of experts to report on improving intelligence gathering and sharing in the region?

[Lord Wallace of Saltaire]

My Lords, the noble Lord will be aware that the problem with the LRA is partly that it operates across the borders of Uganda, the DRC, southern Sudan and the Central African Republic, and it has not always proved easy to ensure that the different UN operations in some of those countries manage to co-ordinate among themselves. The latest information I have is that the LRA is now well under 1,000 strong but that it continues to cause an enormous amount of damage as its members maraud across those borders.

[Lord Anderson of Swansea]

My Lords, the report describes the DRC as the “heart of darkness” and concludes that the conflict continues,

“without credible hope for an improvement”.

Government troops act with impunity, the United Nations troops are discredited, there is widespread rape, and yet the international community is intervention-weary. The African Union has a poor record in relation to Somalia. Are there any signs of hope at all? What can the European Union do that we are not doing at the moment?

[Lord Wallace of Saltaire]

One obvious thing is that MONUSCO needs more helicopters, more support and more troops. At present, the majority of the troops in MONUSCO are from south Asia. The noble Lord may know that the African Union forces are now extremely stretched, given the various different peacekeeping operations under way in Africa. We have to recognise that this is going to be a very long haul. The UK, I repeat, is one of the largest donors under a number of different programmes to deal with the various problems that the DRC is currently facing.

Palestine

Thursday 3rd February 2011 Lords Chamber

Question

11:26

Asked By

[Baroness Tonge]

To ask Her Majesty’s Government what plans they have to recognise Palestine as a sovereign state.

[Lord Wallace of Saltaire]

My Lords, we are aware of the steps that some countries have taken in recognising the state of Palestine. However, we are clear that the only way to achieve a sovereign, viable and contiguous Palestinian state is through negotiations with Israel. Equally, the best way Israel can ensure its peace and security is through negotiations with the Palestinians. We urge both parties to return to talks urgently to reach agreement by September on all final status issues, leading to the creation of a Palestinian state.

[Baroness Tonge]

Does my noble friend agree that recent leaks about the Israel/Palestine negotiations in the past show that Israel has had no intention of making peace and continues to acquire more Palestinian land illegally, particularly in East Jerusalem? Does he also agree that, in order to put the two parties on a more equal footing, we should join the 109 countries, including Brazil, that recognise Palestine as a sovereign state and define its borders internationally as based on the Green Line? If we do not enforce this, does he agree that the two-state solution is dead and that, as a consequence, Israel’s days will be numbered?

[Lord Wallace of Saltaire]

My Lords, the noble Baroness asks a large number of questions and I will try to answer some of them. The expansion of the settlements across East Jerusalem is illegal under both international and Israeli law, and we deplore that. We recognise the current push for the recognition of a Palestinian state, but such a state needs to be in control of its own territory and to have secure borders. Palestine is still under Israeli occupation and Israel is still the occupying power.

[Lord Wright of Richmond]

My Lords, the reports to which the noble Baroness referred make it abundantly clear that, at the moment, Mr Netanyahu’s Government are not prepared to make any moves on a Middle East peace process in spite of some remarkable compromises apparently made by the Palestinian negotiators. Does the Minister not agree that it is time to recognise publicly that a two-state solution is the only possible remedy for the future of the Israeli and Palestinian peoples? Please may I ask one specific question? There have been press reports that the Government are considering upgrading the status of the Palestinian General Delegation in London to that of a full diplomatic mission. Can the Minister tell us where that now stands and will he do what he can to make it urgent?

[Lord Wallace of Saltaire]

My Lords, that was also a large number of questions. As the noble Lord will understand, it is not the policy of Her Majesty’s Government to comment on leaked documents. The status of the Palestinian papers is still not entirely clear. It remains the settled policy of this Government, as it was of previous British Governments, that a two-state solution of a viable Palestinian state with secure boundaries is the only way to secure a peaceful solution between the two sides.

On the question of the Palestinian General Delegation in London, we are aware of the steps that some other EU member states have taken to upgrade its status in their capitals to diplomatic missions. The same request has been made to the UK, which we are considering in accordance with our long support for Palestinian stakeholding. No decision has yet been taken.

[Lord Janner of Braunstone]

My Lords, the entire House would wish to see created a Palestinian state living alongside a secure Israel. However, does the Minister agree that any recognition of such a state must accept previous agreements which call for a negotiated settlement? Does he further agree that the unilateral delegations and declarations such as we have witnessed recently from Latin America serve no purpose in advancing the required and vital peace process?

Lord Wallace of Saltaire: My Lords, none of us should underestimate the seriousness of the current situation in terms of the future of the Middle East peace process. I read in an Israeli newspaper some weeks ago a statement that we have to understand that if the peace process collapses, the war process will start. That is the danger we are now in and it requires active and rapid movement from both sides.

[Baroness Morris of Bolton]

My Lords, I declare an interest as chairman of the Conservative Middle East Council and a trustee of the Disability Partnership, which helps severely disabled children in the West Bank. Does my noble friend agree that, while the talks are going on, the Palestinians are in limbo, without the normal courtesies that we as citizens of this country are able to enjoy? If Israeli citizens—and there are many of them—protest against what is happening in the West Bank, they are treated with courtesy; if the Palestinians protest, they are thrown in prison. What are we doing to monitor some of the more brutal acts of the Israeli army in the West Bank?

[Lord Wallace of Saltaire]

My Lords, there are allegations and, indeed, proven occasions of brutality on both sides. I do not wish to go into that now but will re-emphasise where we are. Given the expansion of settlements, the achievement of an acceptable two-state solution is increasingly difficult. I noted that Ehud Barak, who is still in the Israeli Government, said nearly two years ago that the Israelis want three things—for Israel to be a Jewish state, to be a democracy and to include all the land between the Mediterranean and the River Jordan. The problem is that they have to choose which two of those three they can have, because all three are not possible.

[Baroness Symons of Vernham Dean]

My Lords, I associate these Benches with everything that the Minister said in his opening Answer. Does he share the widespread dismay at the stagnation of the Middle East peace process? Does he also believe that the current state of turmoil in the Middle East—particularly in Egypt and, to a lesser extent, in Jordan—serves to undermine the peace process and causes intense worry throughout the region about the future of the peace process?

[Lord Wallace of Saltaire]

My Lords, the current turmoil across a number of middle eastern states clearly has serious implications for both the peace process and Israel’s future security. I reiterate that this Government, as were our predecessors, are strongly committed to the view that a secure Israel, associated with a secure Palestine, is the only answer to the current tensions.

Consumer Credit

Thursday 3rd February 2011 Lords Chamber

Question

11:34

Asked By

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what assessment they have made of the interest charged by loan and credit companies.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the Government are looking at a number of additional protections for consumers in the credit market through the consumer credit and personal insolvency review, which is now going on. The review is headed up by the Department for Business, Innovation and Skills, which includes consumer affairs, and the Treasury. We are currently considering the evidence submitted in support of the review.

[Lord Kennedy of Southwark]

I thank the Minister for her reply. Does she agree that it is just wrong for some of the poorest and most vulnerable people in our society to pay interest rates of up to 3,000 per cent for credit? Does she further agree that the Government need to actively support the growth of the credit union sector and to support the link-up with the Post Office, and thereby give people access to an affordable, wide range of credit to meet their needs in their high street?

[Baroness Wilcox]

Yes, my Lords, of course I agree. The Government are aware of concerns about the high-cost credit market and suggestions that there should be a cap on high-cost credit products. We have been here before. There have been three reviews, from when the Opposition were in government and when we were in government before—we have reviewed this over and over again. The first time was 15 years ago, when I chaired the National Consumer Council. We are worried that people would go to illegal loan sharks to borrow money if there were capping. On the second part of the noble Lord’s question, we are doing everything we can to reinforce the link-up between the Post Office and the credit unions. It is a marvellous system and I hope to see it flourish.

[Lord Marlesford]

My Lords, are the Government concerned at all that at the present time there is some £60 billion of credit card debt, on which some £9 billion a year of interest has to be paid, and that a large number of the debtors of this credit card debt are unable to pay the interest? Do the Government recognise that this probably represents a substantial reservoir of toxic debt held by the banks of this country?

[Baroness Wilcox]

My Lords, there are enormous worries surrounding such debt. This is why the consumer credit and personal insolvency review is taking place. I am sure that the review would be open to hearing any evidence that the noble Lord might like to give. However, we cannot answer any questions now, until just before the Budget, so that will be in about April.

[Baroness Coussins]

Is the Minister aware of the independent research by Nottingham University, which forecasts that an extra 200,000 people will need help with their debts this year? Given the end of the Financial Inclusion Fund, and the reports that we have heard just this morning about the cuts to Citizens Advice, what help can the Government provide to ensure that the most vulnerable people get help and are kept out of the hands of loan sharks? I declare an interest as the president of the Money Advice Trust charity.

[Baroness Wilcox]

This Government, like the previous Government, are constantly trying to find ways to help people get the best possible information to make sure that the decisions they make lead to debts that they can fulfil. It is very difficult. This is why another review is taking place. We are looking yet again to see what we can do so that people do not have to go to loan sharks. However, I am worried about putting a cap on any of the very, very high interest rate products. At least we know that when people get into trouble they can come to us for help. Countries such as Germany and France capped at 25 per cent years ago. The problem is that there is no access for the very poorest people who need to borrow. It is important that they have access to some facility.

[Lord Sugar]

My Lords, the noble Baroness and I have spoken about this subject once before across the Floor and I reiterate my question about the misleading advertising by credit card companies and loan organisations. It is about time that the Advertising Standards Authority imposed strict regulations about the prominence of warnings in respect of interest payable in those adverts so that they are approximately the same size as the headlines trying to lure the consumers in. Will the Minister, once and for all, take this matter up with the Advertising Standards Authority?

[Baroness Wilcox]

If the Advertising Standards Authority was answering instead of me, it would say that it is complying with everything it should be doing. However, the question the noble Lord, Lord Sugar, asks demonstrates that there is continuing concern about this. I will of course take this on board and reflect again upon what the noble Lord has said and see if there is anything I can do to help things along.

[Lord Razzall]

Is the Minister aware that this issue is being debated today in another place on a Motion tabled by the Labour Party? Is she also aware that the proposal in that Motion is that a total-cost-of-credit cap should be imposed? Would she agree that, on the basis of the consultation that the previous Government undertook, that would not protect the vulnerable in the way being suggested in another place?

[Baroness Wilcox]

I am aware of the debate this afternoon in another place and shall be interested to hear what comes out of it. I am interested in what the noble Lord said, but for the moment I cannot comment because the review is not out.

[Lord Elystan-Morgan]

While I appreciate the efforts made by Her Majesty's Government in relation to credit unions, does the Minister not agree that the scale has to be upped very considerably? In the Republic of Ireland, 50 per cent of personal credit is through credit unions. In Canada and Australia, the figure is roughly 20 per cent, but in this country it is only 0.5 per cent.

[Baroness Wilcox]

We have tried for years to interest the British and Northern Irish public in credit unions. It is just something that we never seem to have got the general public to sign up to. I know that in Canada and Germany credit unions are regarded as a wonderful idea, and so they are. You put your money in and can take a little bit out. It is a very simple system. In fact, I think one of the most successful credit unions in London at the moment is the black cab credit union. It does not take more than 12 people to get together to form one. It may be that this is a good advertisement, yet again, for credit unions.

EU: Emissions Trading Scheme

Thursday 3rd February 2011 Lords Chamber

Question

11:41

Asked By

[Lord Bradshaw]

To ask Her Majesty’s Government what assessment they have made of the European Union’s emissions trading scheme in the light of recent allegations of fraud in the trading of permits.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, the European Union emissions trading system continues to provide an effective means of incentivising cost-effective reductions in emissions from heavy industry. The UK’s ETS registry is widely seen as the most secure in Europe and has not suffered any cyberattacks. The Government have been working closely with the European Commission to demonstrate the security of the UK registry, and I can confirm that it will reopen tomorrow morning. We will continue to work to ensure improved levels of security in other member states’ registries. I refer the noble Lord to the Written Ministerial Statement made to the House of Commons by Gregory Barker this morning.

[Lord Bradshaw]

I thank the Minister for that reply. Does he agree that the trading scheme is the basis on which airlines are able, for example, to claim credits for the fuel they burn, and that any weakness in the system and the system of certificates of origin would be a very serious blow to the industry?

[Lord Marland]

I totally agree with that statement. I would just point out to the noble Lord that airlines will not join the system until 2012, so it is hard to evaluate the role of the system in that regard. By way of evaluation, it will be very interesting to see how it works, because airlines will be registering their carbon in the country to which they send their planes most often rather than in the country where they are domiciled. So there are one or two things that need to be looked at before 2012. However, I completely agree with the noble Lord in the sentiment of his question.

[Lord Tomlinson]

My Lords, I express my gratitude to the Minister for his clear statement that there were no cyberattacks on the emissions scheme, because there are all sorts of conflicting views about that. However, will he confirm that it is imperative to the interests of this country that we secure the services provided by the European Union from cyberattack to precisely the same level as we protect ourselves domestically, and that if that has implications for the European Union budget, so be it?

[Lord Marland]

The noble Lord makes a very good point. The great thing about the British system is that the International Emissions Trading Association has made it clear that we are the most secure of any European country. That does not mean for one moment that we should be complacent—in fact we must be even more vigilant given the potential for cyberattacks and the fraud attacks that have been made on other registries. That is why we recently worked with the European Union on a process to demonstrate the security of our registry—and my thanks here to the Environment Agency for the excellent work that it has done. I hope we can yet again show leadership in Europe on this issue.

[Lord Lawson of Blaby]

If my noble friend the Minister wishes to show leadership in Europe, perhaps I may ask him a question about that. I am delighted to hear that the UK registry is in good nick, but the fact is that we are part of a European emissions trading system. That system—in the accurate words of the Wall Street Journal recently—has been a story of “serial theft and fraud”, which is continuing. What are Her Majesty’s Government going to do about that?

[Lord Marland]

We are not going to do a lot about other people’s registries at this point but I can confirm that there will be a single European registry in 2013 which I think will iron out a lot of problems. I hope the leadership and direction that we have shown with our own registry will become the benchmark for the single European registry, and again I commend the work of our agencies and Government in securing this very fine example.

[Lord Brooke of Alverthorpe]

Is the Minister aware that, in 2008, Sub-Committee D of your Lordships’ European Union Committee undertook a review of the revision of the European Emissions Trading Scheme and that it produced a significant amount of evidence, part of which was from bankers who themselves complained about the inadequacy of the regulation governing ETC trading? Will the Minister look at that report? He will see that the concern is not solely about cyberattacks but also about the fundamentals of the scheme, as the noble Lord, Lord Lawson, identified. Will he also check to see whether the FSA is doing a proper job on it?

[Lord Marland]

As I said earlier, my Lords, the reality is that we have a pretty tried-and-tested system. We should not be complacent, but there is no point in going backwards in reviewing things. I want to look forward in our review to make sure that in the current environment we have an even more secure process. For your Lordships’ information, BarCap, one of the major traders in this scheme, has said that this is the best scheme in Europe. That is a very good starting point for us.

[Lord Berkeley]

My Lords, do the Government have any plans, with the European Union, to widen this scheme to other industries as part of their commitment, which I assume is still there, to reducing the carbon emissions in this country by 80 per cent by 2050?

[Lord Marland]

The short answer, obviously, is yes. As I referenced earlier, the airline industry—as the noble Lord will know as an expert in the transport field—will join it in 2012. We must look further to reduce our greenhouse gas problem.

[Baroness Maddock]

My Lords, as the Minister indicated in his earlier answers, there are other emissions trading schemes around the world. Can he tell us how many have had similar problems to the European one and whether there are any lessons that we can learn from them?

[Lord Marland]

There are a huge number of lessons that we can learn from every attempted fraud. I am not familiar with the detail of these frauds across the world but I am familiar with the detail of those in Europe. There are five or six countries which have endured fraud which is pretty well documented. I will not go through each of them now, or their extent, but we must learn from each of these problems. We live in a very sophisticated world of fraud which changes the whole time and we must make sure that our registry is fit for purpose in that regard.

Business of the House

Thursday 3rd February 2011 Lords Chamber

Timing of Debates

11:48

Moved By

[Lord McNally]

That the debate on the Motion in the name of Lord Northbourne set down for today shall be limited to two and a half hours and that in the name of the Earl of Clancarty to three hours.

Motion agreed.

Children: Parenting for Success in School

Thursday 3rd February 2011 Lords Chamber

Debate

11:49

Moved By

[Lord Northbourne]

To call attention to the role of good early parenting in preparing a child for success in school; and to move for papers.

[Lord Northbourne]

My Lords, I welcome the three maiden speakers who will speak in this debate.

Two objectives of the previous Government were to improve the standard of education of our children in schools and to reduce inequality in society. All the evidence suggests that we can address both these problems together if we pay more attention to the first three years in the lives of our most disadvantaged children. By the age of three, the child’s brain is 80 per cent formed. Experiences during that period shape the way that the brain grows and develops.

Most parents in this country are doing a good job raising their children, but some, often through circumstances beyond their control, need more help and support from us than they are getting today. At the moment, a small but significant minority of our children are not getting the sort of early childhood parenting that they need, and then they often go on to fail in school, disrupt other learners and pull down the standard of our school system as a whole. Then, when these children grow up, they have their own children, and they will tend to bring them up in the same way. This diminishes rather than increases their life chances, and so the cycle of disadvantage is handed down from one generation to the next. This is a disaster. It is very serious.

In support of what I am saying, I shall quote from two reports from opposite ends of the political spectrum—a very proper thing to do from the Cross Benches. In the report Building Character, published in November 2009, the left-wing think tank Demos cites two separate American studies that show how a child’s life chances begin to be determined even before he or she is born. The report says:

“Different pre-birth factors, including the ill-health or stress of the mother, may be hardwiring heightened susceptibility into the developing baby even before the child is born. … elevated levels of the stressor chemical cortisol in the womb during late pregnancy have also been shown to predict negative temperament in infants at age two”.

The report goes on to cite a range of studies showing how infants between birth and three years-old are more malleable than they will be at any subsequent stage in their lives. So, it says, parents are the principal architects of a fairer society.

At the other end of the political spectrum, the Conservative think tank the Centre for Social Justice reaches much the same conclusions in its recent Green Paper on the Family, which says:

“Stable, healthy families are at the heart of strong societies. It is within the family environment that an individual’s physical, emotional and psychological development occurs. It is from our family that we learn unconditional love, we understand right from wrong, and we gain empathy, respect and self-regulation. These qualities enable us to engage positively at school, at work and in society in general”.

Many noble Lords will be aware of the classic research by Bowlby and Ainsworth and other researchers, who worked with Romanian orphans. They conclude that secure attachment and committed parenting during a child’s early years are important in enabling the child to feel safe, loved and valued. A young child needs to feel safe because it is in a terrifying new world. He or she needs to be confident that there is at least one adult whom they can turn to and trust for love and sympathy, who will always be there for them. Conversely, research shows that violence, anger or discord in the family during these foundation years are strongly negatively linked to child outcomes. So is family breakdown.

The child needs to feel loved in order to begin to learn the most important social skill of all—to love and to be loved. Through a loving relationship with the mother or other principal carer, a child learns that love is about giving as well as taking and begins to learn those relationship and communication skills, even if they are only smiles and gurgles to start with, that are at the very heart of communication in later life.

Finally, a child needs to feel valued. To feel valued enables the child to begin to build identity and self-esteem. Self-esteem is the parent of hope. Every child needs to believe that they can succeed at something. Confidence is what makes success possible. A child who arrives at school without these skills will find it difficult to fit in, settle down and learn. All too often, this leads to the child rejecting school and switching off, being disruptive, playing truant and feeling excluded. That, in turn, leads to educational failure, lack of ambition and lack of hope. The director of the Oxford centre for research into parenting and children, Professor Ann Buchanan—who, I am happy to say, is with us in the Building this afternoon—put it this way:

“Escape from social exclusion is particularly difficult for children and parents who have been rendered without hope … because of discrimination, poor social conditions, community norms that may encourage low expectations, domestic violence and child abuse”.

Those children need a hand. That is why good parenting is so crucial for the zero to three year-olds, and why how parents tackle the job, the parenting style, is so important.

The Demos report that I quoted earlier says about parenting styles:

“Using a typology that measures four different parenting styles—tough love, laissez-faire, authoritarian and disengaged—we found that ‘tough love’ children are more than twice as likely to display strong character capability in the early years than those with ‘disengaged’ parents”.

Character capabilities include social and emotional skills such as application and safe self-regulation. They include the ability to defer gratification and to concentrate, or stick to something—life skills which we all know that we all need.

So why are some parents failing their children? Nearly all mothers want to love and be loved by their child. Nearly all parents want their child to succeed. The truth is that many parents face very serious problems. Some do not know how to be a good parent because they themselves have never had any experience of good parenting. Others have failed at school. They may not know how to help their children to learn. They may not even be able to read aloud to them. Then there are many parents who suffer from a whole range of disabilities and disadvantages beyond their control: physical or mental ill health, addiction to drugs or alcohol, poor housing, poverty, debt, or a partner who is violent or in prison. They may be struggling to juggle parenting, work and sometimes also a caring responsibility for an older or sick relative. As a society, we need to be much more effective in addressing these problems. It would be incredibly cost effective to do so in the long run, and even in the fairly short run.

Then, of course, 3.5 million children are today living in broken homes. By way of evidence, the Centre for Social Justice report says,

“speaking with thousands of individuals and organisations tackling poverty at the coalface, we have found that family breakdown is often at the root of”—

other problems.

“Hence a child not growing up in a two-parent family is 75 per cent more likely to fail at school, 70 per cent more likely to be a drug addict, 50 per cent more likely to have an alcohol problem”.

I interpose here that in most cases we must not blame this on the single parent at all.

I turn now to the way forward. The previous Government devoted considerable effort and substantial resources to trying to solve these problems. Frankly, it is extremely disappointing that they were not as successful as many of us hoped. However, we must learn from their successes and failures and move forward. Reports by Frank Field MP and Graham Allen MP were recently presented to government. Both confirmed what I have long suspected: problems created in the first three years of a child’s life cast a long and dark shadow over their future.

Frank Field’s report The Foundation Years: preventing poor adults becoming poor children, published just before Christmas, presents a new strategy to abolish child poverty. This report is particularly important. Frank Field asks,

“how we can prevent poor children from becoming poor adults”,

and concludes that,

“the UK needs to address the issue of child poverty in a fundamentally different way. … We have found overwhelming evidence that children’s life chances are most heavily predicated on their development in the first five years of life”.

He concludes that parents are the drivers in determining their children’s life chances. It is not so much who the parents are—what their jobs are or what social class they are—but what they do and how they nurture their children. All the evidence shows that tough love and intellectual stimulation are what matter most.

Frank Field’s report makes several key suggestions. The first is developing a life chances indicator to measure success in making life chances more equal for children at both the national and the local level. The second suggestion is for a new tripartite education system, in which the foundation stage—from conception to the age of five—has the same status as primary and secondary education have today. Thirdly, he suggests age-appropriate teaching of parenting and life skills in all schools throughout the pupil’s school career. The fourth suggestion is for greater emphasis on antenatal and postnatal care and on parenting education at this stage of the life cycle. I urge the Government to take these proposals very seriously.

The report by Graham Allen, which was also published recently, mainly concerns itself with indentifying interventions that the state can make with children at the foundation stage. It finds, significantly, that current services are variable, fragmented and not easily accessed or understood by those who might benefit from them. It is a pretty depressing report. Unfortunately, I do not have time to discuss the Allen report proposals in detail. Many of them are good, but I have one major concern. For families raising nought to three year-olds, it is very important that interventions should not be intrusive. Even when they have problems, most parents want to feel that they are still in control. For nought to three year-olds, consistent, secure and loving attachment to a mother or some other dedicated principal carer must be by far the most important ingredient in a successful parenting programme. Ever-changing carers or foster carers, however well trained, can never replace secure attachment.

It seems that professionals and experts have now come to agree that a child’s experiences in the early years are crucial to success in school and in later life. I hope that the Minister, when he replies, can assure the House that the Government intend to respond very positively to the proposals in the Frank Field report. I beg to move.

12:04

[Lord Lingfield]

My Lords, it is with a sense of considerable privilege that I address your Lordships' House for the first time. I thank the noble Lord, Lord Northbourne, for giving us the opportunity to have this debate. His efforts on behalf of the underprivileged are well known to us all.

Some noble Lords will know that I have been engaged in education policy for a good part of my life. I hope, therefore, to be able to contribute to your Lordships’ discussions on education. During the previous Conservative Administration I was appointed to lead the movement towards autonomy for state schools. This resulted in grant-maintained schools, from which the current academies programme finds its roots. However, it is about an entirely different aspect of education—special needs in education—that I want to speak today as early parenting skills are hugely important in this area.

In 2006 I was appointed by the then leader of the Opposition to chair a commission and produce a report on the reform of special educational needs. This brought home to me the huge importance of early diagnosis and early help for parents as both of those lead to success in schooling. I pay tribute to Professor John Marks, who helped me with that report, to Mr Brian Lamb, who produced the concomitant Labour report, and to those members of the Liberal Party who laid such emphasis on the early years in their manifesto.

There can be few more devastating experiences for families than finding, perhaps soon after their child is born, that he or she will need special care, possibly lifelong care. The advances in the past decades in medical technology mean that even children with the most complex and serious disabilities can not only survive birth but find much content in their life, provided they get the right attention, the right love, the right sympathy, as mentioned by the noble Lord, Lord Northbourne, and, of course, the right medication and the right schooling to follow. However, as he advised us, many parents do not possess early parenting skills and do not know where to go to get help to acquire them. If they have a disabled child, they will seek a statement of special educational needs but I am afraid that 40 per cent of them are turned down and the number of special educational needs statements is falling year on year. If they are refused, the parents concerned have an even gloomier prospect because they have to go to a special needs tribunal. All those parents who gave me evidence suggested that this was one of the most agonising things that they had encountered. Indeed, a man I spoke to last year told me that this was the most uncomfortable and difficult experience of his life—and he was a QC. How much more daunting is the experience for a young, inexperienced parent, who perhaps has little education and certainly little knowledge of judicial procedures. These processes are complicated. The papers were brought to me at this House a couple of days ago covering one girl’s tribunal. They numbered 500 sheets and I am told that this is pretty average.

Parents tell us that the tribunal system is getting longer, more adversarial and costly—they mention legal bills of about £12,000. The tribunal system was started for the best of all reasons as an arena of last resort, to be used rarely. Now it has become almost the norm. In 2008 it was moved from the Department for Children, Schools and Families to the Ministry of Justice. Appallingly, some of these tribunals now take place in magistrates’ courts. Parents have told me that they find themselves, with their young disabled child, sitting next to people arraigned for criminal activity or awaiting appeals against deportation orders.

Finally, I am delighted that the Government are considering a Green Paper on reform of special educational needs. Among the many reforms that will be required, to which I hope to return at a later date in this House, I very much hope that the Government will consider, first, dejudicialising the tribunal system and, secondly, inserting early on a process of mediation between those parents who require better facilities for their children and the local authorities, which of course are obliged to pay for them. Mediation works extremely well in other walks of life. There is no reason why it should not work well here, provided that the mediators are seen to be independent. Early parenting skills are hugely important, as the noble Lord, Lord Northbourne, told us, and are no more important than in the area of special educational needs. I very much hope that the Government will do the things that I have asked them to consider.

12:11

[Baroness Massey of Darwen]

My Lords, it is an unexpected pleasure to be welcoming the noble Lord, Lord Lingfield, to your Lordships’ House and I congratulate him on his wonderful, confident and thoughtful maiden speech. He said it was his maiden speech, so we must believe him—but I had to check on it.

The noble Lord is a man who says he has no secrets, but he has had one of the most varied careers that I have ever known—including headmaster, publisher, manager, volunteer, and pro-chancellor of Brunel University. We share an interest in cricket, and he is a knight to boot. I know that with all this experience, he will be a great asset to your Lordships’ House and I look forward to getting to know him better.

Parenting is the most important issue we can discuss, so I am most grateful to the noble Lord, Lord Northbourne, for giving us the opportunity to do so. It is a timely debate, given the recent publication of several reports which directly or indirectly refer to the role of parenting in child development. According to Family Lives, most parents and grandparents feel that the task of parenting is more challenging than it was a generation ago. Yet we know that without security, love, support and positive stimulation, children’s brains will not develop as they should, and their physical, emotional and intellectual development will be impaired. Children need early opportunities to play, explore their environment, look at books, be talked to and sung to. They also need structure, boundaries and early bonding. There are important values to be transmitted to children. They need to make sense of the world and to develop self-esteem. They need unconditional commitment and nurturing, as the Frank Field report points out.

Success in school is a spin-off from good early parenting, which encourages aspiration. However, I am highly suspicious of parenting which might be designed to prepare for success. I do not for a minute think that the noble Lord, Lord Northbourne, is simply focusing on academic success. One of the saddest stories I remember from when I was teaching was that of a father saying to me over and over again, “My daughter will be a doctor”. The girl was a talented artist, with no inclination towards science and no aptitude for it. She would not have achieved the necessary grades, however much cramming took place. Noble Lords may have read about the “dragon mother” who forced her daughters to be proficient in playing the piano. I have not read the book but I believe that one girl ended up hating the mother and the other chewing the piano. I said “chewing” not “tuning”. We all may have come across parents who attempt to live out their own ambitions through their children. The father I just mentioned may well have wanted to be a doctor.

Graham Allen’s report on early intervention speaks of enabling children to become excellent parents and of the expense of not fostering social and emotional capability. Children, even very young children, if they are lucky, have a network to support their development: grandparents—how important they can be—other relatives, pre-school education and adults with whom children come into contact. Parents need support, too. Midwives, professionals, Sure Start and family intervention programmes can all help. They may need review, but I hope that they survive the proposed cuts in spending. As the noble Lord, Lord Northbourne, said, we must spend early to save later. I hope that the Government understand that. We know that young people who end up in the criminal justice system have often suffered abuse and neglect and that this is likely to be passed on to their own children.

The UK features low down on UNICEF’s report card 9—I should declare an interest as a trustee of UNICEF. That is due not just to poverty. It is important that children do well at school and go on to succeed, and many children educate themselves out of poverty. However, they should succeed in a broad sense so that they can develop friendships, learn positive values and be happy. Yes, early intervention is important, but that must be carried through into constant intervention—not interference, but thoughtful and unselfish commitment to helping children and young people develop their full potential, whatever that potential might be.

“Parent” is a broad term. More than 200,000 grandparents bring up their grandchildren. Care placements with families are more successful than those outside the family. I find that very interesting and a testimony to the importance of security. As we have argued in this House previously, kinship carers need financial and other support.

The noble Lord, Lord Northbourne, has raised a very complex issue, but one that we must grasp for the sake of ourselves, our children and grandchildren, and of future generations.

12:16

[Baroness Walmsley]

My Lords, I am sure that we are all convinced by the excellent opening speech of the noble Lord, Lord Northbourne, by various pieces of research and by recent, thoughtful reports by Graham Allen MP and Frank Field MP that a child’s life chances are determined in the very early months and years of his life. The Feinstein research published in 2003 found that early child development is a strong predictor of later educational attainment and that social class overlays this. In other words, it does not matter too much if development at 22 months lags behind other children if your parents happen to be in demographic groups A or B, whereas if your brain development is high at a young age but you come from a deprived background, you may not achieve your early promise. This is complex enough, but we then have to overlay it with the factors that affect brain development: maternal and childhood stress, poor attachment, lack of proper development of social and emotional skill because of isolation or violence, lack of stimulation et cetera. A highly complex web of factors affects how well a child does at school.

Have we now got the full picture? Well, no, because we now have to add in parenting engagement and style. There is no reason why a poor family cannot bring up children to fulfil their potential—though it is hard—as long as the parents are fully engaged with their child’s education, put a lot of effort into it and are thoughtful about their parenting. The trouble is that this is easier said than done if you are desperately stressed about money, live in a cold, damp home with nowhere for the child to do his homework, cannot afford the enriching experiences that help a child to understand the world and even find it difficult to nourish your child well. Perhaps, too, you had a bad experience at school. You may not even be literate, so cannot read the helpful parenting materials that are widely available, including on the internet.

I think that I am trying to paint a picture where three solutions emerge from the facts. The first is that we need to raise the income of the poorest families. Secondly, we need to provide parents with support and information about how to help their child not just academically but, as the noble Baroness, Lady Massey, said, mentally and emotionally, as well as in their physical health, their ability to form relationships, their self-confidence and, most importantly, their aspiration. Thirdly, we need accessible, proven early interventions that will make up for shortcomings in other areas. These three solutions are recommended in various ways by the two reports that I mentioned.

The All-Party Parliamentary Group for Children was fortunate earlier this week to hear from and question Frank Field. One thing that he said, which stuck in my mind, was that money on its own is not enough. He cited the three year-old child of a very highly paid banker in the company’s nursery. The person in charge of the nursery asked to see the mother and said that she could not get the child to speak at all. The mother said: “I’m glad you noticed that. I have been waiting for him to speak to me”. This and other evidence made Mr Field conclude that, while we need to eradicate child poverty, other interventions are also needed in order to allow all children to flourish. He also pointed out that giving more money to some families would not help the children at all and concluded that we need to provide family support and early interventions for the sake of the children.

Early years education needs to be of high quality. If it is not, it can do more harm than good. This has long been known from the EPPE study. Less widely quoted is something else that came out of that study, which considered not just the effect of early years settings of varying quality but the importance of the child’s home environment. Kathy Sylva et al concluded:

“For all children, the quality of the home learning environment is more important for intellectual and social development than parental occupation, education or income”.

While we are offering 15 hours of free early years education to three and four year-olds, and now to the most deprived two year-olds, which I welcome, are we ensuring that it is done always in a way that is not intrusive, as the noble Lord, Lord Northbourne, said, and that involves, engages and empowers the parents? If it is not, it will just scratch at the surface of the task of helping the child to develop. Stable, loving and supportive family backgrounds, with positive parenting, are the best for children, but we do not learn to create them by osmosis.

What does this mean for public policy? Sure Start centres are now scattered all over the country and we will be asking organisations to tender for them. Part of the deal must be that they should prove how they are reaching and working with parents. The outcomes for children depend on it.

12:22

[Baroness Butler-Sloss]

My Lords, I congratulate the noble Lord, Lord Northbourne, on securing this important and timely debate and I look forward to hearing the right reverend Prelate who follows me. I declare an interest as a governor of Coram. Perhaps I ought also to say that I was a guest of Barnardo’s last night at an extremely good dinner hosted by the noble Baroness, Lady Massey of Darwen. I will speak about both those admirable organisations.

I will refer in particular to a very seriously disadvantaged group of children: those taken into care either at birth or as very young babies. There is widespread recognition of the good practice in social work of arranging the permanent placement of babies within six months. However, the problem is that by and large this does not happen. First, the baby is taken away and placed with short-term foster parents. The average number of moves before a baby is finally placed is four. There is a wonderful arrangement of concurrent planning, whereby the child is placed with foster parents who are also assessed as potential adopters. The baby may go home to their parents or may be adopted. This has been pioneered by Coram, supported by Barnardo’s, with several local authorities over the past 10 years. Sadly, there are not sufficient numbers of referrals from local authorities for it to be viable for Coram, which is having seriously to consider stopping doing it. This is due in part to the 2008 legislation on children, which has placed far greater emphasis on the rights of parents, and in part to the increasing length of time that one has to wait for a full hearing in the care court. I am told that the average is now 70 weeks; when I was president of the Family Division, it was between 40 and 50 weeks, so I am sad to hear that.

Quick, permanent placements are difficult to achieve, since there is a real tension between the need to place the child quickly, for all the reasons emerging in this debate, and the rights of parents, who can be not only adversarial but very contentious. Other factors include delays in the court process, to which I have referred, the different responsibilities of agencies that have to work together—social workers, CAFCASS and medical experts—and the need for sufficient evidence to move a child permanently. Local authorities are not referring children to Coram and into a potentially final placement until the care plan is finalised. That is perfectly understandable, but it is another delaying factor. Another problem is the contact between the mother and a baby in short-term foster care, which is often extensive and sometimes lasts for several hours every day. That can only be very bewildering for the child, although necessary, and it undoubtedly raises the question of whom the baby forms an attachment with.

We also have to bear in mind that there are inflammatory articles from journalists, such as Camilla Cavendish in the Times, if, in their opinion, children are taken away too quickly. However, I remember one case, when I was a judge, in which the mother of a baby had already had six or seven children taken into care. One might think that her track record gave little cause for hope. I am told that at least one judge has recently dealt with a mother whose previous 14 children had been taken into care.

I am encouraged by the obviously genuine desire of this Government to try to break the deadlock and to get more children adopted. If these babies are to have any real chance of success at school, and consequently in life, it is crucial that they are settled as early as possible. Coram and Barnardo’s are hoping to work together on promoting more successful permanency planning for adoption. There is a Harrow model that, working with Coram, has managed to place some children within six months. That is admirable and, I believe, quite the best that could be done, but it needs a lot of work with parents, local authorities and other agencies.

Other good projects are run by Coram, one of which involves referring children under the age of four with problems. Work is done with these children, including music therapy. Coram does excellent work in helping people through its young parents scheme. That is exactly what should be going on with parents who do not know how to look after their children. The example that we heard from the noble Baroness, Lady Walmsley, of the mother who was waiting for her child to talk is exactly the sort of work that is being done by Coram, and long may it continue. These are all important efforts in helping young children to have a reasonable future. This work must be supported and I hope that the Government will give it proper attention.

12:27

[The Lord Bishop of Oxford]

My Lords, I am most grateful to noble Lords and to our excellent support staff for all the help and practical assistance that I have received since I was introduced to the House shortly before Christmas. I have had to be rescued once or twice as I have wondered the corridors, but at least I am feeling more secure now geographically.

I pay tribute to the former Bishop of Salisbury, who has now taken to the beauties and diets of Weardale in retirement. I know that he made a tremendous contribution to this House, and it is his retirement that has caused the Writ of Summons to come to me. Bishop Stancliffe made a notable contribution through his erudition and confident performance, as well as his passion and clarity of mind. However, I have the privilege of serving the diocese of Oxford, where my predecessor, the noble and right reverend Lord, Lord Harries of Pentregarth, made such a striking impact for 19 years. He led, as I now do, one of the largest dioceses in the Church of England, with 813 churches, 620 parishes and 650 clergy. In the 1830s, Bishop Richard Bagot wrote, rather miserably, that he,

“took this diocese solely because of its smallness, quietness and the little trouble it need give one”.

That is not how I would describe the diocese of Oxford today. It is nevertheless an area of huge energy and fascination, including as it does places as diverse as Milton Keynes, Reading, High Wycombe, Windsor, Slough, Chipping Norton and the well known constituency of Witney. It contains major Armed Forces establishments. Noble Lords will know of course of Sandhurst, Brize Norton and the Defence Academy at Shrivenham. We have our own silicon valley going down the M4 and a huge educational industry, including no fewer than seven universities. Scientific research is carried out not only there but at establishments such as Harwell, the Diamond synchrotron, the Rutherford Appleton Laboratory and all sorts of other places. All this is within some of the loveliest home counties in rural England, which of course has its own challenges. It is also within the multicultural realities of places such as Slough, High Wycombe, Cowley and Reading—all of it small, quiet and of little trouble, of course.

I mentioned the importance of education in the diocese. We have 280 church schools and a very strong commitment to their inclusive and distinctive character. I have been given responsibility, which I have taken on only this week, of chairing the Church of England’s board of education. It has 4,800 schools nationwide, so I have a very particular interest in today’s debate, so helpfully introduced by the noble Lord, Lord Northbourne. I am very engaged with that.

In the midst of much vigorous educational planning by the Government, the debates that we are having today go to the root of the issue of how children flourish. Much has been and will be said about how much money can be saved by early intervention. Although that is true, good and right, surely at a much more fundamental level, we simply want childhood to be joyful and exciting. I heard earlier this week of an adult who has no happy memories of childhood. How tragic is that? I now have four very small grandchildren and I want nothing more for them than that they have an absolutely fun-filled, delightful childhood.

The reports of Frank Field and Graham Allen are excellent pieces of work and I am very grateful for them. I would, however, just add that I am not sure that they sufficiently emphasise the vital importance of a good quality adult relationship surrounding the child. Certainly it is there, but I want to emphasise it because the family structure needs supporting as well as the child. The Church of England has always emphasised that children flourish best in the context of stable, loving, couple-relationships. One of society’s tasks is to support those relationships as strongly as possible—in particular, that fantastic responsibility and privilege of guiding a small life into the wider world. There is just as great a responsibility, of course, to support single parents who may have an even harder struggle, but evidence suggests time and again, that stable, loving, couple-relationships help children to thrive best of all. Relationship support pays off a hundredfold.

My second main point concerns the huge pool of volunteers who, with a little funding, can make all the difference to a child’s life chances. Oxford diocese has an excellent organisation called PACT—parents and children together—which is celebrating 100 years of its existence this year. Among its other functions, which include fostering and adoption work, and extended schools, special work is done with children’s centres. It runs six on behalf of local authorities, one of which started 10 years ago in the aforementioned constituency of Witney. There, a curate, a health visitor and a mental-health nurse got together and got the churches together to produce a multifunctioning, multiagency, multiservice provision in a children’s centre. It has now developed with all kinds of things, such as drop-ins, teenage pregnancy counselling, parenting courses, father support, and so on. That is just one example of what energetic volunteering can do all over the country. At the last count, the Church of England had 67,000 volunteers working with under-sixes in non-church contexts—not in Sunday schools, and so on. Tens of thousands of volunteers throughout all our communities around the country do similar things. There are volunteers to train, alliances to form, partnerships to develop, all of which are doubtless grist to the mill of the big society, but they all need continuity, not the start-stop of constant new initiatives when start-up funding quickly peters out. The work of Sure Start projects, for instance, is beginning to bear real fruit and needs continuity. Support for stable, loving, couple-relationships, support for volunteers and a commitment to continuity are three elements I commend to the House as we debate the flourishing of our most precious asset—the lives of our young children.

12:34

[Baroness Sherlock]

My Lords, it is a genuine pleasure to follow the thoughtful and reflective maiden speech of the right reverent Prelate the Bishop of Oxford. I serve with Bishop John on the council of St John’s College, Durham University, of which he is president, so I am particularly pleased to be able to introduce him to the House. Bishop John started his ministry as a curate in St Martin’s in the Bullring in Birmingham. He has also served in Bath and Wells, in Taunton, and for five years as Archdeacon of Canterbury. I understand that being an archdeacon is rather like being a Whip. It is a nice mix of the pastor and the guidance, so that may stand him in very good stead in this House.

I live in Durham and the first I ever heard of Bishop John was when I had just arrived and was crossing one of its many bridges—its highest one which has an enormous flight of stairs down to the river. I asked the person who was with me whether anyone had ever walked down them and she said, “The Bishop of Jarrow ran up and down them 20 times a day preparing to climb a mountain in the Himalayas”. I encourage noble Lords that if you want to speak to him about something in the corridor move quickly as you may find that he is out of your reach in no time. Bishop John, for anyone who knows him, has a lot of learning which he wears very lightly. He has wisdom, is articulate and everyone I spoke to talked of his good humour and bad jokes. Somebody offered me a photograph—I think a pantomime was mentioned—but I decided to leave it to them. They may be prepared to give it up in return for a decent dinner in the Peers’ Dining Room some time. I will pass on the name later.

As he said, he now chairs the board of education for the Church of England and will speak on education from the Bishops’ Benches, so I know that we will hear a lot more of him and I look forward very much to that. His skills, knowledge and talent will enrich the House, and he is most welcome.

Turning to today’s subject, I, too, thank the noble Lord, Lord Northbourne, for introducing the debate, and I pay tribute to his long-standing commitment to children and families. I shall not rehearse the evidence, as others have done, about the importance of early childhood in brain development and in ensuring that children can attain their full potential, as well as educational attainment in later years. I am concerned about the degree to which we pay careful attention to the research because, as we heard earlier, it is complex. A large number of factors are at play. Social class interplays with parenting style, income, parental status and family structure, and it is hard to separate out causality from correlation, so we need to be careful in using evidence. However, it has been demonstrated that parenting is in itself a significant causal factor, even when one controls everything else. I am pleased that the debate has begun to separate out the idea that this is not about parents’ involvement in education, important though that is, but it is about parenting in the home and parenting itself, and how much difference that can make to children in later years.

I want to draw attention to two things. First, I shall pick up where the right reverend Prelate left off about the importance of couple-relationships. I have worked for some years with single parents, but I also know that most of them did not start out as single parents and never intended to be. Most children were born with both parents either married or resident at the same address, and then life had a way of intervening. One thing that tends to intervene is the arrival of children. There is a lot of established evidence that the arrival of children can place enormous pressure on the relationship between the parents, and conflict within the home can in turn have a significant effect on the child. A wonderful charity, One Plus One, uses a lot of research evidence to develop programmes to support families. Penny Mansfield, who runs it, said:

“This is where there’s a paradox. While a strong relationship between their mum and dad is good for babies, it seems that their arrival can disrupt or even weaken the relationship that should cradle their early life”.

So, support for couples is just as important as supporting children directly. I should be grateful if the Minister will say what steps the Government will be taking to support this important area of work.

Secondly, I welcome the growing acceptance that parenting skills can be learnt. So often, one talks to parents who assume that they should be able to do this naturally but when they get there, they struggle and are embarrassed to admit it and ask for help. It is as though asking for help is acknowledgement of failure as a parent, whereas if you were good you would somehow know how to do it. It is no accident that for a long time one charity had a strap line saying, “Because children come without instructions”. How best can the Government support people in getting that information across? One Plus One developed a brilliantly simple online tool called Baby Clues that parents can use to help them understand better how babies communicate and how they communicate with each other. Babies cannot talk, as the noble Lord, Lord Northbourne, pointed out, but they can communicate. Being able to read the cues that babies offer can be crucial. If a father picks up his baby daughter and she pulls or turns away from him, he may interpret that as her not wanting him to hold her. In fact, she may be signalling that she is overstimulated. Knowing that one piece of information can make a difference to how he interprets the cues coming from the baby and how he in turn feels and reciprocates.

The online nature of that service is sometimes very important. One Plus One provided that along with the Couple Connection. They found that almost half a million parents used it. One quarter of them were men, but half of them said that they would not have used a face-to-face service.

Sometimes the state is not best placed to do that. I strongly urge the Government to think about how they can support the voluntary sector—organisations such as Home Start, One Plus One, Family Lives and a range of other voluntary organisations, many of which are now struggling considerably with their finances. How will the Government support voluntary organisations in supporting parents to do the things that they can do best?

12:40

[Baroness Stowell of Beeston]

My Lords, I start my maiden speech by thanking your Lordships for the warmest of welcomes since my arrival three weeks ago. This is without doubt one of the friendliest places that I have ever joined, but arranging sleepovers is taking the friendly thing a bit too far.

I also take this opportunity publicly to thank my close friends, my noble friends Lord Coe and Lord Hill of Oareford, the Minister, whose support made my introduction to this House all the more special. Talking of special leads me naturally to remark on the impressive professionalism of all staff working in this House—and I really mean all staff. Not only do I thank them for their support and guidance, I wish to record my great respect for them and for what they do.

I congratulate the noble Lord, Lord Northbourne, on securing this debate. Before I make my contribution, I will say a little about my background and to explain why I have chosen this debate to make my maiden speech. There is much academic discussion—and rightly so —about what is termed social mobility, but I am here today because I am fortunate enough to have benefited from it. I was born and brought up in Beeston, a small town just outside Nottingham, from where I am now proud to take my title. I joined the Civil Service in 1986 and, during my time, worked in the Ministry of Defence in Whitehall, the British Embassy in Washington and the Downing Street press office. I had a brief spell in the private sector before returning to politics to run William Hague's office when he was leader of the Opposition. Until the summer of last year, I enjoyed nine busy years at the BBC, and I am now an independent communications consultant. As this is a debate about children, I must declare that the NSPCC is a client.

That is me, but I have omitted two things which are relevant to our discussion today. First, I did not attend university, probably because my comprehensive education was unremarkable. Secondly, the reason that I have none the less achieved considerable success professionally is, I believe, the parenting that I received from my mother and father, a factory worker and a painter and decorator, who encouraged us to be independent, confident and, above else, to seize opportunities that would allow us to succeed.

I share that with your Lordships because, like all new Members of this House, I am frequently asked what is my area of expertise. I am not an expert, but I want to focus my work in this House on how we can encourage ambition and create opportunities for people to succeed, especially those who come from backgrounds similar to mine. To use the policy shorthand, my area of interest is social mobility.

My recent reading has therefore included the report, which has already been referred to, by the right honourable Member for Birkenhead about what he calls the foundation years. Because of my experience, I should not have been surprised, but I was none the less heartened to read in the report not only that parents and families are the most important factor in determining a child's life chances but that their wealth and academic ability are not more important than their aspirations for their children, if those aspirations are maintained. That is the rub. The report shows that parents, particularly those from poorer backgrounds, start with high aspirations but end up with low expectations of what their children will achieve. Parents from backgrounds similar to mine are not aspiring for their children as they get older because they cannot see enough opportunities and because they do not know how their children can achieve success. In my view, addressing that disparity is our biggest challenge and should be one of our priorities. I am pleased that the Prime Minister has already made it so.

I could go on, but, in summary, I believe that we need to champion ambition everywhere and create a range of routes to success that are straightforward, even though they require commitment and hard work. We must not allow our ambition for more working-class children to attend Oxbridge to distract us from helping all young people to be ambitious in whatever they decide to do. To that end, I very much welcome the new generation of university technical colleges and the studio schools which are starting to emerge.

I am grateful for the opportunity to participate in today's debate, and I look forward to future occasions, when I hope to contribute further.

12:45

[Lord Eden of Winton]

My Lords, I am sure that you would all agree that we have just been treated to a real class act, a great speech. As she reminded us, the noble Baroness was for 10 years a civil servant, then she served for nine years at the BBC. In a sense, therefore, she has been both gamekeeper and poacher—the latter occupation, I suspect, finding particular favour with many of your Lordships. She has a reputation for being a straight talker, telling it as it is without fear or favour. We welcome that in this House and look forward to many more such worthwhile contributions from her to our debates.

The noble Lord, Lord Northbourne, has already received proper tribute for bringing this debate to our attention. He has made the welfare of children and family very much his own subject, on which his many years of study and practical engagement have made him a considerable expert. Some years ago, I was the proprietor of a private school for children aged three to 11. That experience gave me an insight, as an observer, into some fundamental truths about the relationship between parent and child.

Being a good parent is not easy. It is true that, in some cultures, it is almost instinctive. To some extent, we have lost that here. That is why it must be helpful that the practice of parenting is taught. There is a clear need for sufficient welltrained health visitors and for the provision of children's centres and the like, to which young parents can turn for advice and guidance. What parents should do is not rocket science, but it is hard work.

Were I now to be speaking directly to a new young parent, I would have the temerity to put forward three prime points. I hope that noble Lords will not find my comments too simplistic. I take courage from the fact that most, if not all, of my points have already been mentioned by other noble Lords. What I am about to say is, to my mind, fundamental to good parenting and to the preparation of a child for subsequent success.

My first point is communication. It is essential that parents talk to their children from tiny babyhood onwards. One of the saddest sights in our modern society is the pushchair with the child facing away from the parent who is pushing it. Both parent and child lose out as a result. There is no communication between them; there is not even eye contact, and eye contact is very important for a small child.

Secondly, it is important, as early as possible, to establish a routine, to do so from day one. The parent should set the parameters and be consistent. That gives the child a valuable sense of security. Thirdly, and above all, as has been said—most notably by the right reverend Prelate in his excellent maiden speech—a child needs to be loved and to feel valued. A lack of love in a child's early life will leave a scar for the rest of its life.

So, communication, order, commitment and love are the essential ingredients of good parenting, the employment of which will help to prepare the child as it confronts the challenges and opportunities that will come its way.

12:50

[Lord Ramsbotham]

My Lords, I join other noble Lords in congratulating my noble friend Lord Northbourne on obtaining this important debate and I echo the words of the noble Lord, Lord Eden, and others who have paid tribute to the tremendous work that he has done and continues to do in the cause of parenting. I absolutely agree with him on his two main points: first, inviting the Government to consider the addition of foundation years education to the current educational structure; and, secondly, concentrating on teaching life and parenting skills in schools and thereafter to potential parents.

I have to admit that my anger at and my interest in the current situation was stimulated in a young offender institution where I was introduced to a 17 year-old boy whose history was that he had been excluded from playgroup at the age of four and was never allowed to attend primary or secondary school. That seemed to me to be utterly idiotic. All that was again stimulated when I read the report by Graham Allen MP, which has already been mentioned. It showed the bleak truth that decades of expensive late intervention have failed. It is self-evident that costs are paid back by early intervention.

The best place that I know to examine what the failure of early intervention and parenting means is the statistics on those wretched children who are currently in custody. I should like to quote some of those statistics because I hope that they will resonate with those who have responsibility for doing something about the current situation. Of those children in custody, 71 per cent were involved with or in the care of the social services before entering custody; 75 per cent had lived with someone other than a parent at some time, compared with 1.5 per cent in the general population; 76 per cent had an absent father; 33 per cent had an absent mother; 39 per cent were on the child protection register or experienced neglect or abuse; 40 per cent were previously homeless; 40 per cent of girls and 25 per cent of boys reported suffering violence at home; 33 per cent of girls and 5 per cent of boys were sexually abused; 1,148 of the 2,010 children in custody in September 2010 were assessed as vulnerable; and 30 per cent of the young men in prison and 49 per cent of the young women received no visits.

In addition, the education of these children is terrible. Of these children, 46 per cent are rated as underachieving; 38 per cent are below level 1 in numeracy; 90 per cent of young men and 75 per cent of young women have been excluded from school; 40 per cent of boys and 53 per cent of girls said that they last attended school before they were aged 14; and 81 per cent have a variety of mental health problems. To take this one stage further, 41 per cent of adult prisoners report having observed violence in the home as a child. The cost goes on and on.

What can we do about it? Of course, we all know about early intervention, but I should like to make one practical suggestion, which I have made many times in this House already. It picks up on the word “communication”, which was used by the noble Lord, Lord Eden. The inability to communicate is the scourge of the 21st century. It starts with parents not talking to their children and then it continues. I discovered, when I found someone wise enough to put a speech and language therapist to assess young people in a young offender institution, that they had done so because they knew that, until and unless you enable a child to communicate with you, you do not know what to do with and for them.

Very sensibly, Northern Ireland has picked this up. Every child in Northern Ireland is assessed by a speech and language therapist at the age of two. I believe that that should be picked up and replicated here. I do not think that this can be done early enough. The figures that we produced in prisons from the age of 15 onwards showed that, if people had been assessed before they started primary school, they would have had a chance to engage with the teacher; until and unless a child can engage with a teacher, they cannot even begin down the education pathway. If I have one plea for the Minister, it is that, in order to enable all the things that people have talked about in this House to happen, this vital ability to enable children to engage is picked up and run with now.

12:55

[Baroness Benjamin]

My Lords, in my maiden speech last October, I mentioned that my mission in life is to put the well-being of children at the heart of society’s consciousness, so I should like to thank the noble Lord for securing this debate, as it focuses on children’s well-being. I also take this opportunity to congratulate all the new Members on their excellent maiden speeches, which highlighted their vision for the well-being of children.

Recent research by the University of York—the Child Well-being Index—showed that, of 29 European countries, the UK was ranked 24th. What a sad indictment that is of our country. I believe that we must strive harder than ever to unlock and unleash the creative potential in the minds of our children and teach them to use it to heal our wounded world. We must prepare our children to think outside the box—differently and creatively—to develop an analytic mind and the ability to express themselves without inhibition.

Childhood lasts a lifetime and children’s future achievements are often decided at birth, as well as through how they are brought up and where they are educated, plus the unconditional love and support that they receive not just from their family but from society. They are our responsibility. We need to excite and feed their imagination in order for them to grow into well rounded human beings. Education is their passport to life. I believe that the best way for young children to learn is through fun and play during those early foundation years, thus stimulating their creative thinking. That includes learning through positive visual and audio stimulation.

For many years I have campaigned for high-quality pre-school children’s television and radio programmes, which at their best can serve as a powerful tool to help parents from all backgrounds to learn how to develop educational and stimulating techniques to use when interacting with their children. It also allows them to watch and listen with their young children, who can use the content as a platform from which they can begin to explore the world and all its wonders.

I do not refer to programmes that encourage passive viewing and are used as surrogate parents or babysitters. Programmes like these should be banned, especially if the television sets are in children’s bedrooms. In fact, I would ban all television and computers in their bedrooms. I am referring to quality not quantity—wholesome, educational, entertaining programmes that open a window on the world and take young minds on an adventure to explore not just their environment but other cultures, too. Yet only 1 per cent of new television programmes are made in the UK and the production of such vital programmes remains under threat. That is something about which we should all be concerned, as children are exposed more and more to programmes that subtract from rather than add to their overall well-being.

I spent many of my early years in the Caribbean with no television, so the art of play was second nature to my parents. Singing songs, reciting poems, listening to stories, dressing up and playing characters from books was a bedtime ritual, which taught us how to communicate to the world. Today, unfortunately, we are living in a different world. Increased working hours, the breakdown of the extended family network and stretched personal financial situations mean that many parents do not have as much time to spend with their children as they would like.

However, high-quality television and radio can be an ally, allowing parents to let their children watch and listen safe in the knowledge that they are benefiting from the content. “Play School”, a programme which I will always be associated with and which I adored being part of, ended two decades ago. It was loved by millions of children and is still remembered fondly. I believe that it was because the producer put children’s well-being at the heart of the programme. It was a sort of mini “South Bank Show” with storytelling, dance, art, songs, mime, music and, of course, the windows that provided a portal to the wider world through which children could expand their knowledge.

Appropriate children’s television is beneficial to childhood development. It can improve attention, expressive language, comprehension, articulation and general knowledge, as well as social interaction and life skills. I urge the Government and broadcasters to wake up to the crisis in the production of quality public service broadcasting for children. I also ask the Government to find creative ways in which to secure funding to maintain the tradition of well made British pre-school programmes that contain all the necessary and essential elements required for our children’s well-being. Children may not inherit all our talents, but they certainly will absorb all our influences, so let us teach them well in order for them to lead the way in the future and to have the confidence, morality and integrity to do so.

13:01

[Lord Ahmad of Wimbledon]

My Lords, I rise to make my first contribution in your Lordships’ House and, in doing so, seek the indulgence of noble Lords for a speech that I hope will meet with the normal conventions of being both succinct and uncontroversial. I am very grateful to many noble Lords from across the Chamber and, indeed, to the officers of the House, who have extended the warmest of welcomes to me and, on the day of my introduction, to my family. The warmth of this welcome was accompanied by some kind words about my relatively youthful appearance. I am reminded of the words of a 19th-century philosopher:

“The first forty years of life give us the text; the next thirty supply the commentary on it”.

What lies beyond that, he does not say, but looking around this Chamber provides me with the hope that perhaps the best is yet to come.

Some noble Lords may recall the day of my introduction, not so much by the fact that it was my introduction, although for those who remember it for that reason alone I am truly flattered, but by the fact that my first day in this Chamber fast became my first night in the House and indeed my second day here as well. It is said that a week is long time in politics; my first week in your Lordships’ House qualified this in literal terms.

Today’s debate is about the importance of good parenting in preparing a child for success in school and success in life. As one of the new Members of your Lordships’ House, I found the empathy and assistance extended to me by many noble Lords a type of sound parenting in its own unique way. Whether this leads to success shall be assessed over time. I also extend my gratitude to the noble Lord, Lord Northbourne, in bringing this subject forward for debate. The noble Lord is someone who has spoken extensively on this subject and is widely recognised for his contributions in the area.

Early learning and the role of parents are key. This is particularly true in infancy, where the creativity of a young mind is like a sponge. From cradle to grave, a journey of learning is something to which I subscribe, but those formative years are key in aiding communication and developing the confidence of a young child. Through my own experience as a youth worker for a youth association for many years, I saw at first hand how children benefited enormously from parents who not only provided the bedrock of security and support but also spent a great deal of time developing a strong relationship with their children. Parents are the earliest role model a child associates with and, if the child is fortunate, as I was, their parents may count among the most powerful and inspiring figures in their life. Indeed, I saw in my time as a councillor and as a governor of a primary school in Wimbledon the importance of integrating parents into the child’s learning, not just at school but during the preamble to school. This had the benefit of allowing the child to be eased into a new environment and for parents to understand the nature of a child’s development.

Another project that I had the pleasure of experiencing at first hand was one in the borough of Tower Hamlets in London. This was based in essence on a mothers and daughters project and it appealed to the Bangladeshi and Somali communities. The initiative is supported through mosaic and is entitled “Seeing is Believing”. Mothers are encouraged to participate through structured classes with their daughters during the reception year. Indeed, seeing was believing, as I saw the benefits of breaking down barriers of language and culture. This assisted not just the children but also the mothers in improving their English-language skills, which enabled and empowered them to become part of their children’s learning in those early development years.

Of course, early learning is not limited to educational attainment alone. This point is well made in the independent review by Graham Allen, Early Intervention: The Next Steps. As I stand before noble Lords today, I reflect on that emotional bedrock and the social importance of developing social and emotional skills. I do so as a beneficiary of parents who, despite the challenges that they faced, spent a great deal of time and took a deep interest in developing my skills during those early years. They are two individuals whose encouragement, support and affection were unlimited and unconditional.

In closing, perhaps I may say what a privilege it is to have had the opportunity to participate in this debate, which focuses on the very foundations of how lives are built, as I begin a new chapter in my own. In this regard, I express my deep gratitude and thanks to my two supporting Peers, my noble friend Lord Howard of Lympne, for his kindness and mentoring, and my good and noble friend Lady Warsi, for her advice, good humour and friendship. I should say how honoured and humbled I am to be in such distinguished company. Entering this House was a time of reflection, in that I have joined the ranks of a quite unique Chamber, one of great history and heritage, renowned for its role in scrutiny and review. It is a place of insight and intellect, brimming with wit and wisdom, as I have seen during the day and, indeed, through the night. I assure noble Lords that, in my humble contributions, I shall always endeavour to protect and respect the best traditions and conventions of this most revered and respected of institutions.

13:07

[Baroness Hollins]

My Lords, it is a real pleasure to be able to welcome the noble Lord, Lord Ahmad of Wimbledon, and to congratulate him on his maiden speech. I want to mention that we share not just Wimbledon in our title but a great love for Wimbledon and Merton, where he is very well known. The noble Lord has already had a stellar career in the financial sector and is an expert in marketing, but we have also heard about his contributions to the voluntary sector. He has also made a huge contribution to local government. I know too that the noble Lord has a lot of international connections and I look forward to getting to know him and seeing something of his youthful energy applied to the work of this House in the future.

I am grateful to my noble friend Lord Northbourne for introducing this debate. The topic is close to my heart as I originally trained as a child psychiatrist. My daughter is also a consultant psychiatrist and psychotherapist working in the field of perinatal mental health and infant development. I am going to focus on the role of specialist mental health services in enabling vulnerable parents to be successful in preparing their children for school.

Graham Allen’s report brings something to our attention that I am particularly pleased about. On page 40 he mentions the impact that unresolved trauma in youth can have on later parenting. He also draws attention to the importance of early intervention in leading to permanent improvements in a child’s health and developmental outcomes, but he stresses that this must happen in the first months and years of life, and even during pregnancy.

Research has increased our understanding of the importance of early experience for later child health and development. The evidence is strong. The emotional and physical environment and relationships during pregnancy and infancy are crucially important in enabling a child to be successful in school and in later life. This applies equally to children with learning disabilities, whose parents must also come to terms with their disability.

The evidence tells us that the first relationships in life are central to healthy development. Professor Schore, from UCLA, says that,

“the child’s first relationship, the one with the mother, acts as a template, as it permanently molds the individual’s capacities to enter all later emotional relationships”.

This profound statement has been understood within the psychoanalytic and psychotherapeutic traditions for decades, but now this has been recognised on a neurobiological level. He explains that the architecture of the growing baby’s brain will reflect the quality of the relationships that it has adapted to. The circuits formed during these early years, when the brain is most plastic, may last a lifetime. A baby needs a mother who can help him by responding sensitively to his distress, so the baby feels understood and can begin to manage his own physical and emotional experiences, both now and in later life. This is the foundation of communication, and when communication is absent the health of this emotional attachment needs attention.

Margot Waddell’s book Inside Lives: Psychoanalysis and the Growth of the Personality gives some excellent examples—which I do not have time to share with your Lordships now—which show well how a parent helps a small child to develop a capacity for learning by helping to manage their emotional experiences. Waddell explains:

“Something happened … which enabled the child to feel understood … Inseparable from this, no doubt, is an experience of being loved and of loving, and the deepening expectation of similar feelings to, and from, others”.

Without a stable early emotional development, children will be less able to form relationships and communicate with others, to learn or to take advantage of their school experiences. The early relationship with mother impacts on peer relationships at nursery and at school, and this can further affect the child’s ability to enjoy school and to be able to share in and learn from group activities.

So what early intervention programmes or treatments can help those who are struggling? An effective intervention recommended in Graham Allen’s report is the family nurse partnership. This programme was developed in the United States over 30 years ago but it has also had impressive results here in the United Kingdom—for example, by improving educational achievement and parenting practices, and by reducing child abuse and crime.

However, some women need more specialised mental health interventions to improve outcomes for their children and will not be able to respond to social or community-level interventions alone. Serious problems can affect women of all ages, cultures and socio-economic groups—for example, parents who themselves have experienced abuse and neglect are more likely to need health-led interventions—and there are other special cases.

Research is clear that mental health problems such as depression, psychosis and anxiety during pregnancy not only carry significant risks for mother and baby but can have long-lasting effects on cognitive, emotional and behavioural development. The complexity of attachment difficulties can be better understood by carrying out psychiatric and psychotherapeutic assessments. Health-led interventions are needed to address these complex and painful situations.

Perinatal and parent-infant psychotherapy can treat distressing experiences such as depression, anxiety and terror by understanding the cause of the difficulties and by focusing on improving the relationship between mother and baby from pregnancy onwards.

Tertiary centres such as the Cassel Hospital are also needed. Sadly, the future of the Cassel is under question. I hope the Minister will recognise the importance of providing specialist mental health services for mothers and their infants rather than waiting for child psychiatry services to intervene at a later stage when problems have already become established.

[Baroness Verma]

I remind noble Lords that this is a timed debate and that they have five minutes.

13:14

[Lord Winston]

My Lords, I apologise to the noble Lord, Lord Lingfield. Against the conventions of the House, I stood up and moved across the Chamber during his maiden speech. However, frankly, he spoke with such gravitas and assurance that I assumed he was not a maiden speaker.

If, immediately after birth and before it is three weeks old, a kitten is blindfolded for merely three weeks, Dr Mower at Children’s Hospital Boston has shown that it will remain blind once the blindfold is removed. The plasticity of the brain cannot compensate for the loss as a result of damaged stimulation.

We have in our brain around 100 billion neurons, which have up to 2,000 connections, and we learn by making more connections as we grow. Most of those connections are made in childhood. However, your Lordships’ brains will be altered in their anatomy permanently as a result of sitting through this debate because, hopefully, you will have learned something—even if it is only to go to sleep. A new-born baby has a brain of about 370 grams, and by the time he is 15 or 16 it will be around 1,450 grams in size. That colossal growth occurs mostly during childhood—and what happens in the first three years of life is of crucial importance, as other speakers have already said.

In 1998, Gordon Brown, when he was Chancellor of the Exchequer, set up the Sure Start programme as a result of concern about child poverty. The programme, which was not greeted enthusiastically by the scientists at the time—indeed, there was some scepticism about its value—certainly did not show massive advantages immediately. However, as time has gone on, it is now clear that the Sure Start programme—which is, admittedly, quite expensive but is devoted mostly to children in the most deprived parts of the United Kingdom—has been of massive benefit. It has made a big difference to social cohesion, social responsibility, the reduction of crime in the affected families and to better parenting. It is, quite clearly, a very good programme.

Although there was original scepticism, a recent publication by Dr Melhuish, Dr Belsky and Dr Barnes, of Birkbeck College, shows on a proper basis that the original programme—in my view, it should have been the subject of a controlled trial from the start, but was not; that was a mistake by the Labour Government—has undoubtedly proved to be of great benefit. It is important that we recognise that today.

The noble Lord, Lord Northbourne, mentioned many things with which I agree, but he referred, in particular, to the question of the self-esteem of children. There is overwhelming scientific evidence that children who are not rewarded, who lack self-esteem, grow up to be deprived as adults. They are much more likely to be depressed and to show various psychiatric disturbances, and they will tend to pass those problems on to their children, as the noble Lord has said. For this reason, I hope the Minister will assure the House that the Government will continue to protect the Sure Start programme, which, though expensive, has been a clear indication of the value of a properly run programme in these areas.

13:19

[Lord Alton of Liverpool]

My Lords, the fact that four noble Lords have chosen to make their excellent maiden speeches today during this debate in your Lordships’ House underlines how well chosen is the Motion that my noble friend Lord Northbourne has laid before us. I join others in offering him plaudits for the way in which he has, during my 12 years here, persistently raised this question again and again and kept this important issue before us. Like some of the noble Lords who spoke before me, I shall focus my remarks on the important report of the right honourable Member for Birkenhead, Frank Field, entitled, The Foundation Years: preventing poor children becoming poor adults.

A rabbi once said, “God was too busy—so He invented mothers”. Perhaps I may be allowed, as a father of four children, to add that He also invented fathers, and that the absence of fathers in the lives of their children has become one of the major factors in the disaggregation of our communities and in the shaping of the next generation of adults. It is estimated that around three-quarters of a million children in Britain today have no contact with their fathers.

In 2002, in a report entitled Experiments in Living: The Fatherless Family, Civitas spelt out the consequences for children who are brought up without a father. It found that these children are more likely to live in poverty and deprivation, to have emotional or mental problems, to have trouble at school, to have trouble getting along with others, to have a higher risk of health problems, and that they are more likely to run away from home and be at greater risk of suffering physical, emotional or sexual abuse.

Mr Field reflects on the rejection of children by their parents:

“Since 1969 I have witnessed a growing indifference from some parents to meeting the most basic needs of children, and particularly younger children, those who are least able to fend for themselves”.

His view is supported by the Millennium Cohort Study undertaken at Bristol University, which showed that the key drivers in determining a child's life chances, measured at the age of three, are: positive and authoritative parenting, the home learning environment and other home and family-related factors. These factors, which Mr Field recommends should be used in the life chance indicators proposed in his report, are predictive of children's readiness for school and of later life outcomes.

These indicators and the foundation years strategy—which other noble Lords have referred to, and which would be the first pillar of a new tripartite education system—may not immediately end income poverty but they can break the intergenerational cycle of disadvantage. Research commissioned by the Department for Work and Pensions bears this out. The simple involvement of a mother or father who is interested in their children's education increases a child's chance of moving out of poverty as an adult by 25 per cent.

Self-evidently the teaching of parenting and life skills should become a greater priority. The extension of initiatives such as Mumsnet, the kitemarking of beneficial television programmes—a point made by the noble Baroness, Lady Benjamin—and a reassessment of the relentless and corrosive advertising aimed at children, also have their place. Sure Start children's centres can help parents put elementary parameters, essential for later progress, into place—basic things such as getting parents to teach their children how to sit still and listen, how to be aware of others, to understand words like “no” and “stop”, to master basic hygiene, and so on.

Mr Field has in no way changed his view about the importance of tackling poverty but believes, as I do, that a strategy that depends solely on income transfer to remedy child poverty is doomed to fail. My own parents left school at 14 and came from backgrounds of acute poverty—my mother was an immigrant whose first language was Irish, not English—but both knew that a positive approach to learning at home, to encouraging the education of their children and to improving their own qualifications was critical; and that despite the vicissitudes of living in poor housing and in a flat on an overspill council estate, money alone was not the key to transforming the life chances of the next generation. I saw this trump card used by many families in the inner-city neighbourhoods of Liverpool that I represented for 25 years either as a city councillor or Member of Parliament. As Frank Field remarks:

“I have increasingly come to view poverty as a much more subtle enemy than purely lack of money, and I have similarly become increasingly concerned about how the poverty that parents endure is all too often visited on their children”.

Mr Field's report reminds us that it would require £37 billion of further tax transfers per annum to cut child poverty to 5 per cent of all children by 2020. We should take his important report—which points to the need for life chance indicators in foundation years—very seriously, and I look forward to the Minister’s response to his recommendations.

13:24

[Baroness Ritchie of Brompton]

My Lords, I congratulate the noble Lord on securing this debate on this important topic, which is of great interest to me; and I welcome the contributions of other noble Lords, in particular those who are making their maiden speech. There is obviously much knowledge in this House in this area. I believe that this debate, as has been said, is timely, as it follows the publication of Frank Field's report in which he explores how the home environment and parental involvement can impact on a child's readiness for school, and the impact of poverty on children's ability to succeed in school and in later life.

I welcome the recommendations in the report to establish a foundation years service and life chances indices to aid and support parents in this vital role. A further recommendation of the report is that the fairness premium, as part of the pupil premium, should be extended to the foundation years. I look forward to hearing my noble friend the Minister’s comments on those recommendations.

There is much research to show that parental involvement both in preparing children for education and in supporting them through their educational journey is crucial. Equally, we all know that being a parent is not always easy and that, for some, their particular circumstances make it even more difficult. Parents may have complicated and disorganised lives; they may have their own health problems that prevent them helping and encouraging their children; they may have had negative educational experiences of their own, or be fearful of the authority which they perceive teachers to represent. In many cases, however, only education will ensure that vulnerable children can move out of the poverty trap, and for that they will need their parents’ help.

If we really want to improve the educational outcomes for our children and have aspirations for them we need to start when they are very young, and we need to make sure that parents are properly confident about helping their children by providing an environment in which they are happy to access services. Many disadvantaged families do not need therapeutic intervention but they do need opportunities to extend the experience of their children—through play, singing, talking, et cetera—so that normal development of the brain can be maintained. These opportunities should be accessible. A programme called the Peers Early Education Partnership—PEEP—had 14,000 visits a year in a local shopping centre where parents could feel comfortable getting support because of the attitude and skill of the staff and because it was open six days a week, for most of the day, in a place where they went regularly and felt comfortable.

Of course, a small minority need more intense and specialised support to deal with the challenges they face, and we need to provide services to address those needs. The coalition Government are clearly aware of these issues and seem committed to addressing them. There is a coincidence of a number of reports, which has already been referred to, and which I hope very much will feed into government policy in this area. Equally, I welcome the Government’s commitment to increase the number of health visitors and support for family nurse partnerships, which shows a real willingness to tackle some of the more fundamental problems in our society. Multidisciplinary working between health visitors and early years practitioners is crucial in enabling them to understand the contribution that each particular profession can make and to co-ordinate their work to make it more effective and less expensive.

This issue is important for national government but also for local government, which provides many of the services; and of course the third sector has an important part to play. In my own local authority, our services for children are underpinned by the concept of “strong families at the heart of strong communities”. We run a range of parenting programmes. One in particular is called Incredible Years and is targeted at families with babies aged up to six months and where there are parental mental health and attachment issues. Many of our programmes are run from children's centres but some can also be offered in the home.

Many noble Lords are involved with charitable and voluntary organisations that are active in this area—I have already mentioned PEEP, which is doing work nationally, and much of whose work has been evaluated by Oxford and Warwick Universities. The charity focuses on supporting parents from their child’s birth through to school age and on developing three aspects of learning with their children: numeracy and literacy, self-esteem, and learning dispositions. Home visits are made soon after birth and there is a programme for families who would benefit from the one-to-one approach.

These are important projects that are intended to help parents become more confident in helping their children to prepare for education. However, it is important, particularly in these financially tough times, that these programmes are based on rigorous evidence and properly evaluated for effectiveness. We need to use the very best research and practice, whether it is from government or the third sector, to ensure that the next generation of our children has all the opportunities that it needs to succeed in life and in education.

13:29

[Baroness Howe of Idlicote]

My Lords, I join in thanking my noble friend Lord Northbourne for securing this debate on the importance of parenting. The subject and, especially, the role of fathers in bringing up children is one where his considerable expertise and persistence in keeping the subject well up on your Lordships’ agenda have at last paid off. Above all, I want to applaud the recognition that has at last been given to why early intervention is so important in a child’s development—indeed, for their whole life—to say nothing of the value it will bring to society as a whole.

Many reports have been mentioned by my noble friend and other speakers, but I am particularly pleased about the fact that two Labour MPs—Frank Field and Graham Allen—were commissioned by the coalition Government to produce this report. I shall construe that as definitely an indication that there is all-party support for this approach. Ironically, we are also to some extent indebted to our catastrophic economic situation because the Government are increasingly looking for evidence of clear value for any money spent. Therefore, they are at last prepared to acknowledge that locking up offenders, particularly young offenders, produces an endless churn in and out of prison at huge personal, social, and financial cost. I welcome the current Government’s declared policy of keeping as many offenders out of prison as makes sense by imposing more big society-type community sentences, paying more attention within prison to education deficiencies and to training for jobs and having a clearer, more effective approach to treating drink and drug addicts and those with mental health problems. All that is certainly a good start and if combined, as it should be, with effective mentoring and help with housing and finding jobs on release, it should help reduce the level of reoffending.

However, what we are discussing today—early intervention—will be even more effective in reducing the ultimate cost of that group, and it is also clearly the right way to unlock the potential in every child, particularly those with physical or other forms of special needs who sadly appear to be growing in number. It is equally important to give support to the poorest, most deprived families, perhaps particularly to those from chaotic backgrounds whose children are at far greater risk of underachieving or worse at school and afterwards.

In all these situations, the returns are demonstrably beneficial. Overall benefit-to-cost ratios are as high as 17 per cent. Quite clearly, if those parenting a child are capable of giving it unconditional love and support, knowledge of right and wrong and that essential ability to communicate and to make and keep friends at school and beyond, then the resources the state will need to spend on those children will be considerably smaller. That does not mean that no resources should be spent on those children. Your Lordships have only to think back to the time when they all became parents. It may be a fairly terrifying world for every child to be born into, as some experts tell us, but for parents— especially, I emphasise, for mothers—it is a completely new and rather terrifying world as well. That is why the coalition's determination to see that there will eventually be enough midwives, health visitors and nurse partnerships to see all parents through those early stages is to be hugely welcomed.

The professional help and advice that they give, together with other family support, of course, will be invaluable to everyone, but if this is the way forward, two aspects are crucial. The first is that the many government departments involved will be committed to working together and to sharing experience and information about the individuals concerned. The second, which is probably of even greater importance, is that the finance involved will be made available. It is no good starting on this path unless the work can be carried through. I do not mind what sources the finance is found from, as long as they are legal, but they must be there before the Government start down this course. If we achieve this, it will in the long run result in savings at every level from reduced prison and policing costs, societal benefits from less fearful neighbourhoods, the economy and individual fulfilment to much, much more. I hope the Minister will be able to confirm that early intervention is indeed an up-and-running, active commitment of the Government.

13:29

[The Earl of Listowel]

My Lords, I, too, thank my noble friend Lord Northbourne for calling this debate. I recall Mary Crowley, the director of the Parenting Education & Support Forum, which for many years co-ordinated efforts in this area, telling me that my noble friend called a meeting in the Moses Room several years ago bringing together interested parties in this area and out of that grew the Parenting Education & Support Forum. As the noble Lord, Lord Eden of Winton, said, my noble friend has many years’ practical experience of organising holiday camps for young people from the East End.

I shall make a few quick points. The noble Lord, Lord Winston, made very important points about Sure Start. A recent report from 4Children and the Daycare Trust found that a significant number of Sure Start centres expect to close at the end of the year. One thing that might help is guidance to local authorities on the best priorities to use when some services might be cut; for instance, on choosing between a speech therapist in a children’s centre and some other practitioner, on whether one post can be lost or on looking at a Robin Hood method so that wealthier parents pay while the poorer do not. This might be something on which the Minister could work with the Department for Communities and Local Government.

The Coram Family was mentioned twice. We speak of Sure Start children’s centres, but the original model on which they are based was the Coram model. This brings me to my theme, which is the importance of having the right professional framework to support parents with complex needs, the sort of professional framework that Coram offers so outstandingly.

I am very concerned about the future of the Cassel family assessment unit, and I am most grateful to my noble friend Lady Hollins for alluding to her concerns. Will the Minister speak with the noble Earl, Lord Howe, about these concerns? We understood that the decision on its future would be taken last month, but I think there is still some hope that that decision might have been delayed because of other priorities. This centre has faced difficulties. In 2005, a decision in the Court of Appeal lifted the duty on local authorities to provide assessments at this centre of expertise in Richmond. It is a 25-bed unit that works with families, both parents and children, with very complex needs. It is a national NHS flagship institution. It has a good record of keeping families with very complex needs together. Since that 2005 ruling, it has been used less and less. It is hard to justify the continuance of this institution because not all its 25 beds are being used. The problem is that it has not been properly funded. It needs to be nationally funded. It is a specialist service. This is the question before the Government now: shall we fund it nationally? If the Government choose not to, it is currently due to close in May so that is a critical decision. I recognise that the Government have a huge range of priorities to decide upon at the moment but, given the importance of this early intervention, the complex needs and the money saved—as has been made so clear throughout this debate—by intervening at that point with those families, I hope that the Minister will pass these concerns to the noble Earl, Lord Howe. I am most grateful for the conversations I have already had with him on this matter.

I turn briefly to the model developed at Hackney of intervening on parents with complex needs. Over the past three to four years, Hackney has reduced the number of children coming into care from 500 to 270. That is a huge saving in costs on those children and in terms of the courts. That money has been saved and reinvested in the service, half of it being sent back to the local authority. That has been achieved by developing a superb expert framework, recruiting the very best social workers who are working in teams with systemic psychotherapists. Those people have eight years of formation and such high expertise that they can quickly get the children back into their families and support the parents in caring for them. I look forward to the Minister's response.

13:41

[Baroness Crawley]

My Lords, I, too, congratulate the noble Lord, Lord Northbourne, on securing this most important debate on one of the most intractable issues facing our society today. I also thank him most sincerely for his courtesy in giving me sight of his speech notes and, more broadly, for his terrier-like grip on the subject of parenting and children’s well-being over many years in this House.

We have had a number of maiden speeches today and we welcome them all. The noble Lord, Lord Lingfield, in a most informative contribution, gave us the benefit of his wide experience in this area of children’s special educational needs and mediation. The right reverend Prelate the Bishop of Oxford gave us a refreshing, moving and most amusing tour of his diocese. As a resident of north Oxfordshire, I hope that our paths will continue to cross both inside and outside this House. The noble Baroness, Lady Stowell of Beeston—I am looking for her; there she is—will be a very important asset to this House, as her clear, humorous and excellent maiden speech demonstrated, while the noble Lord, Lord Ahmad of Wimbledon, gave us an engaging, arresting, confident and highly enjoyable maiden speech, outlining his great experience with young people. He is most welcome both day and night in this House. They were all excellent maiden speeches and the House is all the richer for the contributions of our new Peers.

The Library note issued for this debate draws our attention to the bulging literature on the subject of educational outcomes and parenting. We know from Leon Feinstein's research, which the noble Baroness, Lady Walmsley, referred to in her contribution that at a very early age—by 22 months—a bright child from a disadvantaged background begins to be overtaken in cognitive ability by a less bright but privileged child. While this is not to say that parenting is more likely to be poor in poor families, it does suggest that when parenting is poor the negative effect starts to accrue very early, well before the child goes to school. Moreover, the effects are cumulative and can markedly shape the lifelong prospects of the child.

Professor Desforges and Alberto Abouchaar undertook a literature review on the impact of parenting, one of their findings being that in the primary age range,

“the impact caused by different levels of parental involvement is much bigger than differences associated with variations in the quality of schools”.

A paper by Ingrid Schoon and Samantha Parsons assessed whether growing up in a socially disadvantaged family has a lasting implication for psychosocial adjustment in childhood. It concluded that,

“generally the study indicates that a stable and supportive family environment provides the ideal context for the child to flourish. In the long run, however, even resilient children are still at least in part handicapped by the experience of early social disadvantage”.

Demos, the think tank quoted by the noble Lord, Lord Northbourne, states:

“Parents are the principle architects of a fairer society”.

Amen, I say, to that. Philip Larkin, the poet, put it in another perhaps even more succinct way. We conclude that positive, early parenting is essential for children to grow up into healthy, happy, achieving and rounded adults. We know that, and that most parents want to do the best for their children. They worry about whether they are getting parenting right.

A report was published recently by the charity Family Lives, formerly Parentline Plus, which found that a majority of parents felt under pressure to be a perfect parent—pressure mostly from the media, sometimes from Government and from their own parents. So many parents know that good parenting really matters and they want help and advice from time to time. Almost a quarter of parents in the report had sought help from the child’s school on parenting issues, which is to be welcomed. This raises questions on what role the Government—any Government—should have in supporting good parenting.

It is because of the importance of good early parenting in securing positive outcomes for children, and because parents say that they want access to advice and support when they need it, that the Labour Government were committed to developing a wide range of support for parents, including parenting classes. For example, there are all the main Sure Start children’s centres, which my noble friend Lord Winston advocated very well. We built 3,500 of them in our time, which were used by more than 2.5 million children and families. They were all required to offer parenting classes using one of the well evidenced programmes that have been shown to have lasting, positive benefits for children and their families.

The centres were funded to train staff properly to ensure that such classes were delivered effectively, which was most important. Most primary schools and many secondary schools also choose to offer parenting classes as part of the extended activities and family learning programmes, which again were funded by government, because those schools understood the benefits not only to the children and families but for the schools themselves, with improved behaviour and better learning for all. Is the Minister concerned about the proposed closures of the Sure Start children’s centres and the reduction in parenting classes that they provide?

The Daycare Trust, which was mentioned by the noble Earl, Lord Listowel, said last week that 250 Sure Start centres may shut altogether, with most others suffering deep cuts to their services. The new early intervention grant to cover Sure Start, although welcome, is considerably less than the grants it replaces, with some suggesting that there will be as much as £1.4 billion of cuts in all early intervention programmes. What impact does the Minister expect that the cuts in local government will have on parenting support?

As many noble Lords have said, by far the most effective approach is preventive—helping vulnerable parents by getting to them early—and, as we believed that to be the case, the Labour Government introduced in many areas the much acclaimed Family Nurse Partnership, developed over 25 years in the United States. This approach attaches specially trained midwives to very young, vulnerable first-time mothers, from early pregnancy and through the first two years of a child’s life. The family nurse teaches and encourages all aspects of positive parenting as well as healthy lifestyles, and helps with strong couple relationships between parents, as marvellously outlined by my noble friend Lady Sherlock. Research in the United States has demonstrated that this approach has long-lasting benefits, including in educational attainment, to children born in the most deprived circumstances, as well as significant savings by preventing problems occurring later on in the child’s life. Will the Government continue to expand the Family Nursing Partnership programme across the country?

This has been a serious and timely debate, with highly informed contributions from noble Lords. Nothing is more important than the well-being of our children, as the noble Baroness, Lady Benjamin, and my noble friend Lady Massey have said. We are living through austere, sobering times. The Minister may argue across the Dispatch Box about the rights and wrongs of cuts that are being made to services, but one thing that we absolutely agree on is that it is not the children’s fault that we are where we are economically, and that the impact on them must not lead to a lost generation. As well as responsible parenting, we always need responsible government.

13:51

[The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)]

My Lords, I congratulate the noble Lord, Lord Northbourne, on securing this debate and on setting out the issues so clearly and with his customary thoughtfulness. I thank him for the courtesy of sharing his speech with me, which helped me prepare for today’s debate.

Like the noble Baroness, Lady Crawley, I congratulate the right reverend Prelate the Bishop of Oxford and my noble friends Lord Ahmad of Wimbledon, Lord Lingfield and Lady Stowell of Beeston on their excellent maiden speeches. I cannot add much to the comments made by the noble Baroness, Lady Crawley, but I am clear that, different though they were, they were united in their quality, and we all look forward very much to the contributions that they will make in years to come.

I knew that we would have a good debate, and so it has proved. It has been a broad debate that has raised a large number of issues, and I will do my best to respond to the broad themes that have been raised. I associate myself strongly with the remarks of the noble Lord, Lord Northbourne, at the outset. This Government, like the previous one, want to improve educational outcomes in our schools and to reduce inequality in our society. I hope that it is also fair to say that this Government, like the previous Government, recognise the importance of the early years in children’s lives and development.

In headline terms, there has been a lot of agreement in this debate—first, that good parenting in the early years matters; love, communication and order are some of the themes that have been picked up repeatedly. Secondly, it has been agreed that, despite most parents doing a very good job, there is clearly a group which needs support. Thirdly, there is a cross-party consensus on the need to tackle those issues. Fourthly, we need to find a way of co-ordinating the efforts that are being made, of sharing good practice and of trying to approach the issue in the round rather than in silos. That is particularly the case when one is talking about families with multiple problems.

Today’s debate is timely, as we have heard, because the Government are considering or have commissioned reviews in four separate but interrelated areas: a review into poverty and life chances by Mr Frank Field; a review into early intervention by Mr Graham Allen; a review into the early years and foundation stage by Dame Clare Tickell; and a review into child protection by Eileen Munro. This is a reflection of the priority being given to this whole area. It is the Government’s intention, as we have been urged by noble Lords, particularly by the noble Lord, Lord Northbourne, that we will respond to the reviews by Frank Field and Graham Allen and set out a new policy statement later in the spring.

We know that what happens in a child’s early years is critical to that child’s future attainment, behaviour and happiness. Those points were set out persuasively by the noble Baroness, Lady Massey of Darwen, and my noble friend Lady Walmsley. That is why, in a difficult financial situation, the Government consciously made decisions to try to protect funding as much as possible for the earlier years, keeping spending on schools flat in cash terms, introducing a pupil premium, extending 15 hours of free early education to disadvantaged two year-olds and providing an extra 4,200 health visitors.

I want to say in passing that what we do in schools is important as well. While I fully accept the contention that the early years are crucial, it is equally not the case that a child labouring under some of the disadvantages that we have been discussing is doomed to failure. We can all think of wonderful schools that have high expectations and provide an orderly, caring environment where their pupils achieve at least as well as, or better than, pupils from more affluent backgrounds. I am thinking of schools like Mossbourne Community Academy, which has a very high number of children on free school meals but has outstanding results, or King Solomon Academy, which I was fortunate to visit last week, which is giving the structure, support, engagement and aspiration that those children well might not have been receiving at home.

We have heard a lot of convincing evidence today for why early intervention matters. I was particularly struck by the figures provided by the noble Lord, Lord Ramsbotham. I listened with care to what he had to say about assessment. It is true to say that, as part of the universal healthy child programme, all children are assessed by a health visitor or a member of their team at two and a half years, and we hope that the expansion of the number of health visitors will make the quality of that assessment better and ensure that it is carried out.

I also learnt from the noble Lord, Lord Winston, that I apparently have 100 billion neurones, which is about 100 billion more than I thought I had and probably 100 billion fewer than the noble Lord, Lord Winston. We know from research that 94 per cent of children who achieve a good level of development at age five go on to achieve expected levels of reading at key stage 1, and are five times more likely to achieve the highest level, level 3, than those who have not reached a good level of development at age five. The National Literacy Trust, of which I was fortunate to be a trustee for many years, has also shown that parental involvement in a child’s reading has been found to be the most important determinant of language and early literacy.

There may be a utilitarian argument there for reading with one’s children. I actually have far more selfish reasons for wanting to read with my children: I never found anything nicer to do. I will probably be attacked for saying this by my daughter, who is now at university, but she asked me the other day to read her a Just William story again, so I must have done something right. We also know that parental support for education continues to be important as children get older. Parental involvement in a child’s schooling between the ages of seven and 16 is a more powerful force than family background, size of family and level of parental education. The Government therefore accept fully that the quality of care and support for early learning that young children receive, and their positive engagement with parents, can make a real difference to later outcomes in life.

Quality childcare and practitioners play a crucial role in supporting the children’s learning and development and engaging with their parents, and it is important that we support the sector to continue that role. The early years foundation stage has helped to promote a consistent approach to early learning and development for children aged nought to five across the sector, and has done much to raise standards and engage parents. We have asked Dame Clare Tickell to undertake a full review of the early years foundation stage, and to look at how best to protect young children’s safety and welfare and support their development and learning. Her review covers four main areas: scope of regulation, learning and development, assessment, and welfare. Underpinning all of this, we will aim to reduce burdens on providers, prepare children for learning at school and better support parental engagement in the foundation stage. We look forward to receiving Dame Clare’s report in the spring.

I accept fully the point made by the noble Lord, Lord Winston, and the noble Baroness, Lady Crawley, about the importance of Sure Start services. I recognise the work done by the previous Government in getting that network up and running. We know from stories, some of which we have heard today, that Sure Start services can make a real difference to families’ lives. That is backed up by the 2008 and 2010 reports from the national evaluation of Sure Start, which show improved outcomes in a number of areas, including better behaviour, more positive parenting skills and home learning environments, and better physical health of children living in an area with a Sure Start programme.

Sure Start children’s centres remain at the heart of the Government’s vision for early intervention. That is why we have put resources, in a difficult financial situation, into the system to maintain the network of Sure Start children’s centres and have provided the new investment I have already mentioned to pay for extra health visitors.

Last week, the Government published their response to the Education Select Committee report on Sure Start children’s centres. That response sets out more detail about our vision for children’s centres being accessible to all but with a clear role in identifying and supporting the most vulnerable and disadvantaged, with a commitment to be more accountable for the services which they deliver. We will further set out the key role of Sure Start when we publish an early years policy statement, which I mentioned earlier, in the spring. We will develop this in partnership with the sector to set out a new vision for Sure Start children’s centres, and the practical steps for achieving it. Our aims will be to increase voluntary and community sector involvement with children’s centres, a point made by the noble Baroness, Lady Sherlock, to try to improve accountability arrangements, to increase the use of evidence-based interventions, and to see whether we can introduce greater payment by results.

I accept the point made by the noble Baroness, Lady Crawley, about the issues being faced in some local authority areas as local authorities are looking at their budgets and addressing the future of Sure Start centres. Local authorities are looking at their budgets and are working hard to make the right decisions. Section 5D of the Childcare Act 2006 places a duty on those local authorities to consult before opening, closing or significantly changing children’s centres, and to make sure that there is sufficient children’s centres provision to meet local need so far as is practicable. However, we know that in some local areas families are concerned about whether this will alter their local services. I do not dispute that people have that concern. My honourable friend Sarah Teather, the responsible Minister, is monitoring the situation carefully. Although it is raising difficult issues, which I accept, our basic position is that decisions which affect local families should be taken locally so that services can be managed in ways which best meet local needs.

The Government has announced a national recruitment drive to appoint the 4,200 new health visitor posts I have mentioned. The number of health visitors working with families will increase by almost 50 per cent. The Government have committed to doubling the capacity of the local nurse partnerships. The increase in health visitors will, we hope, reinforce the importance of the relationship between Sure Start children’s centres and health visiting provision. Each children’s centre should have access to a named health visitor. Health visitors have great expertise to deliver universal child and family health services through children’s centres; to lead health improvement on subjects such as healthy eating and accident prevention; to help families stay in touch with wider sources of support, including from the community and other parents; and to be leaders of child health locally, including trying to build partnership between GPs, midwives and children’s centres.

Some of the broad issues that have been raised include families with multiple problems. In December, the Prime Minister set out his ambition to address the concerns of troubled families. I fully accept the point that there is financial sense in doing that, but there is also of course a strong moral need. Successive Governments have grappled with the problem of coming up with approaches that deal with the needs of these families in the round rather than the traditional Whitehall way of dealing with it by department or institution. Central to the Government’s ambition, therefore, will be the development of new approaches to supporting these families, underpinned by freedoms for local authorities to establish community budgets. We are hoping to set these up in 16 local areas to pool budgets for families with complex needs and roll them out to local areas across the spending review period.

The noble and learned Baroness, Lady Butler-Sloss, raised the importance of adoption, which we have debated before in this House. Like the noble and learned Baroness, the Government are keen to see more adoptions with less delay in all aspects of the system. The noble and learned Baroness spoke eloquently about particular problems with the courts system. My honourable friend Mr Loughton is taking the lead in addressing adoption, to speed it up and find more suitable people who are able to adopt, including looking at the role of voluntary adoption agencies.

Relationships and marriage is another theme that was discussed today. All noble Lords recognise that strong and stable families of all kinds are the bedrock of a strong and stable society, a point made very persuasively by the right reverend Prelate the Bishop of Oxford. They are the key to ensuring that children grow up in a loving and nurturing environment, and develop into healthy, happy and successful adults. The coalition Government are committed to helping parents to build strong relationships and supporting families through difficult times. We therefore have plans to put funding for relationship support on a stable, long-term footing to try to make sure that couples are given greater encouragement to use existing relationship support.

The Green Paper Strengthening Families, Promoting Parental Responsibility: the Future of Child Maintenance, was published on 12 January. It places a strong emphasis on signposting separating parents to support, including relationship support. Funding of £30 million for relationship support for the spending review period was announced by the Prime Minister in December. That is an increase on current funding levels and I hope it will make some contribution towards helping couples stay together. As all noble Lords have said, the more one is able to do that, the greater the chances a child has of a fulfilled and happy life.

We have also talked today about the role of fathers. The noble Lord, Lord Alton, particularly stressed that; I very much share the views that he set out. One aspect which the Deputy Prime Minister has addressed is proposals on work and parental leave to make the load more equally spread between the mother and father. That is one way in which, in a more difficult situation for many parents today, we can help give fathers more opportunity to be involved in their children’s upbringing.

It has been, as I thought it would be, a helpful and stimulating debate. If I have failed to respond to any particular questions that were put to me I will follow those up outside this debate. I am thinking in particular of the noble Earl, Lord Listowel, and I will of course speak to my noble friend Lord Howe as he asked me to.

In closing, I cannot do better than quote from the recent report, already referred to today, by Mr Frank Field. The following sentences in particular struck me:

“The things that matter most are a healthy pregnancy; good maternal mental health; secure bonding with the child; love and responsiveness of parents along with clear boundaries, as well as opportunities for a child’s cognitive, language and social and emotional development. Good services matter too: health services, Children’s Centres and high quality childcare”.

As is so often the case, Frank Field puts things extremely concisely. He has summed up our whole debate in those sentences. I share those sentiments; the Government share those sentiments. I am extremely grateful to the noble Lord, Lord Northbourne, for providing us with the opportunity to explore these issues today.

14:10

[Lord Northbourne]

My Lords, when in your Lordships’ House 17 years ago I first mentioned parenting, noble Lords’ eyes glazed over. They clearly did not understand what I was talking about. If I may say so, noble Lords did a great deal better today. It has been a wonderful debate. I very much hope that the Minister will give the House an opportunity to debate this subject after the reports that he promised for the spring have come out. On that note, I beg leave to withdraw the Motion.

Motion withdrawn.

Arrangement of Business

Thursday 3rd February 2011 Lords Chamber

Announcement

14:11

[Baroness Anelay of St Johns]

My Lords, I congratulate the noble Earl, Lord Clancarty, on securing the next important debate. Its importance is reflected in the length of the speakers list of 25. It may be for the convenience of the House—I discussed this with the noble Earl earlier today—if I gently remind the House of the rules governing time-limited speeches. The first debate was a model of good behaviour in this House and reminded us of the respect that all Peers give to each other in keeping to time limits within time-limited debates. I know we have many new Members, whom we welcome to this House. Sometimes it is not quite understood that when the electronic clocks within the Chamber display a time—on this occasion one minute—it means that one minute has already elapsed and the second minute has begun. At that stage, one must consider giving way to others. I refer briefly to paragraph 6.66 —perhaps an inelegant number for giving good advice—of the Companion, which says:

“Speakers in time-limited debates should respect the time guidelines and keep their speeches short, so that all those who wish to speak may do so”.

Arts: Funding

Thursday 3rd February 2011 Lords Chamber

Debate

14:13

Moved By

[The Earl of Clancarty]

To call attention to public funding for the arts; and to move for papers.

[The Earl of Clancarty]

My Lords, I am very pleased that we have the opportunity today to discuss the public funding of the arts. I look forward very much to the maiden speeches of the noble Baroness, Lady Bakewell, and the noble Lord, Lord Wasserman. I look forward as well to all the other contributions to be made, including from those here today who are experts in the arts and the media. I notice that broadcasting is particularly well represented. I am confident that the debate we have ahead of us will be not only a good debate but a highly necessary one. I thank the Library for providing an excellent briefing pack.

There are several good reasons to have this debate at this time. First, there has not been a full debate in this House on the subject of the arts for more than 18 months since the debate of the noble Lord, Lord Bragg, in June 2009. In that period the landscape has changed, with a new Government and a new—although not entirely new—political philosophy, as well as the economic problems that we face. Secondly, this debate complements the debate of the noble Lord, Lord Janvrin, on philanthropy on 2 December last year. Thirdly, there is a timeliness in the light of the speeches and comments made by the Secretary of State, Ed Vaizey and others in just the last few days on corporate sponsorship, which now bring into focus a little more clearly the Government’s intended direction for the arts for the next few years.

My own background is as an artist. I have been a beneficiary of a free arts college education and Arts Council funding. I am a beneficiary also in all the other ways that every person in this country still, to a great extent, benefits both directly and indirectly from public arts funding.

It would take a book with many volumes to write the story of modern post-war public funding of the arts in Britain. It has been one of huge and continuing success, with our important national collections protected, maintained, conserved and now once again permitted free admission to; a state-aided national theatre and ballet; and considerable help given to orchestras, artists and companies working in many forms, supported often through difficult periods and—although more so in former years—when there was little thought either of an audience or necessarily of commercial return. More recently, there has been the provision of arts centres and of larger-scale projects in the regions, achieved often through lottery funding; of education and outreach programmes; and, in the 21st century, the expansion of funding of new media, as well as the establishment of the national theatres of Scotland and Wales, and the successful refurbishment of Belfast’s Ulster Museum, with hugely increased visitor numbers. There has also been much more besides.

What of the situation now? We have severe cuts across the board, including a cut of about 29 per cent to the Arts Council over four years, with 6.9 per cent cuts for this year. It has been estimated that one in six arts organisations may lose funding altogether, although the precise figures will not be known until the end of March. The national museums and galleries have received a 15 per cent cut spread over four years. It was announced just this week that the National Maritime Museum would introduce charges to the Flamsteed House galleries and the Meridian Courtyard—something that the DCMS seems happy with. Perhaps the Minister could give us a hard-and-fast definition of a core collection, and confirm that my concern about the possible creeping introduction of charges is not justified. The effects of the cuts in funding will be more complicated than at first they might appear. Central arts funding cuts come on top of local government cuts described this week by Richard Kemp, vice-chairman of the Local Government Association, as the “toughest in living memory”, and which include, notoriously in my view, the 100 per cent cut to arts provision in Barnet and Somerset.

The interdependence of organisations, individual artists, companies and institutions with each other and their sources of funding are often intricate, so that cuts to one part of the system will affect another. There is also the issue of matching funding, encouraged by the previous and current Governments, which can mean that if one source is withdrawn another may be lost.

There is the abolition of the UK Film Council and of the Museums, Libraries and Archives Council, the functions of which will be transferred to an already overstretched Arts Council England. These will include the significant Renaissance programme of museum regional development, which will have a 15 per cent reduction in funding. There is reduction in funding for library development, alongside the prospect of the closure of hundreds of libraries across the country.

I turn now to the Government’s so-called localist agenda, which has important implications for the arts. It is a long-standing issue that the arts have been more poorly served in the regions outside London. The Arts Council over the years has produced more than one report on this. The Government’s intention is to devolve powers and responsibilities down to the community level. This appears to be the thinking behind asking the eight non-national museums sponsored by the DCMS to lose their central funding by 2015. One of these is the Horniman Museum in south London. On the one hand, it has collections of an international standard, such as its musical instruments collection, to which the important Boosey and Hawkes collection was added in 2003. On the other hand, it is a museum greatly cherished by the local community; indeed, one can argue persuasively that the Horniman’s depth extending from local to international boosts its significance to the local community, and that direct funding is a validation of that.

The London authorities’ umbrella body London Councils has axed its entire £3 million arts budget, which includes grants to a number of important theatres, such as the Theatre Royal Stratford East. At least, this was the case until last Friday when a High Court ruling decided that the entire cuts of £16.6 million were unlawful because there had not been a proper consultation. This certainly has interesting implications for councils across the whole country, which may now be seen to be in breach of equality laws.

In some ways localism is a chicken-and-egg problem. At present there is a sizeable gap between the local and national tiers of government, and we simply do not— at least not yet—have the strong, stable, responsible regional political structures to allow devolution to take place in a meaningful way. But where real devolution is capable of happening, such as for Wales and Scotland, there is a sense of the emergence of young cultures proud of the importance of their arts to society. The great success of “Black Watch”, shown first at the Edinburgh Festival in 2006, and then at the Scottish National Theatre, is emblematic of this.

Coming to the heart of the debate, I want to pose three questions. First, are the cuts actually justified on financial grounds? Every sector of national life, from health to welfare and the arts, has been warned that it must face less government funding while the Treasury seeks ways to pay down the deficit and build growth. As the Arts Council said in Why the Arts Matter:

“The arts budget is tiny; it costs 17p a week per person—less than half the price of a pint of milk”.

Actually, with recent inflation, that now amounts to about a third of a pint of milk. As actor and director, Sam West, said about the theatre in the Evening Standard of 27 October last year,

“the Treasury is shooting itself in the foot by going after a profitable industry that leads the world. The writer and director of Billy Elliot”—

Lee Hall and Stephen Daldry—

“trained in subsidised theatre; the money paid back in VAT by people buying tickets to watch their work repays that subsidy hundreds of times over”.

The right reverend Prelate the Bishop of Liverpool observed in this Chamber just last week that £20 million- worth of public investment has “generated £120 million” in Liverpool’s local economy. In Tuesday’s Daily Telegraph, the noble Lord, Lord Hall of Birkenhead, chief executive of the Royal Opera House, pointed out that this sector contributes,

“£59.1 billion to the economy each year and”,

is,

“growing at a faster rate than other parts of the economy”.

I could spend all afternoon—as I am sure others could, and perhaps will—standing here reciting statistic after statistic suggesting that instead of cutting public funding to the arts we should be increasing it, and by large amounts, and that, indeed, the economic growth so produced would help the country as a whole. But, of course, as things are, the public would not stand cuts to the arts not being made when many important services are being cut.

In January 2010, the Secretary of State, then shadow culture secretary, said that the arts would “not be singled out”. Yet the severity of these cuts to the arts, as well as the length of time over which they are to take place, and the degree of cutting to the infrastructure —50 per cent to Arts Council operating costs—seem to tell another story. We have had severe cuts before. In my view, what is worrying about these cuts—and not just in the arts—is that they are happening at the same time that other forms of funding are being strongly encouraged to step into the void.

This then brings me to my second question, which is: how should we fund the arts? It is a topical question and an important one because there is considerable evidence that different funding models produce quite different results which will determine the arts culture of the future: whether we stay with our current system of one-third public funding, one-third box office, one-third private investment, or effect a shift in these proportions.

Philanthropy, of course, has been with us for a long time and has, indeed, provided the basis for our major museum collections. The Art Fund works exceptionally well in partnership with public funding to secure works of art for the nation, recent examples being the purchase of Pieter Brueghel’s “Procession to Calvary” and Anthony d’Offay's “Artist Rooms”. But, of course, the National Heritage Memorial Fund's grant will now remain at less than half it was before the previous Government's cuts, and there is the longer term danger that such constructive partnerships are threatened. In our mixed system, the Art Fund would like to see more contemporary artwork purchased for regional museums—something that I think should be looked at.

On the other hand, there is criticism of the USA's predominantly philanthropic model as producing a blander, more conservative, less innovative arts scene. Philanthropy is inherently undemocratic in its spread and has a metropolitan bias. Interestingly, there is a sense among most philanthropists, if not all, that philanthropy should be the junior partner in a relationship with public funding. In the Guardian of 21 October, 2010, Dame Vivien Duffield, chair of the Clore Duffield Foundation, one of our most successful and sensitive donors, is quoted as saying:

“Charity ought to be providing the icing on the cake”.

For the moment, of course, in our current economic climate the reality does not meet the Government's hopes and expectations. Last week, Arts & Business confirmed that total private investment in the arts was down 3 per cent. This in itself is an additional criticism—that both philanthropy and corporate sponsorship can be removed at a stroke, effectively putting the arts directly at the mercy of fluctuations in the economy. I am not at all against philanthropy or corporate sponsorship. Indeed, most artists will take what funds are on offer because they have a responsibility as artists to their work. However, I argue that we should retain the balance of the mixed system we have now—a system that was indeed prized over 60 years ago by John Maynard Keynes, chair of the Council for the Encouragement of Music and the Arts, the precursor of the Arts Council.

This brings me to my final and, I believe, most important question—more important than the economic one—which is this: what precisely is it that as a nation we wish to support in relation to the arts? I believe that it is the work of the artist and of the arts that is itself the contribution to society, and that if we shift the balance significantly against public funding, we will start to narrow down the options for the accomplishment of that work. The Arts Council has been, at its best, able to fund those who are off the radar as well as on it—quiet art as well as great art. At its best, it is democratic in a way that no other funding means can be. The good news is its intent to be more democratic, with a greatly simplified application form and more flexible criteria for funding, welcoming all comers. Speaking as an artist, I would like to see closer knowledgeable relationships developed between artist and arts officers, and on a more local basis, although the trend has been towards greater centralisation, but, of course, this takes money. Public funding can also look to our links with, and exploration of, other cultures, and the Arts Council's continuing support of literature translation and the Independent Foreign Fiction Prize should be applauded.

I have not been able to cover every area. For instance, the threat to higher education courses in the arts and in the humanities and social sciences is itself worthy of a full debate in this Chamber. We are fortunate in the UK to have developed a unique style of funding which has evolved naturally, resulting in such extraordinary creativity in the post-war years. We have all benefited from this phenomenon. This is not art for art's sake, but art for everyone's sake. In the end, it must be said that where audiences exist they will have been created by the art itself, not by politicians. At a time of economic uncertainty it is intuitively easier to scale down public funding, leave it to the private sector and say, “What will be will be”. Maintaining and developing the intricate funding ecosystem we have now is not safe or easy, but it is right. I beg to move.

14:27

[Lord Brooke of Sutton Mandeville]

My Lords, I declare an interest, as stated in the register, which is that I have been for 15 years the president of the British Art Market Federation. I look forward to both maiden speeches and wish the maiden speakers well.

The three most vivid indices of the debt that your Lordships’ House owes to the noble Earl, Lord Clancarty, so early in his time in your Lordships’ House, are: first, that we have been given an extra half hour; secondly, that we have been deluged by briefing from within and without; and, thirdly, that our own Library, at 10.30 this morning, had run out of its own composite briefing, which is a compliment to it, too. I congratulate the noble Earl on his speech, which has set the tone for the debate.

There is a mood of ululation about. After an overexcess of public spending, there was always going to be a hangover, although it was sad that the Treasury reverse alchemists should have believed that they had found the elixir that eliminated bust from boom. At this time we are in a mire where all the sources of financial support for the arts, save two, are in retreat. Although there is, of course, interaction between some of the financial sources, which aggravates the decline, this debate will be the better if we look forward rather than back.

I propose to run through the various financial sources via the briefing that we have received, although in no particular order. We shall not know how severe the local authorities’ decline will be precisely until the local government elections in May, but the Performers Alliance has given us an harbinger foretaste, triggered, of course, by the decline in local government central funding. Arts & Business told us last year that all sectors of private support were down from the year before except trusts and foundations. We must hold our breath to see how that element develops hereafter. The sensible qualitative briefing by the Corporation of London warned that changing the culture of private philanthropy—the American version is always quoted—is not simply a matter of turning a switch. As this is the Secretary of State’s preferred option, we must hope that his confidence in metaphorically placing his chips on the number 31, which is of course the highest prime number on a roulette board, pays off before his credit runs out. However, the City of London Corporation’s cautionary advice is prudent, and private support in the mean time is not the best bet to fill a revenue gap.

The Arts Council briefing, coming after its excellent booklet, Achieving Great Art for Everyone, is greatly to be commended for repeating its advice that any applicant for funds—and, admirably, that every hungry mouth must apply if it wishes to receive money—must show that they are contributing to at least two of the council’s five goals, as adumbrated in the booklet. Nor does the council disguise the scale of the revenue gap and the consequent disappointments that will be felt—a matter that is being sensitively and intelligently handled.

However, greater clarity and illumination are needed in the degree of meeting of minds between the Arts Council and the department on how they each see, on the one hand, the difference between administrative and operating costs and, on the other, the difference within private sector funding between sponsorship and donations. Words are cheap; misunderstanding is expensive.

Where the Arts Council deserves praise and support is in its intentions towards the lottery as a financial support, which is the second source of funds that is increasing. In Dame Liz Forgan’s garden, the rose called additionality is being guarded and fertilised and the grants for the arts programme—the GAP—will be one acronymic gap less in hazard, in consequence.

Where the Arts Council has been handed a hot potato is on the proposal to replace the Museums, Libraries and Archives Council and to provide less funding. We shall not know the exact dimensions of the challenge and of the concordat between the council and the department until such sentences as,

“At a broad level we believe this new alliance will for libraries mean a closer alignment of libraries’ cultural role with other aspects of the offer, allowing us to take a holistic view of cultural provision in localities”,

are turned into English. Bears of little brain, such as me, reckon that the ice is thin when the language becomes complex. The great Lord Goodman, at the end of his life, regretted the arm’s-length principle, but less brainy bears regard it and the additionality principle as insurance policies. We may also miss the MLA in its sounding-off role as a commentator on the national scene, as the City of London’s briefing averred.

Finally, we have no direct briefing on ticket sales. Like children, we must hope that the goose that lays the golden egg is not force fed by institutional management, or we shall be still worse off. Those who eat foie gras should not be treated as geese themselves. Where there is doubt as to whether it is the department or the Arts Council that has taken a particular unpopular decision, it is best if the arm’s-length principle is not used to obfuscate and if intellectual honesty prevails.

14:32

[Baroness Bakewell]

My Lords, it is with great pride that I rise to give my maiden speech in this House on a subject that has played a sustained and sustaining role throughout my own life. However, I first wish to thank noble Lords from all sides of the House who have given me such a warm welcome and to acknowledge the help that I continue to receive from the outstanding staff who work here. It is with pleasure that I thank my two distinguished sponsors, the noble Baroness, Lady Kennedy of The Shaws, and the noble Lord, Lord Puttnam.

I understand that I must first declare an interest. I am chair of the touring theatre company Shared Experience. I was for six years the arts correspondent of BBC television and for six years the chair of the National Campaign for the Arts. I have served on, among others, the council of the Aldeburgh Festival, the board of the National Theatre, the BFI, the council of Friends of the Tate and the Film Council.

It sounds, perhaps, as though I was to the manner born—that this came as some sort of birthright—but it is not so. My grandfather, an iron turner in a Salford factory, died at the age of 33 and my father was sent to Chetham’s Hospital, then an orphanage for poor boys in Manchester and now a world-famous music school. Chetham’s had, and still has, one of the finest 17th-century libraries in the country. My father grew up loving books. The importance of libraries in the life of a child should not be underestimated. He left school at 13 to work in a foundry and enjoyed a career in engineering. My mother, the daughter of a cooper in a Manchester brewery, also left school at 13. Many years into their marriage they made up for the lost years by studying at the Workers’ Educational Association. I am the child of their aspirations. I grew up in the 40s and 50s, enjoying a grammar school and university education without fees and without debt. My life is a testament to social mobility. My arrival in this House is surely its crowning glory.

This, then, is the life that has turned to the arts to understand the world about me. From reading that encompassed Jane Eyre and Mrs Gaskell’s novels about industrial Lancashire, visits to Manchester City Art Gallery and concerts by the Hallé Orchestra, I have continued to find nourishment in the sensitivities of those who create and perform works of art. I believe profoundly that the arts are more than the entertainment that awaits us at the end of the working day—a light relief from the real business of living. I believe the arts to be a core essential in shaping and sustaining our human values. So it is not surprising that I am passionate that the rewards should be available to everyone in our society.

Let me speak particularly about how public funding of the arts outreach programmes touches ordinary lives. Not long ago, I opened an art exhibition at the QUAD arts centre in Derby. The exhibition was called Objects of Delight and was curated by 14 people between the ages of 55 and 75, who were given total freedom to select their own show, with works of art freely lent from the Arts Council’s wonderful collection. The show was full of surprises. It included art by Hockney, Ken Kiff, Gillian Ayres and Grayson Perry. The ferment of the curator’s excitement spread throughout Derby, with friends and family catching the mood. This one modest venture was, for those involved, transformational.

It is important to stress that the central purpose of arts funding is to encourage the artistic spirit; that is its absolute undertaking. Art is not a form of social work but, if the enjoyment of art is to be confined to those who can easily afford high prices, public money is not being responsibly spent. Outreach features in the budgets of all our major companies. The Tate currently works with 70 children in Orkney creating art. The sums of money involved are relatively small, but they are important. They are less likely to attract sponsorship or media attention, but they change lives— 76 per cent of adults engaged in the arts in the past year. This is why I commend the matter of the debate today and urge your Lordships not only to enjoy the arts to the full but to endorse a funding strategy that gives all our citizens access to and participation in work that can be uplifting and life changing.

14:37

[Lord Puttnam]

My Lords, it happily falls to me to warmly congratulate my noble friend Lady Bakewell on a wonderful maiden speech. The fact that it was knowledgeable and eloquent was no surprise at all, but it was a tremendous bonus that she allowed us into the background to her achievement. It speaks volumes for your Lordships’ House that in their time both the noble Baroness and my noble friend Lord Bragg, who I am happy to see is in his place, have respectively and respectfully been described as the “thinking person’s crumpet”—no Andy Gray moment for me. I was reminded of that last week when, during her introduction, I glanced across at a packed Bishops’ Bench to see what I can only describe as a group of men glowing with anticipation at her arrival. I am sure that the rest of us felt similarly and I hope that we will hear from her much more and at much greater length over the coming years.

I, too, am extremely grateful to the noble Earl, Lord Clancarty, for securing this timely debate. I should begin by declaring an interest as chair of the altogether excellent Sage Gateshead and as president of the Film Distributors’ Association.

Aneurin Bevan, when drawing attention to the capacity of Governments to pursue counterproductive policies in moments of crisis, famously observed in 1945:

“This island is made mainly of coal and surrounded by fish. Only an organising genius could produce a shortage of coal and fish at the same time”.

Today, at a time when this island is in desperate need of every scrap of creative energy and imagination, it would require a very particular genius to fail to support and nurture both. The fulcrum around which originality leading to the development of intellectual property is based—the coal and iron of the 21st century—is access to and enjoyment of the arts; that is to say, all of the arts and for all of the people.

On 18 March 1998, I had the privilege of introducing a debate in this House to call attention to the importance of the arts in the life of the nation. During that debate, I suggested:

“The arts are an essential element of the cultural and creative lifeblood of any nation. They sustain the conscience and vitality of a society. One measure of any community wishing to regard itself as truly civilised is the quality and depth of its artistic achievement … Even in the most enlightened state, there will never be enough funding for the arts”.—[Official Report, 18/3/98; cols. 717-19.]

That was the challenge that I set out for the then newly minted Labour Government. Despite the enormous changes that we have witnessed in the world of art and culture since that debate, some things have not changed. I continue to stand by my assertion in that debate that, if we want the arts, we find a way of paying for them. For a society such as ours to consider itself civilised, there is, to echo one of the coalition’s favourite phrases, simply no alternative.

During the past 20 years, successive and extremely engaged Secretaries of State consistently sought to expand access to and participation in all forms of the arts, to the benefit of audiences and creators in every discipline right across the UK. At the same time, these policies sought to bring together the arts with education in new and innovative ways. As they did so, it became generally accepted that the type of skills fostered by engagement with the arts—among them, self-confidence, empathy and teamwork—have a value both for the individual’s self-development and for nurturing our sense of connection to others.

This sea change was made possible by combining a sufficiency of funding with a series of strategic interventions designed to maximise the value of that funding and connect it with the widest possible range of audiences and creators, while all the time seeking to raise the bar for artistic and cultural excellence.

Free admission to our wealth of museums and galleries was just one way in which the then Government sought to achieve this. So popular and successful has that policy proved that even the coalition has come to the reluctant conclusion that it dare not touch it. According to the National Museum Directors’ Conference, in 2008-09 24 million people visited just our national museums; that is, a 70 per cent increase in 10 years.

The enhanced popularity of our museums has also had a very positive impact on tourism, now accounting for eight out of the top 10 visitor attractions here in the UK. At the same time, there was also an early recognition of the power of digital technologies massively to increase access to the arts and to allow people to create, share and re-use artistic ideas in ways that were previously quite undreamt of.

A year ago, when it came to the arts, we had a very great deal to be proud of, but, in the space of barely nine months, I am afraid that the coalition has managed to undo or at least put in jeopardy many of the most effective achievements of the past decade. I regret that time does not permit one to list the full extent of them.

Of course, we all recognise the financial challenges that the nation faces, even if many of us on these Benches reject the coalition’s rather broad-brush and cynically inaccurate explanation of how we came to find ourselves in our present position. Self-evidently, the arts and culture more generally are not and cannot stay immune from the financial pressures that are being brought to bear, most particularly on the public sector. But what I find truly egregious is the arbitrary and ill thought through way in which many of the cuts are being implemented, seemingly devoid of any meaningful attempt to assess their likely impact or, indeed, the value of individual initiatives, the roots of which are being hacked away at. I fear for the arts. I fear for the ill considered impact of cuts on UK tourism, on UK jobs, on UK education, on this country’s sense of self-confidence and on the sustainability of its future as a culturally vibrant nation.

14:44

[Baroness Bonham-Carter of Yarnbury]

My Lords, I declare an interest as a member of the board of the National Campaign for the Arts. I join others in thanking the noble Earl, Lord Clancarty, for the opportunity to debate this important topic. One thing that I can claim to have in common with the noble Baroness, Lady Bakewell, whom I congratulate and welcome, is that we are both alumni of “Newsnight”—although there may be two things, because I think that we both appeared on Michael Crick’s blog in that context.

Oscar Wilde said:

“Art is not something which you can take or leave. It is a necessity of human life”.

I have made many speeches agreeing with him. The arts bring happiness to practitioners and consumers alike; they define and bind communities; they provide understanding of the world we live in and what makes us human. They also contribute to the economy and to the esteem in which we are held abroad.

The arts are flourishing, as the noble Lord, Lord Puttnam, said, and we wish them to continue to flourish. The coalition has restored National Lottery funding to its original good causes, which means an additional £50 million a year. We hope to introduce a gross-profits tax regime, which will further enhance receipts. Also, after the 2012 Olympics, lottery funding will be fully restored. However, due to the financial circumstances in which we find ourselves, the arts sector has to accommodate funding cuts that reflect wider pressure on public spending. Consequently, helping arts organisations to raise money from other sources is important.

Philanthropy must be encouraged. To that end, last year’s announcement of a match-funding scheme of £80 million from public funds is to be welcomed. In 2008, the Labour Government introduced a similar scheme to encourage donations to UK universities, which has been hugely successful. However, a crucial lesson was learnt: the importance of investing in the teaching of fundraising skills.

I read the other day of a rather underhand test that eight regional museums were subject to which illustrates the point. A fictional, recently widowed woman sent a letter to each museum saying how much she enjoyed them and how she wanted a new hobby, making it clear that she had money at her disposal. She included a £10 note. Only one museum responded, and only with a brief note of thanks. Can the Minister confirm that part of the £80 million will be used to support small and medium-sized organisations that may not have a history of fundraising?

Looking forward, as my noble friend Lord Brooke rightly said we must, we see opportunities on offer as a result of new technologies. We should investigate how these can be harnessed both to boost fundraising and to extend access to the arts. A type of scheme has emerged on the internet called crowd funding. This involves encouraging large numbers of people to give small amounts of money through the web to causes that they support. WeDidThis is a recently launched site whose manifesto is, “Art for everyone, funded by everyone”. Citizen philanthropy connects the giver with the particular work to which they are donating. A company called Digital Theatre uses its own equipment to record theatre productions, which they then sell for far less than the cost of a ticket to watch online, but from the best seat in the house. The money made is shared with the production, so as well as extending access this is another potential new source of income.

Another, rather different way of alleviating funding cuts is also, happily, good for the planet. I have recently come across a young woman, Rachel Madan, who has created a company called Greener Museums. She helps museums and other cultural organisations of all sizes to identify and develop sustainable practices. The consequence of this is both to reduce costs and to attract sustainability funding. The Beacon Museum in Cumbria has changed its habits in such a way as to allow it to reduce operating costs by £10,000 year on year. Warrington Museum has managed to reduce electricity consumption by 14 per cent in just one month. I believe that the Tate, through its own initiative, has reduced utilities costs by £237,000 over three years.

Finally, I am sorry that funding for the Creative Partnerships scheme, which so successfully encouraged creativity in schools by sending artists into them to work with teachers and pupils, has been cut by both the Government and Arts Council England. I urge the Minister to encourage the Arts Council and the Department for Education not to throw away their very valuable relationship and experience.

I started off by talking about philanthropy. While a lot is written and said about the great contribution of so-called cultural giving in the United States, I am sure that the Minister will agree with me that this coalition does not believe in importing the US model into the UK. The connection that is made between the citizen and culture as a result of funding through direct taxation is a crucial part of the equation. Public money dispensed by arm’s-length bodies free from commercial or, for that matter, political consideration is an essential part of a thriving arts sector—an arts sector that produces the risky and the challenging as well that which soothes the soul.

14:49

[Baroness Young of Hornsey]

My Lords, I thank my noble friend the Earl of Clancarty for securing this debate, which is already proving to be a landmark occasion, and for providing a comprehensive and subtle overview. I also welcome the noble Baroness, Lady Bakewell, and hope that I can extend as warm a welcome to her as she extended to me when we both served on the board of the National Theatre. I am very pleased to see her contributing today.

I should declare a number of interests. In short, I have been a researcher, consultant, adviser and creative producer and have served on numerous boards in the cultural and creative sector, working, for example, with the Arts Council, the Heritage Lottery Fund, the BFI, the Cultural Leadership Programme and so on. My contribution today will echo what some other noble Lords have said, but what I am driving for is much more clarity about the intentions for the arts from the coalition Government. In that sense, I echo what my noble friend the Earl of Clancarty said earlier. I want to know the longer-term vision of the Government for the arts and the creative and cultural sector, what the strategy is for achieving that vision and, perhaps most important, what the underlying principles are of that vision and strategy.

Public subsidy might be a major part of those underlying principles. If we are going to say that substantial public subsidy for the arts is at an end, that it will not recover but will be reshaped forever, we need to know that now. One issue faced by many arts organisations, in particular those that are not large, national and urban, is that they do not have the capacity—I refer to human and financial resources—to take advantage of what few opportunities there are. Often, because they are firefighting a lot of the time, they do not have the capacity to think forward and work out how they might take advantage of some of the opportunities that might arise or produce some opportunities for themselves. That capacity building is necessary. This was alluded to by the noble Baroness, Lady Bonham-Carter, who is no longer in her place.

I will look at some of the work that I have been involved in over the past couple of years, which has been about the socially engaged arts, culture and critical practice. I agree with the noble Baroness, Lady Bakewell, that artists should not be social workers. However, a number of arts organisations, and indeed artists, have a strong commitment to producing work that will have an impact on people's lives, with a determined set of social objectives lying behind that commitment.

When asking about the strategy of the Government, I am concerned not only about some factors referred to earlier by the noble Earl that will impinge on the arts sector but about a number of other issues, such as cuts in department budgets. Much of the work that I referred to, which concerns reducing reoffending, working with young offenders, working with children in deprived areas and so on, is dependent on obtaining funds from other government departments. The issue is not just the lack of money available from sources directly related to arts activities.

I am a strong supporter of public subsidy for the arts because I believe that the market alone will not give us the creative edge, the innovation and the risk taking that artists, practitioners and entrepreneurs in a thriving arts sector need. We are globally very competitive in the arts and creative sector because we have had an ongoing commitment to invest public funds in the arts. It is possible to see that as an investment because of what comes out in future.

Talk of philanthropy and corporate sponsorship is all very well—we have had that to an extent over the years, so we are not starting from scratch—but we do not have an embedded culture of philanthropy or corporate sponsorship that can see beyond the needs of certain kinds of organisations. I get very concerned that, not only in government discourse but elsewhere, the kinds of organisations that are referred to as being the arts sector often fall into the category of national, London-based bodies, which are quite well funded in comparison with smaller organisations. That issue must be addressed.

Bearing in mind the reminder about timing that we were given at the outset of the debate, I have not been able to make all the points that I wanted to make. The key question is: how do the Government see the long-term future of the arts and the role of public subsidy within that?

14:55

[Lord Moser]

My Lords, I, too, thank the noble Earl for giving us this opportunity for debate, and congratulate the noble Baroness, Lady Bakewell, on her remarkable maiden speech and on all that she has done and will continue to do for the arts. I have spent much of my own life involved in the arts, and sometimes have not been popular. Years ago, an Arts Minister said in Parliament, “We are all used to Claus Moser’s annual whingeing for the arts”. Today, however, I will not be whingeing, but I will express some concerns.

The arts are in the most flourishing state that they have been in for decades. I refer not just to the great London institutions but to all the small, innovative, risk-taking activities up and down the country. There is massive outreach, wider access everywhere, festivals and lots of personal creativity. At the centre is the vital and highly successful Arts Council, created by Keynes in 1946.

We all know the benefits. Economically, the creative industries earn 7 per cent of GDP and employ 2 million people. They are a great help to tourism and invisible exports; they help to regenerate poor communities; and they enhance the quality of life and happiness of all of us. Now come the cuts, and the damage that they will cause is inevitable and visible. As we heard from the noble Earl, the Arts Council is facing a tough 29 per cent cut, so inevitably many of its clients will suffer.

However, at least the Arts Council is dealing with this in as rational and helpful a way as possible. I say “at least” because my greatest worry is not the Arts Council clients but those of local authorities. The local authorities do not have any central guidance or leadership. Some of them have already decided to abolish arts funding totally. Others, including Birmingham, are cutting by 50 per cent, and we have not seen the end of it by any means. As if that were not enough, the regional development agencies—a very helpful source of arts funding—are being abolished.

Schools are probably more important than anything else that I will talk about. The schools world is hesitating about what to do with music in future. Universities are cutting the arts and humanities. The combined effect of all this must be to threaten our flourishing arts scene and its obvious benefits, so we must look to the Government to do all that they can to limit the damage.

Private philanthropy is already being urged by Ministers although, as the Economist stated some weeks ago, the practical steps taken so far, including the £8 million spread over four years, will not go very far. The Government must seriously research what chances there might be for helpful taxation changes, with both philanthropy and corporate giving in mind. This possibility is much more realistic for the corporate sector, not least in areas where the local authorities are turning their backs.

What matters most is the atmosphere created by the Government. We want, not least from the Prime Minister himself, encouragement for everybody in the arts world in line with the words of President Kennedy. I have quoted them before and quote them again now in conclusion:

“The life of the arts, far from being an interruption, a distraction, in the life of a nation, is very close to the center of a nation’s purpose—and is a test of the quality of a nation’s civilization”.

That is the kind of idealism that I want from this Government and from all of us, followed of course not just by words but by action.

15:00

[Lord Black of Brentwood]

My Lords, I declare an interest as a member of the Council of the Royal College of Music and as a trustee of both the mayor’s fund for young musicians and the Imperial War Museum.

I want to talk about the vital role of our music conservatoires to the artistic life of our country and the importance of maintaining a crucial element of public funding for them. Our country is fortunate to have a remarkable musical heritage and educational infrastructure that makes us a beacon of international music excellence and London the world’s most vibrant cultural hub. Our major orchestras, the opera, music theatre, dance companies and our chamber ensembles all contribute to a rich cultural life which is not just centred in London but lives in every community. Britain is also home to an astonishing culture of amateur and semi-professional music making—from church choirs to village bands—that enlivens the whole country and is part of the cultural big society in action.

However, none of this comes about by accident. Our national musical life depends on a steady stream of highly trained professional music graduates from our conservatoires. These conservatoires have been the backbone of British music since the mid-19th century. From them, the greatest British composers—Parry, Vaughan Williams, Howells and Britten—have emerged, and over many generations they have acted as teaching magnets for the world’s most celebrated musicians. Even more important, their talented graduates, who in recent years have benefited from a much broader curriculum, populate the orchestras, ensembles and opera companies that are the foundation of the UK’s musical life. More than 90 per cent of conservatoire graduates work exclusively in music, often doing two or three different musical jobs. They are music’s future, and without their throughput of expertise it is no exaggeration to say that our musical life would wither.

These conservatoires are therefore vital national institutions of tangible public value and international renown. They need to be nourished, particularly at a time not just when, as we have heard, there is pressure on corporate philanthropic giving but when we will be looking to their graduates to play a key cultural role in the big society through outreach activities to widen access to music teaching, such as the successful RCM sparks programme.

However, there is an issue that we need to acknowledge. Training professional musicians takes time and is expensive because it relies on one-to-one tuition in a high-quality environment. The conservatoires require concert halls with broadcast facilities, recital halls, opera theatres, high-quality keyboard instruments, sound-protected rehearsal rooms and, above all, the best possible teaching from dedicated professors.

I studied history at university and all I needed was a library, a lecture hall and a teacher; the training of musicians requires a significant and expensive infrastructure, just as do engineering and medicine. Over the years, these high costs have been recognised by the Higher Education Funding Council—most recently in a review in 2008—which has provided a modest amount of exceptional funding on top of its normal teaching grant to allow these institutions to fulfil their specialist function. That is less than £15 million across our four English music conservatoires—a tiny amount in comparison with the huge, catalytic contribution that they make to our cultural life.

I know that the conservatoires accept the need to make savings, which are already being implemented, and they already have well-developed fundraising operations. However, the core issue of the exceptional funding, which cannot be met by these means, is central to their future. If that funding is withdrawn, there is no way that it could be recouped from higher tuition fees, as the quantum involved would be impractical. While the normal teaching grant can be replaced through higher fees, the exceptional funding cannot because fees would need to rise well beyond the new government cap. To date, HEFCE has not clarified whether this exceptional funding will continue to be recognised in the future financial landscape, but it is vital that the funding continue. I know that my noble friend will not be able to give us any commitments today, but I ask her to take note of this issue and to talk about it to her colleagues across a range of government departments while decisions are being made that will reverberate down the generations.

Confucius said,

“Music produces a kind of pleasure which human nature cannot do without”.

I recognise the power of those words, for throughout my life music has been a constant companion and the source of my emotional nourishment—a wonderful word used by the noble Baroness, Lady Bakewell, in her fantastic maiden speech—consoling, coaxing and civilising in a way that no other art form can. I believe that the Government also recognise the power that music has to raise aspirations, as the Secretary of State for Education made clear in his welcome comments on the Henley review of music education.

All of us in this House have over the years been lucky and privileged enough to have our lives enriched by a remarkable musical heritage built on the back of the conservatoires. We have a duty now to safeguard them for those who will come after us.

15:05

[Lord Howarth of Newport]

My Lords, I add my warm congratulations to the noble Earl and to my noble friend Lady Bakewell. The House had high expectations of her maiden speech and they were well fulfilled.

We had seven fat years for the arts under the previous Government—I think that I can say that objectively—and I very much hope that we shall have fewer than seven lean years under this Government. It was entirely unnecessary for the Government to compound the damage of the recession to the arts. Public spending on culture is 1 per cent of that spent on the health service. If we abolished the whole of the cultural budget, it would make no difference whatever to the assessment by the markets of Britain’s fiscal deficit. As it is, the cuts that are to be faced will have a significant effect on the possibilities of future growth in our economy. There is so much more to be lost both economically and culturally by cutting public spending on the arts than to be gained. Be that as it may, the Government have taken the decision that the arts must make a contribution—hefty for them—to reducing the deficit.

In this situation, what are the essential responsibilities of government? I suggest that they are threefold.

First, the Government should do everything they can, within their self-imposed fiscal constraints, to keep the show on the road and to nurse the arts through to the recovery phase of the economy. Therefore, the pacing and timing of cuts in public expenditure are extremely important. Against the background of the reductions in business investment in the arts, it is devastatingly damaging that local government—a major funder of the arts, museums, galleries and the heritage—is to be required to cut 16 per cent from its spending in the first year. Indeed, the impact on the arts will be worse because support for the arts is not a statutory duty of local authorities—and we have seen that Somerset and Barnet are taking the opportunity to cut their funding for the arts by 100 per cent. The Government need to nurse the system through to at least 2013, when we may hope that there is a stronger economic recovery and when, at any rate, the arts and heritage lottery funds will have significant additional sums to spend—a decision for which I applaud the Government. I believe that Lord Keynes would certainly have advocated counter-cyclical public spending for the arts in these circumstances, so why does the reduction to the Arts Council England budget have to be implemented as to 80 per cent in the first two years? Will the noble Baroness tell us what the prospects are for phasing the cuts to the Renaissance in the Regions budget?

In this situation, the Government should concentrate the resources that they have to spend on the basic necessities and refrain from indulging in expensive new initiatives. A new fund of £1 million for technology in the arts is a good idea but one for prosperous times. They should also concentrate on the cost-free changes that they can bring in to assist the arts, cutting in particular the regulatory costs, which, as Neil MacGregor pointed out in his report, bear heavily as it is on arts institutions and inhibit philanthropic giving. I am pleased that the Government have started to act, at any rate, on reserves. They should not have mucked about with institutions that were functioning very well, such as Public Lending Right, the MLA, Arts & Business, Creative Partnerships and CABE. They should have continued to support agencies that themselves support the arts and heritage to build capacity, achieve best practice, and improve fundraising, marketing, exploitation of intellectual property and their understanding of how to participate in the procurement processes of other public bodies.

The Government should also act coherently across government as a whole. The Secretary of State should be the great advocate and champion for the arts across Whitehall departments to ensure that they understand the potential contribution of the arts and heritage to their programmes and that they can benefit from their budgets. Support for the creative economy should be unambiguous. The Secretary of State for Schools should have understood the extraordinary benefit that the Creative Partnerships programme has conferred on attendance and grades that young people in disadvantaged areas achieve. The English baccalaureate should embrace the arts. The barbarism of removing all public support for teaching arts and humanities in universities should never have been contemplated. There is much else that one might say about what the Secretary of State should be aiming to achieve across Whitehall.

I shall say finally that the Government should move intelligently towards a more plural and balanced pattern of funding. They are right to support philanthropy and the development of endowments but those will be gradual processes. In the mean time we need specific decisions and action taken fairly and squarely by Ministers, not hiding behind their quangos, to ensure that the arts right across the country get the help they need. It takes a long time to build up but very little time to dismantle. I look forward very much to hearing the noble Baroness affirm her belief in the value of the arts—no one doubts her own commitment—and describe the Government’s ambition and vision for the arts.

15:12

[Baroness Benjamin]

My Lords, I congratulate the noble Earl, Lord Clancarty, on securing this timely debate. There is a cold wind blowing through the arts world as cuts loom on the horizon and, as usual, the ones who will suffer most are children and young people—our nation’s future.

Article 31 of the UN Convention on the Rights of the Child states:

“Every child has the right to rest and leisure, to engage in play and recreational activities and to participate freely in cultural life and the arts”.

Yet, in this country we are facing the prospect of a whole generation of children and young people growing up in a sterile environment in which art and cultural activities are relegated to the fringes of our society. Organisations, such as Action for Children’s Arts—I am a patron, so I declare an interest—believe that this cannot be allowed to happen. Creativity is central to almost every human activity, as well as being part of a happy and fulfilled life, as expressed so passionately by the noble Baroness, Lady Bakewell, in her maiden speech. Without creative ideas, business and industry would fail. If we neglect the imagination of our young, we restrict our futures. But many children’s theatre companies, and art organisations, which pride themselves in providing vital creative assets to our children, are very worried about future funding. The next 12 months will be the most challenging that they have ever experienced as it will be a struggle to protect all that is so dear to them.

Like many others, Big Brum, an excellent theatre-in-education company, has voiced its concerns, saying:

“To cut arts funding is to betray young people and the future of our country, by denying those that need access most, to that which makes them truly human”.

Nowadays we blame children and young people for joining gangs, graffiti on buildings and developing their own ways of speaking and dressing. Is this behaviour not evidence that it is a basic human instinct to be creative and to form tribal culture? Unless this creative instinct is given direction it could well manifest itself into anti-social ways. In the world of art, experimentation and anti-establishment, ideas often begin with young people and lead to social change. However, without a framework and direction, nihilistic doctrines can develop at a cultural cost to society.

When the right honourable Ed Vaizey was shadow Arts Minister, he said:

“We’re blessed in this country with hundreds of arts organisations which achieve artistic excellence. Their role in education, particularly their ability to inspire and engage, needs to be recognised. Far from being an add-on or a nice-to-have, the role of arts companies in the education of our children is essential and needs as much support as possible”.

It was with that in mind that Action for Children’s Arts suggested that a children’s arts alliance should be formed to bring together interested organisations that have a children’s arts agenda. The purpose of the alliance was to celebrate the work on similarities and forge a way forward, while maintaining each organisation’s differences. The alliance would include organisations, such as the Prince’s Foundation for Children and the Arts, Kids in Museums, the Campaign for Drawing, Theatre for Young Audiences, the Council for Dance Education and Training and the British Film Institute.

To achieve that, I ask the Minister whether the Government would consider the idea of calling for a review of arts for children in England. I also ask my noble friend to consider the need to ring-fence resources and allocate an agreed percentage of arts funding for children’s arts to represent their number, presence and importance in the population of England.

I declare an interest in the debate as I have spent the past 40 years of my life in the arts both in front and behind the camera, as well as being on various boards. That experience has taught me that to help our children’s spiritual and physical well-being, it is very important that children’s access to the arts is not jeopardised by the financial mistakes of their elders. We must not let that happen.

15:17

[Lord Aberdare]

My Lords, I am delighted to speak in this debate and congratulate my noble friend Lord Clancarty on initiating it. I shall focus on classical music, which, of all the arts, is closest to my heart. Music is a great success story for the UK. We have world leading orchestras, performers and conservatoires recognised across the globe and generating substantial benefits for the nation. These include economic benefits from employment, tourism and overseas earnings, estimated at 7 per cent to 8 per cent of GDP for the creative sector as a whole. The arts is one of the major reasons for tourists to visit London and other parts of the UK.

The less tangible benefits are perhaps even more important. Those of your Lordships who watched the BBC's “The Choir” programmes with Gareth Malone will have seen how choral singing can build confidence, discipline, teamwork, aspiration and a sense of achievement, even among seemingly unpromising groups. Above all, music is an essential part of a good quality of life for an enormous number of people, and surely is central to the big society and to our nation, as the noble Lord, Lord Moser, said.

The UK's strength in classical music is founded on our mixed funding model, with support coming from a combination of public funding, commercial income and private support. All of those are currently under stress. Orchestras and other music bodies have shown creativity in expanding their earned income through initiatives such as the London Symphony Orchestra’s own record label, LSO Live, or the Royal Opera House’s live cinema relays. Orchestras already generate 50 per cent or more of their income through their earnings.

The Government are also, rightly, keen to increase arts bodies' income from private sources, but the latest figures from Arts and Business—which is itself losing its Arts Council grant—show that business support fell by 11 per cent in 2009-10 and seems unlikely to resume its previous upward trend before 2013. Individual philanthropy also fell by 4 per cent, and private support as a whole was down by 3 per cent in real terms to £657 million.

The UK does not have a culture of philanthropy like that in the US, where as much as 90 per cent of arts funding comes from private sources. Incentives are needed to drive the growth of private support, such as new tax concessions, matched funding or improvements to the gift aid scheme. Individual giving is often focused on specific projects rather than on core activity. So private funding will remain a supplement to, not a substitute for, public support. Continued public support is essential to maintain the health of the arts and music and to protect their huge contribution to the UK.

Arts Council England supports 15 symphony orchestras nationally, which receive about one-third of their income from public sources. Germany has no less than 129 professional symphony orchestras with anything up to 80 per cent or 90 per cent public funding. The returns generated by that funding are several times greater than the investment, as noble Lords have already mentioned. A recent study valued the impact of the Welsh National Opera on the Welsh economy at £22.5 million, more than five times its annual grant from Arts Council Wales. The funding of classical music represents incredible value for money.

The Arts Council England subsidy is being reduced by 6.9 per cent in 2011-12. Orchestras and music organisations accept the need for that, and will find ways to manage it, but they have also been asked to show how they would manage cuts of 25 per cent to 30 per cent, which would be far more damaging, facing some major institutions with a real possibility of closure. Local authority funding is equally important, not just for many orchestras but for the venues where they perform, which are equally subject to cuts.

A crucial factor in the UK's arts leadership is the quality of its education at all levels, from schools and regional initiatives to the elite arts training bodies and conservatoires in London and other major cities. I add to the list of names cited by the noble Lord, Lord Black of Brentwood, major UK revenue earners such as Sir Elton John, a graduate of the Royal Academy of Music, and Sir James Dyson, from the Royal College of Art. Because they need to provide intensive one-on-one tuition and attract leading international artists and musicians, their costs are too high to be recovered entirely through student fees, and they depend on a small but vital quantity of exceptional funding from DCMS. That must be retained to avoid putting any of our great music and arts education bodies at real risk.

At a time when all elements of the mixed funding model are under threat, and until private and lottery funding start to grow again, we must be sure that public support is managed in a way that protects our leading arts bodies from the possibility of irreparable damage. As Jo Cole, head of strings at the RAM, said in a letter to the Times last week:

“The Big Society isn't going to have much of a soundtrack unless it acknowledges the exceptional part music could play in building and defining it”.

15:23

[Lord Ramsbotham]

My Lords, I, too, thank my noble friend Lord Clancarty for obtaining this important debate and for enabling many of us to raise issues that are dear to our heart. I declare an interest as president of the Arts Alliance, which is a coalition of all the organisations working to bring arts to offenders. I was therefore very interested to hear the noble Baroness, Lady Benjamin, suggest that the need might be the same for children. I can assure her that it works.

I have two requests to make to the Minister. First, I ask that she will thank the officials from her department who play their part in the Arts Forum, which is the cross-government organisation formed to work with the Arts Alliance by the previous Government. Secondly, I would request her to pass what I am going to say to her colleagues in the Ministry of Justice.

When I was the Chief Inspector of Prisons, several times I went to Low Newton women’s prison in County Durham where I talked with the outstanding director of learning and skills. One day she told me that the writer in residence had achieved something that no one else had been able to do. A woman had gone in who was incapable of speech thanks to the violence to which she had been subjected from her husband. The writer in residence encouraged her to write down her experiences and then to write them in verse, which people read out. One morning, she said to the woman, “Come on, you read it”, and she did. After that the woman could be rehabilitated.

I mention that because I want to put forward clearly for the Ministry of Justice that the arts has an enormous role to play in the rehabilitation of offenders because of its ability to get to the heart of what is wrong and what has failed with some people. Every work of art—it does not matter what it is—is a personal achievement. Every personal achievement can be recognised. Every recognised achievement equals self esteem. Self esteem is absolutely vital in getting people on the right road towards work, education and training, which are the keys to successful prevention of reoffending. Therefore, the arts are a crucial part of any rehabilitation programme, not as something that can be measured as an end in itself but as a means to an end.

What worries me, which is the burden of my message to the Minister, is that present attention in the rehabilitation revolution centres on the phrase “payment by results”, under which it is said that organisations working with offenders will be paid for their results, which will be related to whether or not they contribute to the reduction in reoffending. The organisations which deliver the arts—many of which are voluntary and/or small—cannot afford to wait all the years that it may take to assess whether they have made a contribution to the ultimate prevention of reoffending. The money to help them do the work has to be provided.

If rehabilitation is to work, it is absolutely essential that the arts are included in the syllabus of every prison, every young offender institution and every probation area. I would go further and say that contracts for art work should be for not less than three years, but preferably for not less than five, so that proper investment can be made in that work. I say that not just because I have seen the work—of which I have given one example—but because I really believe that the arts have a crucial role to play in the protection of the public by the prevention of reoffending.

15:27

[Lord Wasserman]

My Lords, three weeks ago today I was introduced in your Lordships’ House. These have been action-packed weeks and I know that some noble Lords have found them tiring and perhaps even a bit tiresome. But for a new boy like me, these busy days and long nights have provided a marvellous opportunity to find one’s way around the House and to get to know one’s fellow Peers.

I feel enormously privileged to be a Member of this historic institution. I want to thank my supporters, the noble Lord, Lord Gavron, and my noble friend Lord Taverne. Both have made enormous contributions to this country over many years and I am deeply honoured that they were prepared to overlook my party affiliation and introduce me. I also want to join the other maiden speaker, the noble Baroness, Lady Bakewell, in thanking the officers and staff of this House for their kindness and patience, and for helping us to find our way around both geographically and in terms of process and procedures.

When I decided to make my maiden speech in this important and timely debate, initiated by the noble Earl, Lord Clancarty, I had no idea that the list of speakers would include so many of the brightest stars in Britain’s cultural firmament. I feel rather like a football fan whose knowledge and experience of the game is derived entirely from “Match of the Day” but who somehow finds himself addressing a meeting of Premier League club executives and managers. I therefore beg the indulgence of the House if I express views that might appear to some to be naive and simplistic, but I speak as an amateur in this field, although one who cares deeply about the arts and regards them as a national treasure to be protected and nourished.

We are very privileged in this country to have access to a world-class arts scene: theatre, opera, dance, music, museums, galleries and much more. All this is made possible through a combination of state funding and the generosity of a relatively small number of public-spirited individuals and corporations. As far as the state’s contribution to the arts is concerned, the amount involved will always be a matter for heated debate, in common with every other aspect of public expenditure. As noble Lords will know, the level of state funding for the arts in Britain is extremely generous when compared with the United States, where I lived for 12 of the last 15 years. Where the Americans do score, however, is in relation to funding by what are now called “high net worth individuals”—we used to call them “the rich”—and corporate sponsors. Taken together, these private benefactors account for the vast majority of support for the arts in that country, as other noble Lords have pointed out. The reason for this is not that Americans are by nature a more generous people. I say this as someone who was born and brought up in Canada and knows Americans well. It is because their tax system encourages giving by making it deductible before income tax is paid.

Giving money is not the only way of supporting the arts. Active participation by attending concerts and joining choirs, visiting galleries and even occasionally buying a picture or two, preferably by living artists, may be an even more effective way of building a rich national cultural life. But, for me, the most important thing that we can do to support the arts, no matter how rich or poor we may be, is to encourage young people to develop a love for the arts and, where appropriate, to help them develop any latent artistic talents they may have. We can do this by encouraging children to learn to play a musical instrument, write stories, act, dance, paint or express themselves in any one of countless artistic forms. We can do this by encouraging local schools and youth groups to devote more attention to the arts and by volunteering to help them to do so. We can do this also by encouraging young people with real talent who are tempted to pursue a career in the arts to follow that dream.

I believe that there is much more to public support for the arts than state funding. Public support includes what all of us can do, in our families and in our communities, to encourage a new generation of artists to build upon our cultural heritage and take it forward into the future. It is this kind of public support that we must develop and expand.

15:33

[Lord Freyberg]

My Lords, it gives me great pleasure to follow the noble Lord, Lord Wasserman, and to congratulate him on behalf of the whole House on his excellent and very thought-provoking speech. He comes to the House with huge experience in policing. A former Rhodes scholar, he served as a special adviser to the New York and Philadelphia police chiefs. He is an internationally known expert in criminal justice, science and technology, and for 12 years was the Assistant Under-Secretary of State for police science and technology in the Home Office. I know we shall all look forward to his contributions on this important area and others in the near future.

I thank the noble Earl, Lord Clancarty, for giving us the opportunity today to discuss public funding of the arts. On an occasion such as this, I would normally hope to draw the House’s attention to the pressing issues facing museums and galleries, but today I must make a plea for museums’ less glamorous siblings, libraries and archives. Why is that? It is not because all is rosy for museums at this time of austerity. However, there are nearly 4,500 libraries in the UK, the vast majority of which are funded through local authorities. Nearly 400, and at least 48 mobile libraries, are certainly under threat of closure, and we may learn of others once we know the outcome of individual councils’ local spending reviews.

Meanwhile, archive services—although a statutory responsibility of counties and designated county boroughs—also face an uncertain future. Reductions in funding are likely to result in drastic reductions of opening hours and staff numbers. The ability of archives to manage the collections they have, let alone to embrace new collections for posterity, will be severely hampered.

In recent weeks there has been much public discussion of this subject, and it has consistently been suggested that there is a choice between keeping libraries, keeping schools and healthcare provision, or caring for the elderly and vulnerable children. But that is not a proper way to think about it. Libraries must remain because they are at the heart of our communities. They are places where people can come to learn and meet and place where lives can be changed through the empowerment that those things bring. I know that that is true by having seen my own children’s joy at paying a visit to our local library. There is no question but that the archives also must continue. They are our nation’s memory and without them we cannot know ourselves.

So what are we to do when the axe must inevitably fall? First, closures that are based on short-term cost cutting will be irreversible and must be avoided at all costs. But who will be there to oversee all this now that MLA, the organisation overseeing museums, libraries and archives policy, is being disbanded? Arts Council England will take in libraries, but archives have been orphaned and are without a policy home. I implore the Minister to consider carefully who will advocate for archives from now onwards. Can he tell the House what plans are in place to oversee the archives?

Secondly, archives have for too long missed out on funding that has been forthcoming for museums. With the closure of MLA, it is extremely important that whoever oversees the archives in future can help the sector to gain fairer access to public money than they have enjoyed in recent years. Thirdly, I ask the Government to keep a close watch over progress on this and to ensure that the situation is reviewed at regular intervals.

The Arts Council is having to take over libraries policy at a time when it already faces a budget cut of 30 per cent in relation to its current responsibilities, on top of which it will have to make a 50 per cent cut in administrative costs over four years. That is a huge challenge. Surely checks and balances need to be in place to ensure that the Arts Council has the knowledge to deal with its new responsibilities. A governance review should be instigated immediately so that knowledge within the organisation properly reflects the weighting of its new responsibilities. More importantly, there must be a review within a year or so of how these new arrangements are working and of their impact.

15:38

[Lord Bragg]

My Lords, I, too, thank the noble Earl, Lord Clancarty, for securing this debate. I also congratulate my noble friend Lady Bakewell on an exceptional maiden speech. I declare an interest as president of the National Campaign for the Arts.

We are seeing a rather mindless scything down across the land—“swish, swish” goes the scythe, and down come the weeds; but down, too, come the crops and the blooms. And who is scattering the good seed on the land? They swish and chop away, the coalition cutters, with little discrimination and less differentiation, but above all they fail to identify that which will grow the future—the knowledge industry; niche, high quality, intelligent, globally marketable; we are good at it, and have been for a very long time, in the sciences, technology and the arts.

How much more do the arts in this country have to prove? It bears repeating that for every pound the Government invest, up to £15 is generated. About 2 million highly skilled people are employed in the field. From a modest start after World War II they have burgeoned into an aurora of lights—London, the world centre of music and theatre, as we heard, and a constellation of interdependent disciplines; more book festivals than any other country on the planet; contesting with America for the lead in musicals, the fine arts, films and pop music, with our television and radio richly irrigating the process. It works, it grows. Why slash it? What gain is there? I would appreciate an answer from the noble Baroness, Lady Rawlings.

Over the past half century we have forged a creative economy that is not only envied but magnetic in its galvanising effect. Recent intensive research in America has shown that when there is fierce and successful economic growth, it is essentially bound up with an arts culture that is in itself fierce and successful. The Silicon Valley story, for instance, owes a great deal to the technology of the west coast, but it has been convincingly proved that it also owes a great deal to the creative pulse that rocked and rolled and flower-powered through California in the 1960s and 1970s. When we consider the past, we find that these nodal points of prosperity and advancement share that characteristic—none more than in the glory that was Athens in the 5th and 4th centuries BC. By chance, I did a radio programme on Aristotle last week. What he wrote is central to this debate. He has influenced civilisations for two and half thousand years, so I am sure that your Lordships will give him a hearing here today in your House.

Aristotle lived at a time when creativity and intellectual excellence across the waterfront—science, technology, the economy and the arts—were seamlessly plaited together, and appreciated and supported. The result was a marvel of dynamic growth and a world-changing civilisation. Professor Angie Hobbs of Warwick University pointed out that Aristotle thought of art as much more central to human existence than mere pleasure. He believed that the correct appreciation of art was crucial for the formation of a person’s character and would improve their behaviour in society as a whole. He developed this in his other works, and, importantly for this debate, he included it in his description of the best way to educate children.

This is a truth stated then which we can see, and see working now. For instance, a few years ago I made a film with the composer Howard Goodall to show how the introduction of choirs and orchestras into schools had a spectacular effect on the children. Their discipline improved and their self-worth soared. In those schools we saw children—particularly children from underprivileged backgrounds, soon to be more underprivileged—discover, through playing instruments and singing in choirs, the joy, the self-respect and the pleasure of learning, which was a revelation to them. The disadvantaged were given an opportunity and they seized it. These institutions will now be cut.

I suggest that this debate is not only about funding of the arts or the strength of the unique UK tripod of public funding—30 years in the making—through a newly effective Arts Council, of business investment and the box office. It is about giving fuller, democratic advantage to people, especially the children in this country, so that through knowledge and skill in the arts they can have a chance to make the best of themselves and the best of a society that badly needs to look after its own more carefully. This debate is in many ways every bit as much about funding our future as it is about funding the arts.

15:44

[Lord Colwyn]

My Lords, I take the opportunity that this debate, expertly introduced by the noble Earl, allows to remind your Lordships of the significant contribution of jazz to the economy. According to a new survey carried out by Mykaell Riley and Dave Laing at the University of Westminster for Jazz Services, called Value of Jazz in Britain II, jazz is worth more than £80 million to the British economy. There is an increased interest in jazz among the 15 to 34 age group and a rise in the number of women active in jazz. Yet, most British jazz musicians earn a wage below the national average. The report found that jazz contributes to economic, educational and cultural life at all levels. I declare an interest as a very mediocre jazz musician myself; co-chairman of the All-Party Jazz Appreciation Group, which is supported by PPL; a patron, along with the noble Lords, Lord Bragg and Lord Puttnam, of the National Youth Jazz Orchestra; and as someone involved with the Yamaha annual jazz scholarships for young people.

There is an active jazz scene in all major UK cities. Musicians with established reputations and young musicians, many with great flair and originality, seek a serious audience who can understand and enjoy their music. Many UK jazz musicians have developed international reputations for live performance and have recordings that are seen and bought by a worldwide audience. Every year there are jazz festivals all over the country, many featuring some of the finest jazz musicians in the world. More than 3 million people patronise these events with five times that number expressing a definable interest in jazz.

While jazz continues to attract these audiences, 80 per cent of its musicians earn less than £25,000 a year. This is not helped by the current economic climate where there seems to be increasing public reluctance to pay for music. Yet falling CD sales in a download culture are having a smaller impact on jazz income than might have been expected, and ticket sales and public and private subsidy all showed modest but significant increases between 2005 and 2008. The report also reveals a thriving small-scale recording scene among British jazz musicians with widespread and growing use of the internet to sell recorded music.

A different kind of jazz venue has emerged located in a church, library, museum or community centre in response to the new licensing law’s red-tape challenge to pub gigs. Jazz festivals also expanded and brought new money. The current situation over the licensing of live music, which has had such a detrimental effect on young musicians, is confusing. My noble friend Lord Clement-Jones is waiting for the second Second Reading of his Live Music Bill. The noble Lord, Lord Davies of Oldham, was encouraging in June 2009, and the coalition Administration have made sympathetic noises, but the problem is not resolved. The Licensing Minister, John Penrose, has suggested that plans to cut red tape for live music are out of his hands and are dependent on consent from the Department for Work and Pensions and the Home Office. In a Westminster Hall debate on Tuesday 25 January, he referred to the many aspects of licensing for live music that are covered by existing legislation, but live music at small events is not exempt. The only arguable justification for a licensing regime pre-emptively criminalising the provision of live music subject to prior consent from the public or the local authority, or both, is where there is the potential for a significant negative impact on the local community that cannot be adequately regulated by existing legislation. This is clearly not the case for the vast majority of small gigs taking place within reasonable hours. It would be very helpful if the Minister would write to me with an easy-to-read explanation of the current licensing situation on live music and small venue exemptions.

The annual turnover of the jazz sector of the British music industry is in excess of £88 million. The report by Jazz Services, as part of its Arts Council England development project, found that sales of CDs through shops and websites and at gigs reached almost £40 million, while ticket sales for jazz concerts and festivals were worth £22.5 million. The report estimated that there were 45,000 jazz performances per year in the UK and that jazz received more than £4 million per year in public funding and a much smaller amount in commercial sponsorship. Audience research on music and other art forms showed that more than 3 million adults had attended at least one jazz performance in the previous year, with a core audience for jazz estimated at 500,000 compared to 400,000 for classical music concerts and 100,000 for folk music events. I hope that the Arts Council will recognise this when the new funding arrangements are considered in March.

15:49

[Lord Luce]

My Lords, my noble friend Lord Clancarty has done a great service in introducing this timely debate on arts funding today. I declare an interest as president of the King George V Fund for Actors and Actresses, president of the Voluntary Arts Network, the amateur arts parent body, and president of the newly formed Commonwealth Youth Orchestra. It was just over 20 years ago that I retired as Minister of Arts having had the privilege of five years in that job. Just before I retired, I recall that the journalist Melanie Phillips wrote this:

“The best thing to do with Richard Luce is to have him stuffed and tucked away in the Natural History Museum”.

I took that as a great compliment. Unfortunately, in the past 20 years I have not had time to visit the museum but I have had time to watch with interest and pleasure the improvements that we have seen in the arts world. One great pleasure today is of course to welcome the noble Baroness, Lady Bakewell, whom I recall so well from my time as Minister of Arts. She will make a great contribution in this House.

Perhaps I may make a few reflections on how things have improved in the past 20 years or so. First, the introduction of the National Lottery was a massive improvement for the arts and I welcome the fresh injection now of another £50 million in that area. Secondly, there is the expansion of the creative industries, on which the noble Lord, Lord Bragg, led a debate just under two years ago and which today make a major contribution to the wealth of the nation. Thirdly, the credit must go to the Labour Government for the increase in resources that they gave to the arts over the past 10 or 12 years, although it is sad that the economic crisis that is now being faced leads to such volatility in the funding of the arts, let alone in other areas.

I want to reflect on one or two other things in my short time. First, it is vital that we maintain through this time of adversity the standards of excellence and access to all, because everybody has the capacity to enjoy and to participate in the arts. Secondly, we have to recognise an important change: it is not just about London, which we used to be told was the only real centre of excellence. All parts of the country now enjoy standards of excellence in the arts, from Edinburgh to Glasgow, from Cardiff to Leeds and Chichester, and so on. That is a major improvement. Thirdly, we must not underestimate the importance of the amateur arts—I declare an interest as president of Voluntary Arts—where nearly 10 million adults participate actively in drama, crafts, painting and all kinds of arts. There are 49,000 arts bodies in this country. They do not demand money but what they want, to enable them to flourish, is to be freed from all the regulations and red tape that exist today.

That leads me to my main point, which is the funding structure. I agree with other noble Lords who have said that we are placed somewhere between the United States, which gives very little public support to the arts, and the continent, where there is much more of it. That we are somewhere in the middle is illustrated by the experience of the clients of Arts Council England. On average, one-third of their income is from box office, one-third from sponsorship and one-third from the taxpayer. Now, long may that last, because diversity and plurality of funding are absolutely essential to the arts to give them independence from any one source of funding—and certainly from state control.

In 1980, the National Theatre depended on taxpayer funding for 60 per cent of its support. It is quite a remarkable achievement that today the figure is down to 30 per cent. The Royal Academy—I declare an interest as an emeritus trustee—is totally self-generating. There, more than 90,000 friends give vital support, which is a lesson to be learnt for many other organisations: that the support from friends can do so much to finance arts bodies and that retaining the arm’s-length principle is absolutely essential.

That leads me to my final point about the background of these cuts. They are familiar to me. Much of the language that I hear today I can recall from the 1980s. I recall one day when I was able to go to the then Chancellor, the noble Lord, Lord Lawson, and prove to him that for every £1 of taxpayers’ money I could get back £5 from the private sector. I believe that might be more difficult to achieve today. Nevertheless, that kind of partnership or challenge funding needs to be the way that we go. I end on the point that the chance now is for this Government to produce a whole range and battery of proposals which will encourage the climate of giving in this country—not so that we can ever be like the United States but so that we can at least know that there is a wide range of incentives to enable us to give more to the arts. We should take this time as a challenge to do just that.

15:54

[Lord Scott of Foscote]

My Lords, I thank the noble Earl, Lord Clancarty, for initiating this debate and congratulate both the noble Baroness, Lady Bakewell, and the noble Lord, Lord Wasserman, on their notable maiden speeches, which have contributed significantly to the debate.

I declare an interest, which is not a personal interest, in that my wife is the chair of the Arts & Heritage Alliance Milton Keynes and a member of various constituent organisations in that alliance. Due to her offices, I was acquainted with the report produced by an organisation called the Culture Forum, which was formed under the initiative of the National Campaign for the Arts some time last year so that a collective voice for the arts and heritage sectors could respond to the Government’s call for a national debate on the economy and, among other things, speak for the public funding of those two sectors.

The Culture Forum’s report from last December—I believe that a copy was sent to Ministers, but in any event I have provided a copy to the Minister who will respond to this debate—contains practically all that needs to be said on this important question of the value of funding for the arts and the manner in which the possibility of cuts for that funding should be approached. The forum makes a powerful case for the importance of public funding of the arts. It makes clear the influence of initial public funding for a particular cultural activity or cultural organisation that acts as a magnet to attract private funding for the event or organisation. Together, those funding streams can create economic activity that produces a value of many times the amount of the initial public funding. That multiplier effect of public funding is highly important and should be borne in mind by the Government when considering what, if any, cuts to make to the public funded arts sector.

I shall give an example of that close to my personal home. When Milton Keynes staged an international festival for the arts for the first time last year—Milton Keynes is something of a new city anyway—the festival got off the ground with public funding of something like £600,000 from Milton Keynes Council and other public bodies. That public funding enabled the sponsors to attract private funding of something like £1.8 million. As a whole, that funding led to a very successful festival that lasted nine days, attracted some 90,000 people and generated an estimated £45 million-worth of economic activity in the Milton Keynes area. Similar evidence can be given from other examples—I think of Liverpool’s experience when it was the culture capital of Europe in 2008.

Another feature that the Culture Forum report makes clear is the value of the arts and heritage sectors in promoting the health and well-being of society generally. We hear a good deal of talk these days about the so-called “big society”, but I doubt whether there can be a big society without a healthy cultural sector. Correspondingly, an impoverished cultural sector in the community is likely to be a sure sign of a community impoverished in many other respects. There may be an unanswerable case—there probably is—for cuts to be made in public spending of various sorts, but of course the Government and other public authorities have to decide where the cuts will fall. In deciding what cuts, if any, should be imposed on the arts and heritage sectors, the value of those sectors must, I suggest, be borne clearly in mind.

The first paragraph of the Culture Forum report states:

“Arts and Heritage is one of this country’s greatest success stories. It goes to the heart of what it is to be human. It is a force for good in health, education and strong communities. It is vital for tourism, foreign earnings and urban and rural regeneration. In this field we are world class”.

If cuts there must be, let the Government be careful not to achieve through those cuts the result—for which they would not easily be forgiven—of drowning the baby or throwing it out with the bathwater.

16:00

[Viscount Eccles]

My Lords, I add my thanks to the noble Earl. I cannot resist commenting on the contribution of the noble Lord, Lord Moser. I remind him that more and less difficult times come and go. More importantly, I wonder whether it was my father who accused him of whingeing; come to think of it, that would sound very like him.

My point is about how we deal with the present situation, rather than how we got there. I am informed by the Arts Council that one of its five rubrics is that arts organisations need to be sustainable, resilient and innovative. There might be an overlap between sustainability and resilience. Of course, there are different views about innovation. Even some of the recent performances of “Hamlet” have created cries of “Well innovated!”

I could talk about quite a number of different organisations, because I am a sort of long grass-roots fundraiser, but I will talk about the Georgian Theatre Royal, Richmond, and its finances. It is a small organisation. In one of our briefings, it is threatened. The theatre was built in 1788 and went dark in 1842, but it came alive again in 1963. Much credit goes to the wives of previous members of your Lordships’ House. The wife of the late Lord Crathorne was instrumental in leading the recreation of the theatre, as then was her sister, the late Baroness Elliot of Harwood. Finally, there has been the present noble Lord, Lord Crathorne, and his wife, who sadly died about 18 months ago.

The theatre has two charities: it is itself a charity, and it has a fundraising and investment charity. It keeps underlying control of its finances separate from the management of the theatre, which is probably wise because theatre managers are not always fired up by a close control of money. It is lucky because it is in Richmond, which is of course much older than 1788 and has a castle, a fine cobbled square, the Landmark Trust’s Culloden Tower and the Green Howards Regimental Museum. Richmond is not a place that welcomes top-down instructions. It has an amateur drama company and an amateur opera company. The staff of the theatre is small—sometimes very small—and not paid very much, so the theatre depends strongly on amateurs.

How is the theatre funded? Of course, it has had the lessons of history. There were hard times before, in 1842, and also when we were switched from Northern Arts to Yorkshire Arts. At that time, the policy of Yorkshire Arts was radically different from that of Northern Arts. We were thought to be rather unsuitable for funding by the people from Sheffield. We developed a model that we had in mind from experience. Our experience has been that we can generate about 50 per cent of our total costs from people coming to the theatre. We have one advantage, which is that we have heritage tourists as well as others who attend the about 100 performances of music, drama and opera—some professional and some amateur—that we have in the theatre in a year. That compares with a figure in the mid-40s, which is more the average number of performances.

Ever since the death of the first Lady Crathorne, we have been building up an endowment fund. That has been slow—it takes time—but our target is that income from that will fund 25 per cent of the cost of the theatre. We are more than halfway to that target, and I am confident that if we keep on down the same road we will get there. If you have 75 per cent covered, that is not too bad. It also gives you that flexibility and independence, which, if you are a citizen of Richmond who wishes to escape from being told what to do next, you will find very welcome.

16:05

[Lord Myners]

My Lords, I also express my appreciation to the noble Earl for securing this debate and congratulate my noble friend Lady Bakewell and the noble Lord, Lord Wasserman, on their excellent maiden speeches, which show us all that they will be most welcome to our House and will be important contributors to many of our debates in the future.

I declare my interest: I am a trustee of the Tate Foundation and of Glyndebourne. I was previously chair of the trustees of Tate, briefly a trustee of the National Gallery and a trustee of the Royal Academy. My wife is the chair of the Institute of Contemporary Arts, having previously been chair of the Contemporary Art Society. The depth of declarations made by noble Lords in today’s debate speaks powerfully about the experience of the House and how we can bring many wide and different perspectives to debates and discussions, not only on culture, as we do today, but on other issues.

I will not speak about the role of culture and art; others have done that admirably. Culture is certainly uplifting and helps us to understand ourselves and the context and society in which we live, but we have also been told by my noble friend Lord Puttnam how important the arts are as an economic sector. They employ more than 2 million people. I have seen for myself the impact that an arts institution can have on a local community, with Tate St Ives revitalising the economy of west Penwith in Cornwall. I have also seen the impact of an organisation such as Tate. Under the extraordinary leadership of its director, Sir Nicholas Serota, Tate now attracts 8 million visitors a year and is the most visited contemporary art museum in the world. There are more visitors to Tate Modern than to Pompidou and MoMA together. This is an important part of our economy and society. We all get joy when we go to these institutions, but we also see the joy that others get from sharing in the art that has been accumulated over so many generations.

I am sympathetic to the fact that the noble Baroness, Lady Rawlings, is very supportive of the arts. I know we can look to the noble Baroness for sentiments that we will find encouraging. However, she is in turn limited by the interface and negotiations that the DCMS is required to have with the Treasury. I add that I am delighted that this Government continue to endorse the concept of free entry to our major museums and galleries—one of the great achievements of the previous Government.

However, the simple fact is that this Government have concluded that they will not direct as much money towards culture as previous Governments. We have seen draconian cuts in national funding, and these are being exacerbated by cutbacks in local funding as well, which often affect the smaller institutions in the regions. We have already seen how this can lead to brutal actions in Somerset and Barnet. I fear that there is more of this to come. We are very fortunate that the Arts Council is responding to this challenge in a constructive way. It is highly efficient, well governed and economical, and it has worked well with arts institutions to explain the new reality and move to a new stage of funding for the future.

But what can we do to improve this situation? The Government can do a number of things. First, they can move to simplify gift aid. It is ridiculous that gift aid is still paper based rather than digitally based. This costs the arts sector and the charitable sector a great deal. That would be a simple thing for the Government to do. They could also encourage greater contributions through admitting higher-rate taxpayers into gift aid.

The Government could also extend the acceptance in lieu scheme. In reality, the most tax efficient way of giving in this country is through dying. We need to ensure that people can give in their own lifetime. In the same way that we allow acceptance in lieu against inheritance tax, we should allow it against other taxes. I particularly welcome the opportunity to advance the case that it should be permissible as a means by which non-doms can make their contribution to the £30,000 which they are required to pay. Non-doms are very important in our cultural sector. An opportunity for them to give to a higher value than the tax they are offsetting would be helpful. I hope that the Government will encourage the introduction of charitable remainder trusts, which have proved so successful in other jurisdictions, and that they will repeal Section 6 of the Finance Act 2010 to substitute a more practical implementation of the Persche decision.

Finally, we need to cultivate a new generation of philanthropists. I look forward to the report being produced by the committee chaired by Mr Tom Hughes-Hallett as there is an opportunity here, with the great riches that we now see in the City and in the financial community, to encourage a new generation of committed philanthropists. We need to see corporates giving more. As Mr Simon Robey, the chairman of the Royal Opera House, has recently pointed out, less than a third of our major FTSE-100 companies give any money at all to the arts and culture. We should seek to improve this situation and I look to the Government to take the appropriate steps.

16:11

[Lord Shipley]

My Lords, I thank the noble Earl, Lord Clancarty, for initiating this debate and for reminding us of the importance of free admission to museums and galleries, and that public funding of the arts costs only 17 pence per person per week. However, I feel that the distribution of public spending on arts and culture in England is too heavily weighted towards London. In the next financial year of DCMS funding, three-quarters will be spent in London. Of Arts Council funding in 2011-12, £21.92 will be spent in London per head of population compared with just £3.44 in the rest of England.

I fully understand that London has many centres of artistic excellence and that people from all over the UK can benefit from them but that presumes that people, particularly families, can afford it—and, of course, the reality is that not many can. Therefore, I find the difference in spending between London and the English regions stark. It is even more so when lottery funding and private sector sponsorship are taken into account. An examination of lottery grants to arts and heritage over the past 15 years shows that 31 per cent of the total sum has gone to London, yet Londoners play the lottery less than any other English region, with only 32 per cent of households participating. In the north-east—here I declare my interest as a councillor in Newcastle and a board member of the Newcastle Theatre Royal Trust—56 per cent of households participate, with an average spend 60p higher than the average spend in London.

In addition, 75 per cent of all private sector sponsorship goes to London, so this is a plea for the English regions. Just last week the Royal Shakespeare Company, whose third home has been in Newcastle since 1977, announced that it would not be coming this year because it could not afford it, to the massive disappointment of thousands of theatregoers, but this is the consequence of the way arts public funding works. I sincerely hope that this can be addressed so that the RSC returns for the long term in 2012.

I turn briefly to film and media. Regional funds have been lost with the decision to close the regional development agency. Here I declare my interest as a board member of One North East. National funding is being lost because of the abolition of the UK Film Council with the regional screen agencies. Although there will be a replacement in Creative England through the British Film Institute, there are suggestions that Creative England will receive a reduced amount of grant in aid, compared to the old screen agency network, and will need to use most or all of its grant to cover its establishment costs and overheads, leaving very little to distribute. The film sector needs urgent advice on its future funding levels. The problem is that, with its existing agency abolished and replacement agents wrapped up in their own internal change, the sector is being told very little.

The fundamental changes being made in the management and distribution of funds for film in the UK are complex and will clearly take time to be resolved. However, in the mean time, the immediate danger is that while these new structures are put in place, a vacuum is opening up which could threaten the UK’s film infrastructure in the coming year. Therefore, with just a few weeks to go to the start of the new financial year, I hope that the Minister can clarify what transitional funding arrangements for 2011-12 DCMS has planned for the numerous small independent arts cinema and film festivals across the country that make up the real heart of Britain’s specialised film culture. I should like my noble friend to reassure us that DCMS and the Arts Council will remember that England has regions which need fair and equitable treatment.

16:16

[Lord Chorley]

My Lords, I thank the noble Earl for giving us the opportunity to discuss this important subject. The lengthy list of speakers—my goodness, what a range of experience has been shown—is a testimony to the importance of the subject. I intend to restrict my remarks to one, in a sense, rather narrow subject that is different from all the earlier speeches, with the possible exception of the remarks of the noble Viscount, Lord Eccles—the importance and relevance of endowment funding. It is an insurance against the vagaries and ups and downs of annual government grants. The trouble is that endowment funding in a period of government cuts, as today, appears peculiarly unattractive. However, I understand from the noble Viscount that Richmond has good endowments and shows a degree of buffering.

I start with a few words of historical background. Many years ago, in the early years of my association with the National Trust—many years later, I was privileged to be its chairman—it was experiencing financing difficulties with the stately homes and estates that it had taken on with inadequate endowments. I was asked by the trust’s then finance committee to come up with ideas. The result was what became known as the Chorley formula. This is neither the place nor the time to go into the details of that. Suffice it to say that the formula was relatively simple, but to some it appeared to be unduly expensive. Nevertheless, the formula has worked pretty well and is still being used 50 or so years later, in spite of inflation.

The big breakthrough in its adoption came when that splendid organisation, the National Heritage Memorial Fund, gave its support for the formula in relation to future properties that we wanted to take on. The formula was endorsed by the fund, particularly by its then chairman Lord Charteris, who alas is no longer with us. It was hugely important to have his support, because the formula was strongly opposed by Whitehall, which considered that it tied up far too much funding and was too much “belt and braces”. You did not get much bang for your buck, as it were. This short-termism has always been the great problem of Whitehall.

The important point about the formula was that it was designed to deal with the ongoing costs of the operating deficits of heritage and arts organisations, with a reasonable certainty that it could cope with future inflation. Future inflation was, and remains, the problem. In other words, the formula would deal with ongoing costs, not the initial or acquisition costs—for example, the cost of acquiring a great work of art that needed to be saved for the nation. Put simply, endowments have their role, which is to cover the basic operating costs or overheads—for example, staff salaries or building running costs—of an organisation which has charitable status. The National Theatre would be an example.

I am a fan of endowment funding in the appropriate circumstances. I suggest that the Government look at developing greater use of it. If there had been more endowment funding in the past few years, I suspect that we would have had a rather different debate today. I was therefore surprised, indeed, rather pleased, to learn that the Government had commissioned a paper on endowment funding by Alan Davey. Given that he is the chief executive of the Arts Council, it deserves to be taken seriously. While it is not easy going in all respects, it is thoughtful and thorough. I conclude by quoting just a few sentences of the concluding paragraphs:

“Recommendations for action are split into two key areas … action that the Arts Council will take to help support the organisational development of arts organisations towards the goal of increasing private funding sources, and as part of that, the use of endowments … action that the Arts Council suggests could be taken elsewhere to more greatly incentivise giving in England, easing the conditions under which arts organisations undertake their fundraising activities”.

16:21

[Lord Evans of Temple Guiting]

My Lords, I join everybody in thanking the noble Earl, Lord Clancarty, for initiating this debate. He told us that this was the House’s first debate on the arts for 18 months, since a debate initiated by my noble friend Lord Bragg. This has been such a wonderfully interesting afternoon that I hope that, from now on, we will sit all night talking about the arts rather than other matters.

We heard two very good maiden speeches. It is good for the arts to have my noble friend Lady Bakewell making a contribution here. I also congratulate the noble Lord, Lord Wasserman, on his contribution.

The question before us is quite simple. Although funding is the subject of the debate, a far greater issue than simply money is at stake. The question must be: what sort of country do we want for ourselves, and, most significantly, what do we insist upon for the future? The noble Earl, Lord Clancarty, raised that issue in his opening speech.

As many noble Lords have made clear, the arts make a huge contribution to the financial wealth of the nation. Earlier this week newspapers reported that manufacturing output increased in January by the highest percentage since January 1992. It was also widely commented that sterling rose. However, as a footnote, economists emphasised that the manufacturing sector accounted for less than 13 per cent of the economy. We have the huge task of making our political masters and the press realise that the creative economy contributes as much to gross national product as manufacturing does. Various figures have been mentioned today, including 7 per cent and 9 per cent. I have given a few lectures on the creative economy and always use the figures 12 to 14 per cent. It would be interesting to hear from the Minister, either today or by letter, the Treasury’s latest estimate. When did we hear a Prime Minister, Chancellor of the Exchequer or a senior Treasury Minister identify the fastest-growing sector of our economy, namely the creative industries, fuelled by public funding of the arts?

I will give a current example. Many noble Lords will have seen a film called “The King’s Speech”. It cost less than £10 million to make, it is doing very well in America—I do not have the figures—and here it has grossed $27 million to date. It has 14 BAFTA nominations and will be the biggest grossing independent film of all time. This huge, developing success will make a significant contribution to the creative economy. Yet amazingly, given the British record in filmmaking, the Film Council is being abolished.

I turn from the economic contribution of the arts to the equally important contribution that they make to society. What sort of country do we want? The answer to that should inform how we treat the arts and how the Government should respond to their responsibilities. What is the benefit to the people of the United Kingdom from the feast of fantasy, imagination and history that makes up our culture? Do we not understand the educational and emotional benefits of being able to absorb, on our doorsteps, in cities, towns and villages around the country, the presentation of the past as well as, critically, the future fruits of artists, designers, writers and composers working today?

I will quote from the New York Times. Philip Pullman, author of the His Dark Materials trilogy, gave a speech in Oxfordshire. The subject was Oxford County Council's plan to stop financing 20 of its 43 public libraries. He said that,

“there are things that are above profit, things that profit knows nothing about … things that stand for civic decency and public respect for imagination and knowledge and the value of simple delight”.

He continued to attack,

“the greedy ghost of market fundamentalism”.

What he registered so forcibly is the fact that a hidebound Conservative approach to deficit reduction creates a social austerity far more harmful than the deficit itself. I look at the Arts Council budget being cut by 30 per cent over four years in the light of this statement.

While huge strides have been made in attracting private philanthropy for the arts, such largesse cannot be a substitute for continued government support. While we owe great gratitude to corporations and individuals for their generous support of favoured institutions and events, what about less fashionable projects? As the noble Earl, Lord Clancarty, wrote in the Guardian last year:

“Philanthropy cannot be a replacement for bodies such as the Arts Council, which reaches out … and provides the necessary, often long-term funding without which much … work would otherwise be lost”.

It would also help if a central appeal made in the 2004 Goodison review of the funding for museums and acquisitions could be revisited and fully implemented. John Whittingdale, the Conservative chair of the Culture, Media and Sport Select Committee, asked in 2007:

“When will the Treasury respond to the report's tax recommendations, which have universal support in the arts world as a means of substantially increasing private giving at relatively modest cost?”.

I was the first chair of the MLA, which is to be merged with the Arts Council. I will ask the Minister two or three questions because, as the MLA’s first chairman, I thought that it was a wonderful organisation, and think it continues to be so. One of our first reports was Renaissance in the Regions. We hear that its funding is to be cut. I would be very grateful if the Minister could tell us where the cuts are going to be made and the precise percentage of those cuts. My recollection is that it has been an extremely successful and important initiative.

I should also like to ask what the Government’s reaction is to the ferocious and spontaneous opposition to public library cuts that is emerging daily throughout our country. In her maiden speech, the noble Baroness, Lady Bakewell, stressed that the importance of libraries in the life of young children cannot be overstated.

I have one final question about archives—a matter referred to by the noble Lord, Lord Freyberg. I agree with him that they are incredibly important, and they were a central part of the MLA’a agenda. What is happening, and where will the investment come from? Does the Minister recognise the absolute importance of archives?

We must recognise that the arts are not a mere add-on; they are as much a part of our way of life as the National Health Service and they are a major generator of national wealth, both economic and cultural. I look forward to the response of the noble Baroness, Lady Rawlings, to some of the points that have been made in this debate.

16:31

[Baroness Rawlings]

My Lords, I, too, congratulate the noble Earl, Lord Clancarty, on securing this debate and on his informed and valuable introduction. As an artist in his own right, his contribution is all the more valuable to this discussion. I am grateful to him for his consistency in keeping the subject on the public agenda.

Your Lordships’ House counts among it several distinguished Peers who have highly responsible positions in the arts, including many artists, writers, composers and impresarios, as well as art lovers, many of whom have spoken in this remarkable debate today. It is indeed encouraging that we, as a nation, are so passionate about the arts and that their future is being discussed again today in this Chamber. I am so pleased that the noble Lord, Lord Evans, has answered this debate for the Opposition. He has spent much of his life involved in the arts and he understands how important they are. I shall write to him with details about Renaissance and the MLA, as there is not an enormous amount of time in which to respond to him now.

The arts are important for countless reasons, many of which have been highlighted by noble Lords this afternoon. They are important to our nation because they give a sense of who we are. Britain evokes thoughts of Shakespeare, Orwell, Turner, Elgar, the Beatles and many more. I agree with my noble friend Lady Bonham-Carter that the arts are important because they communicate the tremendous joy at being alive, and they can communicate, too, the sadness that one can experience. As Pablo Picasso said:

“Art washes away from the soul the dust of everyday life”.

They are important because regular participation in the arts is proven to make us healthier and happier. The noble Lord, Lord Evans, is right: the arts also contribute to our country financially; we are a nation famous for our cultural exports.

I reassure the noble Lord, Lord Howarth, the noble Baroness, Lady Young, and my noble friend Lord Brooke that this Government do indeed value the arts in every sense. We recognise their vital role in British society. I thank the noble and learned Lord, Lord Scott, for stressing the value of the arts in heritage. They also play a vital role in the big society and we will continue to support them during our time in government.

Many noble Lords have shown concern about cuts, including the noble Lord, Lord Puttnam, whose expertise in this area is well known. The Minister for Culture, Ed Vaizey, recently told a Commons Select Committee that he would give a blank cheque to the arts sector if he could, as would we all. His and our hands are tied somewhat by our inheritance of the worst peacetime economic conditions in living memory. The coalition Government, however, have made a commitment to eliminate the structural deficit by 2014-15 and our challenge is to fulfil that without causing irreparable damage to British cultural life. The former is under way; the latter is still a challenge, especially for services such as schools, hospitals and our Armed Forces.

As a department, DCMS has had to contribute towards achieving that through the spending review. The arts budget is not immune and the Arts Council’s grant from DCMS has been cut by 29.6 per cent. Within that, the budget that immediately supports organisations that create or enable art will be cut by no more than 15 per cent over the next four years. The Arts Council will announce its funding portfolio for the next three years within two months of this discussion. Understandably, some organisations may see their funding reduced and some may see their public funding cut entirely, but the British system has always shown itself to be resilient in challenging times.

I add my congratulations at this point to my noble friend Lord Wasserman on his eloquent and witty maiden speech. He spoke so many words so dear to my heart and I agree with his pleas for active participation and for buying young artists’ work. Perhaps I should declare an interest in having owned a contemporary art gallery from 1969 to 1988. We need public support for the arts as well as state funding. This House and the Government will benefit from his knowledge, especially of philanthropy tax measures, which, as he knows, are a matter for the Chancellor of the Exchequer.

That leads me to philanthropy, which, in my view, should mean charitable giving without counting the cost. Much has been made of this Government’s plan to foster philanthropy, as many noble Lords have mentioned. Let me reassure the House that this is not a plan to replace government funding for the arts but a route to help arts bodies to diversify their income sources. Philanthropy and business support will continue to be key income streams for culture in the years ahead. It will not be easy. We know from many years of experience that relationships take time to be nurtured and we believe that there is still considerable scope for growth in private giving to culture. We are committed to supporting culture in fundraising activities. There is some concern that fundraising is more challenging in the regions outside London. I am sure that that is broadly right, but it is not impossible that many cultural bodies outside London are already securing significant investment from donors and corporate support. I appreciate the kind words from the noble Lord, Lord Myners, and support what he said regarding our outstanding museums and galleries. I will take away his important suggestions concerning “in lieu”.

Some concern was expressed by several noble Lords that cultural education programmes will be most badly hit by these cuts. I thank my noble friend Lady Benjamin for her passionate contribution. She continues to be a wonderful advocate for both the arts and young people and I shall write to her on her specific questions. I understand her concerns and those of many others. I believe that it was Sophocles who said:

“Whoever neglects the arts when he is young has lost the past and is dead to the future”.

I agree with the request of the noble Lord, Lord Moser, for the Government to have a vision; the concern of the noble Lord, Lord Aberdare, regarding the support for music; and the plea of my noble friend Lord Colwyn for more support for jazz. One of our priorities for arts and cultural education is to make certain that all children learn an instrument and learn to sing—which is, I dare say, music to the ears of the noble Lord, Lord Moser. It will, I hope, provide reassurance to say that children and young people are one of the Arts Council’s priorities for the next 10 years, as mentioned by my noble friend Lord Eccles. The Government will make certain that the young do not miss out on artistic involvement. I am sure that noble Lords will look forward to reading Darren Henley’s independent review of music education, which will be published imminently.

I shall say a few words on higher education and, specifically, the role of conservatoires, as raised in the eloquent speech made by my noble friend Lord Black. As he is aware, that is a decision for the Higher Education Funding Council for England, but I reassure him that the Government are well aware of his concerns. The noble Lord, Lord Bragg, mentioned education. He has great experience in that field. His programme on Aristotle tied into the debate concerning education. If I may add one of my favourite quotations, Aristotle said:

“The roots of education are bitter, but the fruit is sweet”.

Several noble Lords, including my noble friend Lord Shipley, raised the issue of local authorities that have had to cut their support to arts organisations and libraries. I spoke about libraries the other day. I understand the concern about that development. It is the Government’s belief, however, that decisions are best taken at local level. We believe that local government best knows the people and the communities that it serves. We may not always agree with the decisions being taken at local level, but we support each council’s right to make them.

I welcome the noble Baroness, Lady Bakewell. I cannot claim to compete with her on the crumpet stakes but, whatever her merits are in that field, they pale into insignificance alongside her knowledge, experience and lifetime contribution to the world of the arts. I reassure her that this Government believe in the arts reaching everyone.

I thank the noble Lord, Lord Luce, for his work in the voluntary arts sector. We will continue to work with that sector to encourage participation.

I thank the noble Lord, Lord Ramsbotham, for his informative contribution on the arts in the criminal justice system. I thank him for his tireless work as president of the Arts Alliance and hope to reassure him when I say that DCMS officials will continue to work with Ministry of Justice colleagues in that area.

The Government are well aware that the next few years will be difficult for the artistic world. We are a nation of art lovers. People are encouraged to visit us to experience the quality of our culture. I am confident that, as long as artists continue to produce exciting, innovative and challenging work—work that the public want to experience—they will go from strength to strength under this Government. I am confident, too, that the financial support provided by this Government will continue to support a strong arts infrastructure. With the correct measures put in place, this Government will oversee a considerable increase in the amount of charitable giving to the arts.

Your Lordships’ House can boast the most distinguished and experienced group of people, unrivalled anywhere. We have had a most outstanding, constructive debate, from which I am sure that we have all learnt a great deal. This is the House of Lords at its best. I thank noble Lords for their knowledgeable and wise contributions to this debate, especially the two maiden speakers, the noble Baroness, Lady Bakewell, and my noble friend Lord Wasserman.

I apologise to those noble Lords who have contributed but to whose many points I have not been able to respond. Unfortunately, time is limited. I will of course write to my noble friend Lord Colwyn and to all noble Lords to whom I have not responded. I will look into their points and take them back to the department. Once again, I thank the noble Earl, Lord Clancarty, for giving us this special opportunity. I look forward to future discussions on this issue.

16:46

[The Earl of Clancarty]

My Lords, we have had a remarkable debate today with a nerve being struck not just by the number of speakers that we have had but by their passionate and varied opinions, as well as the considerable concerns voiced about the Government’s commitment to the arts and the direction being taken. I thank all noble Lords who have taken part. In particular, I congratulate our two maiden speakers, the noble Baroness, Lady Bakewell, and the noble Lord, Lord Wasserman, on their excellent and thoughtful speeches. I am sure that we will hear much more from both of them. I thank the noble Baroness, Lady Rawlings, for her considered reply and I hope that we will return to many of the issues raised sooner rather than later. In the mean time, I beg leave to withdraw the Motion.

Motion withdrawn.

Investment Bank Special Administration Regulations 2011

Thursday 3rd February 2011 Lords Chamber

Motion to Approve

16:47

Moved By

[Lord Sassoon]

That the draft Regulations laid before the House on 10 January be approved.

Relevant Documents: 12th Report from the Joint Committee on Statutory Instruments.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, I beg to move that the draft regulations and the draft order laid before the House be approved. The global financial crisis and ensuing economic woes have shown us all the huge costs of inappropriate regulation, excessive risk-taking and overconfidence in the banking system. This was no more apparent than with the collapse of Lehman Brothers in 2008, where widespread panic gripped the financial markets and where clients in the United Kingdom were unsure as to whether they would ever recover the billions of pounds-worth of assets and money that they had invested. In fact, that is still being resolved.

We simply cannot afford a repeat of what flowed from the Lehman collapse. It is now our responsibility to develop an insolvency regime robust enough to handle the failure of investment banks. This is essential if we are to maintain the UK’s position as the world’s leading centre for financial services. However, let us be clear: while the regime being debated today is a step towards addressing this issue, the new regime by itself is not enough. That is why the Government are undertaking comprehensive reforms on both the domestic and international stage.

At home, we are overhauling the failed tripartite structure of financial regulation and strengthening our resolution frameworks. We have also set up the Independent Commission on Banking to advise on how to mitigate systemic risk in our financial system. We are looking forward to receiving the commission’s recommendations in September. Internationally, the Government are working closely with the Financial Stability Board and the European Commission to develop a globally consistent approach to resolving systemic firms. This will help to create a level playing field, which is important to ensuring that UK competitiveness does not suffer.

Let me now turn to the focus of this afternoon’s debate, which is the special administration regime. The current insolvency arrangements under the Insolvency Act 1986, although perfectly suitable for winding up most firms, do not take into account the complexities and conflicts that an administrator faces when winding up an investment bank. The administrator does not have an explicit objective to return client assets or to co-operate with market infrastructure bodies. Instead, the administrator must act solely under its objective to either rescue the company or maximise returns to creditors before winding it up. This potentially places the administrator in a difficult position if additional focus is required to return client assets or to resolve counter-party positions. The administrator is likely to require frequent directions from the court before taking the necessary actions, and this is extremely costly. The existing regime also creates uncertainty for investors as it is not clear that the administrator has a duty to work to return their assets and money. This is harmful to the UK’s reputation as a safe place for investors to entrust their assets.

The special administration regime we are debating today addresses this uncertainty by giving the administrator a specific objective to ensure the return of client assets. It will also reduce the length of a potential administration and minimise the costs for creditors and for the wider economy, and it has undergone extensive public scrutiny to ensure that this will be the case. The proposed regime has benefited from the input of an advisory panel of over 30 industry practitioners. We have also consulted on the regulations themselves, and the introduction of the regime has the full support of many in the financial sector. This is because no one wants to see another failure like Lehman Brothers, where the administration is entering its third year with substantial sums of client assets still to be returned.

I shall now provide a brief summary of the two statutory instruments we are considering today, starting first with the Investment Bank Special Administration Regulations 2011. These regulations provide administrators with three statutory objectives. The first objective will give the administrator a duty to return client assets because it is essential that client assets are returned as quickly as possible to prevent any undue suffering and financial hardship. Having this first objective will allow the Financial Services Authority, if necessary, to instruct an administrator to prioritise the return of client assets above the other aims, a power I will return to later. Under these regulations, in order to achieve objective 1, the administrator will also be able to set a bar date for claims to client assets. This will significantly improve the speed at which client assets can be returned. The bar date will include safeguards to reduce the possibility of a client losing out from its implementation—for example, by failing to submit a claim. These safeguards will be set out in the insolvency rules which will be laid separately before Parliament shortly after these regulations come into force.

The second objective ensures that an administrator shares information with market infrastructure bodies. It is essential that when an institution becomes insolvent, the administrator works with the relevant clearing houses and exchanges, and with the authorities, to resolve all failed trades and all open positions. Without this co-operation, market confidence and the stability of our financial markets would be seriously undermined. It is also important that the administrator works with the FSA to facilitate any actions the authorities might need to take as a result of an investment bank becoming insolvent.

Moving on to the third special administration objective, this follows the example set out under the Insolvency Act 1986 to ensure that, in the event of an investment bank special administration, the administrator will continue to work in the best interests of all creditors in either rescuing the investment bank, if that is at all possible, or in winding it up. Having this objective means that the administrator is unlikely to be successfully challenged for working in the best interests of the creditors in winding up the firm. Under the new regime, the Financial Services Authority will have the power to direct the administrator to prioritise one or more of the special administration objectives over the others, although I should stress that the regulations make it clear that this power can only be used if it is in the interests of financial market stability.

Another important part of this regime is that if the administrator continues to meet payments, suppliers of key services to that investment bank will not be allowed to terminate their services. The proposal is relevant to all suppliers of equipment used by the investment bank in connection with the trading of securities or derivatives; suppliers of financial data and infrastructure permitting electronic communications services; suppliers of secure data networks provided by an accredited network supplier; and suppliers of data processing capabilities.

On the second statutory instrument, the Investment Bank (Amendment of Definition) Order, the Banking Act currently stipulates that only firms holding client assets are within the scope of the special administration regime. This order widens the scope of the special administration regime to ensure that firms holding client moneys are also included. This is because the Government and their investment banking advisory panel agree that it does not make sense to have two different insolvency regimes—one for firms holding client assets and one for firms holding client money. It is right that the new regime should apply in both instances as it is suitably flexible to do so. Separate insolvency regimes for firms holding client money versus those holding client assets would serve only to complicate further what is already a complicated process.

The Government have, however, excluded from the scope of the special administration regime institutions that hold client assets only for the purpose of carrying out an insurance mediation activity. We have done this for the simple reason that the special administration regime is not designed for these types of business activity. Firms conducting these activities will enter the same insolvency proceedings as before.

This legislation will help preserve the UK’s reputation as a leading destination for investment banking. It is a clear demonstration that we have learned from past mistakes, that we are serious about financial reform and that we will do everything in our power to ensure that financial stability is placed at the heart of our regulatory agenda. The legislation is good for the industry and good for the customer.

17:00

[Lord Myners]

My Lords, I support both the Investment Bank Special Administration Regulations 2011 and the Investment Bank (Amendment of Definition) Order 2011. The policy objective is to create a special administrative regime in the form of an administration procedure. The aim is to provide administrators with clarity and direction to resolve the firm without needing to approach the court on a frequent basis. These adjustments to current insolvency law will make the process less expensive and less disruptive for an investment firm, its clients and creditors and the market.

The Government have consulted widely and the response has been broadly supportive. It is important that we express our thanks to those who sit on the investment banking liaison panel for the time they have spent working on complex legislation and regulation to ensure that they achieve the Government’s purpose.

The regulations and the order are being made, of course, under the enabling powers in Sections 233 and 234 of the Banking Act 2009, which I had the honour to take through the House. This arose as a consequence of the insolvency of Lehman Brothers, when unanticipated complexities emerged in resolving that investment bank, particularly in connection with client money.

The Financial Services Authority has taken significant steps to improve the supervision of client money and to address a number of areas where there were shortcomings and deficiencies. In particular, it has put a very strong team under excellent leadership in place to be responsible for the supervision of client money. These regulations are important to maintaining public confidence in the stability of UK financial markets and the integrity of institutions and firms operating in these markets.

I have two questions for the Minister. When Lehman Brothers collapsed, one of the difficulties we experienced was that Lehman was holding money in client accounts which were appropriately designated as client accounts and, accordingly, should have been kept separate from the assets of Lehman Brothers when it came to administration. However, Lehman had placed this money on deposit with a separately incorporated Lehman bank in Germany. The German authorities, after the collapse of Lehman Brothers, passed legislation to say that client money held on the accounts of this German banking subsidiary, when placed by an affiliated Lehman body, would not be deemed to be client money under German law. Is the Minister aware of whether any progress has been made on that point? Has this been raised at ministerial level recently with the German Government? It seems to strike at the very heart of the concept of the segregation of client assets which is intended to make sure that those clients are protected from any failure on the part of the institution with which they thought they had an agency rather than a principal relationship.

My second question relates to omnibus accounts. Will the Minister reflect on whether omnibus accounts are in themselves a source of hazard, and whether the practice of using omnibus accounts is one that the regulators should review in favour of looking at the case for requiring all accounts to be designated? Certainly in my experience, omnibus accounts undoubtedly increase confusion over the ownership of assets and the execution of certain fiduciary responsibility including, in particular, the voting rights of shares in UK companies at shareholder meetings.

Finally, I also express my support for the measures that the Government are taking in respect of the continuity of service arrangements, another problem that emerged with Lehman. The House should support the measures that the Government are bringing forward.

In closing I wish to mention a very crude term that is currently being used: banker bashing. Many members of the Government are engaged in banker bashing. The Secretary of State for Business and the Chief Secretary to the Treasury have made wholly uncomplimentary remarks about banks. Last night I was watching BBC “Newsnight” and was surprised to find the Mayor of London making uncharitable comments about banks. It is quite a volte-face, although it really takes him back to where he originally started.

It is important that we recognise that we have very many talented people working in investment banking in this country. I have had the privilege of working with them—they are in very many cases the best in the world, and they do not work only for our own banks. I would happily hear names like Royal Bank of Scotland. It is very easy to regard that as a bank associated with failure, but there are extraordinarily good people working there. Likewise, many people here in London work for firms such as Morgan Stanley and Citicorp, or for our own pre-eminent investment bank, BarCap. We need to maintain context here. Of course some of these problems continue to be self-inflicted by the banks, and I wish the Government well in their talks under Project Merlin, which are intended to bring some sense to bank bonus decisions. However, we need to keep in mind that investment banking, and banking in general, are a source of incredible competitive and comparative advantage for the UK economy. These regulations are entirely consistent with providing the support for a reputable, solid and prudent banking sector of the sort that we should seek to encourage in this country.

[Baroness Falkner of Margravine]

In his defence of the banking industry, with which I broadly agree, will the noble Lord accept that the idea behind the Government asking bankers to be more responsible and to have a social conscience is not to imply that individual bankers are not worthy of their role and status in the industry, which is very important to us, but is directed at certain levels of remuneration? Irrespective of how talented an individual is, no single individual can add the kind of value-added that we have started to see in terms of remuneration and the bonus pool.

[Lord Myners]

I had almost concluded my speech but the noble Baroness’s intervention has provided me with an opportunity to carry on and say more. There are very talented people working in UK banking and some of them are among the world’s very best. They earn their remuneration. Sir Philip Hampton, the chairman of Royal Bank of Scotland, referred to a gangmaster culture in some of the banks. I put down a Question for the Minister on this subject, to which he gave his standard Answer on bank bonuses which I can now recite. Regardless of the Question I ask, I get the same Answer. Perhaps it will change at some point, but I am beginning to lose any great hope that the Minister will seek to answer the Questions that I ask him on these subjects.

[The Archbishop of York]

The noble Lord, Lord Myners, normally speaks with great sense and clarity on matters of money, but the question is not that banking is not an honourable profession. People who work in the banks are people of good will and good respect, and they do a very good job. The first question is about bonuses. People in this country find the bonus culture indefensible. The second question is about the gambling casinos around banking. Will they get rid of those gambling casinos? Many people say they do not like them. The question that the noble Lord asked the Minister about Lehman Brothers and deposit accounts in Germany illustrated the point. Some people say that that is not the honourable business of banking. Anybody who is having a go at banking is saying not that banking is not an honourable profession or that bankers are not very able people doing a good job but that these bonuses and the gambling casinos taint the entire profession of banking.

[Lord Myners]

I can only say that there are failures of agency functions here. The shareholders are not holding the boards to account, and the boards are not asking the right questions or building depth of talent. It may be that the Minister, with his great experience in this area, can share with us his thoughts about why banking has this problem of high bonuses. My father was a fisherman, and there was not a big bonus culture in fishing. There is no bonus culture in making ball bearings, in engineering or in the hospitality industry. I think the answer possibly lies with the work that the Independent Commission on Banking is doing. The Minister always treats anything I say positively with considerable scepticism and caution, but I repeat my strong endorsement of the creation of the Independent Commission on Banking. It may well raise some interesting perspectives on the points that have been made. I close by simply saying that I fully support the administrative orders being tabled today.

[Baroness Maddock]

My Lords, I strongly support many of the things that the noble Lord, Lord Myners, said in support of these orders, particularly the measures that allow for clients’ assets to be recovered more readily. I have three questions.

Not only will administrators be able to prioritise the three objectives outlined in the instrument as they see fit, but they will also be able to continue to administer their organisations with a guarantee that suppliers must provide their services for up to a period of 28 days without pay. Have the Government fully identified the potential costs to suppliers who have to continue to provide their services for this period?

Secondly, I understand that the regulations allow suppliers to gain a court order to exempt them from this duty if they can prove hardship. Again, can the Government expand a little on the definition of hardship?

Lastly, on the bar date by which time claims for assets must be made, will the Government consider setting out what they think might be a reasonable amount of time to allow for claimants to properly state their case?

Having posed those questions, in summary I support these regulations and hope that the Government will give proper attention to the suppliers who must provide their services without pay and, of course, those clients who seek to recover their assets.

[Lord Davies of Oldham]

My Lords, I bring some comfort to the Minister, as he has already had a plethora of questions, which I know he will dutifully answer in his wind-up. I have a few questions of my own but I begin by saying that we welcome these regulations, which bring investment banks within the terms of the special administration or wind-up rules for banks contained in the Banking Act, which otherwise apply only to deposit-taking banks. As my noble friend Lord Myners reminded the House, this goes back to the Banking Act 2009 on which he led for the Government—I was pleased to give him some minimal support at the time and enjoyed that experience—but there was always going to be considerable secondary legislation attendant upon that Act. The regulations are part of that process, and we welcome them and commend them to the House, as the Minister will do in his final speech.

I also want to reassure the Minister that I do not think I will go far down the line on which my noble friend Lord Myners managed to stir up the attendant House—the issue of bankers’ bonuses. There will be a time for debates on that and he will know that we are all watching the work of the independent commission on banking and awaiting its outcome. He will also know that the country expects the industry to be responsive to the obvious fact that mistakes were made and calamities visited both on this country and on the wider world economy because of the significance of the banks. In particular, he will know that their return to the bonuses concept affects our nation adversely in circumstances in which so many people are hard pressed for resources. That applies especially to the banks in which the taxpayer has a substantial stake. The Government must respond to this fundamental question: how is it that, when the rest of the country is suffering such privation, people can pay themselves such enormous sums in bonuses and do so on the basis of a taxpayer bailout? However, that is a debate for another day.

As I indicated to the Minister, I shall concentrate on one or two detailed questions. I want to ask about Regulation 6(1)(b), under which there can be an application for special administration if that is deemed “fair”. Fair by whom? Presumably, the decision is made by the Financial Services Authority or the Secretary of State, but who defines what is fair? This seems a very loose term, in what are otherwise tightly drawn regulations, so I ask the Minister to comment on that point.

Secondly, an important element in reducing the vulnerability of investment banks is to require them to hold more capital and, especially, to limit their leverage. Can the Minister outline what steps are being taken to implement either of those measures?

In what ways is this legislation future-proof? Which agency will be responsible once the FSA is wound up? There is an important element of client protection in these regulations, which my noble friend Lord Myners referred to. Who is actually going to ensure that there is consumer protection? Investment banks deal predominantly in wholesale markets, so it might be thought that the Bank of England was relevant. It is clear, however, that once the FSA goes we need to know who is going to take responsibility regarding consumers in both areas.

17:15

One of the key problems in winding up an investment bank is that it is not easy to identify client assets. Again, my noble friend Lord Myners identified some of these issues. That was a crucial element in the collapse of Lehman Brothers. There is nothing in the regulations to facilitate the matching of assets and liabilities for the firm as a whole. What steps are the Government taking to remedy this issue? What answers are they going to give on the issue that my noble friend first identified?

As my noble friend has introduced the subject of German legislation and the way in which the Germans have responded, is it not also the case that US authorities have taken important steps to facilitate netting by requiring derivative instruments to be traded with central counterparties? What is the position in Britain? We do not know what the UK Government are doing about these matters. The German and US Governments have already acted, and we need to know what our Government intend to do on these matters.

A truly effective resolution regime—that is, a special administration or wind-up regime—would embody a requirement that firms develop living wills. Will the Government require investment banks to do this? Have we any proposals on that point?

The legislation suggests that at this stage the Government appear to have learnt very little over the past three years. All that they are doing is putting in place the power to wind up investment banks without at the same time making the regulatory changes that would reduce the probability of failure and provide for orderly wind-up. We do not just need a mechanism; we need a process that ensures that the mechanism works speedily and fairly. I suggest to the Minister that these regulations, welcome though they are, are such a partial dimension of the total picture that the House will need reassurance on these wider matters.

[Lord Sassoon]

My Lords, this has been an interesting debate, perhaps a little more interesting because of one or two of the little side conversations that got going, and certainly more interesting than the perhaps slightly dry but very important regulations had led me to expect. I am grateful not only for all the contributions made but for the general support for the proposed regulations. The past few years have shown that investment banks can fail and can cause huge disruption, not just to investors but to the wider economy. That is why the Government are putting in place this new regime.

I said at the beginning that the regime is being developed with the input of industry experts. I should like to echo the thanks of the noble Lord, Lord Myners, for the input and help that we have had. These have been complex instruments to develop. I am also happy to acknowledge the process that has resulted in these regulations today was one that the noble Lord himself kicked off when he was in the Government. It has taken a couple of years to get the regulations right and to achieve a regime that I believe is fit for purpose.

In addition, in accordance with Section 236 of the Banking Act, the regime will be reviewed within two years of the regulations coming into force. That review will consider how far the regulations are achieving the objectives set out in Section 233 of the Banking Act and whether the regulations should continue to have effect. A copy of that report will be laid before Parliament. That goes some way to answering the questions of the noble Lord, Lord Davies of Oldham, about future-proofing, continuity and the connection to the wider regime. These are important questions, but they have been taken account of within the regime that the Banking Act sets up.

On the specific question on the future of the Financial Services Authority, I would not presume, until your Lordships’ House had passed the necessary legislation that will come forward, to talk too much about what happens after the Financial Services Authority comes to the end of its life. However, in that legislation, we will take full account of all the functions, including those under these instruments, which the FSA currently covers.

The noble Lord, Lord Myners, asked about the situation with Germany. In particular, in response to that situation, the FSA has consulted on introducing a 20 per cent cap on intra-group deposits of client money so that the scope for exposure to overseas regimes that may have some bar on the return of money is significantly reduced. Of course, as I have already indicated, we work as a Government to ensure that resolution regimes, in so far as is possible, can be made consistent on both a European and global basis.

[Lord Myners]

The capping of exposures may be a good thing in itself, but what happened here was that, after the collapse of Lehman brothers, the Germans effectively said, “These are no longer client assets. They will be deemed to be the assets of Lehman Brothers International”. That is the core of the matter. It strikes me as quite extraordinary that a fellow European nation should have done this. To date, we have not been successful in unwinding what could only be regarded as a hostile action to the concept of client money. I welcome what has already been done, but I urge the Minister to take an interest in this and to see whether, perhaps with the FSA, we could give one more push on this subject.

[Lord Sassoon]

My Lords, the noble Lord, Lord Myners, knows very well the difficult background to this, as well as the fact that the German situation is, in the first instance, a matter for the courts. It is therefore difficult to go into it in much detail. That is where it principally lies, rather than being a government to government matter. As I have explained, the sensible response to cover the generality of these situations is to ensure that investment banks do not in future overexpose the intra-group excessively. That is why they have introduced the 20 per cent restriction. We will wait to see how this matter is resolved in the courts and what further lessons, if any, that leads to.

The noble Lord then asked a second question about sources of moral hazard in omnibus accounts. Again, the Financial Services Authority has certainly focused attention on this area. It has committed to enhancing the client assets source book, where regulatory failures in the general area of protection of clients’ assets were very much exposed by the Lehman Brothers case. It is not the case that omnibus accounts are, in themselves, a source of hazard, as long as there is proper segregation of clients’ money, which is the critical issue here.

As has been said, today is not the time to get into the questions that came up at the end of the speech of the noble Lord, Lord Myners, about bonuses, the importance of the City and so on. We will definitely come back to these things. I am grateful for the noble Lord’s confirmation that he supports the Independent Commission on Banking. I very much hope that it will shed light—as Sir John Vickers’s recent speech indicates it will—on all these issues. The noble Lord also referred to Project Merlin, which we are working on very hard to ensure that banks pay out bonuses that are less than they otherwise would have been and lend more than they otherwise would have done.

[Lord Myners]

I make one last intervention on this. Can the Minister tell us simply how the Government will find out what bonuses otherwise would have been and how much money would have been lent in the absence of Merlin? It seems that the Minister yesterday, in using the terms “demonstrable” and “verifiable”, overreached himself in suggesting that there was a way in which the outcome of Merlin could be proved. Can the Minister, in very simple, straightforward terms, explain how he will prove these issues on bonuses and credit extension?

[Lord Sassoon]

My Lords, when we have a Project Merlin outcome to announce, the noble Lord will no doubt have every opportunity to cross-question me on these matters. I also note, just in case noble Lords missed it, that the noble Lord committed himself to that being his final intervention. He is certainly well below his batting average for interventions in my closing remarks but we will see whether he holds to it. I shall try not to provoke him. The only further thing that I wanted to say in response to the noble Lord was that, despite what I just said about banking and unfinished business on bonuses, I very much echo what he said about the importance of the City. Extraordinarily skilled work is done by many experts across the financial and business services in the City, and the City adds great value to the UK economy; we should not forget that.

I will respond to a couple of the points raised by my noble friend Lady Maddock. The supplier proposal adapts existing provisions in insolvency law, specifically within the Insolvency Act 1986. We are trying to ensure that, in the case of investment banks, those critical suppliers without whom the resolution of the investment bank cannot take place—the positions cannot be closed out—continue to supply. When we talk about 28 days, it is important that the supply is paid for but it is a question of whether it is paid for within the 28 days. The supplier can stop supplying if any charges in respect of the supply remain unpaid for more than 28 days, if the administrator consents to the termination, or if the supplier has the permission of the court. In that context, the definition of hardship will be left to the judgment of the court.

As regards the bar date, the critical protection is that sufficient time has to be allowed for publicity to be given to the fact that the investment bank has gone into special administration. There has to be sufficient time for affected clients to calculate and submit their claims and for practical difficulties in establishing claims to be sorted out. Therefore, I believe that there are sufficient protections in the regime.

The noble Lord, Lord Davies of Oldham, asked me a number of questions. I hope that I have dealt with the future-proofing and questions around the Financial Services Authority. Consumer protection will be fully taken into account in the architecture that we will propose to replace the Financial Services Authority. Central counterparties and the regulation of over-the-counter derivatives is an area which falls within the general heading that I addressed: namely, that we must work to achieve international and global solutions. I see some nodding and shaking of the head from the Benches opposite. That indicates that these things are not easy. We need to have a regime in place that is safe and appropriate for the markets in the UK, but equally we need to ensure that we have something consistent within the EU and the G20 framework as mechanisms which could provide safe solutions that might work against free investment flows. We have to ensure that this is not one of those issues where protectionism comes to the fore under the cloak of providing safe solutions. I absolutely take the point that the settlement of transactions is ongoing business in which the Government take an active part.

As regards how living wills fit with this new regime, recovery and resolution plans are again a core part of both our and the G20 authorities’ response to the “too big to fail” problem and will be required of all systemically important financial institutions. That is the critical definition in that context. It is not a question of an arbitrary definition that splits investment banks from other banks in the way that the noble Lord suggested might be the case.

On the protection of client assets, it is worth remembering that the FSA has set up a new client asset unit, which is a centre of excellence and expertise within the FSA, in further recognition of the important issues raised by the lessons learnt from Lehman. That further stresses the fact that although these instruments being put in place today are critical, they are in many respects only a part of a wider construct.

The first point that the noble Lord raised, but the last one which I should address, concerns the definition of fairness. The relevant provision is based on existing provisions in the Insolvency Act 1986 and the Financial Services and Markets Act 2000. “Fair” is the modern term for the previously used “just and equitable”. While I do not profess to be an expert on these matters, I am assured that the term “fair”—its use is based on a lot of case law defining “just and equitable”—is well defined under court rulings and will be well understood by those administering the special administration regime.

That has been a long response to a short but important debate.

[The Archbishop of York]

I did not clearly hear the noble Lord’s answer to the question of the noble Baroness, Lady Maddock, about the bar. Who will determine what sufficient time is? How would I know that as a client? Who will determine that it is sufficient?

[Lord Sassoon]

I thank the most reverend Primate for pressing me on that. The critical thing, as I said before, is not that some arbitrary time is laid down, because that will relate to the complexity of the individual administration case. The objective has to be for the administrator to fulfil his objectives. The principal objective that we are looking for is the return of the money as quickly as possible. That will be the objective that the administrator will be looking to fulfil, subject to these safeguards that I have tried to explain to make sure that absolutely everything is being done so that those with money at risk are informed and have time to calculate their claims. A date cannot be fixed in a way that applies to all circumstances, because, if so, there would be a backstop date that might disadvantage people in a simple administration.

Motion agreed.

Investment Bank (Amendment of Definition) Order 2011

Thursday 3rd February 2011 Lords Chamber

Motion to Approve

17:36

Moved By

[Lord Sassoon]

That the draft Order laid before the House on 10 January be approved.

Relevant Documents: 12th Report from the Joint Committee on Statutory Instruments.

Motion agreed.

House adjourned at 5.37 pm.