Oral Answers to Questions
(14 years ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Caroline Dinenage (Gosport) (Con)
1. What recent assessment he has made of the humanitarian situation in Haiti.
The Secretary of State for International Development (Mr Andrew Mitchell)
Although the number of people in camps in Haiti has fallen by half to 800,000 since last July, Haiti continues to face serious humanitarian challenges.
Caroline Dinenage
The President of Haiti famously said that it would take a thousand trucks a thousand days to clear the devastation, but the people do not have a thousand days, because they are suffering disease and crime, and they do not have a thousand trucks. What more can the international community do to tackle the problem?
Mr Mitchell
My hon. Friend is right to identify the scale of the damage and of what is required to put it right. We are working directly on tackling the threat of cholera, and working through the UN and the World Bank on some of the more serious aspects of what needs to happen to bring the relief that is required .
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I advise you, Mr Speaker, and the House, that my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), the shadow Secretary of State, cannot be here today because she is on jury service.
As well as direct assistance to Haiti, which we support, Britain has contributed more than $100 million through multilateral organisations such as the World Bank and the European Union, as the Secretary of State said. Does he agree that it is important for the UK to continue to make substantial contributions to such organisations if the world community is to provide the scale of long-term support for reconstruction that Haiti requires?
Mr Mitchell
The hon. Gentleman is right to put it that way. Britain was a key part of the immediate, emergency relief in the aftermath of those dreadful events in Haiti. There was generous support from across Britain through the Disasters Emergency Committee appeal, and we made a number of specific surgical interventions towards the end of last year, including the one to which I referred. Britain is not in the lead on Haiti—this is very much an American, French and Canadian lead—but we are, as he explained, giving strong support through international and multilateral agencies, including the UN and the World Bank.
Mark Lazarowicz
We certainly welcome the fact that British aid is helping the poor and most vulnerable in Haiti. We support that, but unfortunately, it is a different story just 100 miles north of Haiti in the Turks and Caicos Islands, to which the Department for International Development has just agreed to write an unprecedented loan of £160 million, which is much greater than any previous support for a British overseas territory. Surely the priority for DFID in the Caribbean should be meeting the needs of the poorest and most vulnerable in places such as Haiti, so may I ask the Secretary of State—
Mr Mitchell
The hon. Gentleman refers to problems some miles away from Haiti. However, if I may say so, he has a bit of a brass neck. We inherited a terrible mess in the area not far from Haiti to which he refers, and it is thanks to the brilliant work conducted by the Minister of State that the British taxpayer has now given a guarantee, which hopefully will allow the place not far from Haiti to sort out its problems without further cost to the British taxpayer.
Philip Davies (Shipley) (Con)
2. What his Department’s policy is on providing aid to India; and if he will make a statement.
The Secretary of State for International Development (Mr Andrew Mitchell)
From now on in India, we will focus our support on three of the poorest states. Our programme will change to reflect the importance of the role of the private sector and private enterprise.
Philip Davies
India spends $36 billion a year on defence and $750 million on a space programme. It has one of the fastest-growing economies in the world and is developing its own overseas aid programme. Given that we must cut public expenditure in this country, will the Secretary of State accept that many of my constituents will think that such aid to India is now unjustifiable?
Mr Mitchell
That is why our programme in India is in transition, why we will focus on three of the poorest states in the country and why, over the next four years, up to half the programme will transition into pro-poor private sector investment. That is the right way for us to position our development work in the partnership with India, which is of course much wider than development, and which the Prime Minister very significantly re-energised in his major visit last year.
Barry Gardiner (Brent North) (Lab)
I congratulate the Secretary of State on continuing with the £280 million each year to India. That is vital given that India has a quarter of the world’s poorest people living within its borders. How does he intend to focus the aid in those three states, particularly with regard to the health of young women?
Mr Mitchell
The hon. Gentleman is right that there are more poor people in India than in the whole of sub-Saharan Africa. He is right, too, that we should focus on the poorest areas, and particularly on the role of girls and women. Over future years, we expect to be able to assist in ensuring that up to 4 million women have access to income through micro-finance and through focusing particularly on livelihoods. We will also support, of course, the strong programme on education in India. About 60 million children have been got into school over the last four or five years, which is a tremendous tribute to the work of the Indian Government, but it would not have been possible without the intervention of aid and support from Britain and elsewhere.
Malcolm Bruce (Gordon) (LD)
Does the Secretary of State agree that it is worth recording that to lift the poorest people in India out of poverty by $1 a day would cost $166 billion a year, so it is appropriate to continue our transitional arrangements with India? The International Development Committee will visit India next month and we will want to see how DFID’s relationship with the country, albeit with a relatively small amount in comparison with the challenge of the problem, can deliver an accelerated reduction of poverty there.
Mr Mitchell
I am grateful to the Chairman of the Select Committee for that comment and also to the Select Committee itself for going to look with care at development in India and the operation of our programme there. He accurately identifies the scale of need. It is worth noting that the number of the Indian population living on less than 80p a day is 7.5 times the total population of Britain. That puts in context the basic nature of this need and shows why Britain’s partnership is so important.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
Is the Secretary of State aware of the claims made by the Jubilee Debt Campaign and Jubilee Scotland that the work of the UK’s Export Credits Guarantee Department has been funding work in India that is undermining development and human rights? I declare an interest in that I was until recently a board member of Jubilee Scotland. I ask the Secretary of State to investigate and report back to the House on that matter.
Mr Mitchell
The hon. Lady will have heard what has been said about the Export Credits Guarantee Department—that it is at the moment being looked at carefully to ensure that it supports our development aims. She might also like to look at the trade White Paper published last week, which specifically addresses the role of the ECGD in development and in supporting British exports overseas.
Rehman Chishti (Gillingham and Rainham) (Con)
3. On what date he expects the next Friends of Yemen meeting to take place; and if he will make a statement.
Mark Pritchard (The Wrekin) (Con)
5. On what date he expects the next Friends of Yemen meeting to take place; and if he will make a statement.
The Minister of State, Department for International Development (Mr Alan Duncan)
We expect the next Friends of Yemen meeting to take place in Riyadh at the end of March. I visited Saudi Arabia last weekend and was afterwards with the Foreign Secretary in Yemen. We are continuing to work with both countries to agree a firm date for the next meeting.
Rehman Chishti
Given the turmoil in the region, what is the Minister’s assessment of the situation in Yemen and of the Friends of Yemen process? How will it stop the state failing and assist in an orderly succession and economic progress following the commitment by the President not to stand at the next election?
Mr Duncan
Recent events demonstrate more than ever the importance of the Friends of Yemen process to prevent state failure in that country. I welcome President Saleh’s speech on 2 February, committing to follow the constitution of Yemen and not to seek re-election after 2013. Through the Friends of Yemen process, we will work to support political reform and the right of all Yemenis to participate legitimately and democratically in their political future.
Mark Pritchard
Is it not the case that a secure and prosperous Yemen is very much in the UK national security interest? Will my right hon. Friend inform the House what new measures have been put in place to ensure that those objectives are delivered?
Mr Duncan
We have seen substantial progress on many fronts since the New York Friends of Yemen meeting, and I particularly highlight the Yemeni Government’s adherence to an International Monetary Fund financial reform programme and progress made towards completing their five-year development plan for poverty reduction. We are close to establishing a multi-donor trust fund for Yemen. The Riyadh Friends of Yemen meeting will continue the support of Yemen’s friends for political and economic reform in the pursuit of democracy, stability and prosperity.
Keith Vaz (Leicester East) (Lab)
I warmly welcome the Minister’s visit to Yemen last week. I ask him to put one item on the agenda of the Friends of Yemen meeting—namely, the redevelopment and refurbishment of the Aden hospital, which has been ongoing for a number of years. Good health facilities would be of huge benefit to local people in what is one of the poorest countries on earth.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Although I acknowledge the link between poverty and security, not least in Yemen, may I invite the Minister of State to confirm that DFID sees addressing poverty among the poorest people in the poorest countries as its supreme challenge and as being at its heart?
Mr Duncan
Yes, poverty reduction is at the core of everything that the Department does, but I urge the right hon. Gentleman to appreciate that no fragile country has ever achieved a single millennium development goal. Preventing state failure is much less costly than dealing with a failed state afterwards.
Mr Robin Walker (Worcester) (Con)
4. What development support his Department provides to the Palestinian Authority and to Israeli non-governmental organisations working in the west bank.
The Minister of State, Department for International Development (Mr Alan Duncan)
We provide financial and technical assistance to the Palestinian Authority. In this financial year, our support will total £31.1 million. DFID also co-funds the UK conflict pool, which supports five Israeli human rights NGOs operating in the west bank.
Mr Walker
I recently took part in a delegation to Jerusalem and the occupied Palestinian territories of the west bank, and I refer the House to my related entry in the register. During the visit, we met many Israeli human rights organisations and NGOs involved in the peace process, some of which receive financial support from the UK Government. All of them were concerned at moves by elements of the nationalist right to crack down on and embarrass organisations in receipt of overseas funding, no matter how legitimate—
Mr Speaker
Order. I am extremely grateful to the hon. Gentleman, but this is Question Time.
Mr Duncan
My hon. Friend refers to a proposed panel of inquiry on the Israeli side, to look into the funding of its NGOs. Our ambassador to Tel Aviv discussed the issue with the Israeli ambassador to the UK, Ron Prosor, shortly after the Knesset vote on the issue. Officials raised the matter with one of the two members of the Knesset who had pressed for such funding investigation. We do not want such investigations to impede the legitimate work of NGOs in the west bank and elsewhere in the Palestinian territories.
Richard Burden (Birmingham, Northfield) (Lab)
In light of the Minister’s reply, does he share the concern expressed by Norwegian Foreign Minister Støre about the Israeli Foreign Minister’s comments, which appear to delegitimise the work of brave NGOs such as B’Tselem and Physicians for Human Rights? It is important that the voices of those organisations, which are Israeli Jewish but express a different view from the Israeli Government, should continue to be heard.
Mr Duncan
I think that I can give the hon. Gentleman the assurance that he seeks. We are watching closely the treatment of the five NGOs concerned and we will do our utmost to ensure that they remain free to do their good work, even though some of their conclusions might disagree with the those of the Israeli Government.
Robert Halfon (Harlow) (Con)
Is the Minister aware that an increasing amount of aid to the Palestinian territories ends up in the hands of extremists and is used for extremist purposes? Will he take steps to stop that and ensure that aid gets to the Palestinians who need it most?
Mr Duncan
I do not share my hon. Friend’s conclusion. We are very careful how we spend our money in the occupied Palestinian territories and have done our utmost to support the legitimate government of Salam Fayyad with, I think, great success. We would abhor any money falling into the hands of extremists, and we do everything possible to ensure that such an accusation can never be verified or proved valid.
Rushanara Ali (Bethnal Green and Bow) (Lab)
The Minister will know that many in the House and beyond continue to be deeply concerned about the desperate situation in Gaza. What efforts are the Government making to ensure that Israel lifts the blockade of Gaza, which leaves many dependent on UN aid? Given the situation in Egypt, will the Minister update us on the position at the Rafah crossing, and on what action will be taken to ensure that humanitarian aid can be delivered to those who need it most?
Mr Duncan
My right hon. Friend the Foreign Secretary and all Ministers make our views clear on this matter. Prime Minister Netanyahu and Tony Blair announced a package covering the west bank, Gaza and East Jerusalem on 4 February. Gaza measures included new reconstruction project approvals and a timetable for exports. We have welcomed that, but implementation in practice will be the key.
Simon Hughes (Bermondsey and Old Southwark) (LD)
The Department’s work on conflict prevention and resolution is much appreciated. Can the Minister assure the House that this work in the middle east—Palestine, Israel and elsewhere—will be continued in the forthcoming years, and that the budget for it will be protected, and perhaps grown, even given the wider budget obligations?
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
6. What plans he has to provide support for the new UN Women agency; and if he will make a statement.
Tony Baldry (Banbury) (Con)
9. What plans he has to provide support for the new UN Women agency; and if he will make a statement.
The Secretary of State for International Development (Mr Andrew Mitchell)
The coalition Government strongly support the new UN Women agency, which has the chance to make a hugely positive impact on the lives of millions of girls and women in the developing world. I look forward to receiving its strategic results plan, which will allow us to decide on funding by the British taxpayer for future years.
Mrs Hodgson
I thank the Secretary of State for that encouraging response, and for the part he and his colleagues have played in the establishment of UN Women so far. When does he anticipate he will come to a decision on funding for UN Women?
Mr Mitchell
We expect to see a strategic plan from UN Women probably in June this year, and as soon as we see it, we will be able to make decisions about British support for the agency. I am sure the hon. Lady and other Members will understand that I want to see the plan first, before committing hard-earned British taxpayers’ money to it.
Tony Baldry
From the experience of the many visits my right hon. Friend has made across the world, does he agree that very often it is women who are the agents for change in development? Just as UNICEF has helped to support the focus on children, so it is to be hoped that UN Women can help support women as agents for change and development.
Mr Mitchell
My hon. Friend is absolutely right. We cannot even begin to address development without realising the centrality of girls and women in every aspect of what we do, and we share his aspirations for the role of UN Women within the international structures.
Mr Virendra Sharma (Ealing, Southall) (Lab)
7. What recent assessment he has made of the humanitarian situation in Sri Lanka; and if he will make a statement.
The Minister of State, Department for International Development (Mr Alan Duncan)
The number of internally displaced people in camps in Sri Lanka has declined from 300,000 in 2009 to 18,000 today. DFID has provided £13.5 million in humanitarian assistance since 2008, but our bilateral aid to Sri Lanka will cease in March, except for a new demining programme valued at £3 million.
Mr Sharma
Among those affected by the floods are many people who were earlier displaced by the conflict and who had recently returned to their homes only to be displaced again. Even before the floods, these people had been struggling to access much-needed protection and assistance because of Government restrictions on humanitarian organisations’ access to the return areas. What pressure is the Minister putting on the Government to allow humanitarian organisations to have access to the former conflict areas, so that the suffering people there can be given the full help they desperately need?
Mr Duncan
We will continue to press the Sri Lankan Government to grant access to such areas for humanitarian purposes. More than 1 million people have been affected by the flooding. We looked very closely into the sort of support we should give, but the most immediate needs are covered by Sri Lankan authorities and other donors, so we are working principally through multilateral organisations to give the help that is needed.
Mr James Gray (North Wiltshire) (Con)
The United Nations estimates that some 90% of Sri Lanka’s rice crop will be destroyed by the recent flooding. That makes the Government’s decision to stop all aid with effect from March quite worrying, because on top of all the troubles in that unfortunate country there is a very real risk of food security problems or starvation in the years to come. What is the Department prepared to do about that?
Mr Duncan
I urge my hon. Friend to appreciate the distinction between a continuing bilateral programme and humanitarian aid, which can be given as needs must. We will continue to review the humanitarian needs of Sri Lanka and work through multilateral organisations as required.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
8. What support his Department is providing for the training of midwives and maternal health specialists in sub-Saharan Africa.
The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien)
With more than half of maternal deaths globally occurring in sub-Saharan Africa, DFID funds the training of midwives and other health care workers through various channels—[Interruption.]
Mr Speaker
Order. I apologise for having to interrupt the Minister. Far too many private conversations are taking place. It is the height of discourtesy for Members to witter away, including from the Government Back Benches, when the Minister is trying to be heard.
Mr O'Brien
I am grateful, Mr Speaker.
DFID bilateral programmes directly support national health sector plans of partner countries and non-government organisation-implemented projects, and give support through multilateral organisations such as the World Bank and the Global Fund to Fight AIDS, Tuberculosis and Malaria.
Dr Poulter
I am sure the Minister is aware of data collected for the World Health Organisation that show disparity between the provision of maternal health services in more rural areas and in the slightly better-funded urban areas in many countries in Africa? Will he outline what the Department will do to help to address that problem?
Mr O'Brien
I am grateful to my hon. Friend for pointing out that important disparity. The UK Government recently announced the framework for results on reproductive, maternal and neonatal health, which directly seeks to address how that disparity can be narrowed. I have seen for myself in northern Nigeria how DFID supports midwifery services, with a scheme to train 200 midwives who are then posted to rural facilities, which is vital to ensure that the disparity is addressed.
Anas Sarwar (Glasgow Central) (Lab)
I am proud to support Save the Children’s “No child born to die” campaign, which seeks to make more life-saving vaccines available to the world’s poorest and most vulnerable children. The Global Alliance for Vaccines and Immunisation summit is to take place in the UK later this year, and Save the Children is lobbying for the Prime Minister to represent the UK at that summit. What steps will the Minister to take to make sure that the Government are represented at the highest level?
Mr O'Brien
The hon. Gentleman is right; the Save the Children campaign is one that we follow closely. The GAVI conference will be hosted in London and we can confirm that it will have the full support of my right hon. Friend the Prime Minister, to show our commitment.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
10. When he expects to bring forward legislative proposals in respect of the 0.7 per cent. target for official development assistance.
The Secretary of State for International Development (Mr Andrew Mitchell)
The coalition Government have set out how we will meet our commitment to spend 0.7% of national income as aid from 2013, and will enshrine that commitment in law as soon as the parliamentary timetable allows.
Mr McCann
Some may be reassured by the Secretary of State’s answer and some may even be convinced by it, but I can tell him about a group of people who are not: his own loyal staff at DFID in East Kilbride who in August 2010 were told that there would be no mass loss of jobs from the Department, but last Thursday were told that a third of their jobs would be cut. Is it not the case that when this Government meet commitments, the truth and their commitments are strangers?
Mr Mitchell
The hon. Gentleman will be aware that all Departments across Whitehall are having to make economies because of the coalition Government’s dreadful economic inheritance from his party. DFID is not immune from the cuts and will see reductions of some 33% in its administrative spend. I had the opportunity of speaking to all the staff at Abercrombie house just a few days ago to make sure that that was understood.
Duncan Hames (Chippenham) (LD)
I applaud the Government’s commitment to aid, but can the Secretary of State confirm that climate change adaptation funding, beyond the fast-start finance up to 2012, will be additional to the overseas development assistance pledge?
Mr Mitchell
As part of the Government’s fulfilment of our historic pledge, we have set out specifically how climate change funding will rise as part of the overall budget.
Jim Dobbin (Heywood and Middleton) (Lab/Co-op)
Will the Secretary of State congratulate the Government of Kenya, the Global Alliance for Vaccines and Immunisation and all its funding partners, which include the United Kingdom, on the roll-out of their programme of pneumococcal vaccine on Monday? It will save thousands of children in Kenya and across Africa. We hope that it will be a rolling programme across the developing world.
Mr Mitchell
The hon. Gentleman is absolutely right to underline the tremendous success of the vaccination programme. When we announce the results of the multilateral aid review, we shall show how Britain will give a real impetus to vaccination. As the Under-Secretary has just said, we shall host the GAVI conference in London in June and it will be opened by the Prime Minister.
Chris White (Warwick and Leamington) (Con)
11. What progress his Department is making on transferring aid from middle-income states to developing countries in greatest need.
The Secretary of State for International Development (Mr Andrew Mitchell)
We have a clear responsibility to ensure that we target our aid where it is most needed and where it will have the greatest impact. I will shortly announce to the House the outcome of our major root and branch review of bilateral aid, which looked in detail at each country.
Chris White
Although I strongly support the Government’s decision to stop aid to China, can my right hon. Friend explain what impact that will have on his ability to engage with China on development issues?
Mr Mitchell
My hon. Friend is right to say that the coalition made it clear on day one that we would end all aid to China and Russia, but we need to have a powerful and reinvigorated partnership with China on development issues, not only in the areas where we share deep concerns, such as on freeing up the trading system and on climate, but in working in third countries. For example, Britain is working with China now in the Democratic Republic of the Congo on a major infrastructure roads programme. We are doing that work together and it is extremely effective and successful.
John Mann (Bassetlaw) (Lab)
Q1. If he will list his official engagements for Wednesday 16 February.
The Prime Minister (Mr David Cameron)
I am sure the whole House will wish to join me in paying tribute to the following servicemen who have lost their lives in Afghanistan: Private Lewis Hendry from 3rd Battalion the Parachute Regiment and Private Conrad Lewis from 4th Battalion the Parachute Regiment, who died last Wednesday; and Lance Corporal Kyle Marshall from 2nd Battalion the Parachute Regiment, who died on Monday. They were all brave and dedicated soldiers who were serving in Afghanistan for the safety and security of the British people. Our thoughts and deepest condolences should be with their families, their loved ones and their colleagues. They will never be forgotten.
This morning I had meetings with ministerial colleagues and others, and in addition to my duties in the House, I shall have further such meetings later today.
John Mann
Like other Members, I associate myself and my constituents with the Prime Minister’s tribute to our fallen heroes.
One man who also served his country is my constituent Doug Hunt who, with his wife Gladys, lives in Westwood care home, which is currently being fattened for privatisation by increasing its fees by £400—not £400 a year, not £400 a month, but an increase of £400 a week. Would the Prime Minister like to answer Mr and Mrs Hunt, who are listening now, show some leadership and have these Tory cuts removed, or would he like to justify these increases to Mr and Mrs Hunt?
The Prime Minister
I will certainly look at the individual case that the hon. Gentleman raises, but far from cutting the money that is going into social care, we have increased by £2 billion the money going into adult social care because we know how important it is. It is not right to draw a false distinction between care homes run by local authorities and those run by the private sector. There is good practice and bad practice in both, but as we have seen in our hospitals in recent days, we need a change of culture in caring for our elderly to make sure they have the dignity that they deserve in old age.
Mark Lancaster (Milton Keynes North) (Con)
My six-year-old constituent, Millie d’Cruz, is one of just 17 people in the United Kingdom to be diagnosed with the rare genetic disorder, MLD—metachromatic leukodystrophy. Unfortunately, the family must try to raise £200,000 to send her for treatment in Holland, even though the treatment may be available here in the UK. Can the Prime Minister look into the case and ensure that the family get the support that they deserve?
The Prime Minister
I am happy to do as my hon. Friend asks. A big change is taking place in medicine, where far more interest needs to be directed at genetic data and genetically inherited diseases, as this is how we will reduce disease and illness in the future. We are looking, for instance, at value-based pricing, whereby we try to share between companies developing new treatments and the taxpayer the cost of developing them, which could be a good way forward to make sure we get more treatments to more people more quickly.
Edward Miliband (Doncaster North) (Lab)
I join the Prime Minister in paying tribute to Private Lewis Hendry from 3rd Battalion the Parachute Regiment, Private Conrad Lewis from 4th Battalion the Parachute Regiment, and Lance Corporal Kyle Marshall from 2nd Battalion the Parachute Regiment. All these men showed extraordinary bravery and dedication. Our thoughts are with them and their families and friends as they grieve for them.
We now know that inflation is rising, growth has stalled and an extra 66,000 young people are out of work. Can the Prime Minister tell us whether he thinks his strategy is working?
The Prime Minister
Of course today’s unemployment figures are a matter of great regret, particularly in terms of higher youth unemployment, but I have to say to the right hon. Gentleman that youth unemployment has been a problem in this country for well over a decade, in good years and in bad. The level of youth unemployment actually went up by 40% under the last Government—an extra 270,000 young people unemployed. What we have to do is sort out all the things that help young people get back into work. There is a welfare system that does not help you get work, an education system that does not prepare you for work and back-to-work programmes that, under the last Government, simply did not work.
The right hon. Gentleman asked me what is happening in our economy. We are no longer linked with Greece and Ireland and those countries in the danger zone. We have a situation where market interest rates have fallen. Our credit rating is secured. There are 218,000 more people in work than there were a year ago. Above all, what I would say to him is what the Governor of the Bank of England said this morning:
“There has to be a plan A… This country needs fiscal consolidation to deal with the biggest budget deficit in peacetime”.
Edward Miliband
The right hon. Gentleman says that we are doing so well compared with the rest of Europe, but we were the only major European economy in the last quarter of 2010 that had no economic growth and where growth went into reverse. Let me ask him specifically about youth unemployment. His own former chief economist said this morning that he thought that they were wrong to scrap the education maintenance allowance, wrong to scrap the future jobs fund and that they should have been building on it. I know that he likes to make an industry out of saying that the future jobs fund was the wrong thing to do, but what did he say before the election? He went to Liverpool and said that it was “a good scheme” and that he had been “inspired” by what he saw. Why does he not listen to young people and their families up and down the country and take real action to help them?
The Prime Minister
First, the economist from the Cabinet Office whom the right hon. Gentleman has just quoted also said this:
“I would not excuse the previous Government on this; they failed to wake up to the problem early enough.”
What matters is whether work programmes are effective. I now have the figures for the flexible new deal, which was the absolute centrepiece of the last Government’s approach to this matter. Let me give the House of Commons the figures, because I think that they show what has been going wrong. Of the 279,000 people who took part in the flexible new deal, how many got a long-term job? The answer is 3,800. It is not good enough. What we have been doing on welfare, education and back-to-work programmes is not good enough. All those things need to change.
Edward Miliband
What we actually discovered today is that the right hon. Gentleman’s great new Work programme, which he is trumpeting as the answer to all the nation’s problems, will have 250,000 fewer opportunities than were provided under the last Labour Government. We know that his view of social mobility is auctioning off a few City internships at the Conservative party ball, but frankly he is going to have to do better than that. The truth is that he is betraying a whole generation of young people. He is trebling tuition fees, abolishing the education maintenance allowance and abolishing the future jobs fund. Why does he not change course and help those young people who need help up and down this country?
The Prime Minister
First, let me answer the right hon. Gentleman on the Work programme, because this is important. For the last 20 years, in this House and elsewhere, people have been arguing that we should use the savings from future benefits and invest them now in helping people to get a job, and for 20 years the Treasury has said no, including the time when he and the right hon. Member for Morley and Outwood (Ed Balls) were sitting in the Treasury advising. Now, for the first time, under this coalition Government, we will be spending the future benefits in order to get people training and into work. That will include, in some cases, spending up to £14,000 to get people, particularly those on incapacity benefit, a job.
The figures the Leader of the Opposition gives are wrong. The Work programme is the biggest back-to-work scheme this country has seen since the 1930s. Instead of being cash-limited and patchy, like his schemes, it has no limit and can help as many people as possible from all of those different categories. He mentions internships. I did a little research into his: he did one for Tony Benn and one for the deputy leader of the Labour party. No wonder he is so left-wing, so politically correct and so completely ineffective.
Nicholas Soames
Does my right hon. Friend the Prime Minister agree that deregulation is an extremely powerful weapon in economic reform? Is he aware that the programme is not proceeding fast enough, and will he take personal charge to see that the whole process is hurried up?
The Prime Minister
I completely agree with my hon. Friend. One of the problems is the huge amount of regulations—particularly coming out of Europe—that we need to put a stop to before they are introduced. My right hon. Friend the Business Secretary is doing an excellent job with his one in, one out scheme, so that another regulation cannot be introduced until one has been scrapped, but I think we probably have to go further and faster and be more ambitious in scrapping the regulation that is holding back job creation in our country.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
Q2. Can I invite the Prime Minister to look ahead to the summer of 2012, when we will welcome millions of overseas visitors to this country? What does he think will be the abiding images that they take home with them? Will they be images of a brilliantly, successfully staged Olympic games? Will it be a fond memory of the warm welcome to London extended by the newly elected Mayor Livingstone? Or will it be a memory of the shocking images of homeless people all over the streets of London because of his Government’s economic failure and harsh housing benefit cuts?
The Prime Minister
I notice that the right hon. Gentleman could not keep a straight face when backing Labour’s candidate for Mayor, but I have to say that, if the Member who represents Greenwich cannot speak up for the Olympics, there really is a problem. This is going to be a great festival, and something that everyone who comes to our country is going to enjoy—and I look forward to welcoming them alongside Mayor Boris Johnson.
Julian Smith (Skipton and Ripon) (Con)
Q3. This weekend, hundreds of people will arrive in Ripon to celebrate winning the Government’s pilot for super-fast broadband in North Yorkshire, and to work out how we can connect the rest of the county in the years ahead. What message would my right hon. Friend give to delegates about the Government’s commitment to rural broadband?
The Prime Minister
My hon. Friend is absolutely right: we have made a big commitment to that, with £530 million going into broadband investment, and that is absolutely vital, particularly for rural parts of the country, because we do not want them to be cut off from the information superhighway. I hope my hon. Friend will advise them about the opportunities of super-fast broadband—the business creation and job creation that it can mean right across this country.
Edward Miliband
Can the Prime Minister tell us whether he is happy with his flagship policy on forestry?
The Prime Minister
The short answer to that is no. As I have said before in this House, it is a consultation that has been put forward, and we have had a range of interesting responses to it, but what is important is that we should be making sure that, whatever happens, we increase access to our forests, we increase biodiversity and we do not make the mistake that was made under the last Government, where they sold forests with no access rights at all.
Edward Miliband
Even the right hon. Gentleman must appreciate the irony: he, the guy who made the tree the symbol of the Conservative party, flogging them off up and down this country. He says that they are consulting on the policy; they are actually consulting on how to flog off the forests, not on whether to flog off the forests. Is the Prime Minister now saying that he might drop the policy completely?
The Prime Minister
I would have thought that the whole point of a consultation is that you put forward some proposals, you listen to the answer and then you make a decision. I know it is a totally alien concept, but what is so complicated about that?
Edward Miliband
Everybody knows that the right hon. Gentleman is going to have to drop this ludicrous policy. Let me give him the chance to do so. Nobody voted for the policy; 500,000 people have signed a petition against it. When he gets up at the Dispatch Box, why does he say not that he is postponing the sale, but that he is cancelling it?
The Prime Minister
I think, once again, that the right hon. Gentleman wrote the questions before he listened to the answers, and I think the bandwagon has just hit a bit of a tree.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
May I take this opportunity to inform my right hon. Friend and, indeed, the House that the Public Administration Committee is today launching an inquiry into the big society? Does he share my hope that as we consider things such as volunteering, promoting charitable giving and decentralising public services, we will receive positive evidence from all parts of the House?
The Prime Minister
I do, and I am sure that, like everything that my hon. Friend does, it will be wholly supportive of the Government’s position. He makes a very good point, which is that the big society is about more than just volunteering or support for charitable groups; it is about opening up public services, devolving power to the lowest level, and giving people the opportunity to play a greater part in the lives of their communities. I would have thought that people from across the House would recognise that the big state approach has failed and that it is time for something different.
Mr Ben Bradshaw (Exeter) (Lab)
Q4. Is the Prime Minister’s upheaval of the health service resulting in longer or shorter waiting times?
The Prime Minister
We want to see waiting times come down; that is the whole point of the reforms. I think that anyone who has watched what has been happening over the past few days, where we have seen the standards of care that some elderly people—[Interruption.] Well, I think that the country is also interested in the standards of care that old people are getting in our hospitals. This idea that everything is right and rosy in the health service after what happened under the former Government opposite has just been shown to be completely untrue. Do we need to change the system and make it more related to what GPs and patients want? Yes, we absolutely do.
Andrew Bridgen (North West Leicestershire) (Con)
Will the Prime Minister join me in praising the work of the Conservative administration in my constituency, which has saved £1 million a year by cutting senior management and bureaucracy and protecting front-line services—measures unfortunately opposed by the local Labour group on the council?
The Prime Minister
My hon. Friend makes an important point, which is that we have made available all this information. Now, local councils have to set out their expenditure on every item over £500, so people can see how much money is being spent on salaries, how much is being spent on bureaucracy, and how much could be put into voluntary sector and other organisations. We have given local people the tools to hold their local politicians to account, and that is a thoroughly progressive step.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Q5. Can I first put on record my thanks to the Prime Minister for meeting a small delegation from my constituency on the whole question of unemployment in the Ayrshire area? Does he really think, however, that being part of the big society that he talks about means throwing youngsters on to the streets of the UK as a result of the cuts in housing benefit?
The Prime Minister
What we are doing in terms of housing benefit is what was set out in the manifesto that the hon. Gentleman stood on, which is to say that we should not be subsidising housing benefit for people to live in houses that taxpayers themselves cannot afford. That is the principle behind the welfare Bill, which will be coming before this House shortly, and I look forward to it getting wide-ranging support.
Duncan Hames (Chippenham) (LD)
The Prime Minister has drawn comparisons between care homes and hospitals when discussing changes to disability allowance, which are out for consultation until Friday. Yet for those who, for reasons of disability, spend not just their latter years but their whole lives in care homes, this comparison simply is not valid. Will he ask his Ministers to look again at this?
The Prime Minister
My hon. Friend makes a good point. This is exactly what we have been looking at. The whole intention of the change that was announced in the Budget and the spending review was to make sure that there was not an overlap in the way that we were judging people in care homes and people in hospitals. I think that when he sees what is proposed in the welfare Bill, he will see that it meets his concerns.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
Q6. Sadly, since I first asked the Prime Minister about human trafficking in September, he has collapsed every Government initiative on the issue, including the excellent POPPY project, which rescues women from prostitution. Tomorrow, when I meet my colleagues from the Portuguese Parliament who are signing up to the human trafficking directive, where will I tell them that our Prime Minister has lost his moral compass on the issue of human trafficking?
The Prime Minister
What the hon. Gentleman says is completely wrong. The Government are supporting organisations that are helping on the issue of human trafficking. We are committed to ensuring that we have the best and toughest laws on human trafficking. I know that he works on this issue, as does my hon. Friend the Member for Wellingborough (Mr Bone), as have Members in previous Parliaments. It is not necessary to opt in to the human trafficking directive to give ourselves the strongest laws here in the UK. It is that that we should be doing, and that that I am committed to making sure we are doing.
Jason McCartney (Colne Valley) (Con)
Q7. Labour-led Kirklees council is still obsessed with top-down housing targets, leaving my constituents worried that the beautiful green fields of the Colne and Holme valleys will be bulldozed—quite a few trees could be chopped down too. Will the Prime Minister confirm that the Localism Bill will give my constituents a real say in what developments go on in their area?
The Prime Minister
I can give that assurance, but I also make the point that under the top-down targets of the Labour party, house building in this country fell to its lowest level since 1923. The top-down, big-state solutions did not work. Through the new homes bonus and by rewarding local authorities that build houses, we are benefiting local communities that opt to have more homes and businesses, because that is part of the economic development that we badly need.
Tony Lloyd (Manchester Central) (Lab)
Q8. The overwhelming majority of my constituents believe that the cuts to local government spending are not only too fast and too deep, but cruel and politically motivated. Will the Prime Minister tell the House why my constituents are wrong?
The Prime Minister
I tell the hon. Gentleman directly that I think the cuts being made by Manchester city council are politically driven and too deep. Manchester city council is having its grant cut by 15%—less than my council, for instance, which is being cut by 23%—and yet it is cutting services by 25%. I notice that it still has £100 million in bank balances, and that its chief executive is paid more than £200,000 a year. I think that people in Manchester will look at their council and say, “Cut out the waste, cut out the bureaucracy, start to cut the chief executive’s salary, and only then should you look at services.”
Philip Davies (Shipley) (Con)
Q9. After votes for prisoners, we now have the potential for human rights legislation to give sex offenders the opportunity to come off the sex offenders register. Is the Prime Minister aware that my constituents are sick to the back teeth of the human rights of criminals and prisoners being put before the rights of law-abiding citizens in this country? Is it not time that we scrapped the Human Rights Act and, if necessary, withdrew from the European convention on human rights?
The Prime Minister
My hon. Friend speaks for many people in saying how completely offensive it is, once again, to have a ruling by a court that flies in the face of common sense. Requiring serious sexual offenders to sign the register for life, as they now do, has broad support across this House and across the country. I am appalled by the Supreme Court ruling. We will take the minimum possible approach to this ruling and use the opportunity to close some loopholes in the sex offenders register. For instance, we will make it compulsory for sex offenders to report to the authorities before any travel and will not allow them to change their name by deed poll to avoid having their name on the register. I can also tell my hon. Friend that a commission will be established imminently to look at a British Bill of Rights, because it is about time we ensured that decisions are made in this Parliament rather than in the courts.
Nia Griffith (Llanelli) (Lab)
Q10. Given the difference in tone between “Drink Responsibly” and “Smoking Kills”, what action will the Prime Minister take in response to the heartfelt pleas of my constituent Rachel Jones, who wants to see much harder-hitting labels on alcoholic drinks following the tragic death of her boyfriend, Stuart Cable, the former Stereophonics drummer?
The Prime Minister
I think we should be looking at what action we can take through the tax system to deal with problem drinks, which we are looking at, and at tougher minimum pricing for alcohol. That is where we should be putting our attention, rather than necessarily looking at labelling. Many of the problems that we have, such as people—particularly young people—pre-loading before they go for a night out, are related to deeply discounted drinks in supermarkets and elsewhere. That is what we should deal with first.
Jonathan Evans (Cardiff North) (Con)
Q11. Thousands of younger women drivers in the UK face the prospect of massive hikes in their motor insurance premiums as the result of a perverse reinterpretation of the EU gender equality directive, carried forward by those on the Opposition Benches. What will my right hon. Friend say to encourage better risk assessment to avoid such unintended consequences?
The Prime Minister
My hon. Friend makes an important point, which is that because of how this issue has been handled, many people who face lower insurance premiums because of their risk profiles will have to pay more. I am afraid that it falls to me to speak an eternal truth to the House of Commons: on the whole, women have better safety driving records than men, but as a result of that judgment, they will not benefit from lower insurance payments. What that says to me is that we have to work much better at risk-assessing and then stopping so much of the damaging regulation coming out of Brussels.
Hazel Blears (Salford and Eccles) (Lab)
The importance of internships in helping young people to get on in life has been much in the news lately. Will the Prime Minister therefore take this opportunity to express his support for the Speaker’s new parliamentary placements scheme? It is a cross-party initiative backed by the hon. Members for Lancaster and Fleetwood (Eric Ollerenshaw) and for East Dunbartonshire (Jo Swinson) that will give people from working-class backgrounds the chance to come to Parliament, get vital experience of political life and be paid a living wage; and—who knows?—they may well be the politicians of the future.
The Prime Minister
I fully support what the right hon. Lady says. This is a very important scheme. As shadow Cabinet members in opposition we worked with the Social Mobility Foundation to give internships, and we will be doing it again as Cabinet members. It is a very important initiative and I very much welcome what the Speaker is doing.
Charlie Elphicke (Dover) (Con)
Q12. What investigation has the Prime Minister made into the allegation that the IMF was bullied into toning down its assessment of the dangers facing the UK economy?
The Prime Minister
My hon. Friend makes an incredibly important point, which is that the IMF was reporting on the state of the British economy, and was arguing that we did have a structural deficit and that it was a problem. However, Labour attempted to gag the IMF when it was in power, because the previous Government did not want to own up to the mess that they had got this country into. Even now, the Opposition are still denying the fact that they left us with a dangerous fiscal deficit that is the cause of many of the problems that we face today.
Jim Shannon (Strangford) (DUP)
Q13. The Prime Minister will be aware of people’s concerns about the coastguard. This week a cross-party deputation from Northern Ireland consisting of four MPs from this House met coastguard officials. Is the Prime Minister aware that the figures from Bangor coastguard station show 654 responses over this past year? Does he think that one station could satisfactorily handle almost 10 times the current number of calls, should Bangor coastguard station be closed or the service be reduced from 19 coastguard stations UK-wide to an inadequate two stations?
The Prime Minister
I am very aware of this issue, and I know that the hon. Gentleman will be speaking to the Secretary of State for Transport about it. The point is this: the coastguard agency has to prove in the consultation that it wants to co-ordinate the number of offices that receive calls, in order to put more money and resources into the front-line service—the number of boats, rescue facilities and helpers. That is the aim of the policy, but I fully accept that that has to be proved to people in order to go ahead with the proposals being made.
Gavin Williamson (South Staffordshire) (Con)
Q14. At my surgery on Saturday, a constituent explained to me that, with an ill husband and a young family, she had been told that she would be better off giving up her part-time job and relying on benefits. Will the Prime Minister assure this House that we will give people the incentive and the support to go into work and end the culture of welfare dependency left by the Opposition?
The Prime Minister
My hon. Friend speaks about this issue in an absolutely correct way. The fact is that for too long we have had a welfare system that pays people—it gives them an incentive—not to go out and work. The universal credit, which will be introduced through the welfare Bill, will mean that in every case, no matter how few hours someone works, they will always be better off in work and working more. That is absolutely right and long overdue, and I hope that it will have support from right across the House of Commons.
Mr Nigel Dodds (Belfast North) (DUP)
In a week in which we have had revelations about the appalling level of health care for our pensioners, what is the Prime Minister saying to the elderly population of this country by proposing to change the inflation link for the uprating of benefits and pensions from the retail prices index to the consumer prices index, which will cost present and future pensioners millions of pounds in lost income? How is that fair? How does it protect the vulnerable?
The Prime Minister
The first point that I would make is that the state pension, under the triple lock, will be linked with whichever is highest, but we are also taking the step, which the last Government did not for 10 years, of re-linking the state pension with earnings. That is an absolutely vital step in giving people the dignity and security that they deserve in old age.
Dr Julian Huppert (Cambridge) (LD)
Q15. The Government are planning to ask the House to extend the control orders regime until it is replaced by terrorism prevention and investigation measures. I am sure that the Prime Minister would not want the House to act without having all the necessary information, so will he assure all hon. Members that we will have sight of the TPIMs legislation before being asked to vote on the extension?
The Prime Minister
My hon. Friend makes an important point. Obviously, this is a very big change that we are making from control orders to the new system, and I am sure that the House will be consulted properly, and that proper prior sight of what is being proposed will be made. But he can get involved right now if he wants to, as the policy is being developed.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Mr Speaker, in 2008, your review into communication needs described speech therapy services as a “postcode lottery”, and, sadly, in 2010, a national survey of primary special educational needs co-ordinators showed that 57% had never heard of the Bercow review, and that services remain as inequitable now as they were then. In the national year of communication, and with “The King’s Speech” having done so much to raise awareness of this issue, will the Prime Minister clarify whether the Government are planning to implement the recommendations of your review, and how they are planning to do that when local authorities are facing such huge cuts?
The Prime Minister
The hon. Lady will shortly see the Green Paper on special educational needs, in which we are giving priority to this area because, as I know from my own experience, getting hold of a speech and language therapist is often extremely difficult. Of course, as in every other area, there will be constraints in terms of resources, but I think we can do better by having a less confrontational system and making sure that more resources actually get to the parents who need them and who want to do the right thing for their children.
Proposed Sale of Zurbaran Paintings
Helen Goodman (Bishop Auckland) (Lab)
I wish to present a petition from residents of Bishop Auckland, County Durham and the north-east, who believe that the Church Commissioners should not sell Auckland castle or the Zurbaran paintings. Bishops of Durham have lived in Bishop Auckland for 900 years. You cannot take the bishop out of Bishop Auckland.
I believe that the Church Commissioners have seen the light in regard to the castle, but have yet to see the light in regard to the Zurbaran paintings. Because the matter is so important, there are more than 3,000 signatures to the petition.
The petition states:
The Petition of residents of Bishop Auckland, County Durham and the North East,
Declares that the Petitioners believe that the Church Commissioners should not sell Auckland Castle or the Zurbaran Paintings.
The Petitioners therefore request that the House of Commons urges the Church Commissioners not to proceed with the sale.
And the Petitioners remain, etc.
[P000888]
Mobility Component of Disability Living Allowance
Fiona Mactaggart (Slough) (Lab)
I rise to present a petition on behalf of care home residents, children at special boarding schools, and others who are concerned for their welfare. I welcome the presence of my hon. Friends the Members for Aberdeen South (Dame Anne Begg) and for Glasgow East (Margaret Curran), who have also supported the petition.
The petition declares
that the mobility component of Disability Living Allowance (DLA) helps meet some of the extra costs disabled people can face getting around; further declares that the Government plans to stop paying DLA to people living in residential care, which will mean that many people no longer have the money to meet these extra costs and face being trapped at home.
People will lose £49.85 a week or £18.95 a week, and it will simply mean that they cannot get out.
The Petitioners therefore request that the House of Commons calls on the Government to keep the mobility component of Disability Living Allowance for people living in residential care.
I have more than 6,900 signatures on a petition in similar terms. I think that that shows how strongly people feel about the important issue of not being trapped in residential care.
Following is the full text of the petition:
[The Petition of care home residents and others concerned for their welfare,
Declares that the mobility component of Disability Living Allowance (DLA) helps meet some of the extra costs disabled people can face getting around; further declares that the Government plans to stop paying DLA to people living in residential care, which will mean that many people no longer have the money to meet these extra costs and face being trapped at home.
The Petitioners therefore request that the House of Commons calls on the Government to keep the mobility component of Disability Living Allowance for people living in residential care.
And the Petitioners remain, etc.]
[P000887]
Bob Russell (Colchester) (LD)
On a point of order, Mr Speaker. I know how keen you are that Ministers should make announcements to the House first. This evening, BBC television news reported that the Government were planning to abandon their consultation on the Forestry Commission land disposals. Sir, I wonder whether you have received any indication that a Minister will come to the House to make a statement, even at this late hour, or if not tonight, tomorrow.
Mr Speaker
The short answer is no. Many matters are subject to speculation and conjecture, even in our media—a fact of which the hon. Gentleman, on the strength of nearly 14 years’ experience in the House, is well aware.
Sex Offenders Register
(14 years ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The Secretary of State for the Home Department (Mrs Theresa May)
The sex offenders register has existed since 1997. Since that time, it has helped the police to protect the public from those most horrific of crimes. Requiring serious sexual offenders to sign the register for life, as they do now, has broad support across the House, but the Supreme Court ruled last April that not granting sex offenders the opportunity to seek a review was a breach of their human rights—in particular, the right to a private or family life. Those are rights, of course, that those offenders have taken away from their victims in the cruellest and most degrading manner possible.
The Government are disappointed and appalled by that ruling. It places the rights of sex offenders above the right of the public to be protected from the risk of their reoffending, but there is no possibility of further appeal. The Government are determined to do everything we can to protect the public from predatory sexual offenders, so we will make the minimum possible changes to the law in order to comply with the ruling. I want to make it clear that the Court’s ruling does not mean that paedophiles and rapists will automatically come off the sex offenders register. The Court found only that they must be given the right to seek a review.
The Scottish Government have already implemented a scheme to give offenders an automatic right of appeal for removal from the register after 15 years. We will implement a much tougher scheme. Offenders will be able to apply for consideration of removal only after waiting 15 years following release from custody. In England and Wales, there will be no automatic appeals. We will deliberately set the bar for those reviews as high as possible. Public protection must come first. A robust review, led by the police and involving all the relevant agencies, will be carried out so that a full picture of the risks to the public can be considered.
The final decision on whether an offender should remain on the register will be down to the police, and not, as in Scotland, the courts. The police are best placed to assess the risk of an offender committing another crime, and they will rightly put the public first. There will be no right of appeal against the police’s decision to keep an offender on the register. That decision will be final. Sex offenders who continue to pose a risk will remain on the register, and will do so for life if necessary.
When we are free to take further action to protect the public, we will do so. We will shortly launch a targeted consultation aimed at closing four existing loopholes in the sex offenders register. We will make it compulsory for sex offenders to report to the authorities before travelling abroad for even one day. That will prevent them from being free to travel for up to three days, as they are under the existing scheme. We will force sex offenders to notify the authorities whenever they are living in a household containing a child under the age of 18. We will require sex offenders to notify the authorities weekly of where they can be found when they have no fixed abode. We will tighten the rules so that sex offenders can no longer avoid being on the register when they change their names by deed poll.
Finally, I can tell the House that the Deputy Prime Minister and the Justice Secretary will shortly announce the establishment of a commission to investigate the creation of a British Bill of rights. It is time to assert that it is Parliament that makes our laws, not the courts; that the rights of the public come before the rights of criminals; and, above all, that we have a legal framework that brings sanity to cases such as these.
I commend my statement to the House.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
This is an important matter involving some of the most serious crimes in society. I thank the Home Secretary for supplying me with the statement within the last half hour, but I must say that it is worrying that the Home Office has again allowed information to be given to the media before it has been given to the House.
The depravity and seriousness of sex offences, and the harm and damage that they do to victims, mean that the systems that we operate to protect the public must be paramount. We have an obligation to ensure that vulnerable children and other victims can be protected from such terrible crimes. As the Home Secretary knows, that is why the sex offenders register was established in the first place. The law rightly requires people who have been convicted of such serious crimes to meet further registration requirements once their sentences have been served, in the interests of public protection and to prevent further terrible crimes from taking place.
The priority now must still be public safety, and the protection of our young and vulnerable people. Those victims of crime have suffered and continue to suffer greatly because of the actions of sex offenders. We know, too, that many such offenders can still pose a serious threat to the public. The court judgment to which the Home Secretary has responded today itself quotes the research finding that just over a quarter of those imprisoned for such offences did reoffend. Those offences included some that were very serious, a large number of which were committed many years later.
Does the Home Secretary agree that, while of course proper and fair processes must always be followed for individuals through the courts, the protection of families and communities up and down the country is paramount? She has said that the new system will be tough. Let me say to her that it is vital to the safety and protection of children in particular, but also to that of other victims, that the new system is extremely tough if it is to have the support of the House.
The Home Secretary said that Parliament should decide the level of protection that is needed, and that Parliament should set the laws. However, she has given Parliament very little information today about the way in which the new system will operate. Will the new framework be enshrined in legislation? Will Parliament have an opportunity to debate the details? The Home Secretary will know that many Members of Parliament and members of the public will be very concerned about the possibility that any new framework might enable serious offenders to manipulate the system. It is essential that that is not allowed to happen, but it is also important for Parliament to have an opportunity to debate it to ensure that it does not happen.
Will the Home Secretary ensure that the focus is on public protection, rather than on the convenience or rights of those who have been convicted of serious crimes? Will she tell us how many offenders will be affected? Will she tell us what the level of the police assessment will be, and what standards the police will seek to meet as part of their review?
Will the police be given additional resources to do this? She will know that there is concern in the House about the police’s resources and about whether they are stretched already as a result of the cuts the Government are making. Will she say what additional resources the police will have, what additional resources they will require and the number of people on whom they will be expected to carry out reviews as a result of the changes she is proposing? She will know that some police forces have already expressed concern that as a result of the 20% cuts they are facing, their need to respond and their need to try to keep as many people in neighbourhood policing as possible, many specialist units within police forces are coming under the greatest pressure as a result of the decisions she has made. What reassurance can she give the House and the public that there will be no increased risk to the public as a result of these changes and of pressure on the police?
I welcome the Home Secretary’s proposal to consider other tighter measures on sex offenders, but does that have any implications for the changes that she appears to be making in the opposite direction to the vetting and barring provisions? She has also raised, as part of her statement, discussion of a Bill of rights. We would welcome a debate about that, although wider issues associated with written constitutions can also be debated. However, I am concerned at the form that this announcement has taken, because it is, in itself, a major announcement and the House should have an opportunity to have that debate and raise questions.
In conclusion, the Home Secretary will know that the public would be horrified if the rights, or even the convenience, of people who have been convicted of very serious crimes were to be put above the right to safety and family life of the public and of vulnerable people and vulnerable victims. She will know that Labour Members will not support any changes that will do that, and I hope that she intends not to do that. I look forward to her answers to the questions.
Mrs May
I can say categorically to the right hon. Lady that it is indeed the Government’s intention to put the protection of the public first. Had she listened to my statement or read it beforehand, she would have noted that it says that in a number of places. We are appalled by the Court’s decision. I would far rather not have to stand here saying that we have to make a change to the sex offenders register, but we do have to make a change. We will do so in the most minimal way possible to ensure that we do put public protection first, and that we give the police and others the ability to ensure that the public are protected from such serious and appalling crimes as have been committed by individuals on this register.
The right hon. Lady asked quite a number of questions. She asked whether we are making the protection of families paramount, and I have said that we are. She said that the system should be extremely tough and, yes, our intention is that it will be as tough as possible. That is why we have looked not only at what we can do in the minimal way to put this judgment into effect, but at ways to toughen up the sex offenders register regime—for example, by the requirement that we want to introduce for individuals on the register to have to notify when they are going abroad for at least a day. That is a toughening of the current system.
The right hon. Lady asked about Parliament’s opportunity to debate this measure. It will be introduced through an order—a statutory instrument—so there will be an opportunity to debate it. She asked about the numbers who will be affected. That will be set out in the regulatory impact assessment that will accompany the statutory instrument. She asked about the process of consideration that the police will go through. They will be talking to all other agencies that have an interest in this area, so they will talk to the probation service, local authorities, social services, youth offending teams and a variety of other agencies to ensure that they have the best possible picture of the individual concerned in order to make the best possible judgment. I am sure that she will agree that the police are very clear about the importance of public protection. That is why I want the police to make these decisions; I believe that they will put public protection first. They will examine a series of issues, such as the seriousness of the offences originally committed and the age of the victims. They will address a range of issues when they are considering whether a review should be upheld and whether the individual should stay on the register.
The right hon. Lady asked about the ability of the police to deal with this. ACPO and the National Offender Management Service have been actively involved in putting together and shaping the policy. One of their considerations has, of course, been its deliverability. We are confident that the policy can be delivered, as is ACPO. Like us, ACPO wants to ensure that we have the toughest possible policy to protect the public. It is different from the vetting and barring scheme, where the problem was that lots of innocent people found themselves on it and were subject to its requirements. This proposal is about the people who have been found guilty of heinous crimes and is about making sure that we reduce the risk of reoffending to members of the public. As I have announced in relation to the Bill of rights, the Deputy Prime Minister and the Justice Secretary will make further announcements about that imminently.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
May I astonish my right hon. Friend by saying that I think there is some merit in the Court’s decision, particularly in the way she has interpreted it? Does not this case illustrate the fact that rights are not absolute and that the rights of the victim have to be balanced against the rights of children and the public in general? The process of reconciliation is ultimately as much political as legal and Parliament should therefore always have the last word. Is it not a relief that this decision was taken by the Supreme Court and not by the Court in Strasbourg? Does she agree that we should resile from that as soon as possible?
Mrs May
My right hon. Friend tempts me down a route that it would not be appropriate to go down. On his first point, rights are not absolute. The article 8 right against which the judgment was made clearly is not an absolute right. I am sure that many right hon. and hon. Members—indeed, all of them, I hope—are as concerned as I am when a court makes a judgment that puts the rights of a perpetrator above the rights of the public and individual victims. In a similar area, I find it incredible that we are not able to deport people who are linked to al-Qaeda and who have terrorist intent in this country because the court says that their rights mean that we cannot deport them, but the court is not looking at the rights of members of the British public. That is what we should be doing.
Mr Jack Straw (Blackburn) (Lab)
I support the Home Secretary’s views on the merits of the existing sex offenders register and her concern about the Court’s decision, but will she confirm that under section 4 of the Human Rights Act 1998 there is absolutely no obligation on her or the House to change the law one bit? All the Court did was to issue a declaration of incompatibility and section 4 makes it absolutely clear that any decision following that is a matter for the sovereign Parliament. It would be entirely lawful for the House and her to say that the existing regime will continue without any amendment.
Mrs May
The right hon. Gentleman makes a point about the application of the Human Rights Act and the European convention on human rights and about Parliament having the final decision about what should happen. In this case, Parliament will have the final decision on what happens.
Tom Brake (Carshalton and Wallington) (LD)
Does the Home Secretary agree that the right to respect for private life must not trump the safety of our children? Given the impossibility of tackling some offending behaviour of a sexual nature, even if reviews of notification requirements are granted, presumably she expects that those reviews will insist that the notification requirements are maintained. Is it also her understanding that the police decision could be subject to judicial review?
Mrs May
I thank my hon. Friend for his comments about the balance of rights. It is the case, I believe, that the police decision could be subject to judicial review. It is absolutely right that the police will look at all aspects of cases and take every consideration into account when deciding whether a review should be upheld such that the individual no longer remains on the register. I cannot second-guess any decisions that the police will take, but they will be making every effort to ensure that they are, absolutely, looking properly at these cases to ensure that the decisions they take enable them to maintain public protection.
Keith Vaz (Leicester East) (Lab)
The Home Secretary has struck exactly the right tone today, and it is heartening to hear both Front Benchers being very clear about where they stand on this issue. Protection of the public is the most important consideration, but, in view of what the hon. Member for Carshalton and Wallington (Tom Brake) has just said, will the Government ensure that the appeal process is examined very carefully indeed so that it is as robust as possible and there is not a legal challenge? That will mean proper consultation with Parliament and a proper scheme, so that people are well aware that it is very tough indeed.
Mrs May
I take the right hon. Gentleman’s point, and it is absolutely our intention that we should make the scheme as tough as possible and make it clear that it is about an ability to seek a review of a decision. We will frame it in the toughest possible terms and ensure that the process is absolutely right, so that we reduce the opportunity for it to be subject to any sort of judicial review once the decision is taken.
Mr Rob Wilson (Reading East) (Con)
I support and welcome the Home Secretary’s statement, but may I ask for a little more clarity? She said that the final decision on whether an offender should remain on the register would be one for the police. Will that be a matter for the chief constable, as at present, or will it be one for the police commissioner in future?
Mr David Hanson (Delyn) (Lab)
In the unfortunate event of somebody being released from the sex offenders register because of this judgment, does the Secretary of State agree that it is imperative that the victim of the crime be informed of that variation?
Mr Robert Buckland (South Swindon) (Con)
I welcome the Home Secretary’s approach to this as being purely a police matter. There has been a common misapprehension that requirements to sign on the sex register are somehow court orders. They are not. They are not part of the sentence or the judicial process, and I therefore welcome the commitment to keep the matter firmly within the realms of police discretion.
Paul Goggins (Wythenshawe and Sale East) (Lab)
I, too, welcome the rigorous approach that the Home Secretary is taking, and I say that as the Minister who took the Sexual Offences Act 2003 through Committee. Does she agree that given the highly secretive and manipulative behaviour of many sex offenders, it is highly unlikely that the offence of which they were convicted is the only crime that they have committed? Will she ensure in any review process that there is a clear onus on the offender to demonstrate beyond doubt that they are no longer a risk to the public?
Mrs May
I have a number of points to make to the right hon. Gentleman. Throughout the House, we all agree that Parliament needs to get the answer right for the sake of public protection. The police will be able to take other offences into account when they consider whether an individual should remain on the sex offenders register, and they will look as widely as possible at the behaviour of the individual in question, consulting as wide a number of agencies as possible to ensure that they make the best possible decision for the public.
Mr David Nuttall (Bury North) (Con)
I welcome the Home Secretary’s desire to tighten the loopholes in the sex offenders register, and particularly her proposal to prevent sex offenders from avoiding registering by changing their name by deed poll. I am sure she will be aware that deed poll is only one way in which a person can change their name. It is the most formal way, but not the most usual. Changing name by statutory declaration is quicker and easier. Perhaps she will consider that as another loophole that should be closed.
Mrs May
I thank my hon. Friend for raising that point. It is important that we examine the process of changing a name by deed poll and tighten the rules so that sex offenders cannot use them as a means of avoiding the need to register. He makes a valid point about statutory declaration, and we will certainly take it into consideration.
Ian Paisley (North Antrim) (DUP)
The Home Secretary has said that the police decision on these matters will be final. I hope she agrees that if one offender gets off the sex offenders register, it is one too many. Will the victim be able to appeal against that decision by the police and try to overturn it?
Mr Aidan Burley (Cannock Chase) (Con)
I welcome the Home Secretary’s statement, the key phrase in which was that public protection must come first. We may compare that with judges who have instead ruled that paedophiles’ and rapists’ rights to privacy must come first. What would she say to those out-of-touch judges in the Supreme Court who are now openly, proudly and provocatively saying that a paedophile’s right to privacy is more important than children’s protection from those who have committed evil sexual acts?
Steve McCabe (Birmingham, Selly Oak) (Lab)
I congratulate the Home Secretary on adopting a much tougher approach than the Scottish authorities. Does she have any regrets that she did not overrule her officials and similarly reject the much weaker Scottish model for the retention of DNA profiles?
Mrs May
We have not in fact absolutely adopted the Scottish model in relation to DNA, and we have gone further than it has. We have adopted protections for those who are innocent, and that is different from the situation that we are considering today, which is about people who have been found guilty and are at risk of reoffending. We must deal with public protection in that regard. The rules that we propose for the retention of DNA are about enabling the police to have the tools that they need, but at the same time not putting the DNA of a lot of innocent people on the database.
Bob Blackman (Harrow East) (Con)
I, like many others, am appalled by the Court’s decision, but I welcome the Home Secretary’s statement, particularly the part about tightening the rules. One concern will be about potential inconsistency of approach between different police forces. Highly manipulative people moving around the country may find themselves on the sex offenders register in one part of the country, but a decision may be made to take them off it in another part. How will she ensure that consistency is applied to the whole country?
Mrs May
My hon. Friend obviously makes an important point, but of course ACPO has been actively involved in putting the proposals together, as I said earlier, and it will be for ACPO to ensure that its guidance to forces across the country is appropriately strong and followed by all forces.
Mrs Jenny Chapman (Darlington) (Lab)
My constituent, 17-year-old Ashleigh Hall, was murdered having been groomed by a registered sex offender on Facebook. When the Home Secretary is examining the loopholes, will she ensure that all sex offenders are required to register their online identities as well, and that any failure to do so is seen just as seriously as if they had failed to register the fact that they were living with young children?
Robert Halfon (Harlow) (Con)
My constituents will welcome the taking-on of the Human Rights Act and its replacement with a Bill of Rights, particularly as it was a manifesto commitment. Will my right hon. Friend reassure my constituents and the public that sex offenders who have a right of appeal will not be removed from the register if they continue to pose a threat to the public?
Naomi Long (Belfast East) (Alliance)
I thank the Home Secretary for her statement. She highlighted in it the difference in the approaches in Scotland and here at Westminster. Will she reassure us that differences between different devolved Administrations will not lead to people being able to be removed from the sex offenders register because of different thresholds being applied in different locations?
Mrs May
I reassure the hon. Lady that we will talk to the devolved Administrations. What I have announced will cover England and Wales, but we will talk to Scotland and Northern Ireland about the approach that we are adopting to ensure as far as we can that sex offenders do not move from one jurisdiction to another to get around the rules.
Mr Peter Bone (Wellingborough) (Con)
I thank the Home Secretary not only for the content of her statement, but for the fact that she has come to the House so quickly and that the statement was not leaked in advance.
Yesterday, when the Justice Secretary was questioned on the establishment of a commission on the Bill of Rights, he said that it would be done very quickly. Unfortunately, he was unable to answer my question on when that commission will report. Until we have a British Bill of Rights, I am afraid that the Home Secretary will be coming to the Dispatch Box to make more such statements.
Mrs May
I am tempted to point out to my hon. Friend that the statement may not have been leaked, but the Prime Minister covered one or two aspects of it in Prime Minister’s questions.
On the Bill of Rights, the Deputy Prime Minister and Justice Secretary will imminently set out the arrangements for that commission and say how it will be formed, which I expect will include an end date.
Mark Tami (Alyn and Deeside) (Lab)
My right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) asked about funding for specialist units, many of which were formed because of a failure in normal policing to find people on the register, and because police forces did not talk to each other. What guarantees can the Home Secretary give on funding for such specialist units?
Mrs May
Of course, how a police budget is distributed to the different departments of each police force is a matter for the chief constable. The hon. Gentleman will know what I am about to say because the Government have made this clear a number of times. Police forces can take a significant sum of money out of their budgets not by cutting specialist units and visible policing, but by dealing with procurement and IT, and through collaboration with other forces. It is not just me saying that; Her Majesty’s inspectorate of constabulary says it too.
Guy Opperman (Hexham) (Con)
I welcome the Home Secretary’s commitment to close the loophole that allows sex offenders to go abroad for up to three days without notifying the police. The previous Government had since 1997 to close that loophole, but did not take such action.
Barry Gardiner (Brent North) (Lab)
The Home Secretary has been absolutely right in setting her face against the judgment, but will she confirm that it remains lawful to insist that sex offenders stay on the register for life? Although the measures she has announced are strong and seek to protect the public, she does not have to take them—it would be lawful for her to keep to the higher standard of keeping them on the register for life.
Mrs May
We have already had one challenge on this ruled on by the Supreme Court, and there is the prospect of others. We have no further right of appeal through the Supreme Court mechanism, so we are introducing what we believe to be a tough set of measures that will address the issue. Of course, it will continue to be possible for sex offenders to stay on the register for life.
Rehman Chishti (Gillingham and Rainham) (Con)
I welcome the Secretary of State’s statement. I have appeared in Parole Board hearings. Can the Secretary of State confirm that the police officers who will make decisions will have all the information on an offender that is available in a Parole Board hearing, from judges’ sentencing remarks on dangerousness, to pre-sentence reports and the offender’s full record in custody, so that they can make a thorough decision, so that the public are fully protected?
Mrs May
That is absolutely our intention. The police should have the fullest information possible on which to base their decision on whether a sex offender should stay on the register. Indeed, I expect that when we lay the statutory instrument before the House, we will be able to go into more detail on the sort of information that will be available to the police.
Dr William McCrea (South Antrim) (DUP)
I assure the Home Secretary that my hon. and right hon. Friends wholeheartedly agree with her statement. It is time to assert that Parliament makes the laws, not the courts. It is our duty as a House to protect the general public from those who perpetrate such horrific crimes. If it is the will of the House to strengthen our laws, instead of weakening them in the light of the Court’s decision, we should assert the authority of the House.
When will consultation be held with the Northern Ireland Executive?
Mrs May
We will have discussions with the Northern Ireland Assembly and the Scottish Government shortly—we have held some discussions with the latter because they have taken some steps down this road already. These issues will come to Parliament for it to decide. The commission on the British Bill of Rights, which was announced today, is a step that the Government are taking to ensure that we bolster the ability of Parliament to set our laws. The previous Government introduced the Human Rights Act. I am afraid that they saw the problems that the Act created and did nothing—this Government are doing something about it.
Mark Pritchard (The Wrekin) (Con)
I welcome the Home Secretary’s statement, but how confident is she that the increasingly robust Supreme Court, and the European Courts with their extraterritorial reach, will not overrule her very firm and welcome announcement today? Is it not time to introduce a Bill of Rights very early indeed, rather than having a commission which may report sometime in the future—
Mrs May
I see what my hon. Friend is getting at, but it is right to have a commission to look into the British Bill of Rights. The purpose of my statement was to set out a way forward that meets the requirement set by the Supreme Court, which should therefore not be subject to a further ruling by that Court.
Mr Alan Campbell (Tynemouth) (Lab)
Will the victims be not only told of the outcome of the decision, but consulted before the decision is made?
Mr Philip Hollobone (Kettering) (Con)
Residents in my constituency are absolutely fed up to the back teeth with human rights legislation and the way in which it is being used to promote the rights of bad people over the rights of good people. My right hon. Friend the Home Secretary said that when the commission on the Bill of Rights is established, an end date will be published. May I urge her to urge the Deputy Prime Minister and the Justice Secretary to choose an early end date, which we need so that legislation can be introduced in the House in this Parliament, so that the issue can be resolved once and for all?
Mrs May
Most Members of the House are fed up with the way in which decisions by the House are increasingly being overturned by the courts. I can reassure my hon. Friend that the Deputy Prime Minister and the Justice Secretary know well of his interest in this matter. As I said, we will ensure that we can take action to assert the rights of Parliament.
Bill Presented
Welfare Reform Bill
Presentation and First Reading (Standing Order No. 57)
Mr Secretary Duncan Smith, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Mrs Secretary May, Mr Secretary Clarke, Mr Secretary Lansley, Mr Secretary Pickles, Chris Grayling and Maria Miller, presented a Bill to make provision for universal credit and personal independence payment; to make other provision about social security and tax credits; to make provision about the functions of the registration service, child support maintenance and the use of jobcentres; and for connected purposes.
Bill read the First Time; to be read a Second time tomorrow, and to be printed (Bill 149) with explanatory notes (Bill 149-EN).
Criminal Justice (Amendment) Bill
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
I beg to move,
That leave be given to bring in a Bill to make provision requiring certain prisoners due to be considered for early release to complete a relevant offender management programme, where available; to require courts to take regard of mental health problems in sentencing; to make provision regarding minimum and maximum sentences; and for connected purposes.
There are currently too many anomalies in sentencing. People are given sentences that are not always appropriate to the crime they have committed, and sentences do not subsequently have regard to the progress that people make during their time in prison. The Bill would introduce new clauses to the Criminal Justice Act 2003 to address some of those anomalies, to ensure that courts have greater freedom to impose the sentence that they deem necessary, and to ensure that there is greater incentive for prisoners to partake of rehabilitation programmes so as to be considered for early release.
I therefore propose to add three new measures to the aforementioned Act. First, I would add new clauses to warrant that early release from both indeterminate public protection sentences and determinate sentences is incentive-based, not automatic. Secondly, I would add new clauses on maximum and minimum sentences. Thirdly, I would ensure that courts are given the right to have regard to mental health problems when sentencing convicted persons.
I shall speak first on the new conditions to be imposed on granting early release. Indeterminate public protection sentences have been a controversial measure since their inception. Under section 225 of the Criminal Justice Act 2003, where a person aged 18 or over is imprisoned for public protection but the court does not consider life imprisonment necessary, the convicted person may be imprisoned for a period of at least two years but less than life. The court sets a minimum period or tariff to be served before a prisoner can apply for parole. The measure was intended to be used sparingly but, presumably due to the inflexible requirements laid down by the Government, IPP sentences are being used more frequently than expected.
I believe that not enough thought is put into determining a prisoner’s tariff and that because little focus is placed on putting these prisoners into rehabilitation programmes, there are thousands of prisoners on IPP sentences in our prisons who in many cases will be released without regard being given to the remorse shown or even to a prisoner’s rehabilitation. Because of amendments made to the Crime (Sentences) Act 1997 by schedule 8 of the Crime and Disorder Act 1998, a person serving a sentence of imprisonment or detention for a term can be considered for early release after serving one half of that sentence. I believe that that needs to be put right.
My Bill will add a new clause to section 255 of the 2003 Act to the effect that a person serving an IPP sentence shall have that sentence reviewed by the Parole Board at least every two years. Furthermore, all persons serving IPP sentences must have access made available to relevant offender management programmes. When determining whether to recommend a person for release on licence, the Parole Board should have regard to the availability and completion of these programmes. It is cost-effective to do this.
On a daily basis, 5,659 people are serving an IPP sentence, of which 2,229 are beyond their tariff. On average, these prisoners are serving 244 days beyond their tariff. It costs roughly £30,000 to keep someone incarcerated for 244 days. If we multiply this sum by 2,229, we get a figure of £68 million. By comparison, the cost of putting a prisoner through a rehabilitation programme would be £5,000 at most, which, multiplied by 2,229, comes to £11 million as opposed to the currently spent £68 million. Introducing this measure would thus be cost-effective and, I believe, beneficial to the protection of the public.
Equally, for prisoners serving determinate sentences, the Parole Board must be satisfied that they are of low risk to the public before they are granted early release. Under section 244 of the Criminal Justice Act 2003, when a fixed-term prisoner has served the requisite custodial period the Secretary of State shall release him on licence. Since 2005, those serving four years or more have come out after serving 50% of their sentence—regardless of the progress they have made while in prison.
My Bill would add a further subsection to this section, which would ensure that before releasing a person sentenced to four or more years in prison, the Parole Board must be satisfied that the individual is at low risk of harm to the public and low risk of reoffending. These amending provisions would ensure that incentives for rehabilitation are rewarded, but it is just as important that the courts be given greater freedom to impose the sentences they deem fit and have regard to the individual circumstances of each case.
To satisfy this requirement, I would add an additional new clause to the Act on maximum and minimum sentences. This would mean that when sentencing a person to a determinate prison sentence, the court shall state the maximum time that should be served and also the minimum term. The stated minimum term must be less than half the maximum sentence but no less than one third of that sentence. In passing sentence, the court should, of course, have regard to the seriousness of the offence and it may request a pre-sentence report from a suitably qualified employee of the relevant probation trust. The notion of introducing maximum and minimum sentences was included in the last Conservative manifesto.
I referred earlier to the importance of courts being able when passing a sentence to pay greater regard to the individual circumstances surrounding a case. The final new clause of my Bill, added to the Criminal Justice Act 2003, would mean that the courts could pay greater regard to psychological or psychiatric problems diagnosed in a person who has committed a violent or sexual offence. Under section 277, persons of 18 years or older who commit certain violent or sexual offences are given an extended sentence. However, in cases where a person has committed a serious crime and has subsequently been diagnosed—I stress subsequently diagnosed—with psychological or psychiatric problems, it is the feeling of many sentencers that an extended period of licence would be more appropriate both for the individual concerned and for the protection of the public. In many such cases, the disposal of a hospital order would be preferable, but that disposal is not currently available to sentencers.
In the Eriksson case decided on 26 November 2009, that was precisely the finding of Mr Justice Saunders, who presided over the prosecution of a person who stabbed and killed a man while she was suffering from a debilitating mental illness. In his sentencing remarks, Mr Justice Saunders said that this
“would clearly have been a case for a hospital order”,
but that “that disposal” was “not open” to him. He wished to pass a sentence that would provide an appropriate level of protection for the public, although not one designed to over-punish because the defendant’s culpability was low, owing to her mental illness. He expressed great frustration that Parliament does not allow sentencers to order an extended period of licence, which he called “an unfortunate omission” in sentencers’ powers.
In that regard, I would add a new clause to section 277 to the effect that in determining whether to impose extended supervision, a court shall have regard to any psychological or psychiatric assessment that is carried out following the commission of the offence as well as the likelihood of the person being involved in further similar serious offending. I believe that these new clauses would make vital revisions to sentencing, would grant greater autonomy to courts to review the circumstances of each case and would reward the progress made in prison. I accordingly commend them to the House.
Question put and agreed to.
Ordered,
That Mr Elfyn Llwyd, Mrs Linda Riordan, Claire Perry, Chris Evans, Hywel Williams, Jonathan Edwards and Mr Robert Buckland present the Bill.
Mr Elfyn Llwyd accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 15 May, and to be printed. (Bill 150).
Youth Unemployment
(14 years ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
16:14 - The House divided: - Ayes: 237 / Noes: 317 - Question accordingly negatived.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I beg to move,
That this House believes that the Government was wrong to cancel the Future Jobs Fund that would have created 200,000 jobs for young people; further believes that the Government’s economic policies have slowed economic growth, raised youth unemployment and created the highest graduate unemployment for over a decade; further believes that urgent action is now required to stop a generation of young people being lost to worklessness; and calls on the Government to commission an independent assessment of the Future Jobs Fund to report to Parliament before the Government’s Work Programme is implemented and to evaluate whether a guarantee and requirement of work incorporated into the Programme would bring down youth unemployment in the short and longer term and limit steep rises in welfare payments.
I am glad that we have been able to force the Government to come to the House to debate the employment figures—or, rather, the unemployment figures—published this morning, because those figures will worry families, young and old, up and down the country. The headlines from this morning’s numbers are bad enough—five quarters after the recession ended, unemployment is not going down but up; employment is not rising but falling—but the details are, I am afraid, even worse. Private sector employment is flat, while the number of public sector jobs is falling fast. It is becoming clear that the private sector is not creating jobs fast enough to absorb the redundancies that we know are coming down the line. There are now more women on the claimant count than at any time since 1996.
The consequences for young people are perhaps most serious of all. One in five of our young people is now out of work; the number of unemployed has risen again; we now confront youth unemployment of almost a million—the highest figure on record. That figure is a wake-up call to this Government to get their act together. The question we want the House to debate today is quite simply, what should the Government do next?
As if we needed it, this morning’s figures are, if anything, fresh evidence of the need for a plan B on economic growth. We have rehearsed the debate in the House plenty of times over the past year, and I do not plan to do so again this afternoon. Suffice it to say that the Government are cutting spending too far and too fast. The recession having been over for a year, we would expect to see unemployment now falling fast, and yet it is not. Longer dole queues make the deficit not easier to pay down, but harder. The result is that working families end up paying the price.
Alok Sharma (Reading West) (Con)
The right hon. Gentleman was part of a Government who presided over a record rise in youth unemployment. As his Government’s policies clearly did not work over 13 years, should he not, instead of carping from the sidelines, get behind the policies of the coalition Government, who are offering a fresh start to young people in this country?
The Minister of State, Department for Work and Pensions (Chris Grayling)
For the record, will the right hon. Gentleman confirm that last month’s unemployment figure in this country was 2.498 million, and that this month’s is 2.492 million?
Mr Byrne
The unemployment figures are getting worse, not better. This morning I heard the Minister quibble on the BBC that somehow unemployment in our country was stabilising, but the truth of today’s figures is that private sector employment is dead flat, and the number of announced redundancies is growing by the day. [Interruption.] The Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) carps from a sedentary position, but he would be better off reverting to the advice that he gave to the Conservative party before the election about the importance of taking further steps to help get young people back to work.
Mr Byrne
Before I give way to the Minister, let me finish this point, as I want to put a question to him.
As I said, the rise in the dole bill makes the deficit not easier, but harder, to pay down. Although the Chancellor likes to pretend that the welfare cuts are somehow hitting shirkers not workers, will the Minister confirm that once we factor out the lower uprating the truth is that more than half the cuts in welfare spending are hitting working families?
Chris Grayling
As the one who is intervening, I think it is my job to ask the right hon. Gentleman questions. Will he confirm that one of the bits of good news this morning is that, for the second month in a row, job vacancies in the economy have increased significantly? Does he agree that that is an encouraging development?
Mr Byrne
Any increase in vacancies is good news, but 40,000 is not an enormous increase, and when private sector employment is dead flat and public sector redundancies are mounting, I am afraid that it poses serious questions about whether unemployment will continue to rise over the next couple of years.
Toby Perkins (Chesterfield) (Lab)
Does my right hon. Friend agree that, worrying as the youth unemployment figures are, the complacency demonstrated by the Government in debate after debate is even more worrying. We heard today from the Prime Minister that youth unemployment has been a problem for a long time, but the Government’s policies are making the situation worse. In my constituency, 1,100 people will potentially lose their jobs as a result of Auto Windscreens going into administration this week. All we hear from the Government is complacency, rather than an admission that their policies are making this major problem worse.
Mr Byrne
My hon. Friend is right to highlight his constituency case, which has caused concern to families up and down the country. We saw figures today showing that earnings growth is now about half the rate of inflation. At a time when the jobs market is weaker, that will contribute to a tighter and tighter squeeze on working families over the coming months.
Joan Ruddock (Lewisham, Deptford) (Lab)
May I tell my right hon. Friend that in my constituency, in the first 10 years of the Labour Government, youth unemployment was halved? Then we had a recession, and of course it began to rise. Will not the Government’s cuts to the Connexions service, Opening Doors—one of our local facilities paid for by central Government—and education maintenance allowance for students who are in the middle of two-year courses result in more young people going on to the dole?
Mr Byrne
My right hon. Friend is right. Unless we hear something of substance from the Minister, I am afraid that her prediction is all too likely to pan out.
When the squeeze on living standards is about to get tougher and tougher, one would expect action from the Government to help. In fact, more than half the welfare cut will hit working families, and by the end of the Parliament £3.4 billion will be taken off benefits for children—far more than the amount being taken off bankers. Putting aside the question of what kind of Government take more money off children than off bankers, if the Chancellor had done what he should have done, and implemented a proper bonus tax on the banks, he would have about £3.5 billion to invest in jobs and growth, including in jobs for young people. That must be the substance of our debate this afternoon.
Damian Hinds (East Hampshire) (Con)
On the simple numbers, will the right hon. Gentleman confirm whether youth unemployment was higher or lower at the end of Labour’s term in office, despite the golden economic inheritance that it had?
Mr Byrne
Let me respond to that point in substance in a moment, and I will invite the hon. Gentleman to intervene again. Right hon. and hon. Members on both sides of the House will want to ensure that we draw the right lessons from the past 13 years, as they have a critical bearing on the programme that we want the Government to put in place for the future.
There are real differences between Government and Opposition about the macro-economic approach that we should take. We also share some values. Many of us share a passion to attack poverty in all its manifestations. We believe that the poverty of some impoverishes us all, not only because it affects the chances of many to lead the life that they would choose, but because it denies many the chances, opportunities, free range and scope to contribute to our country’s progress. I happen to think that the Secretary of State shares that belief, about which I feel passionately, as my constituency has the second highest unemployment in the country and, as this morning’s figures confirm, the highest youth unemployment. I do not have to go far to see wasted talent—I see it, and think about it, when I go to work every day. That inspires the passion with which many of us think carefully about the programme that the country needs to get youth unemployment back down.
Mr Frank Field (Birkenhead) (Lab)
If we are looking back on our period of stewardship and offering the Government lessons, does my right hon. Friend conclude, as I do, that one of our errors was not to introduce the future jobs fund earlier and put more resources into that than into the new deal?
Mr Byrne
We have learned many lessons from the future jobs fund, and there are many successes on which we can build. I will turn to that question in substance when I dwell on what we should learn from the past 10 years.
The key point, which my right hon. Friend underlines, is that the right strategy for the Government during the recession and the worst financial crisis since the 1930s, was not to sit by and do nothing, or to watch as unemployment went through 3 million not once but twice, but to act, to save jobs, to keep people in their homes, and to keep businesses moving.
Pete Wishart (Perth and North Perthshire) (SNP)
The right hon. Gentleman will welcome the fact that, under a Scottish National party Government, only in Scotland is unemployment falling and employment rising. He will also welcome the fact that we introduced 25,000 modern apprenticeships in our budget. Can he offer any explanation of Labour in Scotland’s opposition to that?
Mr Byrne
The right approach in the Scottish economy—where GDP growth has unfortunately been weaker than growth in the UK generally over the last period—is to build on the success of the future jobs fund and put in place not 3,000 opportunities for the future, but 10,000. That is the approach Labour will propose in the run-up to the coming elections.
Let us address Labour’s record in office, a substantive point which has already been mentioned. When Labour came to office in 1997 some 656,000 young people were out of work. As our economy grew, we introduced a welfare to work programme that included creating Jobcentre Plus and the new deal, and which made sure that three quarters of our young people who went on to jobseeker’s allowance were off JSA within six months. Setting aside those in full-time education—and we substantially increased the number of people in full-time education—that meant that the number of unemployed young people fell by some 20%. Indeed, between 1997 and the start of the global financial crisis the claimant count among young people fell by some 40%, and that was at a time when the number of young people in our country was rising; between 2000 and 2009 it rose by over 1 million. I think that Members will therefore forgive me for agreeing with the man who described the progress we made as “remarkable”, and who said:
“There is no question that the UK has made significant progress in the labour market over the last ten years.”
That man was the Government’s welfare reform Minister, Lord Freud.
Rehman Chishti (Gillingham and Rainham) (Con)
If the last Labour Government’s proposals and policies were such a success, why were one in five 16 to 24-year-olds out of work at the end of their period in office?
Mr Byrne
This may not have come up on the hon. Gentleman’s radar, but there was the worst financial crisis since the 1920s at the end of Labour’s term in office. During that crisis, Labour did the right thing by acting to get people back to work, to keep people in their homes and to help keep business on the move. That was a policy and approach which the hon. Gentleman’s party should have supported.
Rehman Chishti
The right hon. Gentleman says that those economic difficulties arose towards the end of Labour’s time in office, but the increase in unemployment started back in 2001, not near the end of its time in office.
Mr Marcus Jones (Nuneaton) (Con)
The right hon. Gentleman and his party seem to blame the global financial crisis for every ill, but figures I received from the House of Commons Library this morning make it clear that, as my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) said, youth unemployment has been rising since 2001, yet the global financial crisis did not start until 2008. How does the right hon. Gentleman explain that?
Mr Byrne
The facts speak for themselves. Between 1997 and the start of the financial crisis the number of young people on the claimant count fell by 40%. Because of the changes we put in place, the number of young people coming off JSA within six months was about three quarters of the number going on. That is why Lord Freud—the Government’s own welfare reform Minister—was right to say that the progress we have made was “remarkable”.
Damian Hinds
I am sure the right hon. Gentleman recognises the value of international comparisons as well as time series comparisons, so does he acknowledge that in years before the onset of the global financial crisis, such as 2005, the number of young people not in employment, education or training in this country was higher than the OECD average, higher than the EU average, higher than in France, higher than in Germany and higher than in the United States?
Mr Byrne
The number of young people not in education, employment or training was lower, not higher, when Labour left office than when we came to office. Far too often, Conservative Members pray in aid that number—a number that is pretty static—but fail to acknowledge that the number of young people in our country increased by 1 million between 2000 and 2009.
Rehman Chishti
On the effects of the previous Government’s policies, 279,000 people started on the flexible new deal, yet near the end only 3,000 were on it. That shows that the policy was a complete failure.
Mr Byrne
The hon. Gentleman forgets to mention that the flexible new deal was introduced in the middle of the recession when unemployment was high, so that is possibly not the best way to evaluate the success of getting people back into work. I am sure we will learn later precisely which elements of the new deal the current Government are continuing with in their Work programme.
Mr Byrne
I will give way to the Minister in a moment, but first I want to talk about the recession. As this afternoon’s interventions show, it is perfectly natural for Government Members to want to pray in aid figures from the beginning of 1997 and figures from the height of the recession. This point cuts to the heart of the debate we need to have this afternoon. When the recession hit, of course unemployment and the number of young people out of work rose, but we were not prepared to stand idly by and simply watch that happen, because we remember all too clearly the lessons of the 1980s when youth unemployment in this country spiralled up to 26%. Instead, therefore, we chose to act: we chose to expand student numbers and apprenticeships and the chance to work. That is why in the final two quarters of our time in office youth unemployment was falling, not rising, and by 67,000 or 9% by the time we left office. When the Minister intervenes, perhaps he will explain why, all of a sudden, that has now gone into reverse.
Chris Grayling
I am puzzled by a couple of points, and I wonder whether the right hon. Gentleman can answer them for me. First, he keeps referring to the claimant count. Can he confirm that on the claimant count measure youth unemployment is 75,000 lower now than it was at the general election? He also talks about the period before the recession. Why did the OECD publish a report in 2008 saying it was profoundly concerned about youth unemployment in the UK because it was rising here but falling in every other developed country?
Mr Byrne
I would expect the OECD to express concern about youth unemployment. Youth unemployment is a serious issue, which is why we are having this debate. We do not think the Government’s plan is adequate to deal with the problem. That is why youth unemployment is not falling at present, but is going up, which is what this morning’s figures said.
Youth unemployment in the final period of Labour’s time in office, which was also a time of economic difficulty, fell by 67,000 or about 9%. Now all of that hard work has been undone. Since we left office, youth unemployment has not continued to fall. It has not even held steady; it has gone up and up and up. We cut youth unemployment even in the face of the economic storm, yet the current Government have failed to do so even with the winds of recovery at their back. They have watched it rise while the economy is growing. That takes some doing.
Mr David Lammy (Tottenham) (Lab)
Does my right hon. Friend recall that two years ago during the passage of the Education and Skills Bill, we sought to extend the school leaving and training age from 16 to 18 but Members now on the Government Benches opposed that? How did that help youth unemployment at that time?
Mr Byrne
My right hon. Friend is right to raise that question, which underlines the dilemma so many young people now confront. With this morning’s numbers now on the public record, it is clear that young people face a summer of anxiety. If they do not make the grades to get into college—and we know the number of college places is now more limited—they will face a labour market that is tougher than ever. That is a worry for them and their families, and for older residents in this country who, having worked hard all their life, are now concerned about who will pay for the future.
Nick de Bois (Enfield North) (Con)
Does the right hon. Gentleman not understand that there is one significant distinction in respect of the figures he is discussing, in that there was massive over-reliance on putting people into the public sector through many of these programmes as a result of the legacy of economic failure that we have inherited? Therefore, there is naturally now some shrinkage in the public sector. That is the big difference. We have to create real jobs in the private sector for the long term.
Nick de Bois
I am grateful to the right hon. Gentleman for his invitation. A job is very important to the individual, no one doubts that; but we are talking about dealing with youth employment by creating work in a real sector that will last. That is the difference. We will only deal with the problem when the private sector has the opportunity to deliver long-term sustainable jobs—however well intentioned the programmes to which the right hon. Gentleman referred.
Mr Byrne
The hon. Gentleman exposes the dilemma that now perplexes the Government’s entire back-to-work programme. Figures issued this morning reveal that private sector employment is dead flat, yet public sector employment is falling fast. What has become clear from those figures is that because the Government have put the recovery in the slow lane, the private sector is not creating jobs fast enough to absorb the scale of redundancies that are being announced.
Albert Owen (Ynys Môn) (Lab)
Before I became a Member I ran a centre for the unemployed during the 1990s, so I know how painful things are for people who are unemployed long term. The hon. Member for Enfield North (Nick de Bois) referred to public sector jobs. Let us make it clear: nurses and teachers have real jobs and provide real service to our communities.
My right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) is right to compare and contrast the recessions of the 1990s and the present. In my constituency, unemployment was 100% higher during the recession of the 1990s, because the programmes—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I understand the point the hon. Gentleman is making, but we must have shorter interventions. I am sure the right hon. Member for Birmingham, Hodge Hill has grasped the point.
Mr Byrne
I am grateful to my hon. Friend the Member for Ynys Môn (Albert Owen). As many of my hon. Friends are doing this afternoon, he underlines the point that right across the country, over an extended period of Labour’s term in office, youth unemployment was falling fast. Unemployment can never be as low as Members want, but the question that confronts us is how to draw the right lessons from those overwhelming successes in getting people back into work and how to apply the lessons to the present crisis when one in five young people is not in work.
Andrew Griffiths (Burton) (Con)
Perhaps I can help the right hon. Gentleman by making a short intervention. Does he believe that the previous Government’s spending of £3.5 billion on programmes to get young people back to work while youth unemployment rose was good value for money?
Mr Byrne
I am not sure whether the hon. Gentleman was in the Chamber at the beginning of the debate when we explained the simple point that during the latter months of our term in office, when the recession was difficult, youth unemployment was not rising but falling. All that progress—the fall between the peak of youth unemployment and when we left office—has been undone in the months since May. The hon. Gentleman shakes his head, but it is a fact. That is why earlier this week the former chief economist at the Cabinet Office, Mr Portes, told the Government bluntly that the challenge of youth unemployment is serious. He told The Times that the Government were failing to address the scale of the problem. Without urgent action, he warned, hundreds of thousands of youngsters face a bleak employment prospect throughout the rest of their lives. That is why our motion calls on the Government to reflect again on the lessons of the future jobs fund, to commission an independent evaluation, draw the right lessons, learn from them, establish a more substantial programme for the future, and do it with urgency.
The future jobs fund is at the heart of the motion. Because we felt so strongly about the scourge of youth unemployment, a concern that is shared by many Members, we were determined to make sure that as it began to rise again after falling so far, something was in place that would help. We set up the future jobs fund because we knew that one of the greatest lessons from the 1980s is that when young people are allowed to drift too far from the jobs market they lose the habit of work, which is a curse that can stay with them for the rest of their lives. That is why we made substantial investment, which at the time was supported by the Conservatives, to get 150,000—rising to 200,000—new jobs that would last six months, 100,000 of them for young people and 50,000 of them in areas of high unemployment.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
My right hon. Friend said that he thought that the Conservatives supported the future jobs fund. In March, before the general election, the present Prime Minister came to Liverpool to visit Merseystride, a social enterprise that employed many people through the future jobs fund. He described the future jobs programme as a “good scheme” and said that his Government would keep any good scheme. Why does my right hon. Friend think that the Prime Minister has backtracked on what he said when he saw that project?
Mr Byrne
I think the answer is simple: despite good intentions, the Prime Minister has let the Chancellor get the upper hand. I am afraid that is a negotiation the Department for Work and Pensions has lost, which is why its back-to-work programme is being slashed with such dangers for the future.
I pay tribute to Steve Houghton, who was the leader of the local authority in Barnsley and did so much to pioneer the future jobs fund that has worked so well there. The Barnsley scheme is widely acknowledged to be one of the best in the country; it has 600 places for up to 12 months, a mixture of long-term and youth unemployed and a good track record on getting people into work. Barnsley, like other parts of the country, faces a future where that assistance is being pulled away.
The challenge for our young people is that they now confront a triple whammy. Education maintenance allowance has been cut, tuition fees have been trebled and the future jobs fund is a thing of the past. Without the chance to work, without the chance to study, what are our young people supposed to do? Can Ministers tell us? There is not even a big society for young people to retreat to. Three quarters of youth charities are actually closing projects; 80% say that is because targeted support for young people is ending.
In January, the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), decided to act. I commend him for that. He introduced a work experience scheme. It was only for eight weeks, not six months, it did not pay the minimum wage and it did not cover people leaving higher or further education, but at least he was getting the idea. A fortnight ago, we learned that he was stepping up the pace—moving up a gear: at the Tory party’s black and white ball we had the spectacle of an auctioneer selling prized internships at top City firms to the highest bidder. What started as a crusade against poverty has in just nine months become an auction of life chances for the wealthy. No wonder the young people of this country feel that they face a lottery, and the Minister is selling the tickets.
Five people now compete for every job opening, and this morning we heard that things are not getting better. According to the Library, in more than 120 of our constituencies, there are more than 10 people competing for every job. Those people would yearn for a ticket to the black and white ball. [Interruption.] We have just heard something very important: the Secretary of State is putting a ticket on the sale block.
If there was something better to replace the future jobs fund, we might more easily comprehend its abolition. After all, this is what the Prime Minister promised when he told the BBC on Sunday 4 October 2009:
“I want the new Conservative Party to be the party of jobs and opportunity and at the heart of it is a big, bold and radical scheme to get millions of people back to work.”
I am afraid that last night we learned the truth from the BBC, when it reported:
“The government’s new ‘work programme’”,
described by the Prime Minister as the “biggest and boldest ever” plan to get people off benefits and back to work,
“will actually help fewer people than the existing schemes that ministers are scrapping, the BBC has learned.”
The Department for Work and Pensions has revealed that it expects 605,000 people to go through the Work programme in 2011-12, and 565,000 in 2012-13, but the Department admits that 250,000 more people, around 850,000, went through the existing schemes in 2009-10.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. One at a time. If Mr Byrne does not wish to give way, the Minister will have to accept it. I am sure he has noticed that the Minister wants to intervene.
Mr Byrne
I will give way to the Minister in a moment. The whole House wants an explanation of why the promise to get more people back to work has been broken by the Prime Minister, because the Department for Work and Pensions has lost yet another battle to the Treasury.
The Office for Budget Responsibility says that the claimant count next year will be 1.5 million, the same, by the way, as this year. The problem is undiminished, yet the help is being cut away—the Minister’s Department is projecting 250,000 fewer places. When the correspondent from the BBC checked the figures this morning, she was told by a DWP official that she was right. So how is the Government’s scheme the biggest back to work plan ever? Is not the truth that the Minister has been done over once more by the Chancellor? Let him explain.
Chris Grayling
The right hon. Gentleman should not believe everything he hears on the television. It is absolutely clear that the Work programme will offer places through contracted-out providers to more people than was the case under the previous Government, and there is not one single person receiving JSA or employment and support allowance who wants and needs support through the Work programme who will not get it.
Chris Grayling
If the shadow Secretary of State wants a briefing on the Work programme from the DWP, we will be delighted to offer him one. I suggest that he does not take his information from the media.
Mr Byrne
That was not a straight answer to a simple question, which was why a DWP official confirmed the figures to the BBC yesterday and again this morning. The conclusion that the House can draw is a point that was made by the Office for Budget Responsibility—that there is not enough confidence that the Government have a plan in place to get people back to work. Indeed, the OBR has so much confidence in the Government’s plan to get people back to work that it is forecasting a declining rate of employment for the rest of this Parliament.
I do not claim that the future jobs funds was some kind of celestial design. I am sure there are aspects of it that could be improved. As my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) mentioned a moment ago, it was labelled “a good scheme” by the Prime Minister on his trip to Liverpool. The evidence on which it was abolished was simply not there.
In my constituency we have the highest youth unemployment in the country. The leaders of my jobcentre on Washwood Heath road have consistently said to me that the future jobs fund was one of the best programmes they have ever administered. Overwhelmingly, they say, the young people they send on the programme do not come back and join the dole queue. In their first months the Government rushed out some hasty research on its expense. This is what the Work and Pensions Committee had to say about that scribbled bit of analysis:
“A robust evaluation of the FJF has yet to be undertaken…insufficient information was available to allow the Department to make a decision to terminate the FJF if this decision was based on its relative cost-effectiveness.”
That is an extraordinary indictment of the Government’s rationale. The report says that half of future jobs fund graduates get benefits at seven months, but that is because the programme ends at six months.
The Government dispute the claim that the scheme created real jobs. I am not sure what Jaguar Land Rover would say about that and the places that it created on the future jobs fund, but surely the point is that when people do not have a job, any job is a good job.
Alison McGovern (Wirral South) (Lab)
Can my right hon. Friend suggest what Age Concern Wirral in my constituency might think of the slashing of the future jobs fund—a scheme that was not only providing work for my constituents, but helping intergenerational relationships in Wirral and looking after some of the most vulnerable people with early onset Alzheimer’s?
Mr Byrne
My hon. Friend makes an excellent point. In a recession private sector jobs are thin on the ground. Anything that keeps young people closer to the labour market, closer to the habits of work and closer to the disciplines of having a job must be a good thing. The lesson from the 1980s, when youth unemployment spiralled to 26%, is that if we let young people get too far away from the habits of work, they are scarred for generations to come.
Dame Anne Begg (Aberdeen South) (Lab)
When we looked into the future jobs fund in the Select Committee, it became clear that everyone who had experience of it, as a young person in a placement or as an employer, viewed it as a real job that lasted for six months, with a real wage, and was closer to the workplace than anything that could be offered by work experience. That is why it was successful. None of the providers had a bad word to say about it. They thought it was a very good scheme.
Mr Byrne
My hon. Friend, who chairs the Work and Pensions Committee, makes an important intervention. I hope her comments allow us to strike a note of consensus.
My final point is about the long-term costs. In all recessions and in all recoveries, it is our young people who face the toughest challenge. That is especially true of the fight that young women in our country now confront. Overwhelmingly, they are working in the public sector. Overwhelmingly, it is they who are exposed to the cuts and the redundancies that have been announced, which now number around 156,000. We must remember the lesson of the 1980s. When youth unemployment was allowed to soar, and allowed to fester for years, communities were damaged for generations. As the Cabinet Office’s former chief economist put it this week:
“If the Government doesn’t act it will not only damage the employment prospects of young people now but hurt them for the rest of their lives”.
The motion that we have tabled asks that the Government look again at the lessons of the future jobs fund, be ambitious about the programme that they put in place, and ensure that they learn the lessons from the 1980s. We fear that a generation is being lost to the clumsy behaviour of the present Administration, so I call on the Government this afternoon to think again, to preserve the promise that this country should make to its young people, to reconsider the action that they are taking to ensure that our children will do better and better than us, and to think again before we confront once again a lost generation.
The Minister of State, Department for Work and Pensions (Chris Grayling)
Following Mr Speaker’s ruling last week, it is clear that it would be utterly unparliamentary to accuse any other hon. Member of being a hypocrite. I therefore give an absolute assurance that I will not do so this afternoon. It is clear, though, that the Opposition Front-Bench team is suffering from a bout of collective amnesia. We should be concerned for their welfare. I looked up the symptoms of amnesia, and it looks like an open and shut case to me. Amnesia is a condition in which memory is disturbed or lost. In some cases it is described as almost total disruption of short-term memory.
What other possible explanation could there be for what we have just heard? I can only think that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) cannot remember his time in office, so let me remind the House what happened. He and his party stayed in power for 13 years. One of their great missions was to tackle youth unemployment. Their former leader, his former boss, the former Prime Minister and Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), made his maiden speech on the subject back in 1983. When, 14 years later, he took office and became Chancellor of the Exchequer, he said that the problem was a “human tragedy”, “sickening” and “an economic disaster”. He had a mission for change.
What happened? Nine years later, in the middle of one of the biggest booms that this country has seen—let us remember that that was at a time when the then Chancellor was saying he had abolished boom and bust—the youth unemployment rate had gone up compared with 1997. It was higher than it had been when the Labour Government took office. As my right hon. Friend the Secretary of State rightly said from a sedentary position a few moments ago, that was despite the billions of pounds spent on the new deal. In total, £3.8 billion was spent on new deal programmes to get more people into work, yet in the end youth unemployment had increased.
Chris Grayling
Well, we are still waiting for an apology from the right hon. Gentleman for his Government’s record. If he wants to quote colleagues, let me quote one of his, the right hon. Member for Birkenhead (Mr Field)—sadly no longer in his place—who is one of the wisest figures in the House. When the statistics were produced in the latter part of the past decade, he said of youth unemployment:
“We made huge gains at the expense of the Tories in 1997… and now we are not just back to where we started, but in a worse position.”
That is not from someone on the Government side of the House, but from one of the shadow Minister’s right hon. Friends. That was not the half of it, because after that things got worse. More money was spent on more programmes to get more people into work, but youth unemployment continued to go up and up. If he wants to intervene, perhaps he can explain why that was.
Mr Byrne
I am grateful to the Minister for his kind invitation. Will he accept that between 1997 and the beginning of the global financial crisis, the claimant count for youth unemployment fell by 14%? To return to my previous question, why did Lord Freud, the Minister responsible for welfare reform and his colleague in the Department, describe our progress as “remarkable”? Was he deluded?
Chris Grayling
I think that the right hon. Gentleman should listen to his right hon. Friend the Member for Birkenhead, who said in 2006 that youth unemployment was worse than when Labour took power, and it carried on getting worse after that. By the time of last year’s general election, youth unemployment was still 270,000 higher than it had been in 1997, and still they remained in denial—they remain in denial to this day. The greatest brass neck of all was that two months ago the previous Prime Minister had the effrontery to claim:
“Tragically Britain is entering yet another decade of youth unemployment.”
Just what does the Labour party think had been happening for the past 10 years when it was in government?
Perhaps the right hon. Gentleman also does not remember that during the last disastrous years of the Labour Government he was Chief Secretary to the Treasury. For those who do not know, that is the person in Government responsible for keeping spending under control. It was not we who built up the biggest peacetime deficit this country has ever known, but him. What did he do to stop his Prime Minister promising to spend money he did not have and making promises to the unemployed that he could not keep? Of course, there was the notorious letter to his successor:
“Dear Chief Secretary, I’m afraid to tell you there is no money. Kind regards and good luck!”
What characterised the period that he and his colleagues have so conveniently forgotten is that the Labour party spent more and more money and made less and less difference. It is no wonder amnesia has set in.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Will the Minister explain why the Conservative party committed itself to the previous Government’s spending plans when in opposition?
Chris Grayling
We are taking decisions in the interests of the country. When I look back to 2005 and 2006, we always knew that Labour was making a mess of things, but we never imagined that they could do it quite so spectacularly.
Toby Perkins
If you realised that they were making such a mess of things, why did you agree to follow those plans? Is it not the right hon. Gentleman who has the amnesia?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Members should not be using “you”—I have no responsibility for this and am certainly not guilty for the unemployment figures.
Chris Grayling
We spent years warning the Labour Government that their spending was getting out of control and that they were mismanaging our economy, and now we see the consequences of what they did. What are we to do about the mess they created? Let us start by debunking some of the myths that they are peddling. To listen to them, one might think that it was all the fault of the coalition. Only last night the shadow Secretary of State stated in a press release:
“Labour’s legacy was falling youth unemployment and a pioneering programme to get 200,000 young people back to work. The Tories scrapped that programme and now youth unemployment has escalated to a record high.”
What a load of complete tosh.
The programme to which the shadow Secretary of State referred is the future jobs fund. Listening to him, one would think that we had scrapped that programme last May, but as we sit here today, young people are still being referred to placements through the future jobs fund. Although Labour’s attempts to support the unemployed had largely proved to be expensive failures, we decided early on that we would not remove them until our alternatives were in place. If the right hon. Member for Birmingham, Hodge Hill is right and things are getting worse, even though all the programmes we inherited from his Government are still running, what on earth does that say about the quality of provision he put in place?
Mr Byrne
It says that this Government have put the recovery in the slow lane. That is why the figures we saw this morning show that private sector employment is dead flat and public sector employment is falling. It is clear that the Government now need a plan B for the economy. It must start with a proper tax on bankers and the Government must use the money to do something to get young people back to work.
Chris Grayling
I just do not think the right hon. Gentleman is listening to what I am saying. We have left in place the support programmes that his Government left to support young unemployed people, and as of today they are all still there. As he keeps pointing out, youth unemployment has risen, so what does that say about the quality of provision he left behind? It says that it was not much good.
Mr Byrne
If the Minister was so dead against it, why is the right hon. Gentleman leaving it in place until the end of March? Since the Government took over, youth unemployment has started to rise, even though the economy has now been in recovery for five quarters. We were bringing youth unemployment down at a time of economic difficulty; since things have got easier, youth unemployment has gone up. How on earth did the right hon. Gentleman achieve that?
Chris Grayling
What we know is that the programmes the right hon. Gentleman left behind were not fit for purpose.
Chris Grayling
I happen to think that youth unemployment is a significant issue and would rather retain for a few months a programme that is underperforming while we prepare something better than do nothing at all. The right hon. Gentleman seems to think that we are doing nothing at all, but the truth is that we are doing just the opposite. It was his party that did nothing at all for a long period of time.
Let us deal with the argument about the future jobs fund once and for all. It costs around £6,500 per start—net of benefit savings, just under £6,000. That is far more expensive than Labour’s other programme for young people, the new deal for young people, which costs around £3,500 per job, and several times more expensive than other elements of the young person’s guarantee. It is twice as expensive as an apprenticeship, which I happen to think is of much greater value. Even when we net off all benefit savings, the future jobs fund is still much more expensive than any other option that the previous Administration put in place, and it did not work.
Colleagues may disagree, but to me a future job is one that lasts and on which a young person can build a career and sustain an opportunity for a lifetime. The future jobs fund did, and does, create temporary short-term placements, mostly through the public sector, where young people did not end up getting the kind of sustained work experience and training leading to a long-term career. The grants that funded the future jobs fund included no incentives whatever to move people into permanent jobs.
Chris Grayling
The latest information I have received from my colleagues in the Department for Business, Innovation and Skills, who are responsible for this, is that apprenticeship vacancies are currently over-subscribed by both employers and employees. We are making good progress towards delivering on that target and will obviously publish full figures in due course. I am confident that we are making inroads in the apprenticeship market and creating opportunities for young people that will last a lifetime, not just six months.
Pete Wishart
Will the right hon. Gentleman please take no lessons from the Labour party on apprenticeships? Some 25,000 were offered in the Scottish budget last week, but Labour, for some reason, voted against it. The Conservatives supported it, so does he know of any reason whatever why Labour cannot support an increase in apprenticeships in Scotland?
Chris Grayling
It makes no sense at all.
I have a theory. The hon. Gentleman and I agree that apprenticeships are by far the best way of delivering long-term, sustained career opportunities for young people, but the future jobs fund was introduced a few months before the general election, and it was designed to move a large number of young people into temporary placements. He will form his own judgments as to what might have motivated that decision.
The reality is that, in early tracking—and I accept it is early tracking—of outcomes from the future jobs fund, the very first data showed that a substantial proportion, about 50%, of people who had been on the scheme were already back on benefits seven months after they started; and that did not take into account the fact that in many areas local authorities had extended future jobs fund placements by two or three extra months. In April, we will get a sense of the scheme’s real impact, but the first evidence suggests to me that it has not proved to be any more effective than previous new deals or other similar schemes that cost much less money.
Pamela Nash (Airdrie and Shotts) (Lab)
On that point, do the Government honestly believe that for 50% of young people to be in work a full month after their future jobs fund placements—
The Minister of State, Department for Work and Pensions (Steve Webb)
That’s not what he said.
Pamela Nash
My point comes from the same statistics. Do the Government honestly believe that 50% of young people being in full-time work a month later is a failure? In our opinion, it is a great success for the fund.
Chris Grayling
If that were the case. In reality, we know that a number of placements continued for seven, eight or nine months after being funded by local money, so the first indications are that the final outcome of the future jobs fund will be no better than other employment programmes, but involve a much higher price.
Mr Byrne
The Minister is helpfully rehearsing a series of his uncertainties about the effectiveness of the future jobs fund. Why will he not therefore back the part of our motion which says that a proper evaluation is needed before a further decision can be taken on what is put in place in the future?
Chris Grayling
I fully accept that there is a difference between us. The right hon. Gentleman believes that the future jobs fund—six-month placements in the public and voluntary sectors—is the right approach. I happen to believe that apprenticeships—two years of training and the possibility of a longer-term career at half the price—is a better one. I am fully prepared to accept that that is a difference between us, but in reality our approach—tens of thousands of extra apprenticeships, which the Scottish Administration have also chosen but, I am surprised to discover, the Labour party opposes in Scotland—is a better route to follow.
Albert Owen
I, too, have supported apprenticeships over the past decade, and they have been a great success, but companies in my constituency, and one in particular, say to me that they cannot take on apprentices because they are faced with a consumption tax rise of 2.5 percentage points in VAT. Is that not one reason why businesses are not taking on apprentices? Indeed, the Minister is unable to tell us how many additional apprenticeships there have been in the past eight months.
Chris Grayling
Does the hon. Gentleman honestly think that businesses in his constituency would have been better off with a 1 percentage point jobs tax rise, as the previous Administration planned? That would have caused more of an increase in unemployment than anything else the Government could have done.
The right hon. Member made one point, however, which is absolutely right and with which we absolutely agree. Youth unemployment is a major problem for our society and one that absolutely must be tackled. The failure to tackle youth unemployment with schemes that work contributes so much to many other issues that we have to deal with on streets and in neighbourhoods throughout the country.
Endemic worklessness is underpinned by an ever more complex benefits system that traps people in unemployment. Inter-generational poverty is fuelled by welfare dependency, involving generation after generation of people who have not worked. There is a lack of aspiration, especially among young people who lack role models in a country where almost 2 million children are growing up in workless households. Worst of all, the young people who escape welfare dependency and poverty will still carry the economic scars of unemployment for years afterwards, in terms of lower wages and future employment gaps. That is the harsh reality of Labour’s legacy for our young people.
Dame Anne Begg
I worry about the either/or in the Minister’s equation. He says that the answer is either apprenticeships or the future jobs fund, but it should be both, because the young people who go into apprenticeships are not the same cohort who suffer the inter-generational worklessness to which he refers. They need extra support, and that is where the future jobs fund has been very, very effective.
Chris Grayling
I accept the principle but do not agree with the detail of what the hon. Lady says. I shall come on to discuss the Work programme and how I aim to use it to deal with the problem that she rightly highlights.
Opposition Members should remember that over the years they made lots of promises about apprenticeships but consistently under-performed on them. Our job is to make sure we do not do that.
Mr Byrne
The right hon. Gentleman surely accepts that the number of apprenticeships increased from about 63,000 in 1997 to more than 250,000 by the time we left office. Surely that is a record of success in backing apprenticeships, and I am glad that it is a point of consensus on both sides of the House.
Chris Grayling
I remember the right hon. Gentleman’s former boss standing in this House and promising about 400,000 apprenticeships. When Labour left office, the actual figure was 240,000, so I shall take no lessons from the Opposition about delivering promises on apprenticeships. We plan to deliver, and are already well on the way to delivering, 50,000 extra apprenticeships this year, 75,000 extra by the end of this Parliament and more apprenticeships for young people between 16 and 18 years old. Those apprenticeships will cost about half that of each future jobs fund placement, but they will deliver the skills that last a young person a lifetime, and the opportunity to progress on to a secure career path.
Alison McGovern
I thank the Minister for giving way, because this is a truly important point. When I have asked parliamentary questions about targets for the number of apprenticeships, the Government have told me that they no longer set such targets, so will the Minister make clear the status of the pledge that he has just made?
Chris Grayling
We fund a certain number of apprenticeships, and there are 50,000 extra this year. They are being filled at the moment, as we speak. We will fund 50,000 extra apprenticeships this year and 75,000 extra throughout the course of the comprehensive spending review. A few days ago BIS set out a clear goal to increase the number of apprenticeships in this country to 350,000. We have been in office for nine months; the Labour party was in office for 13 years, and it consistently under-delivered on apprenticeships throughout those 13 years.
Mr Lammy
The Minister has been extraordinarily generous in giving way, and I am very grateful, but he has not been able to tell the House how many apprenticeships he has delivered in the past nine months. I set up the graduate talent pool, which involved internships for graduates. Alongside the internships that were offered at the Conservative party event recently, how many internships have been delivered for our graduates in the past nine months?
Chris Grayling
Let me tell the right hon. Gentleman what we are doing to get young people into the workplace for the first time.
One of the first things I received on entering government was an e-mail from the mother of a young woman who had arranged a month’s work experience for herself but been told by Jobcentre Plus that she could not do it, because the rules, which the previous Administration put in place, prevented her from doing so. We have therefore changed things.
We now encourage work experience. Through Jobcentre Plus, we will actively find work experience for young people, without their losing their benefits, and give them the opportunity to solve the age-old problem whereby, if someone cannot get the experience, they do not get the job, but, if they do not get the job, they cannot get the experience.
We have also strengthened volunteering opportunities for young people, and we will have Prince’s Trust representation in every job centre, so that we can steer young people towards voluntary work and take advantages of the trust’s skills to help unemployed young people.
Mr Stewart Jackson (Peterborough) (Con)
Is my right hon. Friend as incredulous as I am at the Opposition’s faux outrage? They are members of the party that, during 13 years of government, imported low-wage, low-skilled people from eastern Europe—more than 1 million of them—and pushed thousands of young people into welfare dependency and on to the dole. They should be ashamed of themselves.
Chris Grayling
My hon. Friend is absolutely right. There is collective amnesia among those on the Labour Benches. One of the things they have also conveniently forgotten, which was revealed by one of their number, the right hon. Member for Birkenhead, is that over the course of those years nearly 4 million new jobs were created in this country, the vast majority of which went to people coming to the UK from overseas. The Labour Government completely failed to make a serious inroad into the nearly 5 million people on benefits, or to get British people into what was once described as the goal of the previous Prime Minister—British jobs for British workers.
Chris Grayling
No, I have given way enough, and I am going to make progress. [Interruption.] When Labour Members have some useful contributions to make, I might give way again.
We now need to talk about what we are going to do about this. The Work programme, which we will introduce this summer, will, I hope, go a significant way towards dealing with some of the problems to which the hon. Member for Aberdeen South (Dame Anne Begg) referred. We have huge challenges in the labour market, with young people who face huge difficulties in their backgrounds. For them, the Work programme will deliver specialist intervention after just three months in the dole queue—much earlier than it has ever been done before. It will be a revolution in back-to-work support in Britain. It will provide a level of personalised support that we have not seen before, because in order to survive in a payment-by-results regime, the providers will need to cater for the individual. It is the kind of revolution we have needed for years—the kind that was promised in Labour rhetoric but never delivered.
Mr Byrne
It is curious that the Minister’s colleague Lord Freud noted in his report:
“The New Deals have been enormously successful”.
He also said:
“The creation of Jobcentre Plus…is…seen as…a model for effective public service delivery.”
He further commented:
“The Government has made strong, and in some respects remarkable, progress over the last ten years.”
I hope that those are lessons on which the Minister can draw.
There has been some dispute about the numbers that the BBC published. Will the Minister now set out for the House his assumptions for this year, next year and the year after about how many people will flow through the Work programme? If he is disputing the figures, let us hear it from him—what are they?
Chris Grayling
We published those figures in December. I suggest that the right hon. Gentleman read the invitation to tender for the Work programme. I will tell him, however, that the number of people who went through contracted programmes in the last year of the Labour Government was well under 600,000, and that next year’s projections for the Work programme are over 600,000. As for my noble Friend Lord Freud, if he thought that the Labour Government were doing so well, why does the right hon. Gentleman think that he joined us?
The Opposition were in government for 13 years, during which they systematically delivered for this country a higher level of youth unemployment than they inherited. They spent almost £4 billion on new deal programmes, much of it aimed at getting young people into work. Even while all that money was being spent, we saw youth unemployment grow between 2005 and early 2007 and rise steadily in the run-up to the recession. Back in 2008, the OECD published a report raising concerns about what the British Government were doing and stating that only in Britain was youth unemployment rising, while everywhere else it was falling.
So let us have no more accusations from Labour Members about the coalition’s record. We have been in office for nine months. We inherited from them 600,000 young people who left school, college or university and have never worked. We are moving ahead with plans that will make a real difference to those young people—through the Work programme, through apprenticeships, and through the schemes we are introducing at Jobcentre Plus level to help them into employment.
Chris Grayling
No, I am going to wind up now.
The Opposition were in government for 13 years, and they failed abjectly. They spent billions; they delivered nothing at all. They left youth unemployment as a national challenge and a national disgrace—part of a legacy of chaos and failure from a Labour Government who ran out of money and ran out of ideas. It is time that the right hon. Member for Birmingham, Hodge Hill and other Labour Members recognised the damage that they did to this country, and time they realised that it will be a long, long time before the people of this country even start to consider the possibility that they might ever be fit to govern again.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Before I bring other Members in, let me just say that the Front Benchers have taken up quite a lot of time because of interventions. We now have an eight-minute limit on speeches. Not all Members have to take all eight minutes, and fewer interventions will mean that I can get more people in. I call Mr Chris Ruane.
Chris Ruane (Vale of Clwyd) (Lab)
Thank you, Mr Deputy Speaker, for calling me so early in the debate.
In 2002, the unemployment statistics for my county of Denbighshire showed that out of its 34 wards, 50% of the unemployment was in two wards alone—Rhyl West and Rhyl South West. Rhyl South West contained the council estate where I grew up and lived for 26 years. Many of those unemployed people were related to me. Over the past nine years, it has been a personal crusade of mine to do something about that. In 2002, I established an unemployment working group, with people from the college, the Department for Work and Pensions, Jobcentre Plus, the police, economic regeneration bodies and the Welsh Assembly Government getting together around the table to create jobs for people, including young people, in my constituency.
In 2007, the DWP agreed that Rhyl could be one of 15 city strategy pilots for the whole of the UK. Although it is not a city but a town of only 27,000 people, Rhyl was included mainly as a pilot scheme for 52 seaside towns in the UK. Since then, we have made great strides in putting young people back to work in my constituency. The leader of the people who have administered the future jobs fund for the Rhyl city strategy is Ali Thomas, a dedicated professional in getting young people back to work. This is what she said about the Government’s decision to abolish the future jobs fund:
“The subsidy enabled employers to consider taking on long term unemployed people, many with multiple problems. They were able to do this because of the subsidy. The employers were taking a risk with these young people but the subsidy made the risk worthwhile.”
She went on to say:
“It wasn’t a one way street. Employers gained well motivated young workers. Nearly 60% of those that completed the placement scheme went on to gain long term employment with the employer.”
Apart from those 60%, a further 10% to 20% went on into full-time education at the fantastic Rhyl college, built by the Labour Government—the first college we have ever had, and a £10 million investment. A 70% to 80% placement rate in full-time education or full-time employment is not bad by anyone’s standards.
I ask the Minister, who is chatting away down there, what targets he is setting for his new Work scheme: 50%, 60%, 70% or 80%? I hope that he will intervene and tell me. He did not know the figures on the number of apprenticeships or internships but can he tell me his target for full-time employment placements of young people on the schemes that he is going to put in place?
Chris Grayling
The Deputy Speaker does not want extended interventions, so I simply refer the hon. Gentleman to the invitation to tender for the Work programme, which will give him some of the details he wants.
Chris Ruane
The Minister does not know.
From my perspective as a constituency MP, and from that of young people affected in my constituency, the decision to end the future jobs fund is nothing short of political spite. The Work and Pensions Committee report said that the DWP
“should conduct a comprehensive evaluation of the effectiveness of the Future Jobs Fund and publish the results.”
This obviously should have been done before the closure of the FJF. That is common sense, but it was not done.
Chris Ruane
No—I am afraid that I might get my head bitten off.
Why did the coalition Government not take evidence? They could have come to my constituency and consulted Ali Thomas and the young people taking part in these schemes, who were gaining confidence, experience, camaraderie and esprit de corps in their groups of 10 to 15, and feeling pride and joy in being able to plan their first holiday, take their first driving lesson, or gain a certificate from the local college, and in having meaningful work with a meaningful pay packet at the end of the week. I will be sending the Minister, who is still not listening, a DVD made by those young people about their job placements. I hope that he will look at it and get back to me.
When I stared those young people in the eye at the presentations, they were full of pride and joy at their achievements—achievements that will be dashed by the Conservative party. One of the main attractions to the young people in the scheme was that it was a proper job with a proper rate of pay. They could be sacked if they did not turn up or if they were not motivated enough, and they had to be punctual. Their reward was the potential for a job at the end of the six-month placement.
Shorter, cheaper, unsubsidised placements will not have the same take-up or buy-in among young people. Such schemes that were introduced by the Conservatives in the past were pilloried and laughed at by the young people who attended them. YTS was called “young, thick and stupid” by young people. They want no part in such schemes. They want quality schemes like those introduced by the previous Government and abolished by this Government.
The future jobs fund has the respect of the young people who have participated, the employers who have taken them on and the people who have administered it. The main reason given for its abolition was the cost. The Government deemed £6,500 too much to pay to turn around a young life. I ask Government Members who send their children to private schools how much they pay a year to turn their children’s lives around. There is one rule for the rich and another for the poor.
Chris Ruane
I am informed by my hon. Friend that it is £30,000 for Eton. Under the scheme, its cost £6,500 to turn around a young life. But no, that is too much. There are a million young people—and the number is rising—on the dole. What will be the cost if they fall into a life of crime? If that positive path is denied them, they might turn down a negative path. It costs £50,000 a year to keep a person incarcerated. That is money down the drain.
Chris Ruane
No, I would get told off. I am sorry, Mr Deputy Speaker, but I feel that I would.
My local future jobs fund is administered by Rhyl city strategy and is one of the most effective in the country. It had a monthly target to put 320 people back to work. It was bang on every month. It was so effective that it had to hunt for another 100 young people to put back to work, which it got through the WCVA. That effective partnership has been snuffed out by the Conservative party. A key part of the success of the FJF in my constituency was that the funding was delivered to a local partnership. That minimised bureaucracy and red tape, which the Conservative party is always banging on about—there was no red tape or bureaucracy in the FJF in Rhyl. That was welcomed by the employer.
Shorter-term, unsubsidised schemes will not work. They did not work in the past, and they will not work in the future.
Jackie Doyle-Price (Thurrock) (Con)
I am sure that every Member of this House believes it is a tragedy that so many of our young people are not in work, education or training. Nearly two-thirds of unemployed 18 to 24-year-olds have not done any kind of work since leaving school or college. That trend has accelerated over a number of years; not just over the eight months of this Government, as the motion states.
The motion is right about the need for urgent action to tackle long-term joblessness among our young people. However, the future jobs fund is not the answer, as the Minister has explained. It has been expensive and ineffective. What we need is support that delivers real skills and jobs, and that adds to the employability of young people. With that in mind, I endorse the Government’s commitment to investing further in apprenticeships. I believe that the Work programme will provide personalised help based on individual needs, through working with private and voluntary providers. Ultimately, we need more engagement with employers to equip young people with the skills that will enable them to find work.
So far, this debate has centred on what we do to help young people when they become unemployed. I would like to talk about initiatives in my constituency that are intended to prevent young people from becoming unemployed. That means investing in skills training for young people while they are of school age. In areas such as mine, where comparatively few young people go on to university, such initiatives are extremely important if we are to get the proportion of people not in employment, training or work down further.
The first initiative is run by one of the new academies in my constituency, the Gateway academy in Tilbury, which has gone out of its way to develop a strong focus on employment options and to offer advice to its pupils. It has developed a curriculum that is tailored to the needs of its pupils and to the job opportunities in the area. In addition, it has established a project called Gateway Connect, which uses a redundant industrial workshop as a strong vocational learning facility to offer pupils work-based training and vocational qualifications. Through that project, 18 pupils have been able to pursue vocational training and only two are not in employment, education or training now that they have left. That shows the impact of such strong work-based projects. With that focus, the proportion of pupils who become NEETs on leaving the school has fallen from 18% in 2008 to a mere 4% in 2010. That makes the case for tackling this problem in schools, rather than waiting until young people are on the dole.
There are other projects in Thurrock that are not based on the school curriculum. In a week in which we have considered the big society, I would like to share with the House some examples of imaginative and proactive partnership working that I have witnessed on the ground in Thurrock to give young people more skills. Thurrock trade school offers evening classes to children aged 14 to 16 who want to learn a trade. It offers courses in carpentry, bricklaying, plumbing and electrics. Young people attend two-hour classes over 12 weeks. The courses are sponsored by Morrison, a local building contractor, which provides tools and mentoring to guide young people towards the opportunities that might be open to them through pursuing the training. Morrison has also engaged as apprentices people who have been through the courses.
The background to Morrison’s involvement is that it was awarded the housing maintenance contract by Thurrock council. As part of that contract, the council asked it to invest in such training. That is a brilliant illustration of how imagination can be used to make use of commercial partnerships to deliver outcomes for the benefit of the entire society. That is the kind of thinking we want to encourage as we build the big society. The example of Thurrock trade school also illustrates the value of working with employers, because they will invest in the skills that they need. We all benefit from such involvement.
Finally, we need to open the eyes of young people to the opportunities that work-based training can bring. With that in mind, I commend another initiative to the House: Thurrock’s Next Top Boss awards. Next Top Boss is another partnership scheme that is run by Thurrock council, the Thurrock development corporation and a large number of private employers such as Procter & Gamble, Carpetright and other big employers that operate in Thurrock. The competition is open to 17 to 19-year-olds. The objective for the employers is to help equip teenagers with the skills, confidence and contacts they need to enter the world of work. Competitors are invited to take part in events in which they can show all their skills, such as working with a team and responding to projects. The employers that participate can show the vast assortment of careers that are available in their organisations. The incentive for the young people is that they compete for prizes, including gift vouchers, work placements and even jobs. It is, dare I say it, “The Apprentice”, Thurrock-style. Central to its success is the involvement of local employers that are attracted to the opportunity to identify future apprentices for their workplace and to showcase the opportunities that they offer.
I do not mourn the passing of the future jobs fund. I look forward to the Government’s reforms delivering improvements in the opportunities available to young people. I hope that Thurrock’s big society examples will inspire other employers, councils, schools and voluntary organisations, as they consider how they can contribute to tackling joblessness among our young people.
Michael Dugher (Barnsley East) (Lab)
I am proud to say that the future jobs fund was inspired by the review by the excellent leader of Barnsley council, Steve Houghton. I thank my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) for his warm and fitting tribute to Steve Houghton earlier in the debate. Barnsley was one of the first councils to implement the scheme, which has made an important difference to many, not only in my constituency but across the country. Since its inception in 2009, the future jobs fund has given young people and the long-term unemployed valuable opportunities by creating real work, with real experience and real job prospects. In Barnsley, a third of those on the programme have already gone into jobs. It is hoped that 200 people will be in employment before the funding regrettably expires in March.
The Government’s decision to scrap the fund—a scheme that would have created up to 200,000 jobs for young people up and down the country—is sadly just another example of how they are letting young people down. Ending the future jobs fund was one of the Government’s early decisions. Since then, the education maintenance allowance has gone, tuition fees have been trebled, we are seeing cuts to Sure Start and the school building programme is being cut across the country. Tackling youth unemployment has been a challenge for all Governments, but thanks to initiatives such as the future jobs fund, youth unemployment fell by nearly 25,000 between February and April 2010.
Since this Government were elected, there has been a massive jump in youth unemployment. Figures out today show that it has risen to a record high, with more than one in five 16 to 24-year-olds now out of work—a rise of 66,000 people to nearly 1 million. In my constituency, nearly 14% of the population are aged between 18 and 24, yet that age group accounts for 35% of people claiming jobseeker’s allowance. We are facing a youth unemployment crisis in this country the scale of which we have not seen since the 1980s. If the Government do not act, this will not only damage our young people’s employment prospects, but affect them for the rest of their lives. It is well documented that early spells of unemployment for an individual, result in reduced employment prospects and lower earnings over their lifetime. Today, for every 100,000 people that this Government put out of work, £500 million is added to the cost of paying jobseeker’s allowance, so theirs is not even a strategy for reducing the deficit.
The fundamental flaw in the Government’s Work programme is that there is simply not enough work. They fail to understand that in parts of the country there are still unemployment blackspots. Focusing on job output may be fine in some parts of the country, where the economy may be expanding, but it will not work in more deprived areas such as Barnsley, where there are still serious structural problems in the local economy and where simply not enough jobs are available. In my constituency, there are currently just over 190 Jobcentre Plus vacancies for more than 2,500 people claiming jobseeker’s allowance. That amounts to 14 claimants for every job vacancy. However, this Government’s approach is solely about getting people into existing jobs. There is no policy for either job creation or the growth that would create those jobs, particularly in the weaker economies.
The Government have to think again, as our motion says. There is an overwhelming need for a job creation programme targeted particularly on those areas with the highest unemployment. The main criticism of the future jobs fund is that not enough jobs were created in the private sector. We all want to see more jobs in the private sector, and in my constituency we will have 2,000 more jobs.
Nia Griffith (Llanelli) (Lab)
Does my hon. Friend agree that, right in the middle of a recession, the whole point was for the public sector to provide some of those jobs—in construction, for example—to keep people’s skills up, ready for when the private sector picked up?
Michael Dugher
My hon. Friend is exactly right.
Those 2,000 private sector jobs in my constituency are coming from ASOS, the online fashion company—I do not see too many takers in the Chamber for its clothes, but we live in hope—but those jobs did not happen by accident. The reason 2,000 jobs are coming to my constituency is that when Labour was in government, we built the facilities that will house those jobs. We built the road that attracted the company in the first place. The public sector plays a big part in supporting private sector jobs.
Michael Dugher
No; I want to make some progress.
We want to see more private sector jobs, but the Government need to move away from the mentality that says that public sector jobs are not, as the hon. Member for Enfield North (Nick de Bois) said, “real” jobs. In many parts of the country, the choice is not between a public sector job and a private sector job; it is between a job and no job. The criticism that too many of the jobs were in the public sector—a criticism that I share—is not a reason to scrap the scheme, but a reason to strengthen it. It is an argument to expand it to include more private sector businesses in those unemployment blackspots and to invest in industry.
The positive benefits of employment cannot be overstated. Most people cite a lack of confidence and skills as the reason for not finding work. Having a job is good for people’s well-being and their physical and mental health. It provides them with an opportunity to prove themselves, giving them an identity, confidence and self-worth—the pride that comes from having money in their pocket and the dignity of knowing that they have just earned it. Everyone knows that it is also easier to get a job for those who already have one.
We saw the impact of previous Conservative Governments in areas such as the one that I am proud to represent—a whole generation of young people growing up with little or no hope of getting a job. It is clear that this Government have not learnt from those mistakes, and are once again letting young people down. There is a growing consensus that the Government need a plan B to get the economy right—growth has stalled—but it is equally obvious that they need a plan A to deal with unemployment and, in particular, the lack of opportunities for young people in my constituency and throughout the rest of the country.
Jenny Willott (Cardiff Central) (LD)
It is worrying how many young people are unemployed at the moment. We can bandy figures around all day, but the figure that sticks with me is that one in five young people between 16 and 24 is out of work. That is a worrying—indeed, horrifying—statistic, and is a tragedy for every one of them, and for their families and the communities around them too. However, when we look more deeply it becomes clear that this situation is, in part, the Labour legacy, as has been mentioned over and over today. The number of people who have been unemployed for more than 12 months has increased. This Government have not yet been in power for more than 12 months, so we are clearly dealing with a legacy left by the last Labour Government. As a result of Labour messing up the economy, the Government are having to deal with a serious financial mess and the unemployment that goes alongside that.
People have talked about complacency about the youth unemployment figures. I have not seen complacency on either side of the House today—clearly people are seriously concerned—but if Labour Members were that concerned, they could have done significantly more when they were in office, rather than leaving a lot of young people on the shelf. Labour could have done more in power to ensure that people had the opportunities that they needed.
Jenny Willott
I will not give way. Everyone will have the chance to speak later if they wish.
As has been mentioned, unemployment among young people has gradually increased since 2002, and that was during the good times, so clearly in the bad times it will not be easy to get people back into work. It is now even harder for the new Government to get them into work, as they have already been out of work for longer, and we know that the longer people have been out of work and the further they are from the jobs market, the more effort, money and time it takes to get them back into work. However, the problem is that the future jobs fund was not working. It was created to ease youth unemployment and make the figures look better; it was not established to create long-term sustainable jobs. Opposition Members have mentioned that many times, but it is not that public sector jobs are not real jobs—of course they are—but rather, that the jobs created for the future jobs fund were not real jobs. They were short-term, six-month placements created for the purpose of the fund; they were not jobs that were sustainable in the long run. That has been borne out by the initial information on what people have done after being placed by the future jobs fund. About 50% of people were back on working-age benefits after seven months—one month after finishing their placement. Of those in a comparable group who found work through other programmes or found work for themselves, only 35% were back on jobseeker’s allowance after seven months. Clearly, the future jobs fund has not been working. It is performing less well than the other programmes that the previous Government put in place.
Jenny Willott
No; I want to ensure that there is time for as many people as possible to speak.
The future jobs fund is not cost-effective. It costs a lot, and that money could be better spent. In theory, it was aimed at those who were furthest from the jobs market, but it seems that a large number of those people in placements were graduates. For example, about 20% of the people taken on by Birmingham city council had at least one degree.
Jenny Willott
I will not.
The future jobs fund was clearly not working in the way that it was supposed to. As with many of Labour’s programmes, the words and the theory were positive but the practice was poor. It was not properly designed or monitored. It simply was not thought through. It did not deliver sustainable employment for young people.
Instead, we need to create a skilled work force and generate jobs for those skilled young people. Apprenticeships make people more employable, potentially by the people by whom they have been trained, but also by similar businesses. CBI evidence shows that 90% of apprentices find employment or become self-employed immediately after their training ends, which means that apprenticeships are clearly far more successful than the future jobs fund.
The group that concern me the most are those who are furthest from the jobs market. For many of them, apprenticeships are inappropriate. They are a particularly vulnerable group, and in the past they have been particularly ill-served. We need to ensure that the Work programme will work, and that the Government learn the lessons from previous programmes to ensure that those vulnerable young people are helped back into work.
I am glad to see that, under the Work programme, young people will get help at a much earlier stage than they do under the future jobs fund. They will be referred to the Work programme when they have been on jobseeker’s allowance for nine months, rather than 12 months as happens under the FJF. More tailored support will be available for those with the most severe disadvantages, and they will be referred after three months if they are not in employment, education or training. All the evidence shows that we need to get in there as early as possible if we are to have an impact. Even with all that evidence, however, the previous Government did not quite achieve their aims, so we really need to ensure that we learn those lessons now.
In addition, under the Work programme, the fees will be structured so that providers will get more if they help those who are furthest from the jobs market and keep them in work for longer. We hope that that will make a real difference to that group of people. Again, that is something that the previous Government tried to do, but they did not go quite far enough. I hope that the coalition Government will learn the lessons from that and ensure that these measures are implemented.
Following the demise of the future jobs fund, we all want to see much better, tailored support aimed at the needs of young people. We cannot afford to damage the career prospects of another generation of young people, as happened in the 1980s and early ’90s. We have to learn the lessons, particularly the ones that the previous Government did not learn from the work that they were doing.
The numbers are bad, and the individual stories are heart-wrenching. I am sure that we have all had people coming to see us in our surgeries who are at their wits’ end and absolutely desperate to find work. We need to ensure that another generation is not left behind, but the Opposition’s proposals in the motion today are simply not the way to do it. The future jobs fund has not worked so far, and given that the number of young people unemployed for more than 12 months has been increasing, why on earth do they think it will start working now? It is time to adopt a new approach, to ensure that we do not leave hundreds of thousands of young people behind. Instead, we must give them the skills and the confidence that they need to build a future for themselves and our economy.
Ian Lavery (Wansbeck) (Lab)
I would like to focus on the young people who have lost their jobs. They are real people, and I welcome this opportunity to discuss on the Floor of the House of Commons the betrayal of those young people. They represent the nation’s future, but they have been bruised, battered and neglected. They are not needed and not worthy—that is the message the Government are pushing to those people.
We have a serious problem, in that those young people are in danger of becoming the lost generation. Employment is a major social ingredient in anyone’s life, and in modern, civilised society. It gives self-esteem and confidence. It breeds purpose in individuals. It is a rung on life’s ladder, which can often be quite cruel. As we debate this issue today, we see an increase of 66,000 young people who are unemployed.
The constituency statistics in the information from the House of Commons Library show that, in the 100 worst-affected constituencies, there are 10 applicants for every job vacancy. On average, across all constituencies, there are five applicants for every job. In my constituency, however, 14.3 people apply for every vacancy. Is it any wonder that our young people, our future generations, feel so let down and demoralised? They feel utterly betrayed by the actions of this Government. Is it any wonder that they are taking to the streets and demonstrating in their tens of thousands in every city against the Government’s attack on young people? They are organising and giving voice to their views. As politicians, we should listen to their call for opportunities, for a chance in life, for dignity, for decency and for equality. That should be readily recognised by the Government.
Sajid Javid
I thank the hon. Gentleman for so graciously giving way. There is a lot that hon. Members on different sides of the House can disagree on, but will he acknowledge, perhaps in a bipartisan spirit, that some of the Government’s welfare reforms—for example, the introduction of the universal credit, the increase in apprenticeships, and the move to ensure that people are better off in work than out of work—are a step in the right direction?
Ian Lavery
I thank the hon. Gentleman for his intervention. I believe that we should wait to see the details of the universal credit. The devil is often in the detail.
The future jobs fund was abolished within days of the election by the Tories. At this stage, I must offer my personal view that I do not accept that this is a coalition Government. It is a full-blooded, blue-blooded Tory Government, propped up by a few desperate Liberal Democrats who are prostituting every principle that they have ever stood for, and abandoning every young person in this country.
The future jobs fund offered a golden opportunity to 200,000 people, but those full-time jobs will be wasted. They were much needed in communities such as mine. The future jobs fund was sowing the seeds of success, and it was proving successful to those young people. It was giving young people who had never had a job before a much-needed break in life. They need and deserve an explanation from the Government. They need to know why, immediately after taking office, the Government abolished a great opportunity, perhaps one of the last opportunities that they will be given for a long time.
I am aware of the eight-minute limit on speeches, Mr Deputy Speaker, but at this point a triple whammy comes to mind: the attack on education maintenance allowance, the increase in tuition fees, and the cancellation of the future jobs fund. People will not forget, and they are asking now why the attack on young people continues and where it will end. The number of unemployed young people has risen by 66,000, and the Office for Budget Responsibility predicts huge further increases in the not-too-distant future. Everything in the garden is not rosy for our young people or for our future. Every 100,000 people who are out of work cost the Treasury £500 million. We cannot, in any circumstances, return to the days of the 1980s, when 26% of people were unemployed.
In my constituency, there are 14.3 applicants for every job vacancy. Unemployment in the region stands at 9.6%, and 46% of working women in the northern region are employed in the public sector. In my constituency, the public sector employs 11,000 women—68% of working women—and more than 50% of men. How dare any Member say in the House that public sector workers deserve redundancy before anyone else? We are talking about teachers, firemen, policemen, council workers and cleaners. How dare anyone suggest that their jobs are meaningless because the private sector should rule?
The attack on public services in my constituency will be unbelievably harsh. The creation of 200,000 jobs through the future jobs fund would have been immensely valuable. Moreover, 10,000 jobs would have been created in the north-east in the renewable energy, environmental and emerging low-carbon technology sectors, and 15,000 would have been created in social enterprises. That is much-needed employment. The Government’s action in abolishing the future jobs fund is an absolute disgrace: it was politically motivated and ideologically driven.
I will not forget 20 October 2010, when the Chancellor of the Exchequer announced the loss of 490,000 jobs. I shall not forget the triumphant, jubilant cheers from the Government Benches. That made me sick to the pit of my stomach. The people will not forget, and I will not forget. I am pleased to have been able to take part in the debate, and I support the motion wholeheartedly.
Nick de Bois (Enfield North) (Con)
It is a pleasure to follow the hon. Member for Wansbeck (Ian Lavery). I hope that he will understand if I return to some of his more outrageous comments a little later. First, let me say how pleased I am that we are debating youth unemployment: it is a major issue, and it is clear that Members on both sides of the House understand the need to discuss it.
Before I came to the House, I derived real pleasure from being able to offer someone a job in our company. I also understood the absolute nightmare of having to make someone unemployed in difficult times. I hope that Members on both sides of the House have approached the debate with the shared goal of alleviating what are very difficult circumstances. I also feel, however, that the debate should be put into context. It takes place against a background of economic failure, a legacy of banks that were not supporting business, a massive decline in manufacturing, and an essentially unbalanced economy.
Governments can take a wide range of measures to ease the problem of youth unemployment, but in my view nothing is more important than enabling the economy to grow at a sustainable level so that business can expand, create those much-needed jobs and, indeed, flourish. That is why difficult measures are being taken: vital measures to deal with deficit control, and positive fiscal measures to support investment. We are seeing changes in employment law, export support for small and medium-sized enterprises, and a review of many of the welfare schemes and benefits out there to encourage people to move from a life of dependence to one of independence.
I am therefore somewhat disappointed by the fact that the debate is focusing almost entirely on the future jobs fund. It was, I am sure, a project born of good intentions, and I admit that there are good stories about it from various parts of the country. The fact is, however—this brings me back to the hon. Gentleman’s speech—that we were creating a large number of temporary jobs, predominantly in the public sector, which did not offer a sustainable solution to the problem of youth unemployment. I hope, indeed I know, that I speak for Government Members when I say that any suggestion that we were disparaging public sector workers is utterly unacceptable. The hon. Gentleman shakes his head, but he has had his say, his say was wrong, and the House should not accept it.
What is wrong, and what we do challenge, is the temporary nature of many of those jobs. We intend to deliver permanent, sustainable jobs, and I believe that most of them will have to be in the private sector. If Members are not willing to take my word for it, as I am sure some are not, let me tell them what the Confederation of British Industry said to the Work and Pensions Committee.
“We are concerned the programme for the most part failed to deliver a long-term strategy to tackle youth unemployment. While there are undoubtedly some successes within the programme, the CBI argued there needs to be better business involvement and a greater focus on long-term job sustainability with future programmes. The Work Programme is the way to deliver this.”
I am surprised that the Opposition have not raised some of the other measures that we have had to consider to help employers take people on. It is beyond question that employers who feel restricted by the heavy hand of all the employment legislation that has grown up over the last decade will think twice not just about employing people, but about retaining them. They may feel that someone who has worked for the company for nearly a year—just before the employment legislation protection kicks in—needs more training or help because he is not quite up to the job. At that point they will seriously consider whether it would be better to lose that employee immediately, before the rules kick in and cause difficulties in future, than to invest more time in him. That is a trade-off governed by excessively burdensome regulation. Such a restriction is not acceptable, and I am pleased that the Government are loosening it to provide flexibility for both employers and employees. [Interruption.] If the hon. Member for Preston (Mark Hendrick) wishes to intervene, all that he need do is ask, rather than chuntering from a sedentary position. I should be more than happy to take his intervention; otherwise I shall press on.
There is, I believe, evidence that we will produce more long-term sustainable jobs through apprenticeships. What evidence is there for this? I witnessed the hunger of those who wish to work and the appetite for recruitment in the private sector when I held a jobs fair in my constituency. It was put together without any cost to the state, and we managed to engage with local businesses and those who were looking for work, either immediately or in the near future. We brought in the voluntary sector too, so that those who wished to keep their CVs active and engaged could do so. We brought more than 40 companies together after a two-month period. Hundreds of visitors turned up and companies such as Johnson Matthey offered apprenticeships. That company is running a programme of apprenticeships which is not supported by the state but which will offer sustainable, long-term jobs to some of those who successfully get through. We had people willing to go to work in the voluntary sector, such is their appetite to keep their CVs active. I admire them and their hunger. Above all, we should note that at this jobs fair the jobs fundamentally came from the private sector in the local economy, thus keeping local jobs for local people. That is the future, which is why I believe that the combination of our enterprise economies, our welfare reforms and our support for apprenticeships will lift us out of this situation and help tackle youth unemployment.
Katy Clark (North Ayrshire and Arran) (Lab)
I am grateful for the opportunity to contribute to this important debate and to speak in favour of the motion, which is far from narrow. It goes much further than simply criticising the cancellation of the future jobs fund, which would have created 200,000 jobs. The motion states clearly our belief
“that the Government’s economic policies have slowed economic growth, raised youth unemployment and created the highest graduate unemployment for over a decade”.
It is in that context that we need to have this debate. As Members from all parts of the House have said, youth unemployment is a significant problem in this country at this time. Given the economic figures that we are seeing, particularly the most recent growth figures indicating that the economy is shrinking and the revised figures from the Office for Budget Responsibility showing that levels of growth are projected to reduce, it is incredibly important to have this debate.
It is unfortunate that the future jobs fund and apprenticeships are being counterposed. The number of apprenticeships created by the previous Labour Government has been mentioned, and I would have liked Labour to have done even more on that. I hope that this Government will set about an ambitious apprenticeships scheme, but we have not seen it yet. I assure the Government that if they do so, they will get the full support of Labour Members, because we fully recognise the value of apprenticeships in both the public sector and the private sector.
My constituency has a strong tradition of public sector apprenticeships in engineering and in organisations such as the Ministry of Defence. Individuals have been trained in the public sector and have worked in it for a number of years, and have then gone on to work in other parts of industry and in the private sector. We want to encourage these apprenticeships and we want the Government to take this on board. Labour Members wish to see policies that will develop our industrial and manufacturing sector, that will support apprenticeships and that will do everything possible to create employment in the private sector. That is particularly important in constituencies such as mine, which faces a significant problem of unemployment, particularly youth unemployment.
My part of the world traditionally had a strong industrial and manufacturing sector, but those manufacturing jobs have gone over the course of many decades. In the 1970s, 17,000 people were employed by ICI at Ardeer in my constituency; 7,000 or 8,000 jobs went in the 1980s at the Glengarnock steel mill; and even when I was at school in the 1980s some 10,000 miners worked at the Killoch pit in south Ayrshire. So I come from a part of the world that has a strong and proud industrial past, but which has been devastated. The manufacturing base is now comparatively weak and we are dependent on the public sector to replace the jobs we had, so the 500,000 public sector jobs cut that the Government are proposing will have a disproportionate impact on areas such as mine.
My constituency has probably the worst youth unemployment problem in Scotland. The statistics show that 20% of our young people between the ages of 16 and 24 are receiving benefits, which is the highest level in Scotland, and that 14.7% of our 18 to 24-year-olds are claiming jobseeker’s allowance.
So it is very fair to say that the part of the world that I represent faces significant challenges, and it is the duty of any Government to create policies that address those challenges and create the economic environment that will ensure that young people are able to get employment. There has been a significant increase in the number of young people in my constituency going into further and higher education over the past 20 years, which is to be welcomed. However, further and higher education is not necessarily the best choice for every young person. It may be something to consider at a later stage, but well-paid employment that gives hope for the future is the best option for some young people.
We have heard tragic stories today of young people who are unable to get jobs, and we know from experience that it takes many decades to recover from a period of high unemployment. All sorts of social problems are associated with high levels of unemployment and youth unemployment, and we spend many hours debating how to grapple with those. Such problems include crime, and drug and alcohol misuse, and they arise when we have the kinds of poverty that are associated with unemployment. Many of the benefit changes being proposed by this Government will disproportionately affect the unemployed, particularly the long-term unemployed. I am thinking of policies such as reducing housing benefit for those who are unemployed for 12 months or more— there are more and more of those people. The number of 18 to 24-year-olds in Scotland claiming jobseeker’s allowance for six months or more has risen by 119% in the past two years, and the number of these people out of work for 12 months or more has risen by 349%. So we face significant challenges.
We have heard criticism of the future jobs fund today, but all the feedback I have received in my constituency, both from people using the fund and from those placing people on to it, has been very positive. The motion calls for an independent evaluation of the fund. We need that to be done, because the future jobs fund is one of the few schemes that is delivering for young people. We need to do everything we can to give young people political priority, so I think it is a tragedy that the scheme is being cancelled. I call on this Government to do more. They should not only support the future jobs fund, but take other steps to give young people the future they deserve. I thank you, Madam Deputy Speaker, for letting me contribute to this debate.
Damian Hinds (East Hampshire) (Con)
It is good to strike a bipartisan note in our debates, even on an Opposition day motion, and I am happy to concur with what a number of Opposition Members, including the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), have said about the scourge of youth unemployment and that these are things we cannot wait to tackle. I am pleased and proud to speak in favour of one of the key clauses in the motion—the bit that says,
“urgent action is now required to stop…young people being lost to worklessness”.
I think we can all agree on that but I suspect we might differ on something that I firmly believe—that the change of management in this country in May 2010 was an important first step towards doing that.
The right hon. Gentleman’s Government left one in five young people out of work. The sharp rise in unemployment started in March 2008, but the sad truth is that there was double digit unemployment among young people according to the standard International Labour Organisation measure even in the good years—the years when the Government were borrowing to the hilt and spending money like it was going out of fashion. In an earlier intervention, I presented the right hon. Gentleman with the international comparisons that he declined to comment on in detail, but perhaps he will do so later.
Of course, Government programmes play a part in all this. I do not think that anyone in the House is suggesting there should be no Government intervention on youth unemployment—of course not. However, I say to the hon. Member for Vale of Clwyd (Chris Ruane), who I am delighted has just returned to the Chamber, that the piece of analysis that he presented concerned entirely the wrong question. We should not ask whether turning around a young person’s life is worth £6,500—of course it is. It is worth that and a whole lot more.
Damian Hinds
The hon. Gentleman displays—I shall not go on.
The important thing to ask is whether that £6,500 is better spent on the fund or on something else that will achieve the same result. It is vital to ask that question at any time, but particularly at a time when the Government and the country not only have no money, but have minus money.
There are examples of the future jobs fund working well. We have heard about what has been happening in Birmingham and Merseyside and I am sure there are many other examples, but we have to examine whether it was doing its job properly across the piece. I think there were three main problems with the future jobs fund—the future problem, the jobs problem and the fund problem. For the future, it was not sufficiently focused on people’s personal development; the jobs involved were not the private sector jobs needed to drive the recovery; and its funding was simply not the most cost-effective way of spending money. Those problems are quite apart from the onerous application procedures, which were partly why so many of the jobs were in the public sector.
I welcome the new Government’s Work programme, which will be more flexible, centred on the individual and, because of the payment by results element, will result in better value for money. As the Prime Minister said a few hours ago in Prime Minister’s questions, it has often been asked why we cannot use the money that will be saved in future and spend it on those interventions now. That is exactly what the Work programme does.
The expansion of apprenticeships is very welcome. Many hon. Members have mentioned that so I shall not say any more on it, but I do want to talk about the new enterprise allowance, which seems to be based on the best features of the Prince’s Trust work mentoring scheme, which I know a little about having formerly been a Prince’s Trust business mentor. That fantastic programme gives young people who are starting businesses access not only to finance but to support, mentoring and coaching to help see things through. I am delighted that the Government are taking such a programme forward. I hope that we will also see more development of microfinance through community development financial institutions and credit unions once the relevant legislative reform order is brought through.
Welfare reform is also vital to the whole picture—not just the ambition but the intention and the plan to make sure that work will always pay in future. Programmes are only ever a part of all this, and I am glad that my hon. Friend the Member for Enfield North (Nick de Bois) mentioned that we need to broaden the debate. The most important thing of all for youth unemployment—indeed, any unemployment—is the state of the economy and our ability as a nation to take advantage of opportunities. We need a healthy physical and, just as importantly, human infrastructure.
There are three key elements to any overarching programme, which are interrelated. The first is having a buoyant private sector, the second is ensuring that the incentives are there to hire and invest in home-grown workers and the third is ensuring that we have the right skills and capabilities across the economy to take advantage of key growth markets.
Chris Leslie
In the city of Nottingham at this time last year, youth unemployment fell for five months continuously, but this year it has been rising. The hon. Gentleman talks about growth and how central it is, but does not he have some doubts that his Government are not doing quite enough on the growth strategy? Could he elaborate on that?
Damian Hinds
I do not have such doubts. I cannot comment in detail on Nottingham’s figures over the past few years, but as we have been examining in this debate, the problem of youth unemployment has not started in the past few months: it has been with us for a long time and we have a structural issue.
I was talking about the buoyancy that is needed in the private sector. That starts with investment because when there is investment, businesses grow and take on workers, including young workers. To encourage investment, we need to keep interest rates low. To keep interest rates low, we need a Government who take the nation’s finances seriously. We also need to ensure that lending is happening, and I am pleased that the Government are taking a very robust approach with the banks on that. Something that we need to work on more, but which will take some time, is ensuring that British firms are not bogged down in regulation, dead-weight administration and an enormously complicated tax system.
As well as a buoyant private sector, we need to make sure that we have the right skills to take advantage of the opportunities in the market, both generally and targeted at specific sectors. When we talk about productivity, we tend to focus on manufacturing, but the service sector now accounts for two thirds of the private sector and for much of the productivity gap that we have in relation to other leading nations. Services will continue to be important in future and we need to build up the skills base of our young people—not just their craft skills but their interpersonal and communication skills.
It is also right to have a targeted approach—a strategy for Great Britain plc. Our record on picking winners is not unblemished, but we do need a strategy. We will never again make T-shirts cheaper than China, but there are sectors in which we can excel. The trick is to find sectors in which there is the coincidence of a high-value, attractive growth market and something that Britain is uniquely well-placed to take advantage of, such as advanced manufacturing, pharmaceuticals, the creative industries, financial services, higher education and tourism.
Let me say a word on tourism, because my background is in the hospitality, leisure and tourism sector. [Hon. Members: “Ah!”] I do not know why people are saying “Ah.” That market is in long-term growth and remains a great export opportunity for this country. We are well-placed to take advantage of that market because of our great heritage, our vibrant cities and our beautiful countryside. In that regard, I must say, on a local level, that I am delighted that the South Downs national park will be opening its doors in a few weeks’ time.
When it comes to tourism at Great Britain plc, the marketing department is very good but I am afraid that the human resources department still needs some work.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
This is about the future jobs fund.
Damian Hinds
Actually, this is about unemployment and creating a vibrant economy in which people can be employed. If the hon. Gentleman reads every clause of the motion, he will discover that I am correct.
In the hospitality sector we find that at entry level, kids who have grown up in this country do not have the same skill sets as some of their rivals from other countries. It is not just about being able to make the best eggs benedict: it is about having the interpersonal skills I was talking about—greeting the customer, making eye contact, smiling, offering to help and owning the problem of the customer. Those are the sorts of skills that we need to build up. It is because of some of those gaps that some employers, sadly, actively prefer to take on young people who have not been educated in this country. That is a huge shame.
I am running out of time. I hugely welcome the Work programme, the enterprise allowance and the expansion in apprenticeships. I equally welcome the review of vocational education and training and the fresh look we are taking at the national curriculum and our commitment to improving education and benchmarking it against the very best in the world. I also welcome the fact that the Government are getting a grip on immigration, which is related to this, and the radical welfare reform. Most of all, I welcome the fact that the Government are living up to their responsibilities to eliminate the structural deficit, to keep interest rates low, to get businesses investing and to grow the economy and create jobs.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
This is a very important debate, and it is a shame to see the Government Benches so empty, not least because the number of unemployment claimants in Stoke-on-Trent Central was more than 250 higher in January 2011 than in December 2010. The good work done by the Labour Government in stopping unemployment, preventing youth unemployment and preventing the worst of the recession is being steadily undone. That was the Labour vision—helping the least well-off through the toughest times. Now we face the morass of a noblesse oblige, laissez-faire big society model that will do little for my constituents.
Part of the Labour approach was the future jobs fund, which secured training and work for young people and slashed long-term ingrained unemployment. Many of my colleagues have spoken very effectively of how well the scheme has worked in their constituencies, and I can say the same of my constituency and the broader north Staffordshire area. The north Staffordshire future jobs fund put hundreds of people into work across Stoke-on-Trent, Newcastle-under-Lyme and Staffordshire Moorlands.
A good example was to be found at Epic Housing, a housing association in Bentilee in my constituency, a tough part of Stoke-on-Trent with ingrained problems of worklessness. Epic looks after 900 homes in the Bentilee area and put 26 people through the scheme, 10 of whom now have permanent jobs—six with Bentilee Environmental Services and Training and four with the parent firm, Epic. Malcolm Burdon, the social enterprise team leader—something that I believe the Government are in favour of—said:
“In six months, the lads go from sitting at home watching Jeremy Kyle to getting up in the morning and coming into work. It makes them disciplined.”
I have nothing against Jeremy Kyle personally, but I am in favour of work and the discipline and pride that come with it, which I used to think the Conservative party believed in.
The future jobs fund has worked not just in Bentilee but in Abbey Green, and it has attacked a culture of worklessness in some tough communities in the city. It is important for my city because Stoke-on-Trent is now on an economic journey, which the Labour Government were helping. It lost its traditional industries, the pits and the pots. Mrs Thatcher did for the mining industry, globalisation did for the steel industry and mechanisation put tens of thousands out of work in the ceramics trade. We are now on a journey of retraining, reskilling, education and attacking worklessness. The collapse of those industries ingrained a culture of worklessness in many communities. People still had the idea that they could go to work in those traditional sectors without needing education and training, and when those jobs went, so too did a culture of workfulness. That filtered down the generations and there was a problem with getting people to work.
The current generation cannot go into the jobs of their fathers and forefathers. As the hon. Member for East Hampshire (Damian Hinds) said, we cannot make T-shirts cheaper than China, nor can we make ceramics cheaper than China in many instances, or steel. We therefore need to train people and give them skills, but we also need to get them back into a culture of work, and that was partly what the future jobs fund was about. My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) explained very well how the fund got into communities and got people back into the culture that they needed.
The real problem with the attack on the future jobs fund is that it forms part of a triple whammy attack by the Government on young people. We had the withdrawal of the education maintenance allowance, which had allowed many people to make the transition to education and learning, which is very important in a city such as mine. We then had the rank stupidity of the teaching budget for universities being slashed by 80%, thereby imposing a £9,000 charge on tuition fees. We should not think for a minute that not all the good universities in the UK will seek to charge £9,000. That leaves many of us wondering what on earth the Government have against young people.
When those moves are combined with an economic policy of cutting too far and too fast, we see that the Government do not have a policy for growth. They have a policy that looks after the banks and supermarkets but slashes business investment.
Mr Edward Timpson (Crewe and Nantwich) (Con)
Will the hon. Gentleman give way?
Tristram Hunt
I would be delighted to give way to a fellow north Staffordshire Member.
Mr Timpson
Cheshire, actually, but I know we are fairly close to each other. You’ll get to know the geography fairly soon.
Will the hon. Gentleman take this opportunity to enlighten us on his party’s policy for growth?
Tristram Hunt
My party’s policy for growth is to rebalance the British economy, and to invest in industry, manufacturing and engineering, which are vital to the north Staffordshire economy. This Government give corporation tax cuts to the banks and the supermarkets, and end initiatives that help investment in science, manufacturing and engineering.
Welfare bills and jobseeker’s allowance accounts are being added to by the undermining of the economic recovery and the scrapping of the future jobs fund, which itself imperils the Government’s hopes of paying down the deficit. The argument about the extraneous cost of the future jobs fund is economic nonsense. My right hon. Friend the Member for Birkenhead (Mr Field), who is no longer in the Chamber, mentioned the great success of the scheme. Government Members like to pray my right hon. Friend in aid at every single opportunity, but on that point they would do well to listen to him.
Many of my colleagues wish to explain the success of the future jobs fund in their constituencies, but it would be unfair to leave my speech without a good old-fashioned example of Liberal Democrat hypocrisy. In a letter dated 21 April 2010, the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), wrote:
“We have no plans to change or reduce existing commitments to the Future Jobs Fund. We believe that more help is needed for young people, not less.”
We now know how far those commitments go.
Liberal Democrats say that they did not know what the books looked like or what the conditions were, but the Secretary of State for Business, Innovation and Skills spent his life writing about the storm and the catastrophe and the crash and all the rest of it, so the situation was not exactly unacknowledged. That talk was either over-egging or dissimulation.
The youth unemployment crisis and the future jobs fund policy points to three things: first, a series of broken promises, denials and U-turns by this shoddy Tory-led Government; secondly, the fact that they have no policy for growth or job creation, eggs benedict and all; and thirdly, the perils of the Government’s vision of the big society. Labour believes in civil society working with the state, but the Government believe in the withdrawal of the state, which will have terrible results in the communities that we represent.
Mr Marcus Jones (Nuneaton) (Con)
I welcome the opportunity to contribute to this debate on youth unemployment. As I am sure all hon. Members know, youth unemployment is a huge problem that needs to be tackled. We should try to avoid playing politics on such an issue, but, sadly, the motion serves to make a party political point.
The future jobs fund is currently part of the policy, but the hon. Member for Stoke-on-Trent Central (Tristram Hunt) seems to think that it is the be-all and end-all, and a utopian solution to the problem of youth unemployment. He does not take into account the fact that it is part of an overall policy to tackle the huge problem of getting our young people into the labour market on a sustainable footing—I emphasise the word “sustainable”.
In proposing the motion, the Labour party is creating a smokescreen—it is a red herring—to disguise the many years of failure to tackle youth unemployment. One in five young people is out of work, nearly 1 million are unemployed, and 600,000 who left education under the previous Government are yet to find work. That record of abject failure and that legacy leave little room for the Labour party to lecture the Government who are trying to sort those problems out, having taken on the worst public finances in living memory.
The future jobs fund was, I am sure, beneficial to some young people, but was it cost-effective and sustainable? Did it lead to permanent and sustainable employment for our young people? The evidence tells us that it did not.
Dame Anne Begg
As an employer, would the hon. Gentleman employ the person with two weeks’ work experience on their CV or the person with six months’ of work?
Mr Jones
It is incumbent on the Government to offer not short-term help but long-term sustainable help for young people. It is important for this Government to make sure that we create a culture in which our young people are ready for work, not force them into short-term work to try to prove themselves to employers. Our youngsters must be ready for work.
The evidence tells us that the future jobs fund was twice as expensive as an apprenticeship. In some places, particularly Birmingham, only 3% of jobs were in the private sector and in most instances very few permanent jobs were created. Most young people, however, are looking for permanent jobs. A grandmother who came to my surgery a few weeks ago wanted her grandson to have a sustainable, long-term future.
I would also like to explore the job market and the culture behind it, which is very important. Throughout Government policy, we must promote the idea of getting our young people into employment and it must be a priority across Departments to reduce the barriers that prevent young people from getting work and take down the barriers that prevent employers from taking young people on, because such barriers do exist.
We also need to look at aspiration, which is acknowledged, particularly by head teachers, as a problem in my constituency. On a number of recent visits to schools, I was told that many of their young people have two aspirations: one is to become a footballer and the other is to become a pop star. My lifelong knowledge of my constituency tells me that during my lifetime we have probably bred three or four people who have become professional footballers and made a living from the sport.
Mr Jones
John Curtis, Peter Whittingham, Darren Gradsby, Julian Alsop—there’s four. They have all done well at varying levels at the professional game. I can tell the hon. Member for Vale of Clwyd (Chris Ruane) that I cannot name anyone who has made it as a pop star. That is why I said that we need young people to have reasonable and achievable aspiration at all levels, which does not seem to be the case at the moment. We have to be honest and recognise that people have different abilities and different levels. That is the case in this House and in the country as a whole.
We must ensure that those who can become doctors and those who go into the trades are valued. We must ensure that the work of young people on the checkout or stacking shelves at Tesco is also valued. We must show those young people that they can make it by working from right at the bottom up towards the top. One good example of that is Terry Leahy who went from stacking shelves at Tesco to become its chief executive; he has been very successful in the business world. We need to show young people that it is worth starting at the bottom of the ladder and working their way up, which can often be a fulfilling experience.
We need to ensure that employers have the right culture, particularly for apprentices. As part of national apprenticeship week, I last week visited a fine small business called MES Systems in my constituency. It employs two young apprentices who are doing fantastic work; they are both excellent and well rounded young men. They were hindered, however, because the culture makes it difficult for employers to give our young people the necessary leg-up to get out and do things on their own. This company employed two youngsters, as I say, one of whom was perfectly able to fit and maintain alarm systems under his own steam. Unfortunately, however, he still had to go around with an engineer and could not go out on his own in his van, as the company could not get access to insurance for him because he was too young. That is the sort of barrier that holds companies back. From what the company told me, I have no doubt that it could take on more young people if it had access to that type of facility.
On the Work programme, I welcome the policies put forward by the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling). The integrated package of support will replace an unclear, confused system that lacks accountability. We will reduce the bureaucratic burden of the current system, and make it simpler for young people and employers to understand, increasing the number of young people who get into work. It is important that we do not have a one-size-fits-all policy for such young people. As the hon. Member for Stoke-on-Trent Central and others have mentioned, things are not as they used to be: sons do not follow their fathers down the pit, or into the car factories as used to be the case in Coventry—[Interruption.] The hon. Member for Bassetlaw (John Mann) comments from a sedentary position, but in my area, which was heavily dependent on manufacturing, thousands of jobs at some of the biggest manufacturing names in this country were lost on his Government’s watch, so they do not have such a proud record on that.
I reject the assertion in the motion about the future jobs fund, given the gravity of the problems faced by the Government in tackling youth unemployment. Members must work hard and take responsibility, across the House, to sort out the problem. I hope the Minister will elaborate on how that work will be taken forward.
Julie Hilling (Bolton West) (Lab)
I want to speak about the support needs of unemployed young people.
In the 1980s and ‘90s, I spent 10 years as a youth worker in a youth co-operative project for unemployed young people. At that time, more than a quarter of young people were unemployed. There was a generation of young people with no jobs, no hope and no future. Some of those young people never recovered: some committed suicide; some turned to drugs and alcohol; others ended up with long-term mental health problems. Even when the economy started to recover, those young people who had spent many years unemployed found it incredibly difficult to get a job. Let us be honest: would an employer prefer to take a 16-year-old fresh out of school, or a 26-year-old who had spent most of the previous 10 years out of work with nothing to get up for and nothing to do? The youth co-operative tried to stop the cycle of despair for unemployed young people, helped them to gain skills and set up their own businesses, gave them driving lessons and taught them how to use computers, built their confidence and gave them a reason to get out of bed. Then we were closed by Tory cuts to the youth service.
The Labour Government came along and introduced the Connexions service—careers advice plus. It provided straightforward careers advice for young people and a dedicated service of support for young people not in employment, education or training or those at risk of becoming NEET. The Government funded other programmes that provided support, training and education to young people, including a summer programme for 16-year-olds from the New Opportunities Fund. There was an activity agreement, a learning agreement, and from the working neighbourhoods fund a range of projects, including bespoke projects aimed at the most vulnerable young people, such as teenage parents and young offenders.
What happened as a result of that support and such programmes? From 1997 to the start of the global financial crisis, youth unemployment fell by 40%, and more than half of young people were off jobseeker’s allowance within three months. Now we have a Tory-led Government, and it is back to the future. All the support programmes are being slashed, the Connexions service, future jobs fund and EMA are going, youth services are on the brink of destruction, and youth unemployment is at its highest since 1992. What are young people, especially those who need additional support because of poverty, disability or low educational attainment, to do? How will such young people compete with those who have more advantage?
The Government have also cut completely the funding to v, the national young volunteers service. Vinvolved provided fun, exciting, eye-opening volunteer experiences for young people, and one-to-one, tailored, maintained support. Most of the young people engaged in the project were experiencing difficult social and economic circumstances. Volunteering enhances young people’s employability, gives them the opportunity to gain experience to put on their CVs, and allows them to get references and develop contacts to help them to get into full-time work. It also enables them to give back to their communities and, perhaps most importantly, gives them confidence and self-respect. The Government’s replacement for it is merely an eight-week summer programme for 16-year-olds.
On Sunday I had the honour of presenting the volunteer of the year award for Greater Manchester to Matthew, a 21-year-old from Bolton. Matthew has multiple disabilities, had no confidence and was doing nothing. His Connexions adviser referred him to get involved in vinvolved. He was offered a number of volunteering opportunities, which he took up. When his support worker visited him a few weeks later, she did not recognise him. He has continued to volunteer and is now training as a coach for disabled football. Matthew is on the road to getting a full-time job. He would not be if it were not for vinvolved.
Most young people from advantaged backgrounds will achieve the transition to work easily, but those from difficult backgrounds often find it less simple. Youth unemployment cannot be solved overnight. Therefore, we must provide support, not only in jobs but in positive activity and action so that our current generation of young people will survive, have hope and have a future.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
Scrapping the future jobs fund is a false economy for this country, because in saving a relatively modest sum in the short term the Government are recklessly running up much greater costs for society in the long term. Those greater costs will come from poor mental and physical health, to which persistent worklessness is linked, and which will have a long-term impact on the NHS and other social services. There will also be greater costs for the economy. A whole generation of people will be unskilled and unequipped for work. That will be a much greater cost for the economy because if we do not provide these young people with the right skills and experience during the downturn, we will lack the human capital to take advantage of the recovery down the line.
The future jobs fund was a serious response to the crisis of joblessness. At its heart was the guarantee of paid work for those who have been unemployed for more than six months. Underpinning it was the economic rationale that investment in jobs now would prevent a repeat of the lost generation of the 1980s. I was amused earlier today to hear the Prime Minister describe the Work programme as the biggest back-to-work programme since the 1930s. That is not much of an achievement, because there were no back-to-work programmes worth the name in the 1930s.
The analogy with the 1930s does hold in the following respect however. In the 1930s we had a Tory-led coalition presiding over mass unemployment. The unemployed were concentrated in the same areas that face the biggest challenges in creating jobs now. When the unemployed marched to London from Jarrow and elsewhere, the Government told them, “Sorry, but we can’t help you as the financial markets won’t wear it.” Does that sound familiar?
The FJF was a creative response to a crisis of youth joblessness. Its abolition is to be regretted for a number of reasons. It is a tragedy for young people in my constituency, which has 13 people chasing every vacancy according to the most recent figures, and it is a tragedy for the country. Unless we invest now in these young people, we will not be able to reap the benefits of the recovery which will flow at some stage down the line. Investment is necessary now. Not investing in these young people is a false economy.
Alison McGovern (Wirral South) (Lab)
I will be very brief, because many Members on both sides of the House have contributed to the debate and have made excellent points.
Young people are always the victim of recessions; they are always the least able to cope. That is true around the world now: in both wealthy nations and developing countries, young people are the victims of the recent global economic crash. It was true in 1992 as well, which was a recession I remember only too well.
We live in a changing world. It is no longer possible to be like my dad and fail at education but succeed in the world of work. We have a different economy, where skills are necessary not just for well-paid jobs but for all jobs. That will continue in the future; our place in the global market has changed and we must recognise what that means for young people.
The existing culture of worklessness that other Members have mentioned and which my neighbour, my right hon. Friend the Member for Birkenhead (Mr Field), has done so much to research and question, arose from the failure in the 1980s to plan for change. Because we failed to plan then for better employment, we have an entrenched culture of worklessness. I hope that Ministers in this Government will not make the same mistake. I have certainly seen their commitment and I hope they will build on it by changing course.
To make sure that young people, especially those on Merseyside and those I represent in Wirral, do not pay the price of the crash, the Government should slow down the cuts, and invest to save. We shall not fix the deficit by forcing young people to remain on the dole. The Government must rethink their plans for work experience schemes that bear too many of the hallmarks of the short-termism of YTS in favour of real jobs in the voluntary and social sector. We can support that sector, which means so much to us, by investing in such jobs, as the future jobs fund was doing. That is the lesson the Government need to learn. It is not by pandering to hard-line calls for cuts that we shall fix the deficit, but by investing in young people for the future.
Stephen Timms (East Ham) (Lab)
We have had a good debate. From both sides of the House we have heard mounting alarm about the youth unemployment crisis that is battering every community in the land, not least, as we heard, those in Thurrock, Cardiff Central, Enfield North, East Hampshire and Nuneaton. We learned today that the number of unemployed young people has risen again and is perilously close to 1 million. The rate of unemployment among 16 to 24-year-olds, which came down in response to Government initiatives from the summer of 2009, rose sharply at the end of last year to the highest rate ever recorded. My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) is right to underline the fact that the rate of unemployed new graduates is 20%. Not only is employment falling; young people are being deterred from education. My hon. Friend the Member for Wansbeck (Ian Lavery) was right; for young people, this is a perfect storm.
The Government should heed the warning, for example from Brendan Barber, that there
“is a real danger of losing another generation of young people”.
That warning is coming not just from Labour and the trade unions. David Blanchflower, professor of economics at Dartford college, New Hampshire, formerly of the Monetary Policy Committee puts it thus:
“Our labour market problem is primarily a youth problem…The data shows that the coalition has sent the youth labour market back into crisis.”
Ministers should certainly listen to the Recruitment and Employment Confederation. In the foreword to its report, “Avoiding a lost generation”, the chief executive wrote:
“These young people risk becoming a ‘lost generation’ unless action is taken by all those with a role to play.”
The REC calls for a series of specific measures from Government and others. The message is consistent. The Government need to act, but action from this Government is what we are missing.
What about the prospects for the coming months? We are at the start of a massive cull of public sector jobs. The Office for Budget Responsibility says that more than 400,000 of them will be lost over five years. Others say it will be worse. The OBR told us that in the current financial year 5,000 jobs would be lost, but the Chartered Institute of Personnel and Development said the figure would be nearer 50,000—10 times as many. We see from figures published this morning that the CIPD was right: 60,000 public sector jobs lost in six months.
What about the coming year? The OBR says that 40,000 jobs will go, but the Conservative-led Local Government Association says that local authorities alone will shed more than 100,000 jobs next year. The OBR seems to have failed to grasp the magnitude of what is going to happen.
There is no sign at all of the boom in private sector jobs that the Government promised to take up the slack. The Office for National Statistics spelled it out this morning. Growth in private sector jobs in the past quarter was nil. Nothing. Zero. With the Government, as Richard Lambert pointed out, having no growth strategy, we will not see a private sector job resurgence any time soon.
We wish the Work programme well, but if there is no work, as my hon. Friend the Member for Wansbeck said, it is not going to work. Now, in an extraordinary about-turn on the promises that Ministers have made about the Work programme, it turns out that it will help far fewer people than the programme that it is replacing. The scorecard published today by the think tank Reform sums up the position. For the Department, the DWP, it is a case of
“promising too much and delivering too little”.
The Government have scrapped the future jobs fund, which has been the focus of the debate. People in Jobcentre Plus echo what we have heard in the debate. Those in my area say that FJF was clearly a success, with up to half of those who were placed in jobs being kept on by their employers after their six-month placement ended, with still others going on to other jobs with the benefit of great experience on their CV. We heard from several Members in the debate about the achievements of the fund. My hon. Friend the Member for Wirral South (Alison McGovern) mentioned people placed with Age Concern Wirral supporting voluntary sector capacity building.
My hon. Friend the Member for Bolton West (Julie Hilling) was right to underline the importance of volunteering as a route back into work. My hon. Friend the Member for Vale of Clwyd (Chris Ruane) paid tribute to Ali Thomas and her work at Rhyl city strategy. My hon. Friend the Member for Barnsley East (Michael Dugher) spoke about 200 young people whom, it was hoped, would be in work by the end of March. We heard from my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) about 26 people being placed in work through Epic housing association. There is a raft of achievements around the country, brightening the prospects of young people for the future.
The problem of youth unemployment is particularly serious at present because there is such a large cohort of young people. The size of that cohort will decrease over the next few years, so there is a strong case for the future jobs fund or something very like it, at least in the next few years. The Minister may not need to announce a long-term initiative, but she needs to grasp the scale of the problem in the short term and come up with proposals to tackle it.
It was the Churches report, “Unemployment and the Future of Work”, that made the case 14 years ago that it was wrong in as prosperous a society as ours for large numbers of people to be deprived for long periods of the chance to earn a living. More than 250,000 of the young people currently out of work have been unemployed for more than a year. As we saw in the 1980s and in the early 1990s, long-term youth unemployment does untold long-term damage. We cannot afford the Government doing what those previous Governments did—abandoning yet another generation of young people. Young people do not need warm words or sympathy. They need action, and the time for action is now.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
I thank Opposition Members for giving us the chance today to debate the record of the previous Labour Government. It has been a lively debate, which is perhaps unsurprising, given that the record of Labour is so fresh and bears the fingerprints of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who opened the debate for the Opposition. I shall deal first with his contribution, which was a master-class in the selective use of statistics.
Let me clear up one or two of the right hon. Gentleman’s statements. He asserted that redundancies are going up. In fact, redundancies are unchanged in the past quarter, at 145,000—less than half the level during the recession—and the number of people on JSA is 20,000 lower than at the election. The number of unfilled vacancies has risen by 40,000 this quarter to 500,000—the sorts of new jobs that can make a real difference in people’s lives.
The right hon. Member for East Ham (Stephen Timms) called for action, and that is what we as a coalition Government are delivering. The Government are determined to make a difference to the lives of young people, which means tackling the root causes of unemployment, not just dealing with the symptoms. That is why we are supporting a host of new measures, including work clubs, Work Together, enterprise clubs and the new enterprise allowance, to help unemployed people move off benefits and into self-employment.
We are getting the Prince’s Trust into jobcentres so that we can help build volunteering partnerships. That is why, for young people in particular, we are developing a far more flexible back-to-work model that gives Jobcentre Plus managers the freedom to work with them and help them get the support that in the past has been lacking. We are also launching a new work experience programme to get young people into the habits of work, with two to eight-week placements targeting hard-to-help groups. We are putting 18 to 24-year-olds who have not succeeded in finding a job after nine months into the Work programme, with early entry for the most disadvantaged.
We have heard a host of contributions today and I would like to pick up on one or two of the themes that have been mentioned. The hon. Member for Barnsley East (Michael Dugher) made an important contribution when he said that jobs play a pivotal role in our lives, and I wholeheartedly agree. He will therefore be as angry as we on this side of the House are that youth unemployment grew by 270,000 under Labour’s stewardship. I hope he can support the programmes that the Government have put forward to address the issues.
Maria Miller
I will not, if the hon. Lady will forgive me, because we are very short of time.
My hon. Friend the Member for Thurrock (Jackie Doyle-Price) talked about the importance of employability, which did not always come through in Opposition Members’ contributions. She outlined the importance of recognising the need to localise support for young people and, in particular, to involve local employers in imaginative thinking to try to unlock the potential of our youth. That theme was echoed by my hon. Friends the Members for Enfield North (Nick de Bois) and for East Hampshire (Damian Hinds), both of whom bring important experience to the debate as employers. My hon. Friend the Member for Enfield North talked about the importance of permanent and sustainable jobs and about Labour’s failure to deliver a long-term, sustainable strategy for youth unemployment. By focusing on that broader element of the debate, he brought in the perspective of the employer.
My hon. Friend the Member for East Hampshire talked about the productivity gap that we see all too often in the market, a skills gap that the previous Government simply did not address, and the importance of education in ensuring that young people are skilled up for the future job market. My hon. Friend the Member for Cardiff Central (Jenny Willott) made an important point in the debate, as did Opposition Members later, about the importance of ensuring that the most vulnerable get the support they need to get into employment. I can assure her that, through my work as the Minister with responsibility for disabled people, and by pressing forward with Work Choice, we will ensure that the Work programme is supplemented by particularly specialist support in that area.
The hon. Member for North Ayrshire and Arran (Katy Clark), who is no longer in her place, made some important points on apprenticeships. Indeed, I think she said that she would have liked her party to have gone further on apprenticeships. I can assure her that where Labour did not go, we will go. I hope that she will support us in that.
Maria Miller
If the hon. Gentleman will forgive me, I will not give way, because we have a lot to get through.
It is important to use apprenticeships in the public sector to transfer skills into the private sector. At the heart of the debate—this is the point that Labour Members were trying to bring out—is the role of the future jobs fund. We heard an impassioned speech from the hon. Member for Wansbeck (Ian Lavery), who made sure that the House listened to his contribution, but I must set one or two of his facts straight. He asserted many points in his contribution, some of which have already been refuted by colleagues. Just to make sure that he is clear, the coalition Government did not abolish the future jobs fund; 75,000 people have started on a future jobs fund job, and that figure will rise to more than 100,000 in the coming weeks. We have honoured all future jobs fund commitments. I hope that reassures the hon. Gentleman: we will make sure that young people in his constituency continue to receive the support to which he referred.
The hon. Members for Stoke-on-Trent Central (Tristram Hunt) and for Wirral South (Alison McGovern) raised a number of issues, particularly on the importance of inter-generational worklessness—something that Government Members feel was not tackled properly under 13 years of Labour. On the importance of re-establishing the culture of work, I am sure that their constituents would not support a scheme—the future jobs fund—that leaves half the young people whom it was designed to support on benefits seven months after they started on it. That is not the sort of success that anybody would like to see for young people today.
My hon. Friend the Member for Nuneaton (Mr Jones) could not have put it better: it feels today as if Labour has been trying to create a smokescreen to hide its true record of failure. Today, we have heard again about Labour’s legacy of failure: a failure to tackle the root causes of youth unemployment, with the number of people in youth unemployment when they left office 270,000 higher than when they entered, and a legacy that they tried to fix with a catalogue of short-termist schemes that seemed to owe more to managing unemployment figures and creating headlines than to trying to provide for the long-term futures of the young people whom we represent.
Let us be clear: the future jobs fund has not delivered, and it does not deliver the long-term opportunities that we, as constituency Members, want. The undeniable fact is that about half of those who went into the future jobs fund were back in the unemployment queues seven months later. The right hon. Member for East Ham called for action, and that is exactly what the coalition Government are delivering. In contrast to Labour, we are focusing on long-term skills.
Sheila Gilmore
Is it not the case that youth unemployment fell below 700,000 only at the very end of the period 1992 to 1997? It did not rise above 700,000 again until 2007, when the recession came. So if we are comparing records, will the hon. Lady please get the record straight?
Maria Miller
I will absolutely get the record straight for the hon. Lady. It is very simple. She may give the House a lot of stats, but I will give one stat back to her: 270,000 more young people on unemployment benefits at the end of Labour’s 13 years in government than at the start. That is the fact that matters.
In contrast—
Maria Miller
If the hon. Gentleman will forgive me, I will not, because I have two minutes in which to finish.
In contrast, we are focusing on long-term skills and sustainable jobs for young people—a real future for the people whom we represent. There will be 50,000 extra apprenticeships this year, at about half the cost of future jobs fund placements, and we will deliver skills that will last a lifetime. The Work programme will provide personalised support that has never been seen before in this country—caring for the individual and caring for individual needs.
There will be work experience opportunities for young people and voluntary opportunities that make the difference, with people getting that first step on the employment ladder and that first job. There will also be a new universal credit that supports young people into work and does not trap them in a lifetime of welfare dependency and underachievement.
Labour spent £4 billion on its new deal projects, much of which was aimed at young people, but we saw unemployment among young people going up. That is a national disgrace. The real change is happening right now. We are not wasting any time. We are giving the young people of Britain the support that they need to reach their potential and to get the experience and training that they need for long-term job opportunities. We are going to set people up for life with the skills that they need.
This is not the time to turn back to Labour’s failed policies of the past 13 years. I urge hon. Members across the House to reject the Opposition motion and to support a more positive future for Britain.
Question put.
Mr Deputy Speaker (Mr Nigel Evans)
I now have to announce the results of Divisions deferred from a previous day. On the Question relating to immigration, the Ayes were 474 and the Noes were 23, so the Ayes have it.
On the Question relating to the terrorist finance tracking programme, the Ayes were 484 and the Noes were 5, so the Ayes have it.
[The Division lists are published at the end of today’s debates.]
Military Covenant
(14 years ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
18:59 - The House divided: - Ayes: 234 / Noes: 318 - Question accordingly negatived.
Mr Deputy Speaker (Mr Nigel Evans)
Before I call the right hon. Member for East Renfrewshire (Mr Murphy) to move the motion, I should emphasise that a large number of Members wish to speak in this debate, which is why a six-minute limit has been put on Back-Bench speeches. May I also ask for restraint from Front Benchers, so as to enable as many Back Benchers to speak as possible?
Mr Jim Murphy (East Renfrewshire) (Lab)
I beg to move,
That this House supports establishing in law the definition of the Military Covenant, in so doing fulfilling the Prime Minister’s pledge of 25 June 2010 to have ‘a new Military Covenant that’s written into the law of the land’; believes that this commitment should not be diluted or sidestepped; and further supports service charities’ and families’ calls for a legally-binding Military Covenant which defines the principles that should guide Government action on all aspects of defence policy.
I start by adding my condolences to those properly offered by the Prime Minister and the Leader of the Opposition earlier today to the families of Private Lewis Hendry from 3rd Battalion the Parachute Regiment, Private Conrad Lewis from 4th Battalion the Parachute Regiment and Lance Corporal Kyle Marshall from 2nd Battalion the Parachute Regiment. They will be loved for ever by their families, and I hope that they will be permanently honoured by our nation.
The motion before us has a straightforward purpose. It aims to fulfil the Conservative party’s pledge to introduce a new military covenant that is written into the law of the land. It will properly fulfil the Conservatives’ manifesto pledge to establish a tri-service military covenant. It aims to address the concerns articulated by the Royal British Legion and other service charities, and to set out in law the definition of the covenant so that there can be a legal basis for the principles that the Government must uphold in order to provide the forces community with the highest level of care and support. Inexplicably, the Government have already voted against an amendment in the Armed Forces Bill Committee that would have fulfilled the aims of today’s motion.
Bob Russell (Colchester) (LD)
Does the right hon. Gentleman agree that the points that he is about to raise were debated in detail in that Committee, and that clause 2 of the Bill bears the words “armed forces covenant”?
Mr James Gray (North Wiltshire) (Con)
I am grateful to the right hon. Gentleman for giving give way, because I am keen to interrupt him at the beginning of his interesting speech. We are grateful for his support for our proposal to bring the military covenant into law. If he casts his mind back over the past 13 years, can he remember any occasion on which Labour either put a proposal to do that in its manifesto or committed itself in any way, shape or form to putting any kind of military covenant into law?
Mr Murphy
I am grateful to the hon. Gentleman for his keen sense of anticipation for my interesting speech. I have already said that, on reflection, we should have gone further towards taking the covenant out of the cut and thrust of party politics—[Hon. Members: “Ah!”] I hope that all those on the Conservative and Liberal Democrat Benches who are now chiding us for not having done that will have the courage of their convictions and take this opportunity to vote for their manifesto commitment later this evening.
Many Members, of all parties, and most people in the country will be hoping that the Secretary of State will use today’s debate as an opportunity to reconsider the Government’s policy. This debate is important because the covenant is the unspoken contract between the nation and our services that guides us to serve with the utmost respect those who serve our country with incomparable courage. As our country continues to change, those values should remain constant. There is a tangible feeling up and down the country that that moral bond between the nation and the forces should be strengthened.
I want to make it clear from the outset that any criticism that I offer today is not mine alone. The Army Families Federation received 2,000 complaints about the Government’s cuts from its members by e-mail in five days, many of which expressed real concern. The director general of the Royal British Legion, Chris Simpkins, has said of the Government’s defence of their Armed Forces Bill:
“The Legion is concerned that this looks like the beginnings of a Government U-turn.”
In truth, if the Government fail to back today’s motion, that U-turn will be complete. Vice-Admiral Sir Michael Moore, the chairman of the Forces Pension Society, has described the Government’s plan for the covenant as “incredibly wet and feeble”, stating:
“It is flute music and arm waving. There is nothing of any substance, with just a couple of no-cost ideas”.
Andrew Bridgen (North West Leicestershire) (Con)
Will the right hon. Gentleman give way?
Andrew Bridgen
Does the right hon. Gentleman not accept that for almost three years the last Labour Government were in complete denial about the adequacy of Snatch Land Rovers to protect our troops in Helmand? Does that not constitute a breach of the military covenant?
Mr Murphy
We massively increased the number of armoured vehicles going to Afghanistan, and that was the right thing to do.
The former commander of the Parachute Regiment in Afghanistan, Colonel Stuart Tootal, said at the weekend:
“There is a real fragility of morale in the Armed Forces at the moment.”
It is regrettable that a Government so young should find themselves in a position so undesirable. That is of concern to Members in all parts of the House. These are real issues, which demand a more serious response than Ministers have given in the past few days and weeks.
Dan Byles (North Warwickshire) (Con)
Would that be the same Colonel Stuart Tootal who resigned his position as commanding officer of the Paras in disgust at the way in which his soldiers had been treated under the Labour Government?
Mr Murphy
The hon. Gentleman knows that not to be the case. Stuart Tootal made his position very clear at the weekend.
I do not doubt the sincerity of Ministers’ words. I have made that plain at each and every turn when I have spoken from the Dispatch Box. However, there is real confusion and concern about their actions. The reason for the growing anger is that they know that the Government’s actions are sometimes enormously unfair, and, in the case of defining the covenant in law, utterly confused.
Let me explain why I think that the Government’s position is flawed. In the Armed Forces Bill, the Government have provided for an annual report on the covenant, explicitly using the term “covenant”. However, Ministers are choosing to overlook the fact that there is no legally binding definition of the term to accompany its use, which means that Ministers can themselves determine how it is interpreted.
Stephen Barclay (North East Cambridgeshire) (Con)
In his evidence to the Public Accounts Committee last month, the most senior official in the Treasury, Sir Nick Macpherson, said that
“there was a point in the middle of the last decade where the MOD lost control of public spending.”
Can the Minister explain what impact that has had on the military covenant?
Mr Murphy
At the same time the hon. Gentleman’s party was demanding more spending on the Army, more spending on the Navy, more spending on the Royal Air Force, more aeroplanes and more ships. When there was real concern about funding, his party was demanding ever more spending. He cannot be in denial about that.
I would rather rely on the evidence of one of the hon. Gentleman’s own Ministers in the debate on the Armed Forces Bill. He was very clear, and the Secretary of State must be clear as well in terms of meaningful commitment. The Under-Secretary of State for Defence, the right hon. Member for South Leicestershire (Mr Robathan), the veterans Minister, said that the Government had no intention of placing in law a legal definition of a covenant.
Angus Robertson (Moray) (SNP)
Does the right hon. Gentleman agree that the sense of responsibility enshrined in a military covenant must also reflect care for service communities that are threatened with base closures? Does he agree that lessons could be learned from the United States, where there is a “transparent” commission which considers base realignment and closure, and an Office of Economic Adjustment, which gives substantial funds and support to closure-hit communities?
Mr Murphy
The hon. Gentleman knows, as I think everyone in Scotland knows, that we do not agree on everything when it comes to the armed forces, but he makes an important point about the impact on wider societies and communities of any base closures. During the last two years or so of the Labour Government, we considered the future of the firing range in the Western Isles, and it was not until we had received a full impact assessment of the impact on the community and the fragile economy of the islands that it was decided to halt the closure.
In Committee, the veterans Minister said:
“The covenant is a conceptual thing that will not be laid down in law.”––[Official Report, Armed Forces Public Bill Committee, 10 February 2011; c. 21.]
The whole country will be simultaneously grateful to the Minister and disappointed that he has made the Government’s position clear. It seems that the Government’s main line of defence is to attack a non-existent threat. No one is arguing for a set of justiciable rights. No one really wants to campaign for such a thing.
The forces charities themselves said that they wanted the principles defined in law—they did not want new statutory rights—and that is what our motion sets out to achieve. In answer to the hon. Member for Colchester (Bob Russell) in the Select Committee that considered the Bill, the Royal British Legion’s director general said:
“I understand the point about rigidity, specific definition and a detailed Covenant being included in law. I am not making that point at all. What I am saying is that the principles of which a Covenant should take account should be clearly stated and understood.”
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Prime Minister’s pledge was not made before the election in the heat of a campaign, but after it. In June last year, he said that the Government would have
“a new Military Covenant that’s written into the law of the land”.
Given the clarity of that pledge, will my right hon. Friend care to speculate as to why the Government would not fulfil that commitment?
Mr Murphy
That is probably going to be the hardest question I am asked all day. Just why have the Government U-turned on this issue, given that it was not a pre-election promise, but a post-election commitment? It is for the Secretary of State and his Ministers to articulate the reasons for their Government’s action.
I come back to the point about principle rather than statutory obligations.
Alec Shelbrooke
The right hon. Gentleman is talking about what happened in the past. Will he take the opportunity to apologise on behalf of the previous Government for sending our troops to war without the correct equipment in 2003 because he did not want to alarm his own Back Benchers that his Government may have already decided to go to war in Iraq?
Mr Murphy
The fact is that I am remarkably proud of much of what my Government did in office in support of the armed forces: we produced the service personnel Command Paper and the first ever cross-government strategy; we made improvements for dependants waiting on NHS waiting lists; we provided support for and investment in the NHS; we ensured better treatment in the allocation of public housing; and basic pay went up in line with recommendations of the independent Armed Forces Pay Review Body in full for 11 years in a row. That is a remarkable set of investments, of which I am rightly proud.
Charlie Elphicke
I understand the right hon. Gentleman’s desire to take a Maoist year zero approach to all this. Leaving aside the obvious exercise in shamelessness, he nevertheless left a £38 billion black hole in the MOD, which has made it much harder to look after our troops in the future.
Stephen Barclay
The right hon. Gentleman suggested that Conservative Members were pointing the finger elsewhere. Does he not agree with his parliamentary colleague, the right hon. Member for Barking (Margaret Hodge), who, as Chair of the Public Accounts Committee, agreed with the following finding:
“The Department has failed to develop a financial strategy identifying core spending priorities”?
The report in question also said:
“The Department’s poor financial management has led to a…shortfall of…£36 billion”.
Does he agree with his parliamentary colleague? Why was the military covenant not part of his Government’s core spending priorities?
Mr Murphy
No, I have already given way to the hon. Gentleman so I shall make some progress.
On the military covenant, the amendment to the Armed Forces Bill that the Secretary of State and his friends were intent on rejecting said:
“The Secretary of State must by Order through Statutory Instrument establish a written Military Covenant (henceforth referred to as “the Covenant”) which sets out the definition of the word “covenant”, used in Clause 2, line 6 of the Armed Forces Bill. The definition would set out the principles against which the annual armed forces covenant report would be judged.”
That is the amendment that the Government have found so dangerous and refused to accept in Committee. That is the amendment that they claim would create a whole set of new justiciable rights when it would do no such thing.
Mr Jim Cunningham (Coventry South) (Lab)
Does my right hon. Friend recall that the deficit that the Government now blame us for was accumulated over nearly 30 years, so they are as responsible for it as anyone? Does he agree that they should not have signed up to a covenant that they never intended to carry out?
Mr Murphy
The fact is that prior to the financial collapse across the world and the banking crisis, we had pared down the debt. [Hon. Members: “Oh.”] There is no point in that crowd on the Government Front Bench moaning about this: throughout that period they demanded ever more spending on our armed forces. They cannot deny that.
Returning to the military covenant—
Mr Julian Brazier (Canterbury) (Con)
Will the right hon. Gentleman give way?
Mr Murphy
In a second. So far, we have not had a single intervention from a Conservative Member who has said whether they are willing to back their own manifesto commitment. I do not mean that as a negative comment on the hon. Member for Canterbury (Mr Brazier) because I know he takes a keen interest in all these matters. I will happily give way to him.
Mr Brazier
I am grateful to the shadow Secretary of State for giving way. He knows that I have raised with Governments of different complexions issues from the treatment of the wounded to the state of married quarters. In my 24 years here, representing a garrison city, I have never once had a serviceman or service family come to me and say, “This is all about producing a legal definition of the military covenant.” What they want is to be treated decently and that is what the Government are trying to do.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
Does my right hon. Friend agree that various issues of concern to military families will be included in the report on the military covenant and that the content of that report should be determined by the external reference group and not by the Secretary of State?
Mr Murphy
My hon. Friend is absolutely right. The military covenant should not be whatever the Government of the day determine it to be. It should not be at the whim of Ministers to decide in a report what is and is not in the covenant. My hon. Friend makes a very important point.
The Government say that it is not necessary to detail the military covenant, in principle, in law, because they are already taking action. They mention the covenant in the report and it was mentioned in the Armed Forces Bill Committee. All those involved in the debate today—except, perhaps, for you, Mr Deputy Speaker, because you are free from involvement in these debates—will have received an e-mail from the Royal British Legion, which stated:
“As the nation’s guardian of the Military Covenant, we would be very grateful if you could urge the Government to honour the Prime Minister’s welcome commitment last June to enshrine the Military Covenant in law. We do not understand why the Government is now claiming that the commitment to produce an ‘Armed Forces Covenant Report’ is somehow the same thing as enshrining the Military Covenant in law. It is not the same thing at all.”
I urge hon. Members from both Government parties to listen to the legion’s voice and vote for the motion today.
The military covenant cannot be whatever Government Ministers of the day deign it to be. It should be defined in law so that it is removed from the cut and thrust of party politics. If the Secretary of State is true to his word, which I believe him to be, he should meaningfully define the covenant in law. What is needed is specific legislation to put the definition of the covenant on a legal footing. In the words of Chris Simpkins, the director general of the Royal British Legion:
“To suggest an annual covenant report would be as effective as a piece of legislation is nonsense and would be evidence of the Government doing a U-turn on their explicit promises.”
Dr Andrew Murrison (South West Wiltshire) (Con)
The right hon. Gentleman has been talking for 20 minutes about putting his definition of the military covenant into law. Is he going to give us any form of definition before he winds up his remarks?
Mr Murphy
I know the hon. Gentleman understands that it is not for me to give a legal definition of the military covenant at the Dispatch Box. It is for the Government to define the principles of it in a legal sense, along with the armed forces and their families in public consultation. [Interruption.] The Secretary of State’s Parliamentary Private Secretary is screaming at the top of his voice that there is no definition. If the Conservatives were in any way interested in the matter, we could arrive at a definition of the armed forces covenant on a cross-party basis, involving armed forces families across the entire nation. In truth, they have turned their back on their own manifesto, will not listen to the British Legion and refuse to act on the issue at all.
Bob Russell
The shadow Secretary of State opened his comments with a tribute to three soldiers from the Colchester garrison. Some 3,000 of my constituents are in Helmand province, and if any of them get to watch or read about this debate, I do not think they will be impressed with the contributions that are being made. I urge Members on both sides of the House to show respect. Playing party politics with our armed forces is not what they want.
Mr Murphy
The hon. Gentleman makes a very important point. I have responded to each point raised in turn, and I will continue to do so.
We are asking the Conservative party to maintain its manifesto commitment, and to vote for it. We will vote for its manifesto commitment today, and the country will expect Conservative Members to do the same.
Today’s debate also provides an opportunity for the Government to reflect again on their decision on the chief coroner’s office. It would give families who have lost those closest to them, often in tragic, painful and extremely difficult circumstances—the type of people whom the hon. Member for Colchester was talking about—the right to the best possible investigations and military inquests into those deaths. On this day of all days, when the constitutional relationship between the House of Commons and the House of Lords is being considered, it is important that we listen to the House of Lords on that important issue.
I turn to the wider of issue of Afghanistan and its impact on the covenant. We have made it clear that we will support the Government on Afghanistan whenever possible, as we did on Monday. I welcome their continued commitment to update the House on progress there, particularly in the diplomatic effort, which seems far less advanced than the military campaign.
Those injured in Afghanistan face enormous burdens and a life of dramatic change. That places a huge responsibility on the Government and politicians of all parties to support them, so that the country fulfils its responsibility to them. Public services, public servants, charities, the private sector and Government must continually consider how best to support all our forces, particularly those who are injured. We should try to generate consensus on that at every possible opportunity.
Mr Mike Hancock (Portsmouth South) (LD)
Why does the shadow Secretary of State think that the wording in the Armed Forces Bill, which reflects the will of the country to honour the covenant, is not what the people want? How does he think it fails to cover all the issues that he is talking about? A lot of armed forces personnel and their supporters undoubtedly believe that it does cover them.
Mr Murphy
As I said earlier, the British Legion has been pretty critical and straightforward about that. The problem is the word “covenant” being used but not given a legal definition, which allows Ministers and Governments of all parties to interpret and reinterpret it in an annual report. That is why the principle of legal definition is important.
Mr Hancock
We had the same problem when the last Government refused to accept their duty of care responsibilities. They did that because nobody could clearly define, in rigid legal terms, what a duty of care was.
Mr Hancock
No, you didn’t. The hon. Gentleman, who was a Minister and before that was on the Defence Committee, will remember from his experiences on the Committee that the Labour Government’s big failure on the duty of care was that they were unable to define clearly what it meant.
Mr Murphy
I shall make some progress before giving way.
As I said, it is important that where we can, we should build consensus, such as on support for the operation in Afghanistan and on the treatment of those who return, but there is one matter on which it is difficult to support the Government: the switch from retail prices index to consumer prices index for forces pensions and benefits. That is a highly charged and emotional issue—rightly—but I shall make my case carefully, and I look forward to the Secretary of State being equally careful and detailed in his reply.
The impact of that switch will be felt by generations of our bravest, from those who jumped from landing craft on to the beaches of Normandy in 1944 to those facing the Taliban today in the Afghan desert sand. A corporal who has lost both legs in a bomb blast in Afghanistan will miss out on £500,000 in pension and benefit-related payments, and the 34-year-old wife of a staff sergeant killed in Afghanistan will be almost £750,000 worse off over her life.
There are only two possible justifications for that policy. The first is that Ministers think that the support that forces personnel and their dependants currently receive is overly generous, but I have not heard any of them say that. The second possible justification is, of course, deficit reduction, which Ministers do pray in aid. However, that argument does not add up. The impact of those measures will be felt long after the deficit has been paid down and the economy has returned to growth. The deficit is temporary, but those cuts will be felt for the rest of our forces’ lives.
Mr Wallace
The right hon. Gentleman said that we should reflect on the British Legion election manifesto and its 15 or 16 demands. The manifesto never mentions the covenant, but it does mention lots of solutions to help the welfare of our veterans and current serving personnel. What part of the Government’s progress is he unhappy with in relation to the British Legion’s manifesto, and what parts of the manifesto would he adopt sooner rather than later?
Mr Murphy
The hon. Gentleman has vast experience in such matters and I do not doubt his commitment, but there is limited validity in him brandishing last year’s British Legion document when he does not accept what it says in its e-mail today—it makes it very clear that it is unhappy with the Government’s position and that it would like a legal definition of the military covenant. Of course we should work on a cross-party basis on this, and I would be happy to do so—
Jim Sheridan
I concur with the hon. Member for Colchester (Bob Russell) that this should be a non-partisan debate, but my right hon. Friend is right to remind the House that during the Labour years, the then Opposition constantly criticised the Government on the lack of spending on protective equipment, as did the generals. We understand why the politicians criticised the Government, but why did the generals criticise them, and why have they suddenly gone quiet in the short period since the election?
Mr Murphy
I do not wish to reopen that debate, but my hon. Friend is free to make that point whenever he wishes to do so.
It is clear that to date, the Government’s policy on the covenant and their policy on the RPI-CPI switch are policies without a patron. No Government Minister has defended them, yet Ministers expect Back-Benchers to suspend their consciences and their sense of right and wrong to vote through a policy that they have not backed.
The Secretary of State for Defence (Dr Liam Fox)
If the change from RPI to CPI in relation to the armed forces is so iniquitous, will the right hon. Gentleman give an unequivocal guarantee that Labour will reverse it?
Mr Murphy
I remember being in the Government and playing that game of saying to the Opposition, “Name your next manifesto,” but it is a desperate tactic. It took me 10 years to use that tactic, but it has taken the Defence Secretary only a few months. Today, he is at the Dispatch Box but will not even stand up for his own policy. Let me give him another opportunity to do so. Does he think it fair that when the deficit is temporary, this cut should be permanent? I am giving him a chance to articulate his own policy.
Dr Fox
This merely proves the economic illiteracy of the Labour party. Even when the deficit is going down, the total debt is going up and the debt repayment is going up. It will take a very long time, even when we are into positive growth, to see the debt coming down. The Labour party knows no more about economics in opposition than it knew in government.
Mr Murphy
This comes from the right hon. Gentleman who, when in opposition, demanded more spending on absolutely everything; even in the midst of financial crisis, he was demanding more and more spending. If this move is driven by deficit reduction, the Government should come forward with a temporary measure rather than a permanent change.
Finally, the military covenant goes to the heart of the relationship between the military, society and the Government. It should never be the exclusive property of one political party, but these permanent cuts undermine the Government’s claim to be honouring the military covenant. Sir Michael Moore, chairman of the Forces Pension Society has said:
“I have never seen a government erode the morale of the Armed Forces so quickly.”
That is a worrying position—one that we all hope to see reversed.
The truth is that this Government have lost the courage of the conviction and conscience they had in their manifesto. One day in June last year summarises this Government’s approach to the covenant. On 25 June 2010, the Prime Minister stood on the decks of the Ark Royal, surrounded by members of the Royal Navy, with Harrier jets as a backdrop, and promised a new military covenant that was written into the law of the land. Parliament did not get a vote on the decision to scrap the Ark Royal and Parliament did not get the chance to express its view on the grounding of the Harrier fleet. Today, however, Parliament has the chance to make its voice heard. We should say it loud and clear, fulfil the Conservative party manifesto pledge and define the military covenant in law.
The Secretary of State for Defence (Dr Liam Fox)
Let me too begin by expressing our condolences to the family and friends of Private Lewis Hendry, 3rd Battalion the Parachute Regiment; Private Conrad Lewis, 4th Battalion the Parachute Regiment; Lance Corporal Kyle Marshall, 2nd Battalion the Parachute Regiment; Private Dean Hutchinson, 9th Regiment the Royal Logistic Corps; and Private Robert Wood, 17th Port and Maritime Regiment the Royal Logistic Corps, all of whom have died in action in Afghanistan. Every death is a personal tragedy; they are not simply numbers, and their loss is felt by families and friends. We in this House remember them all in our thoughts and prayers.
There is no doubt about the general desire in this country to improve and develop the armed forces covenant. It encompasses those of all ages and social groups, those with different politics and those with none. It does not and cannot exist in the abstract, however. It cannot be a wish list separated from the economic reality in which we find ourselves. A covenant between the armed forces and the British people cannot ignore the financial predicament in which the British people and their Government find themselves.
The starting point of this debate has to take account of the economic situation inherited by the coalition Government and the state in which the armed forces and the Ministry of Defence find themselves at the end of 13 years of Labour Government. In short, the issue for the Opposition, as set out in their motion, is one of credibility, so we should examine the credibility of Labour Members on the issues that the shadow Defence Secretary described as important.
Mr Denis MacShane (Rotherham) (Lab)
Will the right hon. Gentleman give way?
Dr Fox
In a moment.
There are three charges that still hang around the necks of Labour when it comes to defence, the armed forces and the military covenant. In 13 years of power, their response to equipping our forces was often too little, too late; their spending priorities were wrong; and there was too much waste and inadequate budgetary control.
We have learned from the Chilcot inquiry—an independent inquiry—that it was purely for political reasons that the Labour Government failed to order enough equipment, including body armour, for troops in the lead-up to the Iraq war. They did not want to send the message that they were preparing for war, and the result was under-prepared, under-equipped forces sent into conflict.
In 2006, they failed to send enough troops and equipment into Helmand province and were painfully slow at providing more capable armoured vehicles to counter improved explosive devices. That led to a number of high-profile subsequent resignations from the Army, as has been pointed out. They went 12 years without a defence review, even though, according to numerous former Defence Ministers and service chiefs speaking at the Chilcot inquiry, the 1998 SDR was never properly funded. They overstretched our armed forces by fighting two wars on a peacetime budget.
Dr Fox
I will give way in a moment.
The Labour Government overspent and overheated an equipment programme that contributed to a £38 billion black hole in the defence budget. In Labour’s final year in power, the MOD saw a record overspend of £3.3 billion in the equipment programme. In fact, we inherited an equipment programme that has its top 15 projects £8.8 billion over budget and a cumulative delay of 32 years. When we were fighting two wars, their idea of commitment to defence and our armed forces was to appoint four different Defence Secretaries in four years, including one who served simultaneously as Defence Secretary and Secretary of State for Scotland.
Labour left a situation in which 42% of service single living accommodation in the UK, and 52% of overseas single living accommodation, was in the worst grade on a four-point scale—although in a speech that lasted half an hour, the shadow Defence Secretary did not once mention the quality of accommodation for our armed forces.
With all that going on, Labour Defence Secretaries spent almost £250,000 on modern art for the Ministry of Defence. As former Chief of the General Staff General Sir Mike Jackson said in his autobiography, they
“preferred to spend on abstract art money which might otherwise have directly benefited soldiers and their families. It may seem a small point, but to me it was so indicative of the cultural divide in the MoD”.
The list goes on. In this country, we judge politicians not by their words but by their actions. The Labour Government had 13 years to put matters right; we have had nine months so far, and I will set out what we have done already.
Mr MacShane
I am glad to give the Secretary of State a moment to calm down from his election speech. On 11 January last year, he wrote to Mr Yeomans in Clevedon that the Conservative Government would review the rules on awarding medals, particularly the proposed national defence medal, which has been supported by nearly 200 right hon. and hon. Members in an early-day motion. Earlier this week, however, the Under-Secretary of State for Defence, Lord Astor of Hever, stated in the other place that the Ministry of Defence would not review the role or membership of the committee that would award the national defence medal if it is granted. That is a remarkable U-turn in one year. Will the Secretary of State address that point and discuss it with his ministerial colleague?
Steve McCabe (Birmingham, Selly Oak) (Lab)
I would like to judge the Secretary of State by his actions rather than his words. What progress is he making towards the establishment of a Government-funded post-traumatic stress treatment programme as promised in the armed forces manifesto?
Matthew Hancock (West Suffolk) (Con)
Did the Secretary of State know about the evidence given by officials who served the Labour Government that it was the ministerial decision to delay the SDR that made the black hole that was left so big and the difficulty of getting matters in order so much greater?
Dr Fox
We could spend a great deal of time detailing the failures of the previous Government. Labour Members constantly talk about making changes as though we were in a vacuum or, as my hon. Friend the Member for Dover (Charlie Elphicke) said, at year zero. We are in a very difficult economic predicament largely of their making, yet they talk about not only the military covenant but almost everything else as if there were no financial cost and as if we should not take what is happening in the economy into account when it comes to pensions and programmes in the Ministry of Defence.
Dr Julian Lewis (New Forest East) (Con)
Does my right hon. Friend agree that in the short term, while the economic situation is so bad, top priority should be given to the education of the children of those who have fallen in action or who have been so grievously wounded that their future earning power will never be restored?
Dr Fox
As I might have expected, my hon. Friend makes a very good point. In the programme for government, we listed a number of measures that will start the process of rebuilding the covenant, and I am pleased to be able to set out to him those that we have already accomplished.
As I have said on a number of occasions in the House, no decisions taken in the strategic defence and security review will have a negative impact on our mission in Afghanistan. In fact, we have already made great strides in improving the conditions for those serving on the front line. In our nine months in office, we have doubled the operational allowance that was paid under the previous Government to over £5,000. Labour could have done so, but did not. We have changed the rules on rest and recuperation, so any lost days of leave—due to delays in the air bridge or any other operational requirements—will be added to post-tour leave. The previous Government could have done that, but they chose not to. We have also pledged to provide university and further education scholarships to the children of members of the armed forces who have been killed since 1990. The previous Government could have chosen to do so, but in 13 years they did not. The current Government have now included 36,000 service children as part of the pupil premium, recognising the uniqueness of service life and its effect on service children and service communities. Labour could have done so, but did not in 13 years.
John McDonnell
I want to concentrate on a more serious issue, which I would like the Secretary of State to—[Interruption.] May I complete what I am saying? The Secretary of State has focused on the past Government’s record, of which I have also been critical, but last week the current Government introduced an immigration fees order which I objected to, and which I see has been carried on a deferred Division today. The explanatory notes explain that it introduces for the first time the power for the Government to charge fees for the registration as British citizens of the children born to British armed forces personnel serving abroad. It cannot be right that we are penalising the children and families of service personnel serving abroad on our orders. I ask the Secretary of State to liaise with the Home Secretary to ensure that she exercises her discretion to waive these fees.
Dr Fox
Not at the moment.
I have set out a number of areas where the Government have already acted in just nine months. Some £61.6 million has been allocated in the current financial year for the upgrade of, and improvement programmes for, service accommodation. That will include upgrading some 800 service family homes to the top standard, with a further 4,000 properties benefiting from other improvements such as new kitchens and bathrooms.
Of course, in the current tight financial situation priorities must be established. My welfare priority will be mental health. We have accepted in full the mental health plan for service personnel and veterans set out in the report by my hon. Friend the Member for South West Wiltshire (Dr Murrison). That will provide a range of improvements in mental health care, including increasing the number of mental health professionals from mental health trusts looking out for veterans and introducing structured mental health surveillance inquiries into routine service medical examinations and all discharge medicals.
The Government are committed to improving health care for our service personnel and have committed an additional £20 million in the SDSR for this purpose, part of which will be used to deliver further enhanced military mental health care services. I believe this must be our priority because it is all too easy to see the physical wounds of war, but the unseen mental wounds of war have too often gone undiagnosed and untreated, and all our society demands that we do not allow a mental health time bomb to be created.
Jim Sheridan
The right hon. Gentleman is explaining the promises or pledges in his party manifesto. Do they include his pledge to compensate Christmas Island veterans, many of whom will be watching this debate and wanting an answer?
Chris Bryant
I want to ask the Secretary of State about 160 Brigade. As he knows, it is the Welsh brigade based in Brecon. Secret discussions have been going on over the last few weeks about collapsing the brigade and joining it with the West Midlands, which would mean there was no longer a Welsh brigade. Can he give an absolute assurance that that will not happen?
Dr Fox
As the hon. Gentleman knows, there are ongoing discussions in the armed forces, but as he has heard me say on a number of occasions, I am very keen that we have United Kingdom armed forces and that we maintain the footprint as widely as possible across the UK. If he wants to talk to me directly about that, I shall be happy to meet him.
Labour’s legacy means that there is not enough to do all that we would like to do, but we can make a start. None of it alone will instantly rebuild the covenant, but it is a step in the right direction. In the difficult economic circumstances the coalition Government have inherited, where all parts of society are making sacrifices, repairing the covenant will not be straightforward. The armed forces are subject to the difficult decisions we have had to make on pay, pensions and allowances across Government.
Neither the Prime Minister nor I came into politics to see cuts in the armed forces, but we have to deal with the reality of the legacy. Every Department has to make a contribution to deficit reduction and the Ministry of Defence can be no exception. We have to put the economy on the right track for the sake of our national security.
The coalition agreement recognises that we have to do more to ensure that our armed forces and their families have the support they need, and are treated with the dignity they deserve. Some of what we need to do will cost money, and with budgets squeezed, we may not be able to go as quickly as we want, but we will make progress where we can. The recent report on the covenant commissioned by the Prime Minister from the military historian Professor Hew Strachan suggests a number of ways to move forward. We are implementing some of them now and will announce in the near future the other recommendations we support.
As Members know, the military covenant was conceived as an expression of the mutual obligations that exist between the nation, the Army and each individual soldier. In consultation with service charities and others, the Government are rewriting the covenant as a new tri-service document—the armed forces covenant—which expresses the enduring, general principles that should govern the relationship between the nation, the Government and the armed forces community as a whole. It will include all three services, veterans, family members and local communities, thereby broadening the scope of the covenant. We shall publish it in the spring.
The reserve forces form an intrinsic part of the UK’s defence capability and thus the armed forces community. The Ministry of Defence is responsible for ensuring that reservists are treated fairly and with respect, and that they are valued. In the drafting of the armed forces covenant, reserves have been considered equally alongside regulars. That will set the tone for Government policy aimed at improving the support available for serving and former members of the armed forces, and the families who carry so much of the burden, especially, as we remember today, in the event of injury or death.
Charlie Elphicke
Does my right hon. Friend agree that it is an extraordinary situation for the Opposition to call a debate on the military covenant, which by their own admission they cannot define, yet we have heard from my right hon. Friend a clear definition of the covenant, which is being written into the law of the land?
Dr Fox
It is surprising that the Opposition should be so desperate for a definition of the military covenant in law, yet fail to produce one themselves. It is just as absurd as their claim that they are trying to implement the Conservative manifesto on the subject. I happen to have the Conservative manifesto of 2010 in my hand and I see no commitment whatever to writing the military covenant into law. Indeed, we have gone further than our manifesto commitment in the coalition agreement by trying to take that forward. It is one of the elements that shows that the coalition Government were able to work together to go further than either party had done in the manifestos that we issued at the general election.
We need to ensure that progress is made, year on year. That is why we have brought forward legislation in the Armed Forces Bill requiring the Defence Secretary to present an armed forces covenant report to Parliament every year. I hope to deliver the first of those reports in the autumn.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Is the Secretary of State saying that his party never made a commitment to enshrining the principles in law? If he is not saying that, will he set out why his position has changed on this difficult subject?
Dr Fox
We are for the first time recognising the covenant in law. We are setting it out in law in the Armed Forces Bill that the Secretary of State for Defence will be required to come to the House of Commons, and when we have published the tri-forces covenant, the House of Commons will be able to decide whether the Government have lived up to their part of the bargain. I find it extraordinary that nine months into the new Government, when we are writing that into the law, we get complaints from the Opposition, who did not once try to do so in 13 years in power.
The covenant will set out how we are supporting our armed forces, their families and veterans in key areas such as health care, housing and education. It will be the first time the existence of the armed forces covenant has been recognised in statute. For that, I think all fair-minded people would believe that the coalition Government deserve some credit.
Mr Geoffrey Cox (Torridge and West Devon) (Con)
Although I applaud what the Secretary of State is saying about his support for veterans and former members of the armed forces, may I draw to his attention the case of my constituent, Ann Dexter, whose son Richard Coombes is suffering from dire mental health problems as a consequence of his injury on active service? The Ministry of Defence was ordered by a judge to pay him £130,000 compensation but still, three years later, not all of that compensation has been paid. Will my right hon. Friend look into that case urgently and get back to the family to explain why the Ministry of Defence has not paid the compensation that it was ordered to pay?
Dr Fox
I am very surprised that three years after it was ordered by a judge to be paid, that compensation has not been paid. I will certainly look into the case that my hon. and learned Friend mentions.
The Government alone cannot provide all the support required so we are determined to strengthen the links with the charitable sector, which does so much good work, often unsung. In many ways those organisations are also heroes in our countries when it comes to the armed forces. Involving the charitable sector is the only way we can make a reality of the armed forces covenant, because the duty of care is on all of us, not simply the Government.
From now on, however, the Government are obliged to report progress on the covenant to Parliament annually. That will ensure that this Government, and indeed all future Governments, are held to account by Parliament. I made it clear last month on Second Reading of the Armed Forces Bill that the external reference group, which was mentioned by the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne), will also continue to monitor Government progress. But it is about progress on the covenant on all sides, not just the Government’s. The covenant is not just between the Government and the armed forces. It is a covenant with the whole of society. That is why I find the external reference group to be of such value. It will bring independence and clear-mindedness.
Sandra Osborne
When the Secretary of State refers to communities, does that include local communities where there are currently armed forces bases? What about the contribution that they have made over the years, and what about the economic impact on those communities of the closure of bases?
Dr Fox
As the hon. Lady knows, we are spending a great deal of time and effort getting the balance of the bases correct, primarily for our national security needs, but we will also take into account the social and other impacts that the changes will have. The hon. Gentleman from the Scottish National party who is normally in his seat usually intervenes at this point. We are aware of the changes—
Dr Fox
Wrong one.
The point is well made by the hon. Member for Ayr, Carrick and Cumnock. We understand the problems that we face, but it was inevitable when we had to make reductions under the SDSR that there would be changes to the basing. We are sympathetic to the local needs that she mentions.
Bob Russell
The Secretary of State will join me in mentioning a body that, as far as I recall, has not yet been referred to—the reserves and Territorials, without whom our actions in Afghanistan would be all the poorer.
Jim Shannon
I speak not as an Irish or Scottish nationalist, but as a Northern Ireland Unionist. I know that the Secretary of State has already responded on the need to look after those with health and mental health conditions, but I have recently met people who had lost limbs, whether legs or arms, so will he indicate what help will be available for those people, because they have had the trauma of the physical disablement and of the resulting mental disablement? I am keen to hear what he will do to help those people.
Dr Fox
Those who suffer traumatic amputations, and often multiple traumatic amputations, increasingly get very high-quality care in this country, both from what the military and the NHS are doing. [Interruption.] Members on the Opposition Front Bench say that that is thanks to the previous Government, and I acknowledge their work on that front. With regard to the interface between the NHS and other services, we are again working increasingly to ensure that we get constructive action between them. Any Member who has visited the medical service or Headley Court will realise just what a high-quality service our armed forced get in this country. It is something of which the whole country, irrespective of politics, should be proud.
Looking after people who are currently serving is only part of the covenant; the duty of care does not end when active service ends. The community of veterans in Britain is estimated to be around 5 million strong. The vast majority of men and women who serve make the transition to civilian life successfully. Many of the skills they learn in the armed forces are highly sought after, as are their character traits: self-discipline, self-reliance and leadership. However, for a small number the transition is not so easy. Some find it difficult to get work or struggle to fit in. Others may suffer more serious problems, both physical and mental, as a result of their service, as the hon. Member for Strangford (Jim Shannon) has pointed out. Those are the people who most need our help.
First, we need to give people the help they need when they leave. It takes time to turn a civilian into a soldier, so we should take time to turn a soldier into a civilian. Our resettlement programme helps service leavers to navigate civilian life; everything from finding a job, to benefits, education and retraining. We are making sure that it is focused on those who need it most.
For example, ex-service personnel now get more support to study at university. The Department for Education is drawing up plans to create a new programme called “Troops to Teachers” to get experienced, high-quality ex-service personnel into the teaching profession. In a country where it is often claimed that there are not enough role models, believe me there are plenty in the armed forces.
Secondly, when a veteran falls on hard times, there should be somewhere to turn. The problems can result from debt, homelessness, addiction or mental illness resulting from their service. Such difficulties can occur years after leaving the services, so we need a proper partnership between all arms of government, national and local, and with the NHS. That means ensuring that veterans get fair access to local housing schemes, providing more money and more nurses for mental health and working with the charitable sector to get the right support to the right people at the right time.
Having worked as a doctor for some years with service personnel and their families, I have seen at first hand some of the difficulties and stress surrounding service life. Many of the pressures are the same faced by ordinary families up and down the country, but others are unique. Those have to be dealt with sensitively and appropriately.
Mr Tom Watson (West Bromwich East) (Lab)
The Secretary of State is being very gracious, and I do appreciate him letting me in.
Will the right hon. Gentleman be a little clearer with me about the definition of “military covenant”? In the Bill Committee last week, the Under-Secretary of State for Defence, the right hon. Member for South Leicestershire (Mr Robathan) said that he thought the military covenant was a “conceptual” thing, a “philosophical statement”, and that it would have
“the same legal position as the service Command Paper”.––[Official Report, Armed Forces Public Bill Committee, 10 February 2011; c. 22.]
Is that the case? Can the Secretary of State give me his definition of the military covenant, so that he might explain to his Minister what it is?
Dr Fox
I have already set out that what my right hon. Friend says is true. There is a concept of what the covenant means in terms of the relationship between the armed forces and the people of this country, and the responsibility that the people of this country have not only to those serving in the armed forces, but to their families and to veterans. As I said very clearly, however, we are setting out and will publish in the spring a tri-service covenant for the first time. It has to go beyond the traditional covenant, which related to the Army; we are discussing the issue with the charitable sector and the armed forces; and we will publish that new tri-service covenant in the spring.
I am aware of the time constraints, Mr Speaker, so let me just remind the House of the point with which I began. This year, the £43 billion that the UK will spend on debt interest payments—the debt that the previous Government left behind—amounts to more than the Ministry of Defence, Foreign and Commonwealth Office and international aid budgets combined. If we did not have it hanging around our necks, how much more could we do on service housing, health care or allowances? Instead, we will get absolutely nothing back for that money. We cannot sustain that level of deficit and debt without losing our influence in the world or being forced to limit our foreign policy and defence options. If we learned anything as a country from the cold war, it was that the stronger our economy, the better our national security and the more we can do for our service personnel.
Labour’s economic policies created a national security liability that goes behind the hard end of national security and impacts on how we treat our armed forces, their families and the veterans through the covenant. Labour wants to, but cannot, wash away its legacy by ignoring its actions while in government—a Government of whom Opposition Members were a part.
There is no point in the people who left us broke complaining that we are not doing enough. There is no point in the people who had 13 years to deliver, but failed to, telling us that we have not done enough in nine months. The shadow Defence Secretary is a very decent man, but he represents a party that failed in its duty to the armed forces. It has no creditability on the issues that should have been dealt with when the money was available in earlier years.
Because of the nation’s dreadful finances, we as a Government are being forced to take some tough decisions—including on allowances and on pensions. We do not do so because we want to; we do so because we have to. We do so because, as the outgoing Labour Chief Secretary to the Treasury actually said in his note, “Sorry, there is no money left”. Perhaps it was a joking matter for Labour, but it is deadly serious for the armed forces.
The coalition Government are taking the difficult decisions required to deal with Labour’s legacy, and we will continue to rebuild the armed forces covenant. I wish we could go faster, but we will go as fast as we can. Opposition Members got us into this mess; this Government will get us out of it.
Mr David Crausby (Bolton North East) (Lab)
My dad landed in France and ran up the beach on D-day. If he was alive today, he would tell us that it was the fastest that he ran in his entire life. He would freely admit that, as he crouched in the landing craft heading for shore, with bullets pinging off the infrastructure, he was petrified of the doors opening. When they finally opened, his stomach turned over, and he went up that beach in full kit faster than Linford Christie. He made it unscathed to the top, but the next day he had most of his stomach blown out by a German shell in a field just beyond the beach. He suffered for it every day of his life for the next 48 years. In return, he received a small pension from the Government and spent the rest of his life worrying about losing it. He was grateful for the money. He spent most of it on beer, if the truth were known, but he enjoyed every pint. Was he worth it? Damn right he was, every penny, because without him and his mates, there would be a foreign flag flying over this Parliament— assuming, that is, that this building existed at all. We owe him, along with thousands of his comrades, a debt of honour. We must never forget that.
The very same applies to our present-day forces. They may be small in number, but when they put their lives on the line we have a duty to look after them, and their families.
Andrew Bridgen
Does the hon. Gentleman agree that the military power of our great country has been, is and always will be a projection of our economic power, which has been devastated by the mismanagement of the last Government?
Mr Crausby
I will get to that point.
We do not expect our forces to join a trade union or allow them to go on strike, so they are entitled to be treated differently. My dad lay in that French field for two days before he was found, but he was eventually flown back to the UK and put back together. When he recovered, he voted Labour, and he never missed the opportunity to vote Labour in every election until the day he died. I make that point simply because this is not a party political issue. Many of his comrades returned to vote Conservative, and Liberal, and other weird things, as was their entitlement, and some did not bother to vote at all. So it is shameful to turn the matter of the covenant into a point-scoring party political issue, as the hon. Member for North West Leicestershire (Andrew Bridgen) did.
We all know that we are in difficult circumstances, but I do not know what my dad would say about cutting soldiers’ allowances at the same time as Barclays pay their investment bankers 20% more—not to mention making Afghan veterans redundant by e-mail, which is even worse than when John Major made Bosnian front-line veterans redundant by post. I suppose that the MOD has at least come up to date.
Bob Stewart
John Major did not do that. I told Bosnian soldiers that they were made redundant personally by waking them up in the morning and telling them as they woke up, and then I gave them the paper. That was rotten.
Mr Crausby
In any event, it was shameful. Whatever my dad would have said about it, I assure people that it would not have been pretty.
The truth is that our defence expenditure is already too low, and has been for years when measured against our foreign policy aspirations. The most important pound that we earn is the one that we defend our families and our country with whenever we are in danger. When we are at war, it should be the last pound that we cut, and we must certainly never cut it from the people who are prepared to make the ultimate sacrifice for us.
Over the next few years, we will be spending countless billions on aircraft carriers, on fighter planes, on unmanned aerial vehicles, on nuclear submarines and on nuclear missiles; it will no doubt end up being very much more than the MOD’s current estimates. So what are we playing at in cutting a relatively small sum from our armed forces’ children’s education? Last year in June, our Prime Minister stood on Ark Royal and talked about making formal commitments on matters such as education for military children and care for those injured on the battlefield. He said:
“I want all these things refreshed and renewed and written down in a new military covenant that’s written into the law of the land.”
He did not say, “I want an annual report.”
Let me give the Prime Minister a tip, and perhaps the Chancellor and the Secretary of State for Defence will take note: if he expects to retain any political or personal integrity in life, he must not make promises that he cannot keep. We can understand Liberals making promises that they do not expect to keep, but the Tories should know better.
Mark Lancaster (Milton Keynes North) (Con)
It is an absolute pleasure to follow the hon. Member for Bolton North East (Mr Crausby), who has been an excellent member of the Defence Committee for several years. The moving story of his father reminded me of a T-shirt that we had printed when I commanded a bomb disposal squadron. On the front it said, “I’m a bomb disposal officer,” and on the back it said, “If you see me running, try to keep up.”
I start, of course, by declaring my interest as a serving member of the armed forces. It was an honour to serve in Bosnia and Kosovo, and I am grateful to the previous Government for allowing me to serve in Afghanistan in 2006. I wish to make it clear that any limited experience that I have pales into insignificance compared with that of those who are serving in Afghanistan today.
Much of the debate has been about whether the Government should enshrine the military covenant in law, or whether there should be a report on the military covenant by law. I am not a lawyer and, to be honest, I do not know about that. As a member of the armed forces and like fellow members of the armed forces, I do not really care. What is important to me is not whether we enshrine it in law. That is a process point which demonstrates how out of touch the House of Commons is with our armed forces. What is important to me is that this and future Governments are judged by what is achieved—by the output of the military covenant. I reserve the right in future years to come back and give my assessment on this Government and future Governments when we have reports on the military covenant in this place.
We have talked a lot about morale in the armed forces, and I will pinpoint one moment. I was excited in 2006 when the previous Government introduced the operational allowance, and I pay tribute to them for that. I received it, and for the record, I donated it to the Royal British Legion because I thought that was the right thing to do as a Member of Parliament. However, I also remember the horror when we discovered that, at the same time, the longer service separation allowance had been cut by almost exactly the same amount. There was a great fanfare by Tony Blair about the introduction of the operational allowance, and yet the cut to the longer service separation allowance was made quietly. Although I fully support this Government’s doubling of the operational allowance, I give the caveat that members of our armed forces will be looking carefully at their payslips in future, such is the cynicism of many of them. We must be very careful on that point.
Another example is the introduction of the new payment system, the computerised joint personnel administration system. It had many gremlins, but such is the way with computer systems. One of the biggest problems with that system, which really upset members of the armed forces, related to the allowances. If somebody went from A to B, rather than being told what their allowances were, they had to go and find out. It was a pool system and people were not notified of what their allowances were. Like many of the benefits that were introduced, people were not automatically entitled to them. That needs to change.
The air bridge was mentioned in the opening remarks of the debate. I experienced the problems of the air bridge in 2006: being woken up five hours before the flight; getting stuck in Cyprus; not being able to ring home to tell the family that one would be late; finally getting back two days later; missing some leave; and having one’s rifle sent to Aldershot, one’s bag sent home and one’s other kit sent elsewhere. I raised those concerns in the Chamber and there has been some improvement, but there are still major problems. I welcome the Government’s move to ensure that any leave that one misses as a result of those problems is added to the end of one’s post-tour leave. Some say that should happen in that two-week period, but that is impractical. It would be simply impossible for a commanding officer in Afghanistan to man his various companies without knowing when soldiers may return.
Finally, I want to say a few words about the reserves. As a reservist, I was delighted that the Secretary of State mentioned the reserves in his opening remarks. There was deep concern back in 2009 when, as reservists, we were told out of the blue that there would be no more training for six months because of mid-year savings. That decision was wrong, so I was delighted that the then Government saw the error of their ways and corrected it. However, that decision should never have been taken. If we are to promote a one-Army concept, we cannot treat the reserves as second-class citizens. I would like a reassurance that such silly measures, which target the Territorial Army and undermine the one-Army concept, will not be introduced again.
The Government’s move to recognise the military covenant in a Bill for the first time is to be welcomed. We can argue about the semantics, but as I said at the start of my speech, I and many other members of the armed forces will judge this and successive Governments not on the detail, but on what is achieved.
Mrs Madeleine Moon (Bridgend) (Lab)
I am incredibly pleased to follow the first two Back-Bench contributions to this debate. I hope that my contribution will be of the same incredibly high order, because it is that high level of debate that our armed forces want to hear from this Chamber, not the yah-boo politics that we heard from the Front Benches.
The military covenant is about the duty of care and the principles of that duty. It must set out the responsibilities of the Government and the country to those who serve and have risked their lives, just as the father of my hon. Friend the Member for Bolton North East (Mr Crausby) did and as the hon. Member for Milton Keynes North (Mark Lancaster) has done. The military covenant is about people who do not have a choice over where they go or what they are called on to do—people who have no right to strike or raise objections; people who have no voice. The military covenant should give a voice to those voiceless, and it must be enshrined in law.
Why must the military covenant be enshrined in law? At the moment, our military is suffering from insecurity and instability. Morale is at an all-time low. Everyone in the Chamber has talked to military families. They will have had military families come to their surgeries who are concerned about how they will weather the strategic defence and security review, the cuts in allowances that have suddenly come upon them and the job losses, whether they are civil servants, many of whom are ex-military, or serving military personnel. There are pressures and tensions everywhere across our armed forces.
The sacking of personnel by e-mail has sent shock waves through the armed forces. The failure to follow through on the training commitment to those young people—many were hours away from completing four years of training to achieve a qualification that would have carried them through the rest of their lives—has devastated families and young people.
Why has the British Legion taken the unusual step of writing to Members of Parliament to ask that the military covenant be endorsed in law? This is a matter of trust, but I do not think that we demonstrate a tremendous amount of trust when we descend into making party political points about the military covenant. I am sorry to say that the Conservatives and Liberal Democrats have already become the parties of broken promises and broken commitments—[Interruption.] I have to say that promises have also been broken by my party.
All of us have a duty to make the highest level of commitment to our armed forces, and we should be judged by our actions. We can all make a list of the things we have done and the things we have failed to do, but what we really need to do is think of the consequences in our communities, because families can be devastated by the decisions that come out of this Chamber. Young people’s futures can be destroyed when their dreams of serving their country are thrown away, after they have read about the decision in a national newspaper.
The military covenant must not be simply a concept or a philosophy; it must be something that people can hold in their hands and feel secure about. It must be something that we, as a country, stand up to and stand by. Our armed forces and their families need to know that, whatever Government are in power, we will stand strongly by our commitments to them and that we will honour those commitments. As I have handed over veterans badges across my constituency over the past few years, I have seen the pride that people still felt about their years of service. They felt that those were the best years of their lives, and the times when they were most alive. We must honour those people, and make a commitment to them in law. If we are to have only a report, there must at the very least be a commitment to a free vote on the covenant for every Member of the House.
Patrick Mercer (Newark) (Con)
It is a privilege to follow the hon. Member for Bridgend (Mrs Moon), who more than lived up to her own billing. She spoke with great passion and great insight. I was also amused to hear the account from the hon. Member for Bolton North East (Mr Crausby) of what his father had done on D-day. If anyone had asked my father what he had done in the war, he would have said, “Actually, I was a D-day dodger.” My father was wounded three times in Italy, but the events there never got the coverage that the troops in France did. The hon. Gentleman’s contribution was a fascinating one. My hon. and gallant Friend the Member for Milton Keynes North (Mark Lancaster) gave us his insight into his own service, albeit as a reservist, and being called up to the front line. That was extremely interesting.
My hon. and gallant Friend the Member for South West Wiltshire (Dr Murrison) is preparing a document on the military covenant, and I have recently been asked what the covenant means to me. I was brought up to believe that the military covenant was the link between soldiers and officers, and between the nation and those soldiers, sailors, airmen and marines and their officers. Even more importantly, it is the link between the nation and the families, to whom the nation owes so much. I would like to pick up on a point that the hon. Member for Bridgend made, which is that the military covenant stands way above party politics. Yesterday’s urgent question showed the House of Commons at its absolute best. It was about looking after the little people who do so much to defend this nation. I will expand on that in a moment.
In 1996, I led Nottinghamshire’s own regiment, the Sherwood Foresters, through what was to be my constituency of Newark. We were essentially a peacetime army: we had come back from Northern Ireland and from Bosnia, but we were essentially a peacetime army. The burghers of Newark were polite, courteous and enthusiastic. The town was glad to see us.
Two years ago, the successor to that battalion, now sadly called 2 Mercian, paraded after its last tour in Afghanistan, where it had picked up a record number of conspicuous gallantry crosses—more than any other battalion in the British Army. The town was mobbed. There was standing room only. Women and children were out on the streets. Union flags were being waved; regimental flags were being waved. The boys were overwhelmed by what they saw, and I was overwhelmed as well. I could not believe it. This was the military covenant put into practice.
What we must understand is that we are mere representatives of those people who were either marching or waving their flags. We must not make the mistake of believing that those kids off the streets of Newark, be they serving in Afghanistan or clapping from the pavements, understand or care about the semantics, the language and the legalities which we use so much and find so precious. What this is about is making sure that we honour our men, our women, our fighters and their families. Whether it be in law or whether it be simply talked about, as we are talking about it today, that is the important thing.
Pamela Nash (Airdrie and Shotts) (Lab)
I do not think that anyone in the House disagrees with what the hon. Gentleman says, but does he agree that legislating for a military covenant would allow military families to trust the Government to provide everything that he mentions?
Patrick Mercer
I do not know and I do not care. What I do know is that when it works, it works superbly. I hope to say more about that shortly, but first let me explain how we have let our troops down and how the military covenant has been compromised.
Let me point out to all Members who were serving here at the time that this week in 2006, on 14 February, we had a debate which my friends and colleagues on the Opposition Benches will particularly remember. Troops were being committed to the Helmand valley in Afghanistan, an area where, in 1880, a British brigade lost 1,000 men in four hours, and where a Russian regimental unit lost 700 men over three days. We committed troops to that area without enough guns, without enough helicopters, without enough ammunition, and without enough bayonet power to do the job. That was the worst sort of compromise of the military covenant, and it was not done by Ministers wittingly. Most of it was done by career officers who did not understand that the military covenant involves the people who will do the fighting, not the talking and the theorising. That is what we must get right.
My hon. and gallant Friend the Member for Beckenham (Bob Stewart) mentioned the notice given to troops who were made redundant after Bosnia. I do not remember that, but I do know that in battalions such as the Cheshire Regiment, whose reputation stands high, the news of that measure was given by the commanding officer personally, because leadership was exercised. That is the point. The military covenant is about the exercise of leadership by officers and Ministers, and by the families whom both represent.
Yesterday, we heard about the most awful nonsense that had occurred some time earlier. A major had given news by e-mail of the sacking of a number of warrant officers who were serving all over the world. I appreciate that that was difficult to administer, but is notable that an urgent question was asked, that the Speaker allowed it to be dealt with in the Chamber, and that Members on both sides of the House stood up for those warrant officers against the leviathan that the Army can be. That was the Chamber at its best, and the military covenant at its best, because we were looking after the people whom we have a sacred duty to look after. I do not care whether that is written into law; the point is that we must get it right. We must honour these men, we must honour these women, and we must honour their families. That is a military covenant.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
It is an incredible pleasure to follow all the Back Benchers who have spoken this evening, as their speeches have shown the House of Commons at its best in terms of expertise and the passion with which Members have been speaking.
I start by paying tribute to our forces and the sacrifices they make for our country, and by referring to the grief of the families of those who have been lost. When I recently went to Afghanistan with the Select Committee on Defence, we visited a forward operating base—I believe this was the first time the Committee had done so—and the dangers faced by our soldiers on a daily basis were obvious and very humbling. Through the work taking place there and at Camp Bastion, together with the training of the Afghan army and police, we are seeing real progress, but for me it was the professionalism of our forces that shone through. The best part of the visit came when we spoke face to face with members of the forces. I was left in no doubt that they are extremely worried about their terms and conditions, and their future pension arrangements, and that many did not feel that they were being treated fairly. I had similar conversations when the previous Government were in office and I acknowledge that members of the armed forces were not happy then either. We have to acknowledge that much more can be done. The shadow Secretary of State outlined what had been done, but we need to make more progress.
In the House, we are rightly always hearing warm words of appreciation for our forces, but they can ring hollow if they are not put into practice in the military covenant and if promises are made and then not kept. In the Armed Forces Bill Committee, the Minister responsible for veterans said that the covenant is a “moral obligation” and a “philosophical statement” and therefore does not need to be spelled out in detail or enshrined in law. That is, of course, the exact opposite of the promise that the Prime Minister made on the Ark Royal—the “Ark of the covenant” perhaps.
My constituency in the south-west of Scotland covers large parts of Ayrshire that are closely associated with the Covenanters, who stood for the preservation of Presbyterianism against all attempts to re-establish Catholic or Episcopalian Church government—that is perhaps not the happiest of illustrations for our Front-Bench team of Murphy and Doyle to take on board. My point is merely that covenants are scattered throughout history, nowhere more so than in biblical times. They often represented the most deeply held beliefs and were of life and death proportions. The adjectives most commonly associated with them were words such as “solemn” and “binding”. It was seldom enough for them to be written in the hearts and minds; it was far better for them to be written on tablets of stone or in blood.
The military covenant is no less a thing; it is not a mere service level agreement and it is more than a bundle of moral obligations or philosophical statements. Moral obligations and philosophical statements do not pay the bills for our service personnel or veterans, nor do they give guarantees in legislation, which is the promise that was made and the promise that should be kept.
Angela Smith (Penistone and Stocksbridge) (Lab)
My hon. Friend is making a tremendously impressive speech on this issue. The people of Barnsley, in my constituency, have great regard for the armed forces and they expect the Members they elect to this House to reflect that fact in not only everything they say, but everything they do. Does she agree with that?
Sandra Osborne
Yes, very much so.
We are fortunate that both the Armed Forces Bill Committee and the Defence Committee contain Members who have served with distinction in the armed forces, for example, the hon. Member for Milton Keynes North (Mark Lancaster), who spoke with such authority. I have not served in the forces, so I am grateful that I have had the chance to take part in the armed forces parliamentary scheme. As hon. Members will know, the scheme allows MPs to spend some 22 days a year with a particular service. Surprisingly enough, in my case it was with the Royal Marines and although it was in no way equivalent to the experience of actual service, it certainly opened my eyes to the reality of the job being done, as well as providing opportunities to speak frankly and off the record to the rank and file. I commend the scheme to hon. Members who might not be aware of it—it is very useful, especially given that relatively few Members of the House have served with the armed forces.
One issue that worries me about the Armed Forces Bill is the narrow way it is framed in terms of specifying the issues that should be included in the covenant. Education, health and housing are very important, but none of them comes under the remit of the MOD. That is not an adequate list of the many issues that exist and, as hon. Members have said, are by no means the only matters of concern. Pensions are of major concern and not just in relation to the retail prices index/consumer prices index debate: widows’ allowances are also of concern. The agreement on pensions is being changed retrospectively and members of the armed forces feel aggrieved about that because they joined the forces in the belief that they would be guaranteed a decent pension. Now they feel let down. I mentioned the external reference group earlier because I think it is important that we have a level of independence. I do not make a party political point: I believe that Governments of any persuasion have a vested interest in highlighting the areas that suit them and ignoring those that do not. For example, why have pensions not been included even though they are obviously a hot issue?
Health care is extremely important and I was delighted to hear that the Secretary of State is prioritising mental health services. Combat Stress in my constituency does a tremendous job for people who suffer from post-traumatic stress disorder, including through cognitive behavioural therapy. I strongly welcome the prioritisation of mental health services and I look forward to the development of further services, but I repeat that a promise made should be a promise kept.
Bob Russell (Colchester) (LD)
I thank Back Benchers on both sides of the Chamber for having retrieved the debate, as Hansard will record. The debate will be read by many service personnel and former military personnel and, as I said in an earlier intervention, it does not go down well to play party politics with our armed forces.
Having served on the previous Armed Forces Bill—now the Armed Forces Act 2006—and on the Committee debating the current Armed Forces Bill, I pay tribute to the previous Government for the many advances that were made regarding the welfare and interests of our serving personnel and their families.
I have no recollection of the military covenant—now known as the armed forces covenant—being mentioned in our deliberations on the previous Bill. That concept has been brought about by the efforts of the Royal British Legion, to which I pay tribute. I also thank the Secretary of State for praising reservists and for reiterating that praise when I intervened on him, because that is part of the one-Army concept. Serving reservists and their families are sometimes left out of the debate.
The armed forces covenant will be enshrined in law when the Bill is enacted because those words will appear in legislation for the first time and because the Secretary of State will be required to come to the House each year and make a report. I am pretty confident that any Secretary of State who for whatever reason tried to airbrush out matters of concern would be quickly picked up, and quite rightly so, by any Member who thought such issues were being ignored.
Mr Kevan Jones
The hon. Gentleman says that the covenant will be enshrined in law, but he attended the Select Committee on the Armed Forces Bill the other day when the Under-Secretary of State for Defence, the right hon. Member for South Leicestershire (Mr Robathan), said of the covenant:
“As I have explained already, it will be a conceptual, philosophical statement, and it will have about the same legal position as the service Command Paper”.
To say that it will be enshrined in law is complete nonsense.
Bob Russell
I am not a lawyer; all I know is that the Bill, which I hope will become an Act, refers to the armed forces covenant. Should there be more than that, or should there be less? I do not know, but I do know that as the years unfold, that concept will be developed and built upon. Not only the Royal British Legion but other charities are involved. We have heard about the external reference group, but in fact a breakdown of that group has shown that the majority of its membership is within Government. It is more of an internal reference group, with a few very important external people added on.
Sandra Osborne
The hon. Gentleman will recall from the activities of the Bill Committee that the devolved Administrations are involved in the external reference group. So far, that is the only way in which they have been consulted on the Bill. Does he agree that such consultation is important?
Bob Russell
I have every confidence that the devolved Assemblies and elected representatives from the areas that they cover will not be silent on the Bill.
On Monday, members of the Committee visited the Colchester garrison, Merville barracks. They witnessed a virtually deserted barracks, because virtually ever soldier of 16 Air Assault Brigade is currently serving in Helmand province. I should like to place on record my admiration of, and thanks to, all soldiers in that brigade, including those from other nations who are attached to it. I understand that three people from the Danish army attached to it have lost their lives.
Members of the Select Committee also saw the modern housing there, which is single person’s accommodation, for which the last Government can take credit. I do not agree with its being funded by a private finance initiative, because it will cost the public purse more in the long run, but it is the yardstick by which the provision of all accommodation for single military personnel will be judged in future. However, the Committee also saw the outside of some of the family accommodation. Although we did not go inside, it is accepted that some of it is not as good as it should be.
Across the road, former Army housing, now acquired by a housing association, is having millions of pounds spent on it from the public purse to provide additional rented accommodation for civilians. That accommodation is welcome, but when an Army family living in their substandard house see public money being spent across the road on modernising the most up-to-date housing available, they have to ask what the military covenant is doing. How can the Government find money to do up houses for civilians, which of course I welcome, yet tell us that there is no money to modernise the housing of people whose soldier husbands are serving in Afghanistan and putting their lives on the line? That has to be addressed. I am not making any party political point, because the families we met were not bothered about party politics as far as I could tell. They just wanted their Government to do something about the problem.
I shall end by talking about education, which is one of the three subjects covered by the covenant under the Bill, although others will flow from them. The pupil premium has been mentioned, and I welcome the concept, but it has not yet been spelled out to me what the criteria will be for that money stream to come forward for the children of military personnel. It will be one thing to identify military children on Army, Navy and Air Force bases, where the majority of the children at the local school will be from a military background. However, we know that increasing numbers of armed forces personnel do not live on military bases. How will the pupil premium find its way to young people from such families?
I welcome the Armed Forces Bill, and I believe that the armed forces covenant will be enshrined in the law of the land. I do not want to argue about the legal semantics, but the Bill is a huge step forward and we should thank the Royal British Legion for all its work.
Teresa Pearce (Erith and Thamesmead) (Lab)
I am proud to represent my constituency, which has a long military history—the arsenal at Woolwich is on our doorstep, and the new town of Thamesmead was built on arsenal land—but I am also proud to be a member of the Thamesmead Town and Abbey Wood Royal British Legion, and it is on behalf of my fellow members that I want to make just one point.
The Conservatives said in their armed forces manifesto that they would look into Lord Boyce’s armed forces compensation scheme review to see whether the reforms were improving things for veterans. I suggest that they also look at how the policies of other Whitehall Departments, such as the Department for Work and Pensions, will affect the conditions for current and future veterans. The scale of the reduction in benefits following the switch from RPI to CPI will wipe out the increases in lump-sum payments that the previous Government introduced following the Boyce review. Far from improving conditions for veterans, that change will be a backward step and a huge blow to members of the armed forces, war widows and their families, because they rely on pensions earlier than other public sector workers. In their lives, members of the armed forces face the risk of injury—both physical and mental—and so rely on getting their pensions earlier, as do the widows and widowers of servicemen and servicewomen who are killed early in their careers.
Those groups, and those on the war pension scheme and the armed forces compensation scheme, will experience a greater diminution of the relative value of their pension over a greater period. Because of the switch to CPI, a 40-year-old squadron leader will lose £300,000 by the age of 85, which is not right. We should not be telling those who have risked their lives for this country that they must suffer a financial loss on such a scale for the sake of reducing the deficit as quickly as possible. As we heard earlier, the deficit is temporary, but the changes to the pensions of members of our armed forces and of other public sector workers will be permanent—the year-on-year reduction in their pensions will continue long after the structural deficit has been reduced.
I oppose in principle the switch to CPI from RPI, and I am unconvinced by the Government’s argument that the former is a better measure. The Government need to postpone that change and to rethink their policy for all public sector workers, but members of our armed forces are a special case. They have served their country, often making huge sacrifices. That also applies to the wider families of personnel. The military service of personnel means that it is likely that they have been away from their families for long periods. We talk about the right to family life in the House when we talk about ourselves, but serving personnel should also have that right. The families of personnel worry every day about the injury or death in service of their loved one, waiting for that phone call or that message, which must be the most awful way to live.
Cutting the pensions of members of the armed services is not the way to reduce the structural deficit. I believe that the deficit can be reduced by greater investment, and a solid strategy for growth over time in a society in which everyone who is able to work does so, and in which we support those who cannot. I urge the Government to review that aspect of their pension policy and to abandon their short-term thinking on the economy, so that members of the armed forces and their families do not pay the price for the banking crisis, in which they had no part.
As the general secretary of the Forces Pension Society, Major-General John Moore-Bick, says, the armed forces pension is “the bedrock of trust” on which members of our forces rely. They know that they or their families will be taken care of in the event of death or wounding, and they can trust that they will have a decent life after active service. We alter that bedrock of trust at our peril, and to our shame.
Mr Speaker
Order. There are now only 20 minutes left for remaining Back-Bench contributions, and several Members still seek to catch my eye. Members are perfectly capable of doing the arithmetic for themselves, but I appeal to them to help each other.
Bob Stewart (Beckenham) (Con)
I will be as quick as I can. I love the idea of a military covenant. Of course our armed forces are a special case. They are a martial profession: people who join them do not do so to join a nursery school; they know they are going to take risks and they know they may lose their lives. As we know, they are in a unique profession, so we have to deal with them uniquely. That is why we must look after them. I repeat: we must look after them.
The military covenant is a work in progress. I agree with my hon. Friend the Member for Newark (Patrick Mercer), who is no longer in his place, and others who say that it is the idea of the covenant that counts rather than law. We feel strongly that the tri-service military covenant being looked at now, as work in progress, could get better. I feel that the military covenant comprises three crucial aspects, which I will quickly run through.
Mr Kevan Jones
What the Defence Secretary said this afternoon, which was also said in recent proceedings on the Armed Forces Bill, is that a document called “the armed forces covenant” is being worked on now and will be produced later this spring. If that is the case, and the Prime Minister is clear that the covenant should be written into law, why is it not part of the Armed Forces Bill? When an amendment was proposed last week to enshrine the covenant in law, why did the hon. Gentleman’s party vote against it?
Bob Stewart
The answer is I do not know, but I will continue and I will be quick.
What is crucial to whatever we call the military covenant is how we respect our soldiers when they are killed. As a boy, I remember watching my father’s battalion come back. He was the only officer who had not been killed and I remember watching the bodies come off the back of an aircraft at RAF Khormaksar in Aden. We have come a long way since then, and we must respect people properly. Secondly, the families must be looked after properly. When someone dies in the service of our country, we have a duty as a Government to look after those families for the rest of their lives. And my third point is that we have a duty to look after those who are hurt badly for the rest of their lives, too.
I am happy that the military covenant is going to be part of the Armed Forces Bill. I like the idea of having a report every year. I commend the idea of the Queen’s regulations. When I was serving, they were my bible when it came to dealing with my soldiers and how I should behave. Perhaps the tri-service military covenant will in due course become part of the Queen’s regulations.
Members on both sides of the House must try to do whatever we can in these parlous economic times to look after our soldiers so that we will remember them.
Nick Smith (Blaenau Gwent) (Lab)
There have been some excellent and thoughtful contributions to the debate. I am pleased that the Royal Welsh Regiment has been given the freedom of the borough in Blaenau Gwent this weekend.
Last week, I asked the Leader of the House for a debate on the Government’s proposed changes to armed forces pensions. I have also tabled early-day motion 1367, which is now supported by 118 MPs from all parties. I welcome today’s opportunity to raise the issue of the military covenant.
For service personnel and veterans in my constituency, pensions are a key component of the military covenant. Unfortunately, they do not believe that a permanent move from the retail prices index to the consumer prices index in calculating pension increases is fair, and neither do I. This change will slash the lifetime income of disabled servicemen wounded on active service. They have been targets of the Taliban and others; they should not be targets in their retirement.
I am proud of Wales’s contribution to Britain’s defence; it has been long and distinguished. The Welsh Assembly has an admirable record in providing for our armed forces. That is why armed forces personnel now get special help through the Assembly’s homebuy scheme. It is good that the Welsh Assembly goes that bit further for our armed forces. That, I believe, is in contrast to the Government’s policy on pensions for the armed services.
As my right hon. Friend the shadow Defence Secretary pointed out, the Opposition accept the need for pay restraint in public sector pay and pensions in the current economic circumstances. However, a permanent move to uprating pensions every year in line with CPI rather than RPI does not recognise the unique condition of military service and retirement. It will, for example, mean that those invalided out, and widows who lose their partner at a relatively young age, will lose out—and big time.
The impact of the Government proposals on pensions uprating are stark and startling. For example, a disabled, double amputee, 28-year-old corporal would lose £587,000 by the age of 70. I do not believe that is fair, given the sacrifices made by our armed services and servicemen and servicewomen. Lyndon Moore, the secretary of the Nantyglo British Legion in Blaenau Gwent, supports me in standing up for servicemen, who, he feels, have been let down by the Government in their hour of need. I applaud the coverage of this matter in The Times and in the Pensions Fit for Heroes campaign of the Daily Mirror in recent weeks.
The Government have acknowledged that the e-mail sackings were a dreadful mistake, and the Defence Secretary’s apology yesterday was a full one. However, let us reflect on how it must feel to have one’s long-term national service terminated by e-mail, especially when one has served the country with distinction. The Government must sharpen up their act so that that dreadful mistake does not happen again.
I hope that in the short time left before the Budget, the Defence Secretary will make the case to the Chancellor for a rethink on armed services pensions uprating. We need an informed discussion on how we devise CPI and RPI. The International Association for Official Statistics has said that there is a risk of loss of public faith in official data. The public are sceptical about a measure such as CPI, which excludes housing costs. Service pensioners know that housing costs are a long-term element in their monthly outgoings, particularly for invalids and war widows. That is why CPI increases are so problematic for them, and that should be emphasised today.
Service personnel should be assured that the change in pensions uprating from RPI to CPI will be as brief as possible. Surely the Minister does not want to penalise service families for ever and a day. If the Government change their mind, it will be an important boost to service morale and will ensure that the military covenant is credible. Importantly, it is the right thing to do.
Caroline Dinenage (Gosport) (Con)
I pay tribute to the fantastic contributions that we have heard in the House today. In comparison, my speech will probably sound quite parochial, as I speak as a member of a forces family: my husband is a Royal Navy officer, so perhaps I should declare an interest as I am one of the people under discussion.
We have heard comments about political point scoring and making promises that we cannot keep, and those are the two issues on which I want to focus. The armed forces is not a homogenous mass or fighting machine, but soldiers, sailors, airmen, wives, husbands, kids, mothers and fathers. We are asking people not just to lay down their own lives but to lay down the lives of those whom they love most in the world, to protect our country and its interests. We must remember, every day in this Chamber, that those are the decisions that we are making.
I fully endorse the renaming of the military covenant as an armed forces covenant. The many Navy members of my constituency—it is a military constituency—have often felt that “the military covenant” is an Army-centric term, and they like the fact that the Navy and RAF are included in the rebranding of the name.
I want to reinforce the point made by some of my hon. Friends this afternoon that it is missing the point and the sentiment behind the covenant to talk about enshrining it in law. Forces families have heard it all before—[Interruption.] Hon. Members can chunter all they like, but I can talk only from personal experience. Successive Governments have promised to take care of the armed forces and failed to deliver.
Forces families do not want special treatment. They just want a level playing field; they want the same treatment as everybody else and the same opportunities as non-service families. Sadly, forces families are no strangers to having their hopes raised and then dashed. For example, MODern Housing Solutions offered itself as a revolution in delivering maintenance and repairs for forces accommodation. Everybody in married forces was very excited about that, but it failed to deliver its promises.
When I was newly wed to a naval officer, I was told by the wife of a more senior officer that the only thing I could guarantee in my life as a Navy wife was that the day my husband told me he would be home from sea is the only day he would not be home. That sums up the situation. Such changes of plan are unavoidable of course, but the MOD must work on its communication skills. Families can often be seen as a bit of a nuisance, and they are often the last to find out when their loved ones will be home.
Caroline Dinenage
I would love to give way, but I will not do so as I am also thinking about other Members who wish to contribute.
An unhappy family makes an unhappy service person. We need to rebuild the trust of our armed forces, and if we make a promise we must stick to it. Making promises that are achievable and then exceeding expectations is far better than seeking to enshrine things in law.
The UK’s armed forces have been working at a sustained rate for decades. Whitehall is lined with statues commemorating the valour of servicemen and women, but what would be a far more fitting commemoration in their honour is a tangible covenant that can respond to the changing needs of our armed forces and that keeps its promises to them and makes them feel safer abroad and more valued at home.
Huw Irranca-Davies (Ogmore) (Lab)
I will try to be brief by asking the Minister to answer the questions of others, not points raised by me.
The director general of the Royal British Legion, Chris Simpkins, said:
“We’re seeing various allowances paid to the armed forces being reduced…If we then see that the Government isn’t prepared to give a legal commitment to an armed forces covenant I feel that may well be the straw that breaks the camel’s back and will have a very harmful impact on morale.”
In case there is any doubt, he talked previously about
“the need to define and enshrine in law a set of principles in a military covenant.”
Let me put some points made by serving armed forces families. J. Winfield of Nottingham says:
“Once again a new Government have got into power on the back of broken promises. For those of us in the military, we have seen a cut in take-home pay (not a pay freeze), an attack on our pension scheme (against the charter) and basically a complete betrayal by this Government. When the economic climate improves they need not worry about compulsory redundancies as experienced personnel will be leaving in droves. But let us remember ‘we are all in this together’.”
Hilary Adams of London says:
“I’m constantly amazed that anyone in the Army is surprised when they get dumped on by Government. Haven’t you people realised you’re nothing more than cannon fodder? They made a big PR issue of upping other perks to soldiers when they came into power. It should surely have been obvious that they would pay for that by taking it away from you elsewhere!”
Let me conclude by quoting some comments I have taken off one of the armed forces sites. As the Government Front-Bench team will know, these sites can use fruity language, so I have edited the comments.
“How many of you are actually aware that as we speak, the Government are to steal from each and every one of you who have served your country and earned your pension tens of thousands of pounds because they are to change the way the annual increase is worked out?...I just like thousands of other soldiers, sailors and airmen have done my time plus some more and now they have decided to change the goal posts. I stayed in and I am still in because of the pension, not because I like being institutionalised…For me integrity is important; if you promise something to a person, you keep that promise and give it to them. The next person to come along does not necessarily have to get the same deal, this is the way life is. I was promised something, and I want it in the same form I had become used to expecting I would receive it. I honoured my side of the agreement, will they”—
he is referring to the Government Front-Bench team—
“honour theirs? I doubt it.”
He said:
“I shall be next year, aged 43, forced into possible unemployment because the option to remain serving isn’t there for me like many others. Perhaps if enough of us actually give a hoot, and took action he”—
the Prime Minister—
“may have second thoughts. Wake up, people, if you are entitled to an Armed Forces pension you are going to lose tens of thousands of pounds over your lifetime. What really annoys me is that it seems many of you either don’t know this is going to happen”—
speaking to his other colleagues—
“or don’t give a damn. Please start to take action now before it’s too late. We are getting royally bent over and”—
I leave the rest to the imagination of the House.
If the Government do not honour that covenant given on the Ark Royal, what will they do? Servicemen and their families are asking the House to honour the covenant. That is what the debate is about.
Penny Mordaunt (Portsmouth North) (Con)
I declare an interest as I am attached to Royal Navy Reserve, King Alfred, Portsmouth.
I want to make three points. First, many Members have pointed out that the covenant and defence are not the turf of one political party or another; they are far too important, and must be beyond political gain. Those of us in the Chamber today, and those of us who speak regularly on these issues, must work with our parliamentary colleagues to build understanding and interest in the contribution our armed forces make not just to security but to our entire way of life.
We need deeper understanding of the challenges that our armed forces and their families face in doing their duty, and I am pleased to announce that this year, for the first time, we will be holding a Trafalgar night in the House of Commons to showcase the contribution the Royal Navy makes to our way of life. I am delighted that the shadow Secretary of State has agreed to co-host that event with me. It shows how we can build depth and breadth in our colleagues’ knowledge of defence and related matters.
Secondly, I repeat a point made by the Secretary of State. The covenant must be about actions, not just about words. We judge our service personnel in a binary way. Did we win? Did we secure our objectives? Our armed forces invariably do so. As politicians we do not have the same reputation. Given the catalogue of anecdotes about the failures of previous Governments, it is unsurprising that we face a sceptical audience in the armed services and their families.
The debate has been about words—about legal status—but our focus beyond today must be on action and results. I pay tribute to the Secretary of State and his ministerial team; they have done a lot in a short time on operational allowances, mental health services, rest and recreation and education, but the covenant is about much more than welfare issues, which leads me to my third and final point.
The covenant is just as much about our industrial strategy, the size of the defence budget and the voice of the military in future defence reviews as it is about welfare issues. In future months, I shall be arguing not just for service pensions to be linked to the retail prices index, for medals for submariners and the Arctic convoy, for damp-coursing in naval housing and additional allowances for those who search for improvised explosive devices, as well as for those who dispose of them, but also for a larger defence budget in future years, support for exporting Royal Navy-designed ships and for military representation on the secretariat of the National Security Council. Why? Because if the armed forces covenant is to be realised, it requires funds. It requires that we make the right procurement decisions and that we have a Parliament that listens to and learns from the concerns and day to day issues of service personnel.
In that sense, the subject of the debate is a decoy. Despite wonderful contributions, it is a piece of theatre. We know that the military covenant will be enshrined in law, but it will be the subsequent actions of the House on the broader, more fundamental issues that ultimately decide whether the covenant is worth the paper it is written on. I urge the shadow Secretary of State to focus on that in future Opposition day debates.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
I shall make three quick observations. If the covenant is about anything, it must be about human resources and how we deal with people. First, will the Minister look at the composition of the Defence Board? If that was the board of a large international company, it would include human resources representatives. It does not, other than a human resources representative of one of the outside companies.
Secondly, the defence cuts go to 17,000 service personnel and 25,000 civilian personnel. Will the Minister ensure that we do not end up making the military, which will be on higher wage rates, perform functions that cheaper civilian personnel had performed, and that the proper resources are made available? Thirdly, will he consider whether, if the budget is not increased, he will be able to withdraw British troops from Germany in 2020? Will he bear in mind that military personnel deserve some stability in their life, and that making promises that he cannot keep is not a good idea?
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
We have had an excellent debate this afternoon, including the speeches that we have just heard from the hon. Member for Portsmouth North (Penny Mordaunt) and my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart). We called for the debate today to enable Members to hold the Government to account for the promises that they made to our service personnel. The Government said that the military covenant is shattered, but they have failed to offer a clear plan to strengthen it, and they have broken their promise to write the covenant into law.
Numerous Members paid tribute today to our armed forces and they are right to do so. None did so more movingly than my hon. Friend the Member for Bolton North East (Mr Crausby), who paid tribute to his father. Our servicemen and women do difficult and dangerous work all over the world and we owe them a huge debt of gratitude for the sacrifices that they make to safeguard our liberty. We must not forget our armed forces families, as the hon. Member for Gosport (Caroline Dinenage) reminded us. Theirs is a huge sacrifice too, having their husbands and wives, mothers and fathers, sons and daughters spend many months away from home risking their lives. That puts a great strain on families, but their support is priceless. We owe them our sincere thanks, but we also owe them fair treatment.
There was great progress on support for our armed forces under the previous Government. We delivered a cross-Government approach to forces’ welfare. The Service Personnel Command Paper set out improved access to housing schemes and health care, free access to further and higher education for service leavers with six years’ service, and extended travel concessions for veterans and for those seriously injured. We proposed strengthening the military covenant by enshrining the rights of our service personnel, their families and veterans in law through an armed forces charter. My hon. Friend the Member for Bridgend (Mrs Moon) explained why that measure is so important.
Christopher Pincher
I am obliged to the hon. Lady. It has been a pleasure to serve with her on the Select Committee on the Armed Forces Bill and now on the Bill Committee. She mentioned enshrining the covenant in law, but she heard the evidence of General Mans, who told the Committee on 8 February 2011:
“I don’t think there is a requirement to set down standards”.
In the same Committee sitting she heard the evidence of Admiral Montgomery, who said:
“I have detected no appetite for legally enforceable measures within this covenant, none whatsoever.”
Why are those gentlemen wrong and why is she right?
Gemma Doyle
Indeed, it has been a pleasure to serve with the hon. Gentleman on that Bill Committee. As he and I have already discussed, there has been some confusion over two separate issues. One is about a highly prescriptive covenant being written into law, and the other is about enshrining the covenant into law at all, which the Armed Forces Bill does not do, but which his own Prime Minister has said he wants to do.
That takes me neatly to the main thrust of today’s debate—the Government’s approach to our armed forces and to the military covenant. In opposition the Conservatives declared that the covenant was “shattered” and they promised to rebuild it. That does not fit with the coalition Government’s record of action since they have been in office. Last week, on 10 February, a spokesperson for the RAF Families Federation, in evidence to the Armed Forces Bill Committee, said:
“At the moment, there is a real feeling within the armed forces that they are being battered from all sides.”
The Government must pause and reflect on those comments.
The hon. and gallant Members for Milton Keynes North (Mark Lancaster) and for Newark (Patrick Mercer) spoke about their own service experiences. They both said that they do not know and they do not really care whether the armed forces covenant is enshrined in law. I entirely respect that position, and I entirely respect their service. My concern is that the Prime Minister promised that the military covenant will be enshrined in law, and that the Armed Forces Bill, as drafted, does not do that.
The Conservative and Liberal Democrat manifestos made wide-ranging pledges on covenant issues, but we have heard little about how, in government, they will take those forward. The Government’s plan to link public sector pension rises to the consumer prices index, rather than the retail prices index, means that inflation will hit service personnel and war widows hard, as my hon. Friends the Members for Erith and Thamesmead (Teresa Pearce) and for Blaenau Gwent (Nick Smith) explained. That change is fundamentally unfair on the people who serve to defend our way of life, as my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) noted, which is why we have suggested an alternative, fairer approach.
What action have the Government taken on the covenant? The Prime Minister established a taskforce to seek out
“low-cost, innovative policy options to help rebuild the military covenant”.
The Government have said that they will ensure that our brave soldiers will get the best, but can the Minister really look them in the eye and assure them that that will happen, given that the Government have said that they want it done on the cheap?
As I have mentioned, Labour have proposed enshrining the rights of our armed forces in law. Last summer, it looked as though the Prime Minister had adopted our idea. He visited the aircraft carrier HMS Ark Royal and promised her sailors that
“Whether it’s the schools you send your children to, whether it’s the healthcare you expect, whether it’s the fact that there should be a decent military ward for everyone who gets injured…I want all these things refreshed and renewed and written down in a new military covenant that’s written into the law of the land.”
Fast-forward eight months and what a change we have: HMS Ark Royal has been consigned to the scrap heap and the Prime Minister’s promise has not fared much better. The Government have not enshrined a military covenant in law, and nor do they propose to do so in the Armed Forces Bill. We have had much debate on this point in the Bill Committee, with Ministry of Defence officials tying themselves in knots, frankly, arguing both that the covenant should not be laid down in law and that the Bill will in fact enshrine it in law—it was quite a sight to behold. However, the Under-Secretary of State for Defence, the right hon. Member for South Leicestershire (Mr Robathan), who is responsible for veterans and is serving on the Committee, has finally admitted that the covenant will not be laid down in law.
The hon. Member for Ogmore (Huw Irranca-Davies) raised the concerns of the Royal British Legion. Its e-mail to MPs today stated:
“We do not understand why the Government is now claiming that the commitment to produce an ‘Armed Forces Covenant report’ is somehow the same thing as enshrining the military covenant in law. It is not the same thing at all.”
Neither the covenant, nor the principles by which we would understand it to operate, will be enshrined in law. The Government are not being honest with our armed forces. They promised a military covenant enshrined in law, but what is being offered is little more than fuzzy assurances and woolly platitudes. They should fulfil their promise, as our motion seeks to make them do, and ensure that they offer nothing less than the unshakable commitment and the cast-iron guarantee that our servicemen and women deserve.
Furthermore, like service personnel and charities, we have concerns about the annual covenant report that the Government plan to introduce. It is too narrowly defined and lacks the independence from Government required to ensure that it is an effective tool for improving the lives of members of our armed forces. It is to be welcomed that the Secretary of State will lay a report before Parliament for debate, as the hon. and gallant Member for Beckenham (Bob Stewart) mentioned, but as it stands, only health, education and housing are specifically cited as issues to be considered in that report. That is insufficient.
Of course those issues are vital to service personnel, their families and veterans, but there are many other concerns that affect their daily lives. I visited Colchester garrison this week, along with other members of the Bill Committee, and the hon. Member for Colchester (Bob Russell) spoke with pride today about the 16 Air Assault Brigade currently serving in Afghanistan. The concerns raised with me on Monday were about cuts to allowances, cuts to pensions and the difficulties faced by service family members seeking employment. As things stand, the Secretary of State would not be obliged to report on how those issues affect our armed forces. I think that he should at the very least report on issues that fall within his remit.
The Opposition have proposed that the scope of the covenant report should be expanded to include issues such as mental health care, pensions, benefits, employment and training. The Government have rejected our proposals in Committee in a clear indication that they want the Secretary of State to decide which issues should be reported to Parliament. I would like to address many other issues, but time does not permit me to do so.
Today’s debate has been an important opportunity to hold the Government to account on their approach to our service personnel, their families and veterans. Our brave servicemen and women would be right to expect a lot from this Government, given their pre-election rhetoric, but they are not being honest. They have U-turned on a pledge delivered personally by the Prime Minister to enshrine the military covenant in law. It is no wonder that the chairman of the Forces Pension Society has said:
“I have never seen a Government erode the morale of the armed forces so quickly.”
Our brave servicemen and women, their families and our veterans deserve better.
The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
The British people and, indeed, a great many Members will have been puzzled by today’s debate, because all parts of the House agree on the substance of the issues and on looking after the armed forces, and we have heard from both sides how much people care about armed forces personnel, their families, veterans, the injured, widows and so on. So what we have heard, I fear, is a synthetic debate about semantics—dancing on the head of a pin. We on the Government Benches are absolutely concerned about results, not about party political point-scoring.
I shall turn my attention first, if I may, to the hon. Member for Bolton North East (Mr Crausby), who gave a very moving account of his father on D-day. The hon. Gentleman is absolutely right: we all, of whatever age, owe a huge debt to those who fought in the second world war on D-day and on other occasions. I have to say, however, that I am sorry he thought that people who went off after D-day and voted Conservative were voting weirdly; I have always thought that it was a bit weird to vote Labour, but never mind. We agree also on defence expenditure, but if I may say so gently, we cannot spend money that we do not have, and that is why we have to cut the defence budget.
My hon. and gallant Friend the Member for Milton Keynes North (Mark Lancaster) made, without doubt, the best joke of the day. He also spoke sensibly from experience, including recent operational experience, and I say to him, “Trust me. We will not forget the reserves.” The reserves review will report this year to me.
The hon. Member for Bridgend (Mrs Moon) started calmly and asked to be non-political, but then I found that, rather sadly, she turned tribal and became rather party political. I do not doubt her sincerity, however, and I assure her that I and Her Majesty’s Government similarly care deeply for the armed forces.
My hon. and gallant Friend the Member for Newark (Patrick Mercer) spoke from experience and, again, rather movingly, this time about the covenant manifested in Newark. I thank him for his contribution, and he is right: we must, indeed, look after our people in the armed forces.
Turning to the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne), I am sorry to say this, but “the Ark of the covenant” was without doubt the worst joke of the day. Again, however, I do not doubt her commitment to, and support for, the armed forces. My hon. Friend the Member for Colchester (Bob Russell) is a great supporter of the armed forces and, indeed, of the covenant, and he made a sensible and knowledgeable contribution.
The hon. Members for Erith and Thamesmead (Teresa Pearce) and for Blaenau Gwent (Nick Smith) spoke about pensions, and again I do not doubt their sincerity. We are deeply concerned about, and looking specifically at the issue of, widows and maimed personnel in terms of pensions. The hon. Lady referred to a 40-year-old squadron leader and how much his pension might be affected, but she should know that I have drawn a pension from the armed forces for more than 20 years, and although she may not think it, I have managed to earn a little on the way as a Member, so we need to be realistic about the issue: we cannot exempt everybody from the change to CPI from RPI. People who think we can are totally in denial about the state of the public finances, which the previous Government left to us. We have to clear up that mess, and we have no other duty than to do so before we deal with other matters.
Mr Robathan
I shall give way to the hon. Lady, because she sat through the debate and did not get in.
Angela Smith
The Minister is being very generous. Is it not the case, however, that the current Government knew about the deficit before the election? On that premise, why did they make the promise that they made to the electorate?
Mr Robathan
We did not appreciate quite what an awful state—[Interruption.] I could point the House to innumerable references to, “When we open the books, we will find out what things are like.” We did not appreciate the awfulness. We certainly did not know that the MOD budget for the next 10 years was overspent by £38 billion. I am not sure what promise the hon. Lady is alleging that we are breaking, because I cannot see one.
Nick Smith
The Minister hinted that he might be able to make some progress on pensions for widows and for people who have suffered injury. Can he give us some more detail on that?
Mr Robathan
I have had many discussions with representatives of the War Widows Association and the Forces Pension Society, and we are looking at particular cases and how we can perhaps take this forward. I cannot make any concrete commitment, but I can assure the hon. Gentleman that should we make any progress or change, I will let him know.
I thank my hon. and gallant Friend the Member for Beckenham (Bob Stewart) for his contribution. He, too, has been in receipt of a pension for a few years—a bigger one than mine, but there we go.
My hon. Friend the Member for Gosport (Caroline Dinenage), although not gallant herself, is married to a gallant officer. I am grateful for her contribution, in which she spoke from her experience of service family life. She is of course absolutely right: we have to look after the armed forces, and that is what we pledge to do.
I was rather surprised when the hon. Member for Ogmore (Huw Irranca-Davies), for whom I have always had a bit of affection, started to quote from blogs. I think we all read blogs from time to time, but most of the stuff that is written there is not worth repeating.
Huw Irranca-Davies
Far from blogs, I also quoted Chris Simpkins of the Royal British Legion, who said:
“The British public has shown it sees”
the role of coroner
“as vital in ensuring bereaved Service families can have confidence in the investigations of their loved ones’ deaths. We believe it is fundamental to the inquest process and to the fulfilment of the Military Covenant”.
The Minister should not respond to the blogs but to the Royal British Legion.
Mr Robathan
I will come to that if I have time at the end.
My hon. Friend the Member for Portsmouth North (Penny Mordaunt) might qualify as almost gallant in her role in the Royal Naval Reserve. I am grateful to her for what she said. She is absolutely right that this Government believe in action, not words—not spin, but results.
The hon. Member for Birmingham, Edgbaston (Ms Stuart) made three swift points that seemed pretty reasonable. I would love to respond and wonder if she could write to me about them.
I now turn to the Front-Bench contribution by the right hon. Member for East Renfrewshire (Mr Murphy). I expect that he now regrets having called this debate, because he has not come out of it with any credit. Like the hon. Member for Ogmore, he quoted at length the Royal British Legion. I have here the Royal British Legion’s initial comments on the proposed armed forces covenant, dated 21 January—not four weeks ago—in which it says that it broadly welcomes the proposals. I am afraid that one can quote selectively at any stage, and Labour Members are doing so.
I am afraid that the hon. Member for West Dunbartonshire (Gemma Doyle) regurgitated the arguments that we have heard in the Select Committee on the Armed Forces Bill, and they had no more resonance. The Committee has made three visits—to the Nottingham reserves centre, to Colchester and to Headley Court—and I am disappointed that of the six Labour Members on the Committee, who make so much fuss about these things, three did not come on any of those visits.
Mr Alan Campbell (Tynemouth) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.
Business of the House (Today)
Parliamentary Voting System and Constituencies Bill
(14 years ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
20:14 - The House divided: - Ayes: 310 / Noes: 231 - Question accordingly agreed to.
Mr Deputy Speaker (Mr Lindsay Hoyle)
A message has been received from the Lords on the Parliamentary Voting System and Constituencies Bill. Under the Order of the House of 15 February, any message from the Lords relating to the Bill may be considered forthwith, without any Question put. The text of the Lords insistence on amendments 1 and 8, and reasons, is available in the Vote Office as Bill 152. A paper is also available in the Vote Office setting out the motion, which I now call on the Minister to move.
Lords message considered forthwith (Programme Order, 15 February).
Clause 1
Referendum on the alternative vote system
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
I beg to move that this House insists on its disagreement with the Lords in their amendments 1 and 8, but proposes amendment (a) in lieu.
Yesterday the House debated whether to oppose including in the Bill Lord Rooker’s amendments specifying that if less than 40% of the electorate vote in the referendum the result should not be binding. We have accepted an amendment in lieu. We do not accept that there should be a threshold in the referendum, and the amendment does not propose one. It simply states that the Electoral Commission must publish information about the turnout. If we were simply to oppose Lord Rooker’s threshold amendment again without this amendment, and were their Lordships to reject our position, the rules on double insistence would result in the loss of the Bill. We have tabled our amendment to avoid that eventuality.
I explained in some detail yesterday why the Government disagreed with their lordships’ proposal, both on principle and on the basis of the practical difficulties identified by both the Government and the Electoral Commission in giving it effect. I said then that I considered those arguments compelling, and the House agreed. When the motion to disagree was voted on, it was carried by 317 votes to 247, a majority of 70. That was on the back of a conclusive rejection of the proposals for a threshold made by my hon. Friend the Member for Stone (Mr Cash) on Report. I think that we made our view clear, and by a clear margin.
Kevin Brennan (Cardiff West) (Lab)
I understand the Minister’s point about the technical reasons for the Government’s amendment, but does he not owe it to the House to explain what he considers to be the benefits of the amendment if we are to vote on it?
Mr Harper
If the hon. Gentleman will allow me, I will give the details as I proceed with my speech. If he does not think that I have done so satisfactorily, he can intervene again. I should say at this point that, although I shall attempt to be generous in giving way, I also want to ensure that other Members have an opportunity to contribute to the debate, so I may not be quite as generous as I was yesterday.
Mr William Cash (Stone) (Con)
Having studied the amendment, I trust that the Minister will not spend another 25 to 30 minutes going through all the stuff about the Electoral Commission. We want to get down to the real stuff.
Mr Harper
If my hon. Friend will allow me, I will make some progress.
The House of Lords has now asked us to consider the matter again, after voting to reinstate the original provisions. It is only right, therefore, that I briefly report the reasons that it gave for doing so, and explain why I do not believe that those reasons are sufficient to change the clearly expressed view of the House of Commons. First, though, let me deal briefly with the suggestion made by the Lords that it was necessary for this House to consider the issue again because we had not given it proper scrutiny.
The House of Commons has debated the issue of thresholds on a number of occasions, and has voted conclusively against the principle twice. We specifically considered the merit of Lord Rooker’s proposal. During the Lords debate, Lord Falconer suggested that I had misrepresented it, but I thought that I had made myself clear when I said that his amendment sought to make the referendum result indicative should turnout fall below 40%, rather than ruling out implementing the result altogether. My point was that this proposal is a threshold nevertheless, and I make no apology for making the case against it yesterday.
Mrs Eleanor Laing (Epping Forest) (Con)
The Minister has just referred to two occasions on which the House has debated thresholds. Both times, the amendments under discussion had been tabled by me. I believe that thresholds are appropriate in the context of such matters as referendums. However, I accept that my amendments were defeated by the House of Commons, and that the will of the House of Commons must prevail. The House of Lords should accept that too.
Mr Harper
I am grateful for my hon. Friend’s support. I am sure that her clarion call will be heard at the other end of the building.
This morning Lord Wallace made the important point that when a referendum poses a yes/no question, a turnout threshold effectively makes every abstention a no vote. A number of noble Lords supporting Lord Rooker’s amendment suggested that that would not be the case with the kind of threshold that he had proposed. Let me make it clear that it would. Under his amendment, abstentions would still mean that a yes vote might not be upheld. The amendment would still create an incentive for those who favour a no vote to stay at home. Those who favour a no vote might well think that abstaining could create a low enough turnout to see off a yes vote.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Is not one of the problems with their lordships’ threshold that it invalidates only one of the options—the alternative vote system? If the referendum turnout was under the threshold, both the first-past-the-post and AV options should, in fairness, be invalidated—if indeed we accept the principle of a threshold, which we should not. If we do accept it, either result should be invalidated in such circumstances.
Mr Harper
The hon. Gentleman makes a good point, because the threshold sets up an incentive for one side to campaign for people to stay at home. As democrats, we should all be arguing for people to turn out to vote, be it yes or no. That should apply no matter what side of the argument we are on, and Government Members have been very frank about the fact that we will be campaigning on different sides.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Brennan, the Minister has given way once and he has said that he is not going to give way again.
Mr Harper
I am grateful to you, Mr Deputy Speaker.
A related point made in the other place was the argument that Lord Rooker’s threshold was appropriate because the question being decided in the referendum was constitutionally significant. My argument is that we are having the referendum because this is an important issue—it is about how we are elected. It is not right that we make that decision, because the people should decide how Members are elected to this House.
Mr Geoffrey Cox (Torridge and West Devon) (Con)
What is meant by “the people”? Is there any size of turnout that the Minister would regard as not really constituting a verdict of the British people? Is it not sensible for a fundamental constitutional and political change such as this to have a minimum turnout threshold to warrant and justify it?
Mr Harper
Our system does not have a minimum turnout threshold for elections and we do not have a tradition of thresholds for the 10 referendums that have been held in this country. Only one of those referendums had a turnout threshold and its effect was to thwart the clearly expressed will of the people. It may have been something I agreed with, but it meant that that issue festered for another decade.
Mr Harper
I have already given way to the hon. Gentleman and I am going to make some progress.
There are some perverse mathematical effects of such a barrier. As I said yesterday, this Lords amendment provides that if 39% of the electorate turned out the result would not be binding, even if 75% of those voting were in favour of change, whereas if 41% of people turned out the result would be binding, even if far fewer people actually voted in favour of the proposal. In the first scenario, 30% of the electorate might have voted for change but be denied it, whereas in the second only 21% might need to vote for AV to see it implemented. Why should that be the case? I have heard no arguments, either in this House or in the other place, to explain how that would be fair.
Mr Harper
I am not going to give way to the hon. Gentleman.
I know that some Members favour this Lords amendment because this referendum is binding, but the Government have made it very clear that we want to offer the people the chance to make a decision. If they make that decision, it would not be right for the matter to come back to this House and for us to say, “We have heard what you said and we are going to ignore it.” That would not be right, however much we might not like what the people have told us. We accept that when we stand for election and we should accept it in a referendum.
Mr Harper
I am not going to give way.
The key arguments against the threshold remain as compelling as ever. I have addressed some of the points made by their lordships during their debate today. Although they are entitled to ask us to consider the matter again, I do not believe that the points they raised change the balance of argument.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Does my hon. Friend not recognise that there is a difference between an ordinary election and constitutional change? A common feature of many constitutions is having thresholds for constitutional change. Just because we have an unwritten constitution, that does not mean that we are absolved of any responsibility to show that there is a reasonable threshold for constitutional change. If there were only a 10% turnout in London, where there are no forthcoming local elections, would that really constitute a valid result?
Mr Harper
I have two points to make. First, on my hon. Friend’s last point, we are talking about a national referendum and the important thing is to get people to vote across the whole of the United Kingdom. Secondly, we do not have a tradition in this country of thresholds for referendums either. Ten referendums have been held and only in the devolution referendum in the 1970s was a threshold inserted—the rest of the referendums had no such provision. He is being too pessimistic, because people will engage with this question. However, it would be wrong to thwart a clear decision—a yes vote—on the basis of the sort of mathematical formula that I have just set out. It could have quite perverse results and give an incentive for people to stay at home.
Mr Harper
I am just going to deal with the point the hon. Gentleman raised earlier. I am asking hon. Members on both sides of the House to disagree with amendments 1 and 8. In their place, we have proposed an amendment in lieu, which provides:
“Following the referendum, the Electoral Commission must—
(a) publish the most accurate estimate that it is reasonably possible to make of the turnout in each of England, Wales, Scotland and Northern Ireland”.
Information on turnout is useful and important; a turnout threshold is not.
Chris Bryant (Rhondda) (Lab)
As I said yesterday—I know that I do not carry the whole House with this first sentence, but perhaps I will carry more of it later—I support the alternative vote and will be voting yes in the referendum. However, the way in which the Deputy Prime Minister has conducted this piece of legislation, or rather the way in which he has not conducted it, is steadily putting me off the idea. It is an enormous shame that he does not have the courage to be in the Chamber this evening even to represent his own view. I say to Liberal Democrat friends who would like this legislation to pass, that it would be a good idea to progress in a slightly different way.
There have been many misunderstandings about the nature of the threshold that Lord Rooker suggests should be introduced, which their lordships agreed to by a significant majority earlier today. Some think that the threshold would act in a way that other thresholds have acted elsewhere—in other words, that it would make it impossible for the Government then to bring forward the alternative vote. That is expressly not what it does and I am afraid that the Minister rather elided his interpretation of the Rooker amendment yesterday evening. It is absolutely clear. As Lord Rooker said in this afternoon’s debate in the other place, “I have said all along that if the turnout was less than 40%, the House could decide to implement AV and I would not argue with that.”
The simple point that we are making is that because this is not a fatal, kill-all threshold, but would mean that Parliament would have to think again, it puts the decision in the right and proper place. Everyone who supports the alternative vote has some version of a threshold in their mind, whether it is 1%, 5% or 10%.
Chris Bryant
I will give way in a moment. Of course we do not expect there to be only 10% or 15% voting in elections and we do not expect that to be the threshold in elections later this year, but there will be a significant difference between the turnout in England, Wales, Scotland and Northern Ireland. I say to Government Members who are concerned about how English people view the way in which the House transacts its business that if the votes of Scotland, Wales and Northern Ireland end up effectively rigging the vote across the whole United Kingdom because they are having other, substantial, national elections on the same day, I think that will bring the decision into disrepute, and that is a problem.
Paul Farrelly
Just before the Minister summarily sat down, he said that if there were a clear decision, it would be wrong to thwart it in this way, but he did not define what he meant by a clear decision. Will my hon. Friend ask the Minister to give the House a definition?
Chris Bryant
I am afraid that I have been asking the Minister to provide clear definitions and clarity for some time but we certainly did not get much of that yesterday. My point is fairly simple. The amendment that has come from their lordships would not kill off the decision that might come through if fewer than 40% of voters voted in the referendum in May, it simply means that Parliament would have to take cognisance of the decision, so it would be an advisory referendum rather than an implementing referendum.
Mr David Winnick (Walsall North) (Lab)
Is it not the case that the amendment was originally carried by one vote in the Lords and was today carried by a majority of 62, including 27 Conservatives? Does not that show the strength of feeling in the Lords about the necessity for this modification in the Bill?
Chris Bryant
I believe my hon. Friend was in the Chamber yesterday when we had an interesting moment. The Minister effectively advanced his own threshold argument, which was that winning by only one vote in the House of Lords somehow did not really matter. I think their lordships listened to what he said and decided that they would introduce a threshold of their own—a 60-vote majority—which they surpassed quite easily. I am grateful to the Minister for helping us win more significantly in the House of Lords earlier today. I hope that his contribution this evening will do that again.
Ian Murray (Edinburgh South) (Lab)
One of the key arguments being made is that AV would mean that all Members of the House would have 50% of the vote, or close to it, and therefore have legitimacy. Does it not follow that if there is a miserly turnout in the referendum, it will not have legitimacy and the matter should come back to the House for us to debate whether the result should stand?
Chris Bryant
It is a particular irony for those who advocate the alternative vote, as I do, which in the majority of situations will mean that an MP will have secured 50% of the vote—
Chris Bryant
I will in a moment. I am still dealing with this question. I know that the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) is going to make a silly point, and I will let him make it in a couple of moments.
It is suggested that we are advancing a system that guarantees that the vast majority of MPs will have 50% of the vote—some of us already achieve that—but then it is said that that provision should be delivered on perhaps a 30% or 35% vote.
Chris Bryant
I will give way to the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) first, because he asked first.
Sir Alan Beith
I am grateful. If the hon. Gentleman loses the vote in the Commons tonight, does he think the unelected House is then morally entitled to defy the expressed will of this House?
Chris Bryant
As the right hon. Gentleman knows, I have advocated an elected House of Lords for a very long time, and that is still my position. However, many people, including himself when he was on the Opposition Benches, have argued that the sagacity and wisdom of people down the other end of the building should sometimes be listened to. Whatever system we end up with for the two Chambers, I would simply say that as in most other countries in Europe that have a parliamentary system, there will be a second Chamber with a particular concern for constitutional matters.
If the Bill had made progress as the result of pre-legislative scrutiny, with a Joint Committee considering all of its proposals, or for that matter if there had been two separate Bills, one on the AV referendum and another on parliamentary constituencies, I would agree wholeheartedly with the right hon. Gentleman. However, I believe that the Government have abused every single constitutional convention in driving the Bill forward, so I am afraid I am not with him on this occasion.
Mr MacNeil
Surely if a threshold is in place, it is an incentive not to participate. I hope that the Labour Front Benchers do not want to create such an incentive. Surely it is those who care who will vote. Those who are happy either way will probably not vote and will accept whatever those who care deliver. If the threshold that the hon. Gentleman wants were not reached, would that not invalidate both first past the post and AV, not just one of them?
Chris Bryant
I knew the hon. Gentleman was going to make a silly point, because he made the same silly point earlier. We have to have elections to this House, and they will either be under the first-past-the-post system or, if the referendum question is carried, under AV. I therefore do not accept his argument. I also point out to him that I believe there will be very different turnouts in Scotland, Wales and Northern Ireland from that in England. That is why I have never supported holding the referendum on the same day as other elections there.
Kevin Brennan
To return to the amendment in lieu that the Minister has proposed, does my hon. Friend agree that it effectively constitutes a direct insult to the other House, first because of its puerile nature and the fact that it is totally unrelated to the amendments from the other place, and secondly because of the Minister’s cursory explanation of it, which gave the game away?
Chris Bryant
My hon. Friend is, as always, spot on, and I will come to the Government amendment in lieu after I have made one significant point. Implementing referendums is fundamentally dangerous. All too often in other democracies, such referendums have been a way of circumventing the process of parliamentary democracy. That is a particularly dangerous way of doing business under coalition Governments. I do not believe that implementing referendums is a good idea, except for when there is a settled constitutional view that has been established on the basis of consensus, which is certainly not the situation with the AV referendum.
Everybody has a threshold in their own mind, but the truth is that the Government are proceeding as they are because they know perfectly well that if they were to introduce a stand-alone Bill to introduce the alternative vote, it would not be carried in the House or in the House of Lords. That is the profound danger with the way in which the Government are trying to proceed.
Mr Jack Straw (Blackburn) (Lab)
I apologise that I was not here at the commencement of these proceedings—I got caught short in the gymnasium.
I put it to my hon. Friend that it scarcely lies in the mouths of the Conservatives to challenge the authority of the other place when they were happy to see that authority used to the greatest extent on these provisions just before the election when they vetoed their inclusion from the Constitutional Reform and Governance Act 2010.
Chris Bryant
My right hon. Friend is absolutely right. In addition, the Liberal Democrats and the Conservatives so respect the House of Lords that they have decided to pack it with pliant Members so that they can start getting better results in votes. I praise those Members of the House of Lords, including Baroness Trumpington, who has never voted against the Conservative Whip, and who is notwithstanding a very splendid woman, who today decided to vote for the amendment in the name of Lord Rooker.
I support the alternative vote, but to me it is an even more important principle that the views of the British people, completely and definitively established, are enacted. That is why Lord Rooker’s threshold is appropriate.
Finally, the Minister’s amendment in lieu has absolutely no value. It would mean merely that the process that is already adopted by the Electoral Commission would be implemented. He knows that it is a chimera—the smile without the Cheshire cat.
Mr Cash
I entirely endorse the final remarks of the hon. Member for Rhondda (Chris Bryant)—the Government amendment in lieu is a load of rubbish.
It is important to get across what is really going on here. In the context of the referendum, the Conservative party is being led like a lamb to the slaughter. The reality is that the referendum is entirely to do with Liberal party aspirations as expressed in the coalition agreement. I have here an extract from the right hon. Member for Deauville—[Laughter.] I meant the right hon. Member for Yeovil (Mr Laws), who might as well have come from Deauville. He quotes the Secretary of State for Energy and Climate Change, the right hon. Member for Eastleigh (Chris Huhne), as saying:
“Our historic mission is to create a British Liberal party whose influence will be embedded in our politics through a reformed voting system – a Liberal party capable of dealing with both other parties.”
The reality, therefore, is that what lies at the heart of this debate is not the rubbish that we have heard from the Minister on the Electoral Commission, but the glue that holds the coalition together.
I pay tribute to the noble Lord Rooker and the other Lords and Ladies who made such magnificent speeches this morning, which I had the privilege to witness. They are right that the Bill provides for a binding referendum, and that the essence of the argument is that the Bill is a constitutional issue, because it proposes to change our constitution in a fundamental way for the first time.
I believe that 40% is a reasonable test. It is accepted by all the constitutional authorities—including, ironically, Vernon Bogdanor, who was the Prime Minister’s own tutor. This threshold of 40%, which has come down to us in an amendment from the House of Lords, is reasonable and fair with respect to the electorate as a whole. We are being asked to reject that provision. I am no longer going down the route of my original proposal, which one of their Lordships referred to as “the fatal amendment”. I propose, for all the reasons that have been so ably put forward this evening, to follow what the House of Lords said.
There is no reference to thresholds in this coalition agreement—none whatever. None of the political parties expressed any genuine manifesto commitment to the alternative vote and no commitment whatever to the threshold. Given that the Bill purports to provide for a fair electoral system with preference votes, one would have thought that its proponents would at least have the decency and common sense to give the electorate a fair deal—[Interruption.] Yes, and the courage, as one of my hon. Friends says. I thought that the Liberal Democrats believed in fairness and constitutional propriety, but I was mightily mistaken.
Mr Jenkin
Can we dispense with this argument that any kind of threshold somehow provides an incentive for the no campaign to campaign for people to stay at home? The truth is that this is simply a test of whether there are enough people motivated in favour of change to justify it. If enough people are not prepared to vote for change, why should it take place? That seems to me to provide the reason why a threshold should exist for every referendum. Incidentally, when the Conservatives were in opposition, we voted for a threshold in every referendum.
Mr Cash
I agree with my hon. Friend and point out that no European country other than France does not have a threshold. Over the generations, we in this House have always regarded constitutional matters as of such fundamental importance as to require a free vote and to rule out the sort of programming and guillotining that we are seeing here. Yesterday, I had a mere two minutes in which to express the arguments on my amendment.
I heartily dislike this Bill and I believe that its effect will be exceedingly damaging to the Conservative party and exceedingly damaging to our national interest. I strongly urge my hon. Friends to vote for the threshold arrangements proposed by the noble Lords. I believe that doing so would be in the interests of the Conservative party, its individual members and its councillors who are soon coming up for local elections, as well as in the national interest of the electorate as a whole.
Other Members wish to speak, so I shall bring my remarks immediately to an end. The Government should be careful about what they wish for because it might come true.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
The hon. Member for Harwich and North Essex (Mr Jenkin), who intervened a few moments ago, is of course absolutely right. The Conservatives have voted for thresholds in referendums whenever they felt it suited them and whenever they thought it would be to the disadvantage of a Labour Government. Indeed, Scottish devolution was delayed by 20 years because the Conservative party voted for a threshold on the referendum on Scottish devolution in 1979.
It is appropriate that this motion should stand in the name of the leader of the Liberal Democrats because this entire Bill is about the Liberal Democrats. Anybody who has the opportunity should read the Nuffield study, “The British General Election of 2010”, which makes it absolutely clear in a masterly piece of research that the sticking-point on whether the Liberal Democrats would go into a coalition with the Conservatives was whether the referendum that we are debating this evening would be introduced by a coalition Government. What the Government are doing—I rarely agree with the hon. Member for Stone (Mr Cash), but he is absolutely right this evening—is rigging the British political system with this Bill. The Bill was introduced, and is being railroaded through, to placate 8% of the House of Commons; 92% of the House of Commons do not want it.
Sir Gerald Kaufman
I will give way in a moment, but I want to proceed on this point.
When I was shadow Home Secretary, I negotiated with the then Conservative Home Secretary, Leon Brittan, about a Representation of the People Bill—that is what Bills dealing with the political system and elections in this country used to be called— which he was introducing. The dog’s breakfast that is before us this evening is a misrepresentation of the people Bill, based on an obligation to placate the self-interest of the third party in the House. There is no doubt whatever about that.
Sir Gerald Kaufman
I will give way in a moment, but I want to complete this segment of my argument, taking into account the limited time.
This is a partisan Bill. All the Representation of the People Bills that went through the House of Commons, from when I first entered the House, were agreed between the Government and the Opposition—I negotiated with Leon Brittan even down to the threshold for retaining a deposit—but not now. The Conservatives do not want the Bill. We are dealing not with the question of whether we are for or against the alternative vote; we are dealing with the question of whether a fundamental aspect of our British political system should be decided not on its principles, or on whether it is appropriate and admirable for the country, but on whether it suits the interests of a minority party, which wants to go on having coalitions, as that is the only way in which its useless Members would be able to sit on the Government Front Bench.
Mr MacNeil
The right hon. Gentleman referred to rigged referendums, but would a threshold not rig a referendum by blocking a change that the majority of those taking part wanted?
Sir Gerald Kaufman
I understand the hon. Gentleman’s point, but I do not necessarily agree with him.
Paul Farrelly
The hon. Member for Stone (Mr Cash) quoted not the Member for Deauville, or even Trouville, but the right hon. Member for Yeovil (Mr Laws). Does my right hon. Friend recognise that those of us who are more sympathetic to AV have legitimate concerns about its operation in practice because of the behaviour of the Liberal Democrats since the general election. They talk of five more years of the coalition, but we cannot be sure that they will not direct their supporters to use their second preference against the Labour party, for instance. In those circumstances, is it not reasonable to have a threshold, so that we can be certain that the British people have expressed a clear opinion?
Sir Gerald Kaufman
We do not know what the turnout will be on 5 May. What we do know, in my constituency, is that we will murder the Liberal Democrats in the local elections, whatever the threshold. My hon. Friend’s point is relevant, because the issue is not whether one is for or against AV. The debate is not about that; it is about whether we seek to appease a small minority of the House of Commons by rigging our precious electoral system, which has served us well.
Stephen Williams (Bristol West) (LD)
This is an extraordinary occasion in that the unelected House of Parliament is, with absolutely no sense of irony, telling the elected half of Parliament how to conduct a ballot. The simple principle is that in elections and referendums it is the people who turn up who decide the result, not the people who do not turn up.
In my brief remarks last night I recalled many election results in Bristol—I am sure you would have found this very interesting, Madam Deputy Speaker, had you been in the Chair—when the turnout had fallen below 40%. I have since looked up a few more statistics. For the European Parliament elections in 2009, only 34% of the British public turned out to vote. I say in all candour to Conservative coalition colleagues that I do not recall any of them saying at the time that that was not a valid election result. In fact, I recall them saying that the Conservative party had won that election.
Mr Christopher Chope (Christchurch) (Con)
Is the hon. Gentleman not at all concerned that, having listened to the arguments he deployed last night, the Lords majority was 62 rather one?
Stephen Williams
I thank the hon. Gentleman, who is my Political and Constitutional Reform Committee colleague, for that intervention, but I think he can predict my answer. What disturbs me about the response from their Lordships last night is that it ignores the will of the elected House. Our fellow Select Committee colleague, the hon. Member for Epping Forest (Mrs Laing), got that balance exactly right.
The Welsh Assembly election in 2003 had a turnout of only 38%. I ask my Labour friend, the hon. Member for Rhondda (Chris Bryant), who is an ally in arguing for a yes vote should we have the referendum in Wales, does he really think the Government of Rhodri Morgan who were elected in 2003 had no validity because only 38% of his constituents turned out? Does the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) think the Labour administration of Manchester city council, elected on a 27% turnout in 2008, has no legitimacy whatever? That same question could be asked of Sheffield with 36%, or Leeds—a Liberal Democrat-Conservative coalition—with 35.7%.
Jacob Rees-Mogg (North East Somerset) (Con)
In general elections the turnout is normally 70% or more. Is it right that that 70% of people should have their voting system changed by fewer than 40%?
Stephen Williams
If we were at a different point in the electoral cycle, we could be having this referendum on the day of a general election. We may well have a referendum on future changes on the date of the next general election in May 2015. However, that is four and a half years away, so we are having the referendum rather sooner, and everyone who is conducting the arguments about this threshold knows that, other than in a general election, the turnout is likely to be lower than 40%. That is why I have quoted the statistics I have.
Stephen Williams
The hon. Gentleman has made a lot of interventions, and other Members wish to get in.
When an election is over—you will recall the first general election I fought was against you, Madam Deputy Speaker—and the result is in, the people have spoken. As democrats, none of us says the people have spoken but with a caveat; we sit down and accept the result. On this occasion, I say that the voters should have the final word in a referendum—the voters who turn up to vote—and on this matter their elected representatives should have the final word.
Mr Winnick
I am not going to beat about the bush. I am not in favour of the change. I am not going to pretend I am and put forward various reasons why the Lords amendment should be accepted. If I had any doubts at the beginning—I must confess that at times I did consider the possibility of a change in the electoral system—the way this Government have gone about their business has certainly persuaded me to support the no campaign.
An article in today’s Evening Standard by a former editor of The Spectator makes a valid point about how little interest there is in changing the electoral system; there is very little enthusiasm for that. As I asked yesterday, where is the pressure? Where are the letters and e-mails? Where are the people coming to our surgeries and saying, “This is the most crucial issue of all”? It is important to bear in mind the fact that there would have been no possibility of such a referendum if the Conservatives had a working majority; indeed, they would be arguing the opposite of what the Minister was saying.
I do not want to eat my words. On many occasions, when I was sitting on the Government Benches, I said that the view of the elected Chamber should prevail. I do not deny that I said it, and I cannot say that I have drastically changed my mind. Indeed, my hon. Friend the Member for Rhondda (Chris Bryant) has made the point that the Conservatives were only too willing to allow the unelected Chamber to overturn the decision of the Commons when there was a Labour Government.
I have no desire to eat my words, but on a major constitutional issue the Government should be willing to listen, even more so when we are talking about a voting system that has been in operation for a long time and there is so little evidence of a desire for change. As my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) said, the only reason why the measure is being introduced is the coalition. There is no other reason whatever. There is certainly no enthusiasm for it in the Conservative party, either on the Back or Front Benches.
When the Lords last voted on the proposal the majority was only one, but today it was 62—including 27 Conservative Back Benchers and, in many respects more important, Cross Benchers. They do not have a particular party view, but it is understandable that they should be concerned that if there is to be a vote on a change to the electoral system there should be credibility in the turnout. The provision is not binding. The point has been made on a number of occasions: if turnout is less than 40%, it does not mean that there will not be another referendum. The Government and Parliament can reconsider the position. What if turnout is less than 30%? Will we really work on the assumption that that gives sufficient credibility and is sufficient justification for changing the electoral system?
The Minister said that if there was a threshold, it would be an incentive for the no campaign. Surely it would be an incentive for the yes campaign. If the yes people are so keen on change, it is up to them to campaign as hard as possible to persuade the electorate of their case. The Government have put through most of the measures in the Bill. They should show some generosity and consideration for the strength of feeling. They should not be so obstinate. [Hon. Members: “Be nice.”] There would be no harm at all in the Government showing a less obstinate spirit and recognising the strength of feeling both in this place and next door.
If there was a free vote in the House of Commons, this measure would be overwhelmingly rejected.
Mr Richard Shepherd (Aldridge-Brownhills) (Con)
The Government give as their reason for disagreeing:
“Because the outcome of the referendum should be determined by those who vote in it and should not depend on how many do not vote.”
I challenge that. I do not accept it. One of the reasons why I challenge the process is that we are under a guillotine. During the whole passage of the Bill we have been guillotined. Their lordships are part of Parliament and therefore used to be considered custodians of the constitution, so that we in our party passion might not force through something that altered the balance of the constitution. I oppose the motion for that reason.
The Bill is a major constitutional change. No one has argued otherwise. It will change the voting system. We have almost universal suffrage. Everyone is entitled to vote. If they choose not to exercise—
Mr Shepherd
I shall not, if the hon. Gentleman will forgive me. We have so little time and others want to speak.
We have universal suffrage so if a proposition is put to us, I shall take the older course of action, which the hon. Member for Walsall North (Mr Winnick) hinted at. Those who seek change from a settled position have the right to advocate it in a referendum, but those who are not convinced about change are not negligible. They are part of the equation and their very reluctance to vote was normally taken, in an older tradition, as acquiescence in the existing arrangements—that is, they did not step forward and seek change by the exercise of their vote. That was a profound and reasonable position to adopt.
Those who want change have the opportunity in a referendum to vote for it. Those who do not vote have not indicated consent, so the level of consent can be very low indeed in the context of the universal suffrage of our country. Dismissively, the Government say that the outcome is not to be determined by those who do not vote.
Kevin Brennan
Like my hon. Friend the Member for Rhondda (Chris Bryant), I support AV and will vote yes in the referendum.
Hon. Members might wonder about the Minister’s desperate desire to sit down without explaining the amendment that he is asking us to send back to the House of Lords. He knows that in the other place Members rightly think that this House has not properly considered the matter, not least because he hogged all the time yesterday when he gave us an hour for debate. Now we have a mere hour to do the same, and many hon. Members want the opportunity to speak. We still have not considered the matter fully and had a full and proper debate in the House.
Mr Straw
Picking up the point made by the hon. Member for Stone (Mr Cash), does my hon. Friend accept that the coalition agreement, or the needs of the Liberal Democrats, has undermined the traditional relationship between this place and the other place? In every previous example that I can think of when we were in government, there would have been a compromise in such a situation. That was the case scores of times, but Ministers lack any authority to grant a compromise.
Kevin Brennan
My right hon. Friend is right. I shall come to that point.
The Minister is still trying to obfuscate over the threshold and suggest that in some way it would negate the proposals in the Bill. What is unusual about the proposed referendum is that the Government are making it binding. Normally under our constitution, referendums have been advisory to Parliament, not binding in their outcome, and that includes the devolution referendums that were mentioned. The difference in threshold in the Scotland and Wales Bill back in 1979 was that it required 40% of those voting to vote in a certain way.
All the amendment does is say that if 40% of people fail to vote in total in the referendum, Parliament should reconsider the matter. That is an entirely different and reasonable position and in keeping with the traditions of our constitution that referendums are advisory and not binding, particularly when turnout is so low.
The amendment that we are sending down to the House of Lords is an insult to the other place. The Minister’s puerile explanation of it and the cursory way he dealt with the amendment that he is now asking us to vote for was a complete insult to our intelligence and that of the public.
I am afraid that when one lifts a stone in this place, procedurally what one sees underneath is sometimes quite unpleasant. Constitutionally, the Minister had to table an amendment, but instead of putting down a serious amendment that attempted to meet the House of Lords somewhere along the line of compromise, he tabled the parliamentary equivalent of a colouring-in book; he had to fill it in with something and so produced this puerile and meaningless amendment. It is an insult to the other place and to our intelligence. They sit there on the Front Bench, hairy man and smooth man, abusing our constitution. The Government should try to meet the other place somewhere on the spectrum of compromise. That would have been the reasonable thing to do and in line with our constitution.
As someone who will vote yes to AV in the forthcoming referendum and encourage as many people as possible to vote, I think that the idea that this House should not even have the constitutional right to look at the outcome of the referendum if only a very small number of people vote is an insult to democracy.
Mrs Laing
The arguments of Lord Lamont and his colleagues in the other place are absolutely right, as was everything the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) said this evening; I would repeat them in my remarks, but time will not permit me to do so. Sadly, those two rights are incompatible, because the choice before this House this evening is no longer about AV referendums and thresholds. I hate AV and do not want this £100 million referendum. I have always been in favour of a threshold and have said so many times in this House, but that is not the choice before us.
Sadly, the choice before us is between a Labour Government who ruined this country’s economy over 13 years and a coalition Government between the Conservatives and the Liberals that will give the country the stability it needs to recover from the dire economic situation. This referendum on a simple majority, which is stated in the coalition agreement, is a high price to pay for that stability. I, for one, agree to pay it with a very heavy heart.
Jacob Rees-Mogg
I am slightly troubled by my hon. Friend’s remarks, because I was unaware that this had been put down as a confidence motion.
Mrs Laing
I appreciate my hon. Friend’s intervention. It is not a confidence motion, but sadly it is for some of us who have loyalty to the Prime Minister, because we are Conservatives first and foremost and want to see the stable government that is now being provided in every area other than constitutional development. We want to see that stable government and so must support our Prime Minister and his coalition. For some of us, it is done with a heavy heart, but that is the price that the Liberals have sought in order to improve their party political advantage. The right hon. Member for Manchester, Gorton is absolutely right that we ought to have a threshold, but it is too late. The Bill is at its end. Let us just get on with the process of having a referendum and ensure that the British people see it for what it is and do not vote to change our constitution.
Dr William McCrea (South Antrim) (DUP)
With the greatest respect to the hon. Lady, for whom I have great respect, I think that that is one of the saddest contributions that she has ever made in this House.
Earlier today, the Home Secretary came to the House and said that, in the making of laws in this country, Parliament is superior to the courts, but here we are, going for the lowest common denominator—the survival of a coalition Government. In reality, however, that cannot be so. Is the hon. Lady suggesting that, over this issue, for which there is no appetite in the country, the Liberal Democrats would actually pull down the Government? Is she suggesting that, in actual fact, the Deputy Prime Minister would leave his gilded office over such an issue? I suggest that he most certainly would not.
Mrs Laing
The hon. Gentleman is right; I do not disagree. He is right also about it being my saddest speech. I hated making it, and this is a dreadful situation to be in, but my suggestion was not about the Deputy Prime Minister, but about the Prime Minister, who gave his word that there would be a referendum. I wish that he had not, but he did.
Dr McCrea
The Prime Minister giving his word to the Deputy Prime Minister is one thing; what counts is the Prime Minister’s word to the people of this United Kingdom. Our Prime Minister has no appetite or conviction for this legislation at all. This is a grubby deal simply to keep a party happy, and to keep its Back Benchers happy at this time, but on a major constitutional issue such as this, is that the way in which we run our country? Is that the way in which we are supposed to make our decisions? On a previous occasion, the question was asked, “Would the coalition collapse if this issue were defeated?” The answer, if I can remember, from the Deputy Prime Minister was no, so to try to suggest that it would collapse is not factual at all. If it were, I suggest that it would be blackmail, and we cannot blackmail hon. Members of this House.
What we are here to ensure is what we, by conviction, believe is best for the country, not the lowest common denominator. So, I ask this question: where is the pressure coming from for this legislation or for AV? It is certainly not coming from the Conservative party, or from the Prime Minister, because he takes the very opposite view. It is simply coming from a few members of the Lib Dems, who believe that, from now on in, they can hold the country to ransom. They hope that, as far as governing is concerned, they will hold the balance of power in any election that follows.
The hon. Lady had better remember, and let us make no mistake, that if the Lib Dems thought that, in order to keep their ministerial cars after the next election, a coalition would be better with Labour, they would join a coalition with Labour. They are not doing this out of conviction; they are doing it for personal, petty position, and I suggest that that is a ridiculous way of dealing with such a constitutional issue.
Mr Cox
We have but, I think, two minutes—[Interruption.] One minute.
During the time in which this subject has been before the House, I have voted consistently but regretfully against the Government’s position. I cannot understand why we voted for thresholds in opposition and are voting against thresholds in government. I cannot understand why a party—the Liberal Democrats—that preaches constitutionalism does not appreciate that constitutional protections and constitutional safeguards, such as minimum thresholds on fundamental—
Business without Debate
European Union documents
Madam Deputy Speaker (Dawn Primarolo)
Under the Order of the House of earlier today, the House is not to be adjourned until any message from the Lords has been received and Royal Assent has been notified to any Acts agreed upon by both Houses. I therefore suspend the sitting to await a message from the Lords. When the House is ready to resume, the bells will be sounded. A warning notice will be put on the Annunciator in the usual way.
Mr Speaker
I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Act:
Parliamentary Voting System and Constituencies Act 2011.
Petitions
Helen Goodman (Bishop Auckland) (Lab)
I wish to present a petition from residents of Bishop Auckland, County Durham and the north-east, who believe that the Church Commissioners should not sell Auckland castle or the Zurbaran paintings. Bishops of Durham have lived in Bishop Auckland for 900 years. You cannot take the bishop out of Bishop Auckland.
I believe that the Church Commissioners have seen the light in regard to the castle, but have yet to see the light in regard to the Zurbaran paintings. Because the matter is so important, there are more than 3,000 signatures to the petition.
The petition states:
The Petition of residents of Bishop Auckland, County Durham and the North East,
Declares that the Petitioners believe that the Church Commissioners should not sell Auckland Castle or the Zurbaran Paintings.
The Petitioners therefore request that the House of Commons urges the Church Commissioners not to proceed with the sale.
And the Petitioners remain, etc.
[P000888]
Fiona Mactaggart (Slough) (Lab)
I rise to present a petition on behalf of care home residents, children at special boarding schools, and others who are concerned for their welfare. I welcome the presence of my hon. Friends the Members for Aberdeen South (Dame Anne Begg) and for Glasgow East (Margaret Curran), who have also supported the petition.
The petition declares
that the mobility component of Disability Living Allowance (DLA) helps meet some of the extra costs disabled people can face getting around; further declares that the Government plans to stop paying DLA to people living in residential care, which will mean that many people no longer have the money to meet these extra costs and face being trapped at home.
People will lose £49.85 a week or £18.95 a week, and it will simply mean that they cannot get out.
The Petitioners therefore request that the House of Commons calls on the Government to keep the mobility component of Disability Living Allowance for people living in residential care.
I have more than 6,900 signatures on a petition in similar terms. I think that that shows how strongly people feel about the important issue of not being trapped in residential care.
Following is the full text of the petition:
[The Petition of care home residents and others concerned for their welfare,
Declares that the mobility component of Disability Living Allowance (DLA) helps meet some of the extra costs disabled people can face getting around; further declares that the Government plans to stop paying DLA to people living in residential care, which will mean that many people no longer have the money to meet these extra costs and face being trapped at home.
The Petitioners therefore request that the House of Commons calls on the Government to keep the mobility component of Disability Living Allowance for people living in residential care.
And the Petitioners remain, etc.]
[P000887]
Bob Russell (Colchester) (LD)
On a point of order, Mr Speaker. I know how keen you are that Ministers should make announcements to the House first. This evening, BBC television news reported that the Government were planning to abandon their consultation on the Forestry Commission land disposals. Sir, I wonder whether you have received any indication that a Minister will come to the House to make a statement, even at this late hour, or if not tonight, tomorrow.
Mr Speaker
The short answer is no. Many matters are subject to speculation and conjecture, even in our media—a fact of which the hon. Gentleman, on the strength of nearly 14 years’ experience in the House, is well aware.
Incinerators (Hertfordshire)
(14 years ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The House divided: - Ayes: 474 / Noes: 23 - Question accordingly agreed to.
Mr James Clappison (Hertsmere) (Con)
We come to a subject in which the media do have an interest, particularly in the county of Hertfordshire, because it is a subject of wide concern to the residents of Hertfordshire and, in particular, to my constituents. I am talking about the possible location of an incinerator on a site in Harper lane. That is actually within the constituency of my hon. Friend the Member for St Albans (Mrs Main), who is in her place and is planning to intervene in this debate, but the plan considerably affects my constituents, particularly those in the community of Radlett.
Waste management is a matter for Hertfordshire county council, as it is for other county councils, and it has decisions to take on the issue. But how those decisions are taken, the process that is followed and the timing of decisions raise wider concerns, and these concerns have been reflected in cases involving other local authorities up and down the country. For that reason alone, Ministers need to examine the way in which local authorities take decisions on waste management. To a layman, the process being followed in Hertfordshire, which has led to the selection of Harper lane as a possible site, seems somewhat odd, if not bizarre.
Last July, Hertfordshire county council announced that Harper lane was under consideration as one of two possible locations in Hertfordshire for a major waste incinerator to be operated by E.ON. Notwithstanding that, the council launched a consultation last November on a new waste plan. Thus, the consultation began some three or four months after the announcement of this possible location. The following was said on behalf of the county council at the time:
“We already have a Waste Plan for the county, but this is now out of date and needs to be reviewed. The new plan, which will cover the period 2011-2026, will set out the county council’s policies and proposals for the future annual treatment of three million tonnes of waste. This includes identifying areas that may have the potential to accommodate waste facilities as well as safeguarding existing facilities.”
That raises the question: what was the point of the consultation undertaken by the council, given that it had already announced that the Harper lane site was one of two possible locations for the incinerator? The council had already narrowed its choice of site down to just two in Hertfordshire.
The question of where this all fits into the Government’s strategy also arises, because last June my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs announced a major waste policy review, which was to examine
“what policies are needed to reduce the amount of waste generated and to maximise reuse and recycling, while also considering how waste policies affect local communities, individual households and businesses.”
The review is considering the role of energy from waste, and I understand that its preliminary results will be published by the Department in 2011. Yet by that time, Hertfordshire county council will be a very long way down the road on implementing its plans and may even have appointed a preferred bidder to deal with its waste incineration.
So my question to the Minister is: should a county council undertake such a course when a Government consultation is under way and may produce results that are at odds with the course taken by the county council? In respect of both the council’s own consultation, which was announced hard on the heels of a decision on possible locations for the site, and the Government’s consultation, which was still taking place when that announcement was made, there would seem to me, as a layman, to be obvious prematurity in the council’s decision to narrow the choice of sites down to two, including the Harper lane site.
That is not the only strange aspect of the process being followed by the county council, because in October 2008 the council submitted an outline business case to the Department for Environment, Food and Rural Affairs that enabled it to obtain £115 million of private finance initiative credits. The Harper lane site was not the reference site for that bid, nor, as I understand it, was it in the plans of the four shortlisted bidders with an energy-from-waste proposal. Notwithstanding that, Harper lane emerged, out of the blue, as one of two shortlisted sites last July. In June of this year, if not before, the county council is set to announce its preferred bidder and site.
Up to that point, there will have been no opportunity for public consultation about the emergence of Harper lane as a site. Indeed, in the process that has been followed, the public could be said to have been kept in the dark because there is essentially no public information on why Harper lane was chosen as a second potential incinerator site. It does not fit with the stated criteria of Hertfordshire county council for a number of reasons, including the fact that the site is in the green belt and has poor main road access, being located close to a notorious traffic congestion blackspot.
There are also very serious environmental issues relating to the Harper lane site, which will become apparent in due course. Local people have had no opportunity to have their say on any of this. As a strong supporter of the Localism Bill and the localism principle, I am tempted to ask the Minister how this all fits in with the concept of localism. Of course, before a final decision on the location of the incinerator site can be taken, a separate planning process will have to be conducted by Hertfordshire county council and presumably local people will then have a say. That will come only after the county council has appointed a preferred bidder for the preferred site and presumably entered into some sort of legal relationship with the preferred bidder.
Doubtless, Hertfordshire county council will be scrupulous in observing the requirements of the planning process, but, to say the least, how can this appear fair to the lay observer and to interested local residents? Would not they be entitled to conclude that the process is flawed? Many residents all over Hertfordshire might want to ask whether there should be an incinerator at all and whether incineration is the most environmentally friendly process in all the circumstances. Certainly, the assumptions being made about incineration in this case seem to be unambitious when it comes to recycling and waste minimisation in both of which Hertfordshire has a good record. Let it be said that Hertfordshire is a green council with a very good record on recycling and is very good at stimulating environmental awareness. The recycling and composting rate for Hertfordshire is in excess of the national rate and it is on course to achieve the recycling of 50% of all household waste by 2013 if not before.
Jim Shannon (Strangford) (DUP)
Is it possible that if a number of people were unhappy with the application and objected to it through the planning application process, the planning authority could say no to it and that concerns could be addressed at that stage?
Mr Clappison
That is possible, but by that time Hertfordshire county council would already have a preferred bidder and might have entered into a legal relationship with it, so it would, in a way, be judging its own cause in the eyes of local people. There would then be a question of whether it could take that decision and be seen to be a disinterested party, which is very important to the planning process. That is a very strange process to follow.
Up to this point, even before we reach any of those considerations, there has been no opportunity for local people to have their say, no opportunity for full ventilation of the environmental issues at stake and no opportunity for the case against incineration to be put—the case in favour of more recycling and other environmentally friendly ways of dealing with waste. Neither, it seems, has there been any opportunity thus far for a consultation on a full environmental impact assessment. Local people are aware of a number of serious environmental concerns about the Harper lane site, including the fact that it will be on an inner groundwater source protection zone and the fact that it is a close neighbour of the Wildlife Trust’s nature reserve of Broad Colney lakes and of Hounds Wood. In the eyes of many local people, the development would be highly damaging to the local environment and could hardly be more unsuitable on environmental traffic and local infrastructure grounds.
Local people have come together under the auspices of the Watling incinerator group, known as WING, to put the very compelling case against such a development, but should they not have already had the opportunity to put their case formally at an earlier stage to help shape decisions and to participate in genuine consultation, so that the process appears to be one in which people have had a chance to have their say? The process appears to be open to the many questions being asked about it.
Mrs Anne Main (St Albans) (Con)
I congratulate my hon. Friend the Member for Hertsmere (Mr Clappison) on introducing this important debate at this late hour. As he observed, the site in question is in my constituency, but it is on the edge and much of the traffic and other impacts will affect his constituency.
My poor old constituency is in the same corner of the county that only recently was under threat from a rail freight interchange. One of the arguments against that was the fact that lorries access the Harper lane site, the very part of the county that the county council said at the time was particularly heavily congested and unsuitable for having more traffic. That was a really strong argument. The half a lane of road available in the area is now one of the main rat runs to escape problems on the M25 and M1.
I visited the site in question about 18 months ago, or it might have been two years now—time is flying. I was aware then of an aspiration to have an incinerator on the site. It is already a gravel working site and there is recycling there. It is heavily utilised, and access for lorries is compromised. At that time, we were aware that there was concern, particularly because of the previous Government’s landfill directives, about the great pressure on Hertfordshire to deal with its waste through a new incinerator.
What concerns me, like my hon. Friend, is the lack of transparency in the process. Whispers and rumours abound that we must not upset a Minister in another corner of Hertfordshire, or that some deal has been stitched up. If we are to give the lie to local people’s worries, we need a transparent process that they can buy into and have a degree of faith in.
My hon. Friend mentioned a particularly important aquifer. The whole of Hertfordshire is characterised by chalk streams, aquifers with a potentially very big drain on them because of the sheer number of people living near them, and low rainfall. On top of that, not so long ago there was a big disaster at Buncefield, which has severely compromised another of our aquifers. That watercourse is still undergoing monitoring for the long-term impacts of PFOS—perfluorooctane sulfonate—as a result of the Buncefield disaster. We in Hertfordshire are extremely concerned that the environmental impact of anything else that goes on in our environmentally sensitive area must be taken into account.
Plenty of people in St Albans, and I know in my hon. Friend’s constituency as well, say that the particulates coming from lorries travelling in and out of the Harper lane site, the potential compromising of an aquifer and the concern about pollution from lorries queuing through Park Street village and into Radlett will compromise an already congested area and add to the health concerns that residents already have. Those concerns were profoundly expressed when both of us were fighting the rail freight interchange.
We should ensure that the public do not have any hint that there is a stitched-up deal done behind closed doors. They should not have to have any worries about whether a different site has greater potential value to a council as housing development land, and whether the council will therefore sacrifice what it sees as a scrubby bit of green belt somewhere else.
The Harper lane site is important, and it already delivers a lot to Hertfordshire through recycling and gravel extraction. It gives a lot, and it does not need to give any more. It is grossly unfair to expect one corner of the county, on the edge of my hon. Friend’s constituency and mine, to deliver so much more than others, without people having had any say about whether it is the best place to put an incinerator, if we are to have one at all.
I do not have a particular concern about incinerators per se. I used to have the waste portfolio when I was a district councillor, and I visited incinerator sites. They are very well run if they are well sited, but I do not believe that Harper lane is the site on which to put an incinerator. It is already a compromised site and a rat run, and it is heavily utilised by lorries. To have waste going into the area to be incinerated as well would be a blow too far and cause further concerns about aquifers.
I should like the Minister to address in his comments the potential for a delay in the scheme, should it come through, in the interests of localism and because of concerns about the environmental impact. Local people should not have to feel that it is another scheme being railroaded past them. They cheered when we had a change of Government, because they felt that it was the end of railroaded schemes. Now there is potential for a scheme that is seen to be a done deal.
Let us have transparency, localism and a fair say for the local community. Let us say that this is not the right site for a number of environmental reasons. We need to explore those reasons, not pay lip service to them in a dashed-through consultation, all in a bid to find a waste site to consume what will probably be waste from other areas, not just Hertfordshire. As my hon. Friend the Member for Hertsmere said, we do a pretty good job of recycling our waste in Hertfordshire. We do not need to import other people’s rubbish.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
I congratulate my hon. Friend the Member for Hertsmere (Mr Clappison) on securing a debate of such importance to his constituents. I also congratulate him and my hon. Friend the Member for St Albans (Mrs Main) on the passion with which they spoke. As I am sure they are aware, this subject would normally come under the remit of my noble Friend Lord Henley, but I have none the less been very interested in the issues raised in this evening’s debate. This Government have pledged to be the greenest ever. That is not an aspiration; it is an imperative. We have also pledged to devolve decision making as much as possible from the central to the local level. It is in the context of those two pledges that I welcome the chance to respond to this debate and the concerns that have been raised.
We need to rebuild our economy, and we need the new economy to be sustainable. It can be sustainable only if it is green, and a green economy is a zero-waste economy. That does not mean that there will be absolutely no waste—we are realistic—but it does mean that resources are fully valued, economically and environmentally. It also means that one person’s waste is another person’s resource. As my hon. Friend the Member for Hertsmere said, the Government are currently conducting a thorough review of our waste policy. We are due to report in the spring, so I shall not seek to pre-empt our findings today. Nevertheless, the recovery of energy from certain wastes has a role to play in moving us towards a zero-waste economy.
A green economy means generating renewable energy. We have tough targets for that, with 15% of energy required to be from renewable sources by 2020. We need an energy mix to meet our energy needs and the need to reduce greenhouse gas emissions. Recovering energy from waste is part of that. Waste can be a renewable source of energy, offsetting the fossil fuels that would otherwise have been burned and reducing methane emissions from landfills. That offers a net climate change benefit. I have not forgotten that this debate is about incinerators, but it is important to emphasise that recovering energy from waste can be achieved by using many different technologies, of which incineration is only one. There is no silver bullet, but incineration is one of the many means available for meeting our renewable energy needs.
My hon. Friend has used this debate to raise his constituents’ concerns, just as my hon. Friend the Member for St Albans raised her constituents’ concerns so ably. The Watling incinerator group—a group of committed local people—is understandably worried about how incinerators might affect local air quality and the natural environment, and about the health of communities in the vicinity of the proposed incinerator. I must emphasise that all modern waste incinerators are subject to stringent pollution controls. Modern incinerators must comply with the waste incineration directive, which sets strict emission limits for pollutants. The Environment Agency will not grant the permits required for an incinerator to operate if a facility is not compliant with the directive.
Mrs Main
That is why I said I had not set my face against incinerators. I have visited some incinerator sites and I am aware of exactly what the Minister says. However, it is the location of the sites and the access to them, along with the lorries and the pollution that they generate, that also need to be taken into consideration.
Richard Benyon
I entirely accept the points that my hon. Friend raises, and I am of a similar mind.
Studies have failed to establish any convincing link between emissions from incinerators and adverse effects on public health. In 2009, the Health Protection Agency reviewed the existing evidence on public health and incinerators. It concluded, on reviewing the existing evidence, that any effect on people’s health from incinerator emissions was likely to be so small as to be undetectable. It affirmed that adverse health effects from modern, well-regulated waste incinerators did not pose a significant threat to public health.
This debate is also about communities, and we need to meet the challenges at local level. My hon. Friends will be aware that I am unable to comment on the specifics of this particular application, as it is currently subject to a competitive tender process, and it would therefore be inappropriate for me to comment. What I can say is that vigorous debate within a community is healthy, and necessary in order to ensure that the right choices are made in each community.
In these debates, we need to be alive to the facts that all communities produce waste and that responsibility must be taken for dealing with it in a way that best balances the needs of the community and the environment. Our aim is to allow those who are best placed to make decisions to take them in a balanced and informed way, with as little red tape as possible. A reformed planning system will be underpinned by the Localism Bill. This will create a less bureaucratic, more decentralised and more collaborative process and will help to build the big society by radically transforming the relationships between central Government, local government, communities and individuals.
As my hon. Friend the Member for Hertsmere said, the Government are also undertaking a review of waste policy, which is looking at all aspects of policy development and delivery in England, including the possible role of energy from waste and related infrastructure needs. However, it has never been the intention that the review should prohibit any particular type of technology or take any decisions that would have a direct impact on individual projects. The waste review will report in May this year. Hertfordshire county council will have to decide how this timetable impacts on the progress of its own plans, but I do not believe that its actions in any way undermine the waste review.
To put us on the road to a zero-waste economy, we need to manage all our waste according to the waste hierarchy. The hierarchy involves an environmental order of preference for the outcomes of waste. After the preferable options of preventing, reusing and recycling waste, there is recovery and, finally, landfill—the least desirable environmental outcome. The order of the hierarchy can be changed for individual waste types, if it can be proved that that makes environmental sense over the life-cycle of a product. Generally, however, the hierarchy works, and that means keeping waste out of landfill whenever possible. Gone are the days when we do not worry about putting waste in holes in the ground. We know that biodegradable waste rots in landfill, giving off methane, which is a greenhouse gas more potent than carbon dioxide. My hon. Friend the Member for St Albans made some very good points about the impact on water in aquifers. That is fundamental to our concerns about landfill.
Following the logic of the waste hierarchy, it is reasonable to ask whether, if we are burning waste, we need not recycle it. Worse, might we be providing incentives specifically not to reduce, reuse or recycle before recovering energy from waste? Those are valid concerns that the Government’s waste review is setting out to address. But we know from other countries that recycling and energy from waste can co-exist. In the Netherlands, for example, recycling rates are around 65%, alongside 33% energy from waste. The picture is similar in Denmark and Sweden.
We are doing this not only because it makes sense but because it is the law. The waste hierarchy will shortly become UK law through the revised waste framework directive. We have legal targets to keep waste out of landfill, and the Climate Change Act 2008 rightly sets tough targets for every sector of the economy to contribute to the UK-wide carbon budgets. The waste sector is no exception. All those obligations will help our drive towards growing a zero-waste, green economy.
I hope that my hon. Friends the Members for Hertsmere and for St Albans will continue to make their case passionately on behalf of their constituents. They will find that they are able to engage in a process in which they will be listened to, and in which they will be part of the decision-making process. That is what this Government are about. We want them to be part of the process, rather than feeling that they are having these developments inflicted on them with no ability to say anything.
I congratulate my hon. Friends on the high quality of the debate and on the passion with which they have raised this issue. I hope that I have gone some way towards explaining why we are confident that incinerators do not pose a threat to public health, and why our policy on incinerators is part of, rather than in opposition to, our being the greenest Government ever. I hope I have been able to assure them that, as a Government, we are committed to giving power to communities such as those in their part of Hertfordshire.
Question put and agreed to.
Housing: Prices
Matthew Hancock
To ask the Secretary of State for Communities and Local Government what estimate his Department has made of the number of domestic dwellings valued at £2 million or higher in each (a) local authority, (b) parliamentary constituency and (c) region.
[Official Report, 10 February 2011, Vol. 523, c. 391-92W.]
Letter of correction from Mr Robert Neill:
An error has been identified in the answer given to the hon. Member for West Suffolk (Matthew Hancock) on 10 February 2011.
The full answer given was as follows.
Robert Neill
The Department has not made an estimate of the number of domestic dwellings valued at £2 million or higher. This estimate would require figures on the individual value of all domestic dwellings in each area. Such data are not held by the Department. Estimating the current capital value of individual domestic dwellings in each area would require a valuation/revaluation exercise. The Coalition Agreement rules out a domestic revaluation in this Parliament.
The correct answer should have been:
Robert Neill
The Department has not made an estimate of the number of domestic dwellings valued at £2 million or higher. This estimate would require figures on the individual value of all domestic dwellings in each area. Such data are not held by the Department. Estimating the current capital value of individual domestic dwellings in each area would require a valuation/revaluation exercise. The Government have ruled out a domestic revaluation in this Parliament, as outlined in the written ministerial statement of 11 October 2010, Official Report, column 2WS.
Westminster Hall
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Economic Regeneration (Glasgow)
(14 years ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Margaret Curran (Glasgow East) (Lab)
Thank you very much, Mr Gale. I am very pleased to speak here this morning. This is my first Westminster Hall debate since I was elected as a Member of Parliament at the last election, and I am pleased that the subject is my own city of Glasgow—the great city of Glasgow. I am sure that you will hear much of that this morning, Mr Gale.
Of course Glasgow is vital to the current economy of Scotland, and over the years it has also contributed a great deal to Scotland and the United Kingdom. Although Glasgow has suffered many setbacks and difficulties along the way, I argue that the city has fought to overcome them with significant success. It is important that we understand the key ingredients of that success and that we do not repeat the mistakes of the past. Instead, we must deepen and enhance the processes of regeneration, so that we can benefit from them in the future.
The second city of the empire, Glasgow inspires great pride and loyalty in its people: pride in the skills and contribution made by working people to the economy, and loyalty to a city famed for its humour and resilience. By 1870, Glasgow was producing more than half of Britain’s tonnage of shipping and a quarter of all the locomotives being built in the world. Of course, our interest in shipbuilding continues to this day, as I am sure Ministers know. In my constituency, Glasgow East, we had Parkhead forge, which was a powerhouse of the steel industry. It was one of the biggest steel employers in the world—at one point, it employed 30,000 people—and it made an enormous contribution to the war effort. The plant finally closed its doors in the 1980s.
I argue, with some regret, that that great contribution to Scotland’s economy has not been properly recognised or rewarded over the years. There is a real sense among Glaswegians that our work and contribution were used when times were good, but that we were abandoned when change was under way, and we cannot let that happen again. As a result of that abandonment, we were left with a legacy of ill health, high poverty and mass unemployment. That situation was particularly bad during the 1980s, when unemployment soared. There was a sharp decline in public services, urban decay set in and a cycle of worklessness and hopelessness became embedded in too many communities and too many families. The next generation worked hard to tackle that legacy through economic and social regeneration. As I mentioned at the beginning of my speech, there were many successes along the way. As a result of economic diversification and increased investment in infrastructure, health and education, Glasgow achieved a great deal.
More than 53,000 jobs were created in the city between 2000 and 2005, which was a growth rate of 32%. Between 1998 and 2001, the city’s financial services sector increased by 30%, and it is now one of Europe’s largest financial centres. In 2005, more than 17,000 new jobs were created. In 2006, private sector investment in the city reached £42 billion, which represented a 22% increase in such investment within a single year. That shift in Glasgow’s fortunes marked very significant progress and played a vital part in helping to change Glasgow’s image of economic decline and worklessness. In doing so, it inspired confidence in the people of Glasgow, and it inspired investors to have confidence in the city. Of course, it also demonstrated that the famous Glasgow resilience pays off.
A debate about regeneration is about not only the physical aspects of a place but its people. Glasgow has had a strong sense that the process of economic regeneration and the accompanying process of cultural renaissance that it experienced in the 1980s and 1990s should benefit all its citizens and not only those who were skilled and able to make the most of those opportunities. Too often, Glasgow was characterised as a city of two halves, and there was a real push to ensure that all the people of the city benefited from any regeneration process. Glasgow’s problems of ill health, poverty and deprivation were so deep-rooted that there needed to be a step change in how we tackled them. A vital ingredient was the regeneration of some of the most disadvantaged communities, a number of which are in the east end of Glasgow in my constituency. Long before the big society was ever heard of, Glasgow pioneered community development.
We are all aware of the mistakes that were made in the past when things were “done to” communities rather than “with them”, particularly in relation to housing. Economic regeneration is at its best when we work with people who have experienced the problems and have a vested interest in finding the solutions, rather than when we impose top-down reforms. That is best illustrated in the housing sector. Through housing stock transfer, the city has been able to bring additional major spend into housing investment. That process not only involved tenants in a completely new way but delivered a programme of sustainable housing in Glasgow. In my previous role as a Member of the Scottish Parliament, I was the Minister with responsibility for housing in different ministerial capacities, and I was substantially involved in housing stock transfer. If anyone wants to hear me talk for half an hour about housing stock transfer, I am very willing to oblige, but such talks are obviously not in great demand at the moment.
Given the challenges facing Glasgow, it is important to understand how we made progress. Glasgow city council was instrumental in building a lasting partnership with the private sector, a partnership which continues to this day. That partnership with the private sector will be the theme of my contribution to the debate, including how it is possible to get the public and private sectors to work together. My real fear is that that partnership is being jeopardised at the moment. The experience that we had in Glasgow of the partnership between public and private is relevant to the discussions of today and the priorities that we set.
In Glasgow, the private sector understood the need to invest in education and the benefits that it accrues from that investment. The private sector benefited enormously from the developments in housing and in particular from housing stock transfer. For example, the £1 billion investment by Glasgow Housing Association has seen unparalleled improvements in housing throughout the city. Perhaps the employment opportunities that arise from such housing investment are not properly understood, but in fact 4,000 people were directly employed between 2006 and 2010 as a result of the investment in housing in Glasgow. Nearly half those people were employed through community benefit clauses, which shows that public intervention works by creating sustainable employment. Of the 2,000 people who were employed through community benefit clauses, half of them were trainees or apprentices. Once again, that employment has had a real impact in the communities in which those people lived and worked.
We have experienced a bit of a jolt to the process of regeneration in Glasgow in recent years, since the Scottish National party came to power. I would argue that during that time the partnership approach to regeneration has been undermined. That is exemplified through the development of the Scottish Futures Trust. That trust was set up by the SNP Administration, and it was meant to be part of a new approach to raising private finance, allegedly for investment. However, it has failed to commission the building of a single new school, and funding for capital investment projects has fallen by £1 billion at the cost of 37,000 jobs in the construction industry.
The SNP Government have refused point blank to listen to the pleas of the business community in Glasgow, and as a result of that cut in capital investment and other cuts, the construction of school buildings has been scrapped and thousands of teachers and nurses have lost their jobs. The “Salmond slump”, as it is now termed in Scotland, has also seen the cancellation of vital capital infrastructure projects such as the Glasgow airport rail link. The cancellation of GARL has meant the loss of 1,300 jobs. For the first time in a long time, Glasgow unemployment figures have begun to fall behind those of England.
There is no doubt that the decline in investment under the SNP Administration has hit Glasgow hard. In my own constituency, the number of new or refurbished schools between 1999 and 2007 was 14, so we had 14 brand new or refurbished schools in the east end of Glasgow in that time. Since the SNP came to power, not one school in my constituency has been built or refurbished—there has been no investment at all in schools. Recently Glasgow city council has had more than its fair share of budget cuts, as the council itself will confirm. There has been a 3.6% budget cut, which is the highest cut for many years and above the national average.
Glasgow is battling on, and there are still regeneration projects that matter enormously. I want to refer to two of those projects that are of great importance—first, the Commonwealth games, and secondly the Clyde Gateway. The 2014 games will be an exciting occasion, and there was great celebration in Glasgow when we won them. It is an occasion to celebrate sport in a city famed for its sporting achievements. As the Member of Parliament for the great football team of Glasgow Celtic, I expect everyone to be aware of our great expertise on the football field, and I am sure that we will inspire interest in other sports when the Commonwealth games are held. It is, however, also an opportunity to foster economic regeneration, most particularly in areas of the city that still need rejuvenation. More than 9,000 businesses entered the bidding process for affiliated contracts and subcontracts, and it is expected that the games will create 1,000 jobs and stimulate £1 billion of infrastructure investment in Glasgow, most particularly addressing our urge to ensure that the most deprived areas benefit. In the east end of Glasgow the games are of great significance, so will the Minister, in his response, focus on the games? We could perhaps learn things from the UK’s experience with the Olympic games, and the UK Government could perhaps play a part in ensuring that the Commonwealth games are an important success.
The Clyde Gateway is another important development in the east end of Glasgow. It has been identified in the national planning framework as Scotland’s top regeneration project. It has the target of creating 21,000 jobs and 10,000 homes over two decades. It is vital to the success of Glasgow, but recently there have been some problems with its funding. The SNP Government have taken some action to address the concerns, but the role of Scottish Enterprise has, I think, been controversial in its support of the gateway. We cannot afford to let the project slip, and some of my hon. Friends will perhaps want to make more detailed reference in their contributions to the progress, or lack thereof. Hopefully, we can particularly focus on that in the coming months, as it is key to the regeneration of Glasgow. Both the Clyde Gateway and the Commonwealth games are important to regeneration, particularly as they have a focus on and locus in addressing the issue of deprived communities, as well as having a stake in Glasgow’s future.
Glasgow is, of course, facing the double whammy of a Tory-led Government—hon. Members will have expected me to move on to this topic. In debates such as this, I always want to be polite, so I will say this in the most generous personal terms, but I cannot resist making political criticisms and I hope that the Minister will take what I say in the tenor in which it is meant. We have seen some difficulties and challenges since the election of the new Government, including the cancellation of the future jobs fund, which was doing so much to tackle problems of unemployment and particularly of youth unemployment, where we were just beginning to grapple with some of the more deep-seated issues. We have seen the cuts in public expenditure, and we have heard from the Government that when cuts are made in public expenditure, the private sector will step in to fill that gap. I say assertively to the Government that that did not happen when the SNP cut expenditure. In fact, the business community put quite a different case in Glasgow, where it said that when public expenditure is used wisely, it can assist private sector development, and we have seen the details of that in Glasgow and the real success of the model.
We have also seen a raft of cuts in housing benefit, which has undermined that twin process of economic and social regeneration. I would be the first at the barricades saying that welfare reform is important, particularly because of the constituency that I represent. I was a great supporter of the welfare reforms introduced by the previous Labour Government, but how reform is done is critical. The number of people on incapacity benefit tripled under the previous Tory Government, but fell during the previous Labour one. It is concerning that this Government’s welfare reforms are perhaps undermining regeneration. A particular example is the Government’s decision to take away 10% of housing benefit from someone who has been on jobseeker’s allowance for a year. Even if that person is doing all that is required of them and is desperately looking for work, they will still lose their benefit. That not only has a harsh impact on the family but undermines housing-led regeneration, because it affects funding for housing associations in Glasgow, which would be a desperate setback for our city. In all honesty, such a punitive, nasty cut reminds Glaswegians of the bad old days. We have had the higher education cuts that have come through the block grant, and investment in education, particularly at university level, matters so much for a skilled work force, because it enables growth in key sectors such as life sciences and finance.
Centre stage in this discussion has to be unemployment. The numbers have been creeping back up in Glasgow, particularly with the real concerns about the retraction in the economy shown in the recent growth figures. In Glasgow in December, 15 claimants were chasing every vacancy—in my constituency, the figure was 25. That is deeply worrying for those individuals, families and communities, and it has an enormous impact in the city as a whole. It is all very well telling people that they must go back to work, but there are no jobs to go to, which cuts the feet from under the policy. We cannot have welfare to work if there is no work, and it is employment and the lack of it that lies at the heart of the regeneration debate.
For generation after generation, Glasgow has experienced surges in unemployment through profound economic shifts without the right action to protect its people and to get its economy back on its feet, and it looks as though we are experiencing that yet again. I have no doubt that the Government will respond by saying that it is all the fault of the previous Government, and that there is nothing else that has to be done apart from tightening our belts. That has been said to Glaswegians before, and it is has been proved very wrong indeed, many times. I argue very strongly that the people of Glasgow understand that the banking crisis was the fundamental cause of the recent economic experiences, and there is great resentment that that sector is not being made to contribute more to the solutions. Britain’s debt was among the lowest in the G7, and the Tories actually argued that we should perhaps have gone further in our plans for public expenditure. In reality, as Glasgow has shown, it is not “public sector investment bad,” as if that were somehow a drag on the economy that stifles private sector development; it is both the public and private sectors working together in partnership that is good and that matters.
I will draw my remarks to a close, and I thank hon. Members for attending the debate. One of the first demands that I had when I became a Member of Parliament came from Glasgow’s Evening Times, that other significant element of Glasgow life, which my hon. Friends know. The paper contacted me and insisted that my job here is to stand up for Glasgow and that I should make that one of my central claims, which is what I agreed to do—we always agree, I am sure, with the Evening Times. I will continue to do that, because it is our job here to highlight the city’s strength and potential.
People have many images and stereotypes of the city of Glasgow, and I never deny the problems that we face. I have hopefully done some work to try to deal with some of our city’s great difficulties, but it is also a city of great strength, promise and resource, and we have to learn from not only its problems but its great successes. I hope that the Minister will listen and will take back Glasgow’s message to the Government. That message is that they should think again about cuts in housing benefit in particular and that they should support our fight for jobs, particularly as we have seen the job crisis increase. They should recognise Glasgow’s contributions and work with us to support economic and social regeneration.
Mr Roger Gale (in the Chair)
Four hon. Members on the Back Benches wish to participate in the debate. The Chair chooses to give preference, when possible, to Members who have written to Mr Speaker to indicate that they wish to take part, so I propose to call Mr Greatrex next. It might be for the convenience of Members if I also indicate that I shall then call Ms Swinson, Mr Bain and Mr Sarwar, in that order. If hon. Members would be good enough to confine their remarks to 10 minutes, that will enable me to call the Opposition Front-Bench spokesperson at 10.30 am.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I will endeavour to keep my remarks as brief as possible, so that other Members are able to make their points.
I congratulate my parliamentary neighbour, my hon. Friend the Member for Glasgow East (Margaret Curran), on securing this important debate. She rightly spoke of the history, character and legacy of the city of Glasgow and, importantly, of the city’s potential. I pay tribute to her and the other hon. Members who are standing up for the great city of Glasgow in this debate.
I speak as somebody who definitely does not represent a Glasgow constituency. My constituents who live closest to Glasgow are not slow to remind me that they live in the Royal Burgh of Rutherglen. They might have Glasgow postcodes and phone numbers, but the River Clyde forms a natural boundary between Rutherglen and the east of the city, although that natural boundary might not be respected in future by the Boundary Commission, depending on the outcome of deliberations elsewhere today. However, I suppose that that is a debate for a much later hour.
Although my constituency interest is not directly in Glasgow, the fact that my constituency neighbours Glasgow gives me a strong connection with the city across the river. The southernmost part of my constituency shares many characteristics with the east end of Glasgow, as described by my hon. Friend in her speech. Due to that connection, my constituency has a direct interest in the regeneration of Glasgow, particularly through the Clyde Gateway project, which she mentioned and I will discuss briefly.
I realise that the Minister will get both a geography and a history lesson during this debate. I hope that the Clyde Gateway is a fairly self-explanatory description of the regeneration area. It takes in the area to either side of the Clyde and east of the city, and includes the constituencies of my hon. Friends the Members for Glasgow Central (Anas Sarwar) and for Glasgow East on one side, and mine on the other. The Minister might be less familiar with the work of the Clyde Gateway urban regeneration company. I pay tribute to the work of Clyde Gateway, which has learned the lessons from sometimes less successful regeneration initiatives in other parts of the country. Clyde Gateway has actively involved and engaged communities since its establishment in late 2007, and its priorities have been led by what local communities say they need and want for the area.
It is fair to describe this as a once-in-a-lifetime chance to make a difference to some of the most deprived areas of Glasgow and South Lanarkshire. The opportunity has been created partly by the Glasgow bid for the Commonwealth games in 2014, as my hon. Friend mentioned, and partly by the construction of the final, missing section of the M74 from Cambuslang in my constituency to join the M8. The improved transport connection and legacy sports facilities from the games will make a massive difference to the area. At the same time, an opportunity is at stake to do much more in relation to housing, industry and jobs—not only construction work but sustainable long-term jobs.
So far, only some of those benefits have come to fruition in the form of improvements in and around Rutherglen station, the opening in the past few weeks of small business units in Stonelaw road in Rutherglen and an innovative arrangement with Campbell Construction Group to ensure that the construction jobs and training associated with the Clyde Gateway project are geared as far as possible towards local people.
The Clyde Gateway area on the side of the river that I represent has a long and proud industrial history, but history does not always get us far. It does not provide many jobs, keep local people in the communities where they want to live or help economic growth. Although the pits have long gone and the Cambuslang Hoover factory has been closed for several years—some of the physical structure is still around—the steel works continue. There is huge potential to help regenerate what was once and can again be a thriving economic base in my constituency.
The potential is clear. Thanks to the work of Clyde Gateway, public support exists and some of the first projects have been delivered. Visible progress has been made not just in Rutherglen but in Bridgeton on the other side of the river. The project has also gained the support of business organisations, Glasgow city and South Lanarkshire councils and, until recently, Scottish Enterprise, the regeneration agency in Scotland. Clyde Gateway has been an evolving success story, with huge potential and the support—at least in words—of Ministers in the devolved Administration in Edinburgh.
It was therefore of great concern when in January this year, without notice, consultation or explanation, Scottish Enterprise announced that the budget of Clyde Gateway and other URCs in Scotland would be cut by nearly half, which is well beyond the level anticipated or warned about and places in doubt the future of Clyde Gateway and its ability to deliver some key projects. Many people felt utterly betrayed, not by Clyde Gateway or by their local authorities, which were keeping to their side of the bargain as founders of the regeneration company, but by the crass actions of Scottish Enterprise.
The once-in-a-lifetime opportunity has been left cruelly in limbo by Scottish Enterprise. Last week, after pressure, John Swinney, the Finance Minister in Holyrood, managed to find the money to reinstate the sum cut from the budget for URCs for this year by creating an underspend elsewhere, a juggling act of the type I am sure Treasury Ministers are practising for March.
Clyde Gateway is still at the mercy of Scottish Enterprise. A week later, Scottish Enterprise has still not confirmed how much money will be redirected back into the projects to which it committed, nor what the long-term position is given its previous commitments to funding until 2016. Scottish Enterprise said in its business plan, published less than a year ago, that it will
“continue to work…to deliver national regeneration priorities”
such as Clyde Gateway, ring-fencing £12.5 million in 2011-12 and 2012-13 and maintaining funding until 2016.
As I am sure the Minister will understand, the continued ability to lever in private sector investment and commitment from potential employers depends on stability and confidence that plans will be delivered, not left in the lurch. It is not good enough that, although John Swinney was forced to restore the money cut from the budget, Scottish Enterprise has failed to explain what that will mean for Clyde Gateway next year. There is no sense of what the position will be in the further two years for which money was previously committed.
We have heard in this debate and will continue to hear about the importance of regeneration to many communities in Glasgow. Clyde Gateway covers one aspect of that regeneration in a specific area, but it is a crucial time for the east end of the city and the areas across the river in Shawfield and Rutherglen. If taken, this opportunity can make a difference to many people. If it is missed, they will be cruelly let down. The area has needed regeneration for far too long, as is obvious to anyone travelling through it. Progress has been made recently, creating hope, but there is now a danger that due to the twisted logic of Scottish Enterprise, the opportunity could be lost.
I realise that it is not the Minister’s direct responsibility, but I take this opportunity to place on the record my hope that Scottish Enterprise will do what it can to make clear its ongoing commitment to Clyde Gateway so that crucial capital projects can progress. Failure to do so will let down the communities in my constituency and other hon. Members’ in a shoddy and disgraceful way.
Jo Swinson (East Dunbartonshire) (LD)
I congratulate the hon. Member for Glasgow East (Margaret Curran) on securing her first Westminster Hall debate on this very appropriate topic, and on how she introduced it. She is well known for being dedicated to her constituency and constituents, and she captured the city of Glasgow’s past and continuing energy.
Like that of the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), my constituency is just outside the city of Glasgow, although it does not have the same natural boundary. The town of Bearsden in my constituency is right next to Anniesland in Glasgow, and Bishopbriggs in East Dunbartonshire runs into Springburn in Glasgow. It is fair to say that people in the west of Scotland who live near the city are very aware of whether they are within Glasgow city boundaries, but the further away they live, the more solidarity they feel with Glasgow. As a student in London, I recall sometimes feeling like an outpost of the Glasgow tourist board. When I said that I was from Glasgow, people would say to me, “Oh, that’s a dirty, horrible industrial city,” and I found myself putting those myths straight.
Although Glasgow has a proud industrial heritage, it is also a city with stunning Victorian architecture—indeed, it was the UK city of architecture and design in 1999—and an exciting mix of culture. It was the European city of culture in 1990, which was in itself a great catalyst for regeneration, similar to that which we have seen in Liverpool recently. Glasgow is now very much a modern, vibrant and confident city, and people with an outdated view of it should visit in order to experience what it is like today. Many of my constituents work in Glasgow—the transport links are good—so the economic regeneration of the city is important for the health, well-being and prosperity of people living in East Dunbartonshire. Glasgow has a wide hinterland. It is very much the focal point for all of the west of Scotland in terms of economic activity, which covers everything in the region, from the bustling city centre to the tranquillity of the shores of Loch Lomond.
On regeneration, I want to touch upon a particular part of the hinterland, namely the town of Kirkintilloch in my constituency. It is celebrating its 800th anniversary as a burgh this year, and it is the focus of much regeneration. I think that the hon. Member for Rutherglen and Hamilton West will know a great deal about Kirkintilloch’s initiative from his previous work for East Dunbartonshire council. The initiative has brought together a multimillion pound regeneration package, including a new leisure centre, a new health centre and a newly opened link road, which, as well as alleviating some traffic problems, makes Kirkintilloch much more accessible to people travelling there from Glasgow. It has helped to regenerate the town, which certainly needed it—it is, perhaps, the part of my constituency that has been in most need of regeneration. That has been successful and much of it has now been completed.
The town has recently been allocated £361,000 for town centre regeneration from a Scottish Government fund. Therefore, although the hon. Lady has genuine criticisms of the Scottish Government, it is perhaps fair to say—particularly because no representative of the Scottish National Party is present—that the Government in Holyrood have done some things right. However, I agree with her complaint about the cancellation of the Glasgow airport rail link. I do not now fly to London—I take the train instead—but that was an important project that would have been helpful had it not been cut. Kirkintilloch has a great deal of heritage—as I have said, it is celebrating its 800th anniversary. The Forth and Clyde canal runs through it, and it has much Roman heritage. In fact, much of my constituency runs along the line of the Antonine wall, which not long ago became a world heritage site.
That brings me to the issue of economic regeneration and tourism. It is frustrating that we underperform in that area in the west of Scotland. One of Scotland’s biggest industries is tourism, but so many people I meet who say that they have visited Scotland have been only to Edinburgh and think that that is enough. We must and can do more to draw people across, even if it is only for a day trip, so that they do not just think, “We’ll go to Edinburgh.” After all, the two cities are only 45 minutes apart on the train, and the west of Scotland has a wealth of activities and things to offer people that they would not necessarily get in Edinburgh. We should be promoting that more.
As I have said, we have the world heritage site of the Antonine wall. We also have the west highland way, which is one of the world’s greatest long-distance walks and which starts in Milngavie in my constituency. We have not properly exploited its economic benefits. Obviously, there is a current economic benefit, but it could be so much greater. The recent opening of a tourist information centre in Milngavie was a welcome start to that process, but it speaks volumes that, until recently, this world-famous, long-distance walk did not even have a tourist point at its start. It has not been given the priority that it should have for many years.
Another reason why we should attract more people to Glasgow is that—if I may be slightly biased—we are a much friendlier city than Edinburgh has a reputation for being. I am sure that if people come, they will want to come back and become ambassadors. Those of us who represent the west of Scotland in this place and in other Parliaments have a responsibility to be ambassadors, as the Evening Times rightly told the hon. Lady. We need a renewed focus on tourism at all levels of government.
The 2014 Commonwealth games provide a great opportunity to sell Glasgow, and they are also clearly a huge boost for economic regeneration through the investment for building various facilities. We should make sure that there are good links—I understand that this is the case—between the teams preparing for 2012 and 2014, but we should also use the expertise of Manchester, which had such a successful Commonwealth games in 2002. Beyond the boundaries of the city, enlightened local authorities surrounding Glasgow have the opportunity to do what some of those surrounding Manchester did in 2002—own the Commonwealth games and use it for economic, educational and cultural benefit by linking up with countries that may want to base their training camps in those parts of the west of Scotland. They could also create much more meaningful links with local school projects and get the whole community involved. Moreover, the 2012 London Olympics and the 2014 Commonwealth games even have the potential to encourage some countries partaking in both games to base their training camp for 2012 in and around Glasgow and to return there in 2014, so there would be a relationship over several years.
This is a Westminster Hall debate, so there is a general spirit of consensus, which has been well noted this morning. I will end, however, on a slight note of discord. The hon. Lady is right that it is essential that the public and private sectors work together and that that can be successful. I take slight issue, however, with the suggestion that we have a low level of debt and that it is not a major problem. The fact that we have more than a trillion pounds of national debt is a threat to economic regeneration. The fact that we are spending £120 million every single day in debt interest almost makes me want to weep, because it makes me think about what else that £120 million could be spent on. We can all think of things in our constituencies that would promote regeneration and on which that money could be well spent, but at the moment it is, effectively, just dead money going on debt interest.
In the grand scheme of things, much needs to be done to promote economic regeneration in Glasgow and elsewhere, but I agree that tackling the deficit has to be a key part of that. If we do not do that, we will not have the environment that is essential for confident business growth, which will, ultimately, deliver the further improvements that we all want to see in Glasgow and elsewhere.
Mr William Bain (Glasgow North East) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Gale, in this important debate on the Glasgow economy. I congratulate my hon. Friend the Member for Glasgow East (Margaret Curran) on securing the debate and on speaking with the experience of 12 years as a parliamentarian serving Glasgow, both in this House and the Scottish Parliament. She was also a champion for social justice when she was a Minister in a previous Scottish Executive.
It is clear that, prior to the global economic downturn in 2008, Glasgow was on the cusp of a real economic renaissance. Between 1998 and 2008, there were more Glaswegians in work than ever before, while 30,000 jobs were created in business services—a 60% increase—and more than 4,000 new jobs in the financial services sector. Glasgow experienced strong retail growth in that period, with 1,500 shops in the city centre, which even now generate £2.4 billion per year in retail sales turnover. Glasgow also extracts real economic benefit from tourism, as the hon. Member for East Dunbartonshire (Jo Swinson) has said. The current expansion in hotel capacity is key to attracting new events and to the hosting of a successful Commonwealth games in 2014.
Even in recent times, major companies have continued to invest in Glasgow’s biggest asset, its people, by announcing major recruitment programmes. In autumn 2010, Vertex, a provider of customer management outsourcing, announced plans to create 368 jobs, while 1,500 new jobs have been announced in the financial sector by Barclays, Santander, esure, Morgan Stanley and Odyssey Financial Technologies. There has also been a 75% increase in the leasing of office space in the city.
I would like to emphasise three points. First, investment in infrastructure is needed if Glasgow is to remain competitive in increasing its output in retail and business services. The particular priorities are upgrading Glasgow’s drainage and water catchment system to mitigate flood risks, and improving transport networks. There is an overwhelming case for constructing a high-speed rail network from London through the major English cities to Glasgow and Edinburgh at the earliest opportunity. That is worth £20 billion in economic benefits to both cities. The city council, the business community, the Scottish Council for Development and Industry, and Labour Members are concerned about the lack of momentum by the Department for Transport in initiating the necessary discussions with the Scottish Government on the planning and financial issues involved in the construction of high-speed track in Scotland. I hope that the Financial Secretary and the Secretary of State for Scotland will encourage the Secretary of State for Transport not to leave that essential work in the slow lane. The Scottish Government also need to play a central role in increasing capacity, principally between Glasgow airport and the city centre, through the reinstatement of capital funding for the Glasgow airport rail link, which has—as my hon. Friend pointed out—the potential to create 1,300 jobs in the west of Scotland. A further priority is the upgrade of major roads, such as the completion of the M74, because half of those who work in Glasgow live in constituencies outside the city’s boundaries—for example, that of the hon. Member for East Dunbartonshire.
Secondly, more has to be done to tackle Glasgow’s historic underperformance in labour productivity, particularly in the service sector. BAK Basel Economics benchmarked Glasgow against a group of 35 European cities, and Glasgow averaged an annual growth rate of 2.3% in productivity from 2000 to 2005, which puts it in the top 10 cities. However, Glasgow lay in 33rd place in relation to measures of labour productivity in 2005, which is relatively low in comparison with other major EU cities. Thirdly, Glasgow’s economy needs to diversify in order to take advantage of the expansion in the renewables sector, of our universities as centres of scientific and other research excellence, and of high-value-added manufacturing.
The life science community within the west of Scotland is home to 180 companies, including those in Nova park, Robroyston in my constituency. Those companies range from major pharmaceuticals, to diagnostics, therapeutics, medical devices, contract researchers and manufacturers, all of which jointly employ more than 80,000 people. However, continued business support from the Government is required to ensure that they flourish in the coming decade.
Glasgow is home to a quarter of the west of Scotland’s core energy sector businesses and many other energy sector supporting businesses. Research undertaken by the sustainable Glasgow initiative found that Glasgow currently emits around 4 million tonnes of CO2 per annum, which is linked to its energy use. The initiative proposes a series of measures to reduce those carbon emissions, such as renewable energy systems, fuel switching and energy management systems.
Ann McKechin (Glasgow North) (Lab)
I am speaking as a Glasgow constituency Member rather than as an Opposition Front Bencher. I very much welcome what my hon. Friend has said. Does he agree that Glasgow is a perfect location for the new green investment bank proposed by the Government, given its track record not only in financial services, but in innovation and in having a connection with the renewable energy sector?
Mr Bain
I am most grateful for that intervention. As on so many other matters, my hon. Friend anticipates the argument I was about to advance. She has pointed out why it is particularly regrettable that the creation of the green investment bank, which could kick-start many renewable energy projects in Glasgow, has been caught up in a game of Whitehall pass the parcel. As the Secretary of State for Business, Innovation and Skills revealed last week, plans for capitalisation are unlikely to be published before May at the earliest. It is still uncertain whether the green investment bank will have sufficient operational independence from the Treasury, and there is a wider need for capital for new innovatory business start-ups. In addition, there is a strong argument for investigating the case for a wider British investment bank.
The city council has identified low pay as an area requiring urgent attention. In 2006, the average Glaswegian earned 2% less than the UK average, but thanks to the adoption of a living wage policy—first of £7 an hour, but rising to £7.15 an hour this year—by 150 businesses that employ 50,000 people in Glasgow, average earnings are now 3% above the UK average.
It would not be fair to leave out the records of the Scottish and UK Governments in recent months on assisting Glasgow in developing a strategy for growth. I regret to say that Glasgow has not been particularly well served by either Government. The city council experienced a cut in funding of 3.6% from the Scottish Government, which was 1% more than previously indicated and is the worst financial settlement since 2007. Despite that, the city council has made job creation, particularly for young people, a priority. It has invested in the Commonwealth apprenticeship initiative, through which 241 companies took on 600 apprentices last year, and the Commonwealth jobs fund, which aims to create 1,000 jobs for young unemployed people across Glasgow through a £6,500 subsidy per job. That is open to every private and third-sector employer in the city.
However, it is clear that, at a UK level, the cut in capital and investment allowances is affecting manufacturing exporters and harming Glasgow business. The UK Government’s failure to continue the future jobs fund beyond the spring and the revelations this morning that fewer people will proceed through the Government’s work programme than under the initiatives of the previous Government add to concerns that the hard-earned progress on employment levels of the past 13 years will slip backwards. As my hon. Friend the Member for Glasgow East intimated in her remarks, incomes will also be damaged by the Government’s proposals on housing benefit, which it has been estimated will cost £10 million to £12 million a year in lost spending capacity by the poorest families and individuals in the city.
The Glasgow economy has the potential for continued growth in existing and new areas in the next decade, but it will require Government at all levels to exhibit a sustained and credible strategy for growth, rather than simply a plan for an over-hasty fiscal retrenchment that may cost jobs and damage Glasgow’s competitiveness.
Anas Sarwar (Glasgow Central) (Lab)
I join my colleagues in congratulating my hon. Friend the Member for Glasgow East (Margaret Curran) on securing the debate. During 12 years as an elected Member of both this House and the Scottish Parliament, she has demonstrated her commitment to the city of Glasgow. I am delighted to stand side by side with her and every other Glasgow Member of Parliament to say that our first priority is and always will be to stand up for the great city of Glasgow, which we are all proud to be from and serve.
From the outset, it is important to recognise the huge amount of regeneration that has taken place in the city of Glasgow over the past 13 years. Within my constituency, we have seen tremendous regeneration next to the Clyde, involving the media Hub, the BBC, ITV, the Scottish Exhibition and Conference Centre development, the Clyde auditorium and the science centre. I am pleased to say that all that development is happening within my constituency. There has also been tremendous development in the city centre. Sauchiehall street and Buchanan street have the second highest footfall of any UK city centre, second only to Oxford street in London. There has also been a huge amount of housing regeneration right across the city. However, sadly, that has stalled through the recession and as a result of these difficult times.
As the hon. Member for East Dunbartonshire (Jo Swinson) rightly pointed out, the 2014 Commonwealth games will provide a great opportunity to sell Glasgow not only nationally but globally, and will bring opportunity for the east end of the city. It is important to recognise that Glasgow has had a tumultuous economic history, and that the growth and development seen in recent years is extremely fragile, particularly in such a tough economic climate. All hon. Members present today understand that regeneration is driven by economic growth, be it a particular area or the nation as a whole. The regeneration that Glasgow enjoyed under 13 years of a Labour Government is at threat at its roots as a result of inaction from the Scottish Government and a new UK Government policy. However, as with all development and regeneration, cutting off support too early means cutting the lifeline to projects, which will end before they have begun, squandering the initial investment and leaving communities back where they started.
Therefore, in spite of the current climate, it is important that we ask the Government to remember fragile areas such as Glasgow when they make cuts and choose where to invest. That includes cuts to initiatives such as employment zones, and investment in projects such as high-speed rail. The people of Glasgow have been forgotten in the past, when the closure of the shipyards left generations unemployed, and I hope this debate will help to ensure that Glasgow is not forgotten again.
It is important to remember that regeneration is not only about the physical development of new areas through Government and developers investing large amounts of capital, but giving renewed energy to existing systems and supporting the local economy and local people, so that Glasgow can regenerate itself from within. One way that the previous Government began to achieve that was by supporting unemployed people back into work—an essential step to bring growth back into deprived areas is to increase employment.
Despite investment in Glasgow in the last decade, which has improved prospects for thousands of people, the city still has one of the highest unemployment rates in Scotland and has been hit hard by the recession. The announcement by the Government that they will scrap the future jobs fund, which created more than 1,100 jobs for Glasgow and 15,500 jobs across Scotland, is devastating. The Government insist that their replacement back to work programme—when it eventually appears—will provide a more effective system for getting people back to work. However, in the news just yesterday, we heard that the number of people expected to benefit from the scheme in 2012-13 will be down by almost 300,000 on the number who benefited from the previous Government’s programme nationwide.
Labour’s employment zones, which were due to be scrapped six months before the new work programme, were also of great benefit to the city of Glasgow. I am pleased that the Government have done a U-turn on scrapping them six months before the new work programme had begun. It is a shame that it took Labour party pressure from the Opposition Benches and Glasgow Labour MPs having to fight with the Government to make them do that U-turn. The Government should have seen sense in the first place.
We have to recognise that with regeneration and unemployment, one size does not fit all. The Government need to demonstrate that they are paying attention to areas with serious long-term unemployment problems through plans to provide focused support to get people in those areas back to work, particularly given their plan to penalise the long-term unemployed with policies such as a 10% cut in their housing benefit.
Poverty and a lack of opportunity are huge problems in my constituency, and the cuts to regeneration projects such as the Glasgow airport rail link and the Clyde Gateway, coupled with cuts in employment programmes, only threaten to compound the situation. It is important to recognise that the people are willing to work, but jobs must be available for them to fill. It is the growth of Scottish business that will ultimately drive the creation of the economy that Glasgow requires to regenerate itself. Therefore, in addition to supporting work programmes and investing capital in Glasgow itself, the Government must be mindful of longer-term policy decisions that will affect Glasgow’s independent growth. That includes supporting Glasgow’s growing sectors and ensuring that it remains well connected.
The Glasgow to Edinburgh improvement project will go a long way toward supporting Glasgow’s growth by improving connectivity between the two cities, reducing travel times and costs to businesses, and creating one central hub. Although strengthening Scotland’s internal links is important, Glasgow will struggle to present itself as a viable place for start-ups, or to maintain a good environment for growth, if it is not adequately connected to the rest of the UK. The Scottish market alone is not large enough to support very large businesses, particularly those in manufacturing, and international businesses will require strong links with London and the rest of the UK market before they will be attracted to settling in Glasgow. That is why it is such a concern that the plans for High Speed 2 do not currently include an extension to Scotland. Under the present proposals, journey times between London and Glasgow will be reduced by only half an hour if High Speed 2 terminates in Manchester. With current proposals planned for completion as far off as 2025, that prompts the question of how long Glasgow, and indeed the rest of Scotland, will have to wait before they benefit from an adequate rail connection to the rest of the UK.
Britain is already behind our European counterparts in providing proper high-speed connections—the French TGV began operating more than 25 years ago. Scotland’s growth will be actively disadvantaged if there is not even a longer-term plan to link Scotland with the rest of Europe. When we add to that the recent announcement that British Midlands International is to stop its Glasgow to London service, we can understand the deep concerns the Scottish business community will have when it finds competing in the international market increasingly challenging. Both Glasgow and Edinburgh city councils have come together on this. I can assure you, Mr Gale, that Glasgow and Edinburgh do not come together on many issues, but they have on high-speed rail. Independent research conducted for both councils has shown that a high-speed link could be worth up to £7 billion to the Scottish economy. What Glasgow needs in order to grow is a long-term commitment from the Government that high-speed rail for Scotland is a top priority, and that they will endeavour to make it happen at the same time it happens for the north of England.
Glasgow is a vibrant city and a great place to live, and I wholeheartedly believe that it will continue to grow if we can create opportunities for the people living there. There is no real reason why, given the right support, Glasgow cannot become an economic hub in its own right and help to drive growth for the rest of Scotland. What Glasgow needs is continued commitment from the Government to ensure that those opportunities will begin to appear, and evidence to show that Glasgow has not been forgotten, as it sadly was in the past.
Mr David Hanson (Delyn) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gale. I begin by congratulating my hon. Friend the Member for Glasgow East (Margaret Curran) on securing this debate, which is of crucial importance not only to Glasgow and to those who have a concern about and an interest in Scotland, but to the wider UK economy. I am pleased that she has been supported today by my hon. Friends the Members for Glasgow Central (Anas Sarwar), for Glasgow North East (Mr Bain) and for Rutherglen and Hamilton West (Tom Greatrex) and by my hon. Friend the Member for Glasgow North (Ann McKechin), the shadow Secretary of State for Scotland, who is speaking in a personal capacity today. I also very much welcome the contribution from the hon. Member for East Dunbartonshire (Jo Swinson).
What struck me about the debate is that my hon. Friends have made an important case that is applicable not only to Glasgow, but to many other parts of the UK. The key to economic growth and the success of local economies is partnership. It is about not only what government, the voluntary sector or individual entrepreneurial spirit can do, but the partnership that brings those things together. My hon. Friends have discussed national UK Government investment in Scotland, economic projects that link Scotland to other parts of the United Kingdom, the clear benefit that public expenditure brings to Scotland and how such public expenditure relates to the private and voluntary sectors and to the social progress of people who live and work in the great city of Glasgow and the surrounding community.
My hon. Friend the Member for Glasgow East began by pointing out that Scotland has a great manufacturing, cultural and social history, including shipbuilding, the automotive industry and football—one of Glasgow’s great exports is Kenny Dalglish, who has brought great success to my part of the world. The key point is that that manufacturing history and support is where we need to build that partnership for the future. What I have taken from the debate is the issue of partnership. Secondly—my hon. Friends have touched on this, and I shall return to it—a strategy for growth is needed that involves the public sector, looks at key infrastructure projects and helps to develop the voluntary and private sectors. There is also a need—this is key to where the Government are currently failing—for that strategy, that partnership, that development, and that active government to focus on social fairness. Even at a time when there are challenges with the deficit, which we have all recognised, the way in which the Government implement their deficit reduction strategy can, as my hon. Friends have touched on, damage social fairness and the social fabric of our communities.
That is particularly important because—I do not yet have the figures for Scotland—unemployment in the United Kingdom rose by 44,000 in the last month to 2.5 million people. Particularly worrying is the rise of 66,000 in youth unemployment, which has now risen to 965,000 people between the ages of 16 and 24, which makes a total unemployment rate of 7.9%. When the Labour Government left office in May last year, unemployment was starting to fall and there were signs of growth after a difficult period. Sadly, I have to report that unemployment will undoubtedly hit the city of Glasgow, as it will elsewhere in the United Kingdom.
My hon. Friends made the case that the Minister has to explain key policies that he has promulgated in the House and now has to follow. Those policies are having and will have a severe impact on Glasgow’s economy. We need to challenge them, as my hon. Friend the Member for Glasgow East has by securing this debate, and look at alternatives. We must ensure that however we tackle the deficit, which we need to do in part—the Minister knows that when I was a Labour Minister in the Home Office, the Department had plans to make £1.5 billion of savings, so it was something that we were planning to do. However, the scale, pace, depth and front-loading of this Government’s cuts are severely damaging communities in Glasgow and other parts of the UK.
The budgets for the devolved Administrations—this is key to my area, Wales—show that the capital budget, which impacts on housing, education and infrastructure in Glasgow and elsewhere, is being cut by the Government, and in Scotland that process is being supported by the unfair application of the cuts by the Scottish National party-led Government. The £3.4 billion of capital spending in 2010-11 that was planned by the Labour Government will be cut by this Government to £2.3 billion of capital spending in 2014-15. The cut is from £3.4 billion this year to £2.5 billion in 2011-12, which makes a £900 million cut in the capital programme.
My hon. Friend mentioned that her constituency has had no investment in schools thanks to the SNP Government in Scotland and that it faces difficult challenges in respect of housing and infrastructure. Those issues will be magnified tremendously by this Government’s £900 million cut to the Scottish Executive’s budget. Again, there are ways in which we can tackle deficit reduction, but that level of drop front-loaded in the first year will hit Glasgow and other parts of the UK extremely hard. The £900 million cut for Scotland will mean that the private sector, which is so dependent on recovery in Scotland, will suffer. It will be hit by not being able to create the jobs that would have met some of that capital expenditure demand. My hon. Friend pointed to real challenges in her contribution and was supported by other hon. Friends. The Minister needs to recognise that the front-loading will cause real difficulty. The cuts, which are too quick, will exacerbate unemployment, as we have seen with the rise today.
I am sorry that there is no one here from the SNP, but I do not wish to intrude on private grief. I represent a constituency in Wales. The nationalists in Wales, to give them their due, would have been here to argue their case if the debate had been on the economy of Cardiff or Swansea. I am sorry that we have not had a contribution from SNP MPs. They might have explained how they would implement the draconian cuts at a local level. Perhaps that is something that we will return to at a later date, perhaps even outside this Chamber. My hon. Friend may wish to raise this issue elsewhere and discuss the SNP’s lack of interest in this debate and in Glasgow.
The capital cuts and, indeed, the revenue cut, which, cumulatively, is a 7% reduction in real terms in the resource budgets of the Scottish Parliament, will impact heavily on the ability of Glasgow to weather what is still a difficult period coming out of a recession which, as my hon. Friend said, was not the fault of the people of Glasgow East, yet they are the very people who will have to bear the real hardships caused by public sector reductions and the Government’s social policies. The rise in VAT and cuts to housing benefit will be extremely difficult. The unfairness of those changes hit hardest the poorest people in Glasgow, whom my hon. Friend has represented for 12 years here and in the Scottish Parliament.
There are some good news stories which should not be forgotten in this debate. Hon. Friends from both sides of the Clyde have mentioned the Clyde Gateway project and the importance of progressing it. I want to support them from the Opposition Front Bench in their endeavours to influence not only the Scottish Executive but the Westminster Government to ensure that it is a success. The project embodies the partnership that my hon. Friends have discussed today. It has the potential to develop large areas of the east end of Glasgow plus Rutherglen and Shawfield in South Lanarkshire. It involves investment of more than £62 million between 2008 and 2011, with Scottish Enterprise hopefully bringing forward £42 million to 2016. It will lever in private sector investment of up to £1.5 billion for private development, which will create jobs and homes.
The project is symptomatic of why the Government’s approach to public spending is so wrong. The Clyde Gateway scheme shows that public-private partnership can create jobs, homes and social progress. It is not a one-size-fits-all scheme, in which the public sector appears to be the devil to all other aspects of society. The Government are committed to reducing the public sector, not only to reduce the deficit but because they do not like public spending and public investment as a whole.
I hope that the Minister will endorse and support the Clyde Gateway scheme, that the UK Government will give it succour, and that that will also apply to the 2014 Commonwealth games. As my hon. Friends have said, the games will be a key economic generator and will put the spotlight on Glasgow’s tourism potential. They will be a showcase for the great skills of the people of Glasgow and for the city’s great attributes. They will involve £1 billion of investment in infrastructure, 1,000 additional jobs and 15,000 volunteers—the big society will be alive in Glasgow, irrespective of any Conservative party initiatives, which mean, in effect, a small state. I hope that the Minister will touch on that proposal today, recognise that it will result in economic growth and development in Glasgow, and support it.
Despite those positives, the Government’s policies on public spending and also on social issues will damage the economy of Glasgow. My hon. Friend the Member for Glasgow East picked up on various points. Linking local housing allowance to the consumer prices index will result in lower income for people locally. The cut to housing benefit ignores the fact that, in an area with rising unemployment, long-term unemployed people who are trying their best to find work, who are going to interviews and sending out applications and who are turning up at the Jobcentre but are still unable to secure employment will face a reduction in their income.
My hon. Friend knows that if the people of Glasgow East find that they are unemployed and that their housing benefit has been cut, the money that they lose will not be spent in Glasgow. They will not be spending in local shops, supporting the local economy and voluntary organisations, or creating local jobs with that resource in the east end of Glasgow. We add poverty to poverty by taking unfair cuts forward.
Glasgow has a younger population compared with the rest of Scotland, and, sadly, youth unemployment will disproportionately hit that area hardest. The future jobs fund has been mentioned. It had the potential to create 200,000 full-time, paid jobs for young people up and down the country, and Glasgow would have had its share. There will be real problems in the future because of that cut.
I was pleased that my hon. Friend the Member for Glasgow North East mentioned the living wage campaign. That is a big society issue: companies, voluntary organisations and the council are agreeing to pay a living wage and working together because they recognise, without the Government telling them to be part of a big society, that they have a partnership interest in the future of Glasgow. Many of the challenges are self-evident, but the Government are adding to them by front-loading public expenditure cuts too fast and too deep. However, Glasgow has real positives for future growth, such as the Commonwealth games and the Clyde Gateway, which we should celebrate on a UK basis.
Another issue that has been mentioned today is tourism. I was struck by the strong representations to extend the high-speed rail link along the west coast main line from the current proposal, which would run from London to the west midlands and through to Manchester. I use that London to Glasgow main line, because I get off at Crewe and go west. There is an argument for looking at such investment over the long term, to ensure that we enhance the high-speed link.
My hon. Friends pleaded for serious consideration of developing new industries in Glasgow and made a strong case for the green investment bank to be placed in the city, growing the financial services sector not only in Edinburgh but in Glasgow. The growth and development of renewable energy projects, with the support that the UK Government can give, are real and positive things.
My hon. Friends and I came to the debate with severe criticisms of Government policy. While needing to tackle the deficit, the Government have gone too far, too fast. However, we can work with the UK Government on some real positives, as well as with the Scottish Executive which, hopefully, will be under the control of the Labour party after May this year. We could build on the strengths and the will of the people of Glasgow to develop their own future by attracting new businesses and visitors, and by ensuring that the success of the Commonwealth games showcases that great city to the rest of the United Kingdom.
I am grateful for the opportunity provided by today’s debate, which is the first that my hon. Friend the Member for Glasgow East has secured in Westminster Hall; I hope that it will be a success. I look forward to the Minister defending his draconian cuts but also, I hope, working with my colleagues to ensure that he can mitigate those cuts and develop a strategy for growth for Glasgow into the future.
The Financial Secretary to the Treasury (Mr Mark Hoban)
I congratulate the hon. Member for Glasgow East (Margaret Curran) on securing the debate. She struck me as passionate about her city, its people and their prospects. I commend that, and it will serve her well in this place.
I have to disappoint the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), but I am not sure that I need much of a history or geography lesson about the city. I have visited Glasgow quite frequently, I have met businesses in Glasgow and I am going to Edinburgh next month. [Interruption.] I know there is some fraternal rivalry between the cities, but the hon. Member for Edinburgh East (Sheila Gilmore) is in her place representing Edinburgh and ensuring that the Glaswegians do not get everything their own way. I understand some of the challenges in the Scottish economy. Having been born and brought up in the north-east, I recognise from my own region some of the trends referred to by the hon. Members, such as the decline in shipbuilding, or in coal mining, as mentioned by the hon. Gentleman. I see strong parallels.
I congratulate other right hon. and hon. Members, including my hon. Friend the Member for East Dunbartonshire (Jo Swinson), on participating in the debate and making the case for their constituencies.
Before I turn to the main text of my contribution, let me deal with four areas mentioned by a range of speakers. First, it is vital for Glasgow to use the Commonwealth games as an opportunity for economic development. I note the job creation initiatives around the games. Some lessons could be learnt from the London Olympics, not only in the regeneration provided for east London but in how the games are a focal point for businesses to promote the benefits of London as a place of inward investment. I encourage people in Glasgow to work closely with the Olympic authorities in London to understand the opportunity to attract inward investment and to raise the profile of the city.
The Clyde Gateway, as with the spending for the Commonwealth games, is a devolved matter, for prioritisation by the Scottish Government, but I am sure that Scottish Enterprise will have heard the strong messages from this morning’s debate. However, if MPs and others from Glasgow wish to see funding devoted to that project, they must place pressure on the Scottish authorities.
I will raise with my right hon. Friend the Secretary of State for Transport the issues about the completion of High Speed 2, which affects a number of areas of the country not covered by the current route, such as the northern part of England as well as Scotland. I will ensure that he is aware of the concerns expressed.
On the green investment bank, I am afraid that Glasgow will have to join the queue of bidders for the headquarters. A number of parts of the country have made representations through their Members for the site of the headquarters. Green investment is a huge opportunity for economic growth and development. Existing skills in local communities or in the universities serving those areas can be used to promote renewable energy and green industries. The issue affects all parts of the country but, at the time of the Budget, my right hon. Friend the Chancellor of the Exchequer said that at least £250 million from the green investment bank will be spent in Scotland. We have not lost sight of the important role such investment can play in stimulating economic growth.
As pointed out by the hon. Member for Glasgow East, Glasgow was at the forefront of the industrial revolution and it remains one of the most important and innovative cities in the UK. It is Scotland’s largest urban economy, generating £13 billion gross value added each year and supporting 400,000 jobs. As we heard, the jobs are enjoyed by those living not only in Glasgow but in the surrounding areas, as part of the economy of the west of Scotland.
We want to work in partnership with the Scottish Government to promote our shared objective of increasing economic prosperity for all in Scotland and Glasgow. As mentioned, economic regeneration policies are largely a matter for the Scottish Government and their local authorities and agencies, which was evidenced by the criticism made by the hon. Lady of the Scottish National party Government. I am sure she will take every opportunity over the coming weeks to remind SNP Members of that and to question their non-attendance today.
Setting out the Government’s economic strategy and its impact on Scotland—in particular, Glasgow—will be helpful. We set out three strands last year: first, to reduce the deficit inherited from the previous Government; secondly, to increase economic growth, including by rebalancing the economy throughout all the countries and regions of the UK; and, thirdly, to promote fairness for all.
As my hon. Friend the Member for East Dunbartonshire rightly pointed out, we have a deficit to tackle and we are spending £120 million on interest every day—we spend more in interest than we do on schools. Clearly, we need to resolve that issue if we are to support economic growth, keep interest rates low and protect jobs in all parts of the UK.
The reality that the right hon. Member for Delyn (Mr Hanson) keeps trying to escape from—he and I have had many debates on such issues—is that the previous Government set out cuts starting from April this year that would have been only £2 billion less than the cuts we have outlined. When he talks about front-loading, he ought to think about the previous Government’s plans and acknowledge that the cuts this year are only £2 billion more than in the plans we inherited. All parts of the UK, including Scotland, must bear their share of the deficit reduction made necessary by what we inherited from the previous Government.
Funding for the Scottish Government in the spending review reflects the Government’s commitment to invest in infrastructure and to ensure that conditions for growth are in place throughout the UK. The spending review increased capital funding in the UK by £2 billion compared with June’s Budget plans, which is more than what the previous Government had set out as their capital plans for the new Parliament. I repeat, the right hon. Gentleman must be careful what he criticises: we have been more generous in our capital settlement than his Government had intended. We are keen to ensure that capital expenditure is used to protect projects with high, long-term economic value and that spending is focused on investment promoting economic growth, including in transport, science, regional growth, digital infrastructure and supporting the low-carbon economy. Glasgow MPs need to challenge the Scottish Government on how they will prioritise their budgets to deliver those objectives. These are devolved matters, and the Scottish Government are accountable for the priorities they set and how they respond to the needs of Scotland.
Margaret Curran
I take the point about devolved matters, and we do pursue those. Housing benefit, however, is a reserved matter. Will the Minister confirm whether the Government are going ahead with the 10% cut in housing benefit after a year to those receiving jobseeker’s allowance?
Mr Hoban
I will return to the issue of housing benefit in a moment. Let us be clear: the Scottish Government have not suffered disproportionate cuts. Funding has been determined by the Barnett formula in the usual way. The percentage of Scottish Government total reduction in departmental expenditure limits for 2014-15 is below the UK average—they are getting a better spending settlement than the rest of the UK. Public spending per head in Scotland is substantially above the UK average and is expected to remain so over the spending review period. The Scottish Government have benefited from substantial increases in spending since devolution.
If we are to promote strong and sustainable economic growth that is evenly shared across the country and between industries, we need to tackle the debt and deficit that we inherited. The Government are inviting businesses to take part in a fundamental review into what each area of Government is doing to address the barriers facing industry. They have already acted to remove barriers to growth, and the growth review announced last year set in train an intensive programme of work to drive forward action on the Government’s priority areas. That relentless focus on growth will continue to form the basis of the Government’s agenda for the rest of this Parliament. We started by focusing on planning, trade and inward investment, competition, regulation, access to finance and corporate governance.
The review will look at all sectors of the economy, but we have first identified six key sectors: advanced manufacturing; digital and creative industries; business and professional services; retail; construction; and health care and life sciences. Manufacturing is a strong part of the Scottish economy, and it has seen six consecutive quarters of growth. That is a helpful sign of the rebalancing of the economy.
As the Financial Secretary to the Treasury, financial services is my specialist topic, and the importance of financial services to Glasgow has been mentioned a couple of times during the debate. In 2009, I visited National Australia Bank at the Clydesdale branch in Glasgow and spoke to management and businesses from the west of Scotland. The financial sector is one of the most significant contributors to UK GDP and employment, and although London is the heart of that industry, there are important financial centres across the country, including in Glasgow. Financial services firms in Scotland account for 9% of total UK employment in the sector.
Financial services is one of the biggest employers in Glasgow. In 2008, 95,000 people were employed in financial services firms in Scotland, and many of those jobs were based in Glasgow. Major local employers include National Australia Group, which I referred to earlier, and Lloyds Banking Group. I know that Glasgow has recognised the potential role that financial services can play in a growing economy. The £750 million joint public-private venture investment in the international financial services district could bring an extra 20,000 jobs to the city.
We often think of the strong tradition of businesses that are based in Scotland, but we should not lose sight of the fact that many international financial services that we associate with Canary Wharf and the City have significant operations outside London. Morgan Stanley is in Glasgow, as are Deutsche Bank and Citibank. Those global businesses chose to locate some of their operations to Glasgow, which shows that the benefit of having London as a global financial services centre spreads beyond the boundaries of the square mile. We are doing as much as we can to ensure that the UK remains an attractive and competitive place for financial services to do business.
As well as measures for the financial services sector, we must ensure that the UK is a good place for inward investment. In the Budget we announced plans to reduce the rate of corporation tax from 28% to 24% over the next four years. We published a corporate tax road map that set out a significant programme of corporate tax reforms designed to restore the UK’s tax competitiveness, including reform of the controlled foreign company regime. The Government are responding to business concerns about the instability and unpredictability of the UK tax system while taking action where they can to improve the UK’s competitiveness. We will work with our partners in the Scottish Government and elsewhere to ensure that Scotland is an attractive place in which to do business.
Increasing fairness is a strand of our work, and that point was touched on by a number of hon. Members. We must be clear about the important reforms to welfare set out by the Government. I recognise that there is a degree of support for those reforms from Labour party Members, but we clearly need to improve work incentives and get more people into work. Too many people must make a decision about whether they can afford to go to work, or whether the system means that they are trapped on benefits. That is why my right hon. Friend the Secretary of State for Work and Pensions is setting out plans for the universal benefit, which will be introduced from 2016. It means that for new claimants, it will always be better to be in work than on benefits. That sends a positive signal that people should take employment opportunities and will be better off if they do. That is not just economically better off—significant social benefits flow from people being in work.
The future jobs fund was mentioned by a number of hon. Members, and it is a convenient soundbite to say that the fund has been scrapped. We should all recognise, however, that many of the jobs that were funded were temporary and many were in the public sector and did not represent good value for money. That is why we are bringing forward the Work programme that will strengthen support for those seeking to get into work.
The hon. Lady mentioned housing benefit. She will recognise—as do a number of her colleagues—that the bill for housing benefit increased significantly under the previous Government. There are some anomalies in how the system works and the way that it distorts incentives. That is why it is important to restructure housing benefit and engage in reforms. We recognise the challenges that that will create, which is why additional money has been set aside to help manage the transition.
The hon. Lady also spoke about defence and shipbuilding. She will know that some of the work on the new aircraft carriers is being done on the River Clyde, just as some is being done in Portsmouth just outside my constituency in the Vosper Thornycroft yard. The Astute class submarines will also be based in Scotland and there is a great deal of support for Glasgow from central Government. However, if we are to achieve the great goals of this Government to rebalance the economy, spread wealth and prosperity, create jobs and ensure that prosperity continues across the nation, not just in London and the greater south-east, difficult decisions have to be made. We must tackle the deficit and find ways to remove some of the barriers to growth in the UK. That is why the Government are committed to the growth review and to ensuring that we do as much as possible to remove the barriers to economic growth.
Having claimed part of Merseyside and north Wales, the right hon. Member for Delyn (Mr Hanson) spoke about the importance of partnership. It is important to recognise the way that Scottish local authorities have worked with the private sector on a number of initiatives to support economic growth. We need to see more such partnerships but we must also tackle some of the underlying issues that we inherited from the previous Government, including the deficit and the national debt. Alongside tackling those things, we must lay the foundations for increased prosperity across the whole United Kingdom.
Infrastructure Planning Commission
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Nadine Dorries (Mid Bedfordshire) (Con)
It is a pleasure to see you in the Chair again, Mr Gale. The Infrastructure Planning Commission is examining an application from an American waste company by the name of Covanta to build an incinerator masquerading as an energy-from-waste plant in my constituency. Each year, it will burn 585,000 tonnes of waste, which will be sourced from Bedfordshire, Buckinghamshire, Hertfordshire, Cambridgeshire and, frankly, anywhere in the country that will feed the incinerator. On the basis that what goes up must come down, it will do so on my constituents. We do not buy the argument that the fly ash and the emissions from the incinerator’s chimneys will be completely harmless, because the particles are too small to measure in the atmosphere. As it is too difficult to capture and measure the particles, it is not possible to say that what will be emitted from the incinerator will be harmless.
Not surprisingly, the proposal has met with furious opposition in my constituency. Constituents, campaign groups, local authorities and 24 town and parish councils—I can assure people that it is no mean feat for 24 town and parish councils to work together on one issue—are all burning the midnight oil preparing written submissions urging the IPC to reject this diabolical application for an incinerator.
The examination will run until 15 July and the IPC should reach its decision by 15 October. Before the IPC process existed, there would normally have been public examination, with cross-examination of witnesses. My constituents would have had the opportunity to express and make known their views, probably via a public inquiry. The Secretary of State used to take the final decision after having all the information in front of them and did not have to accept the recommendations made by the planning inquiry or the inspector, provided that they gave good reason. However, the previous Government’s Stalinist approach to that democratic process was the Planning Act 2008, which transferred the final decision to a new independent body—the Infrastructure Planning Commission.
Evidence is considered by the IPC primarily in writing, unless it chooses to hold an oral evidence session. Note the word “chooses”. The IPC chooses, not local people. Legally, the Secretary of State has no opportunity whatever to overturn the IPC’s decision. The IPC makes its decisions mainly on the basis of the relevant national policy statement. These statements are open to public consultation and to consideration by Select Committees before approval by the Secretary of State.
Mr Lee Scott (Ilford North) (Con)
I congratulate my hon. Friend on securing the debate. Does she agree that wider issues are at stake? Not only on incinerators but on a number of different planning applications, it is vital that local people feel engaged and have had their say. Whatever the outcome might be, at least they have had their say and put their case. Does my hon. Friend agree that that is vital?
Nadine Dorries
Absolutely. I will go into more detail about how undemocratic the IPC process is and how local people are completely excluded from the decision- making process for major infrastructure, whether that involves hospitals or whatever else being built in their area.
The national policy statements are open to public consultation. While still in draft form and before the relevant national policy statement has been designated by the Secretary of State, the IPC can still consider the evidence, but the Secretary of State will make the final decision. To date, the national policy statement remains in draft form. The Select Committee on Energy and Climate Change, of which I am a former member, has published its report on the six revised national policy statements. It has made 18 recommendations, the more important of which is about the timing of the statements. The Committee calls for the national policy statements not to be designated until the Localism Bill has been enacted, the abolition of the IPC has occurred and the national planning policy framework and national infrastructure plan are operational and harmonised with the electricity market reform process.
The IPC has published the following statements:
“If the NPSs which apply to a proposal are adopted before the point of decision making on a project, the IPC will make the decision.
If the relevant NPSs have not been adopted at the point of decision making on a project, the IPC will make a recommendation to the Secretary of State”.
I say to my right hon. Friend the Minister that this is a fundamental question. Given that the IPC hopes to conclude its own consultation by July and make a decision in October, will he please inform us on which date the national policy statements will be designated?
To date, my constituents have been forced into Kafkaesque engagement with a body that is to be abolished, with no certainty about whether the national policy statement guiding the IPC examination will be altered once the deadline for written submissions has passed. If the national policy statements are altered and designated after the existing public consultation period has passed, will the Minister agree that my constituents, after having digested a 7,400-page document, will have provided their submissions on the basis of documents that are no longer relevant and therefore the IPC process relating to the Covanta incinerator in my constituency must be abolished—scrapped—and begun again on the basis of the relevant designated documents? How can a process of public consultation exist if the information constituents are given is no longer relevant by the time the IPC makes its decision? My constituents will have been providing consultation responses based on one set of rules and the IPC will be making its decision based on another, which will enable the IPC to disregard completely the public consultation as it will no longer be relevant when the IPC makes its decision.
The consultation process as run by the IPC has been woeful and undemocratic. Either the Government are wide-eyed localist or they are not. The IPC is not and is at odds with present Government policy. On Monday 17 January, at 10 o’clock on a cold morning in Bedford, the IPC held a public hearing—nowhere near the community where the facility is to be placed. Guidance was given to my constituents not to instruct lawyers and not to take legal advice. However, when my constituents arrived at the public hearing, they found that both the local authorities and the IPC had brought their team of lawyers along with them. The atmosphere was, to say the least, intimidating as lawyers played legal ping-pong with one another. Only the bravest of my constituents felt able to stand up and contribute. They had been told before the hearing took place the issues they were not allowed to discuss. One of those was noise, which is actually one of the biggest considerations for my constituents.
John McDonnell (Hayes and Harlington) (Lab)
The hon. Lady’s party and I opposed this whole process under the last Government. It is being played out exactly as we predicted—undemocratically; not taking into account local people’s views. Does she agree that whatever system is put in place, and whatever the policy statements or framework, it must take into account local views but must also be accountable to and amendable by Parliament?
Nadine Dorries
I completely agree. I hope that when the IPC is abolished—the present Government have committed to abolishing it and bringing the functions in-house—the fact that the Secretary of State will have the final decision and that, hopefully, we will go back to the previous system of public engagement and inquiries means there will at least be a more democratic process. Of course, that will need to be discussed in Parliament, and I hope we will take a vote on it.
To return to that cold Monday morning in Bedford, only the bravest of my constituents, as I said, stood up to speak at the meeting. All left it feeling that they had not really had an opportunity to express their concerns about the proposal.
The application document my constituents had to plough through to submit objections was 7,400 pages long and was available online, so those who were not computer literate and did not have access to a computer were disadvantaged. There were a limited number of hard copies, but people had to pay hundreds of pounds for them and they were available only at certain locations. How is that democratic? The people who wanted to respond to the documents could not even get hold of them. Furthermore, constituents’ initial representations were limited to 500 words, but the document they were responding to was 7,400 pages long. Why is that? How can that be democratic?
Only a limited number of hard-copy registration forms were available to those who did not have access to a computer. People had to complete those forms to inform the IPC that they were going to object to or, indeed, support the proposals, although I imagine that most people wanted to object. Given the limited number of forms, however, those who wanted to let the IPC know that they were going to object could not even do that.
Those who made a submission online met a barrage of problems. For example, the registration process had a cut-off date. Once that date had passed, some people received e-mails telling them that they had not ticked a particular box on the very detailed form and that they had to resubmit the form, but the submission date had passed. It seemed that lots of tricks were employed to minimise the number of objections so that the IPC and Covanta could say that there was not that much public opposition.
The IPC timetable is very inflexible, short and tight. That is why people missed the registration point. If the timetable had not been so tight and inflexible, there might have been room for adjustments and amendments where people had, for example, made errors with e-mails, but there was absolutely none—everything was played according to the IPC’s rules, with absolutely no consideration given to the difficulties local people might have in engaging with this complicated and bureaucratic process.
An unelected official in the IPC or the Department for Communities and Local Government should not take a decision to impose a major infrastructure project on a local community when almost every man, woman and child is against it. The only representation those people have is via their elected representatives.
If, despite the objections of local people, the Government believe that it is vital in the national interest for an application to be approved, that judgment should be the responsibility of the Secretary of State in the relevant Department, and it should be reached only after a thorough examination of local people’s wishes. There should be a thorough examination of the application, and people should have the opportunity to attend meetings and make their feelings known. Of course, people in my constituency may absolutely support the current project, but I do not think that that is the case. The Secretary of State should halt the IPC process using the powers in the Planning Act, so that all participants can contribute to the process and so that a clear decision can be made.
The process of finalising the national policy statements, on which the IPC would base a decision, will prejudice the application if it is carried out at the same time as the application is being considered. A legal process cannot be deemed reasonable and fair if the goalposts are moved while it is being carried out. If the national policy statements are designated during the IPC examination process, any changes in the final versions will not be reflected in the process that has taken place up to that time.
At present, I and the residents of Mid Bedfordshire have no idea who will take the final decision or on what basis they will do so. If the national policy statements are not finalised before the Secretary of state makes a decision, any other matters taken into account in reaching the decision will not have been subject to examination. Any recommendation made by the IPC on the basis of the national policy statements should be disregarded because they lack democratic legitimacy. Furthermore, the IPC process relies on a limited number of rounds of written submissions, which does not allow detailed examination of the key issues that matter to local people.
Is the Minister aware that Mid Bedfordshire is largely flat? In fact, Bedfordshire is known for being flat until one reaches the Dunstable downs. The incinerator is to be in the centre of Marston vale, so it can be viewed from almost every vantage point in the constituency and will absolutely blight the view from all of them—it can be seen from every raised point from Ampthill park to the Millennium park.
Is the Minister also aware that the constituency proudly recycles more that 50% of its waste? Central Bedfordshire council has worked hard to educate and inform people about the importance of recycling. If the incinerator is granted planning permission, all that recycling, education and work will go to waste because everything will be fed into this monstrous machine.
As the hon. Member for Hayes and Harlington (John McDonnell) said, the Conservative party predicted this problem with the IPC. However, I am running out of time, so I would like to have a clear answer from the Minister on a number of points. When will the national policy statements be designated? If they are designated during the process taking place in my constituency, and after my constituents have made their submissions, does the Minister agree that the process should be stopped? My constituents will have made their submissions on the basis of information that is no longer relevant and considerations into which they will have had no input.
Will the Minister please understand that we are not talking about a group of nimbys in Mid Bedfordshire complaining about something that will affect just a few people? The geographical lay-out of my constituency means that everyone there is angry about this issue. Everybody is incensed about how dreadful this application is and about what a disaster it will be for Mid Bedfordshire if it goes through.
The Minister of State, Department for Communities and Local Government (Greg Clark)
It is a pleasure to serve under your chairmanship, Mr Gale. I warmly congratulate my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) on securing the debate. She spoke with her characteristic passion in representing her constituents. They are fortunate to be represented by one of the most tenacious campaigners in the House. There is no cause that my hon. Friend takes up that she does not take up with verve, passion and the greatest tenacity. In recent months, she has worked hard to raise the profile of this issue in the House. She has organised rallies in Mid Bedfordshire; she has written to me; we have spoken in person; and she has raised her concerns at Prime Minister’s questions—she has taken the matter right to the top. Everyone should reflect on the vigour with which she pursues these matters.
I was pleased to see my hon. Friend the Member for Ilford North (Mr Scott) and the hon. Member for Hayes and Harlington (John McDonnell) in the Chamber. That shows that the process that the IPC was set up to operate under is a matter of cross-party concern. I hope that the Government will have the support of the whole House when it comes to abolishing the IPC in the Localism Bill, which is currently in Committee, but which will return to the Floor of the House on Report and Third Reading in a few weeks’ time. It is useful to know that the issue goes beyond my hon. Friend’s constituency.
I have listened carefully to my hon. Friend. For the reasons she set out, she will appreciate that it is not possible for me to comment on the merits of the incinerator. If the national policy statements are not designated before the decision is made, it would fall to the Secretary of State—that is shorthand for the ministerial team at the Department for Communities and Local Government—to determine the application. Given that today’s proceedings have a bearing on that process, it is important that I do not prejudice my view of the application. However, I have heard what my hon. Friend has said, and I will comment on each of her points. Let me take in turn the three general points that she made.
My hon. Friend argued that the decision on where a piece of infrastructure of national significance should be located should not be determined by an unelected body in defiance of local people’s wishes; I entirely agree. Projects such as major roads, reservoirs and power plants are essential to our health and well-being and to the nation’s economic future. They have a major influence on society’s impact on the environment, helping us reduce our dependence on fossil fuels and cut our carbon footprint. They form the legacy that we leave the next generation. It is right to have a regime to consider those major applications, which recognises their larger-than-local aspect.
It is worth observing that all the existing municipal incinerators in England contribute less in annual emissions than bonfire night—a single night. It is worth putting the matter in perspective. However, I believe that when the relevant decisions are made there should be—as there are not with the decisions of the IPC—elected Members who are accountable. Unfortunately, we have inherited from the previous Government a system in which, ludicrously, the final decisions about when and where major developments should take place are made by the IPC, an unelected quango that is unaccountable to the public. I mean no disrespect to the people who work there, who have been given a remit in legislation. They discharge that remit, I am sure, to the best of their ability, but they have been caught in a situation that is fundamentally undemocratic. That is an astonishing deficit of democracy, and the arrangement must go.
Nadine Dorries
The point about bonfire night has been raised several times, almost as a smokescreen—if hon. Members will excuse the pun. The emissions from an incinerator are constant and daily—they continue day and night. The incinerator will burn for 24 hours a day. Bonfire night is one night of the year. We took evidence from Professor Paul Connett from America, the world’s leading authority on energy from waste. The emissions from the incineration are constant. Companies such as Covanta frequently breach their licences—the company is in court in the States at the moment. They frequently release toxic emissions into the air. I grant the Minister that if they kept to their licences and operated as they are supposed to, there might be merit in the bonfire night argument, but history shows that such incinerators do not operate as they are supposed to, because they break the law almost daily and release into the atmosphere emissions that they should not. The comparison with bonfire night cannot be made.
Greg Clark
It is important that any facility that is or will be licensed, wherever it is, should stick to any terms and conditions of the licence. I am sure that Department of Energy and Climate Change Ministers, who are in charge, along with our colleagues in the Department for Environment, Food and Rural Affairs, of supervising those issues, will reflect on what my hon. Friend has said and try to ensure that there is the greatest possible confidence in the adherence to those conditions.
We are determined to introduce reforms in the Localism Bill. I look forward, as I am sure my hon. Friend does, to the day when it is passed. However, provided that the national policy statements on energy are designated as we expect, we anticipate that the application in question will be decided by the IPC alone, without the possibility of ministerial intervention. That is the system that we have been bequeathed. An observer might ask, as my hon. Friend does, why, if Ministers believe that there should be democratic accountability, they do not scrap the IPC and the regime under which the planning application was submitted. However strong the temptation may be, Ministers must obey the law.
The law is at odds with Government policy, but we live in a parliamentary democracy and cannot rule by decree. There have been recent examples relevant to that. I think my hon. Friend is familiar with the case of CALA Homes, concerning the revocation of the regional spatial strategies, in which the courts determined that however clear the Government’s intention to abolish those strategies, we need to go through the parliamentary process to abolish them, rather than anticipate that abolition. The courts were clear on that. The fact that we took the decision that resulted in the court case shows the Government’s desire to do as much as possible to implement our policy as quickly as possible, which is important. However, for good reasons we are required to go through the House to pass legislation. When it comes to abolishing not only the IPC but the current procedures for considering major infrastructure applications, that is what we must do. We are constrained in that way.
My hon. Friend raised concerns that the process of pre-consultation has been defective. I have listened to her carefully and will immediately take up with the IPC all the points that she made. It is crucial that consultation should be fair and open, so that people can give their views even in a system that we both agree is flawed. It should facilitate the meaningful involvement of all those who want to be involved in the process. It is important that local people should be able to be heard in person and demand an open hearing. The onus is also on any organisation that carries out a consultation to ensure that its electronic procedures are widely accessible and compatible with the systems that users are likely to have. Organisations should not have an inaccessible system, which they should design with users in mind. I shall immediately get in touch with the IPC on the points that my hon. Friend raised.
The Planning Act 2008 specifies, as my hon. Friend knows, a narrow range of conditions in which Ministers can take decisions out of the IPC’s hands, which is our difficulty. Those conditions include questions of national security and defence. Even if we wanted to stop the process, I do not believe the law would allow us to do so.
My hon. Friend raised an important point about the role of national policy statements and the likely timing of their designation. She knows, having served on the Select Committee on Energy and Climate Change, the reasons why it is crucial, when we face a prospective crisis in generating capacity, to get investment in that capacity. The nuclear programme is important to that. We have always said that we want to bring national planning policy statements to the House as quickly as possible.
My right hon. Friend the Secretary of State for Energy and Climate Change has not yet responded to the Select Committee, and it is for him to respond to its concerns about process, but it is the Government’s view that we should get on as soon as possible and allow Parliament the chance to ratify those statements in the interest of energy security and, indeed, investment in that important area of national life. However, there is clearly a possibility that the statements might not be designated, and then the decision in question would come to the Secretary of State. I do not want to raise my hon. Friend’s hopes and create an expectation that that will happen, because the opposite is to be expected. My right hon. Friend will respond to the Committee in due course.
We are in an unfortunate position. I commend my hon. Friend for the vigour with which she is pursuing the matter. She is right to make sure that her constituents’ voices are heard. Of course, even under the existing flawed system, the IPC has a duty to consider local people’s voices, and I shall, as I have said, pass on to it her comments about the process to date. It is worth pointing out that the IPC has not yet made a decision. I hope that the debate is an opportunity to explain to my hon. Friend’s constituents what I think she knows, being expert in the matter, about the constraints, and the requirements on the IPC for consultation and to share our frustration—we would rather not be in this world. I hope that the next time we discuss the issues, it will be after the passage of the Localism Bill, and that the IPC will be dead and buried and replaced by a system that my hon. Friend and I—and, I think, the hon. Member for Hayes and Harlington—want. That is a system in which major decisions of national importance are taken through a fast-track, streamlined procedure, with a Minister ultimately responsible to the House and, through the Government, to the nation, in charge of making the decisions.
Pubs (Planning Policy)
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Greg Mulholland (Leeds North West) (LD)
I am pleased to have secured this important debate and to see once again some of my pub supporting and friendly colleagues, who come from both sides of the House. It is important to remember that the matter affects each and every one of us as constituency MPs. We are all doing our best to preserve and support the great British pub, a wonderful institution that is of considerable importance to our communities.
I am delighted once again to have the opportunity to be debating the subject with my hon. Friend the Minister, who is responsible for community pubs in his role at the Department for Communities and Local Government. I hope that, like me, he sees the debate as being part of a conversation between us and the all-party save the pub group, one that will continue during this Parliament. That conversation may sometimes happen here in Westminster Hall and sometimes in parliamentary or ministerial offices, but due to our genuine interest I hope that it will continue sometimes to happen in the pub.
We had a well-attended debate a few weeks ago, in which we heard that the British pub faces many problems. There is the problem of the pub codes of practice and their distortion of the beer tie; there is the problem of the supermarket ban, with unreasonably low prices and below-cost selling; and there is a problem with various aspects of regulation. All those factors cause real concern.
What is sometimes lost in our debates, perhaps deliberately so, is the one thing could save the British pub, almost at the stroke of a pen but certainly at the stroke of the parliamentary printing press as many of these problems are covered by secondary legislation, and that is to strengthen planning law to recognise the importance that pubs play in our communities. At the moment, that is not happening.
We are all aware of what successive Governments have done, and I make no criticism here. I pay tribute to the Minister’s predecessor, my right hon. Friend the Member for Wentworth and Dearne (John Healey), who also took a genuine interest in the subject. It is easy to say positive things about the importance of the pub, but until that is recognised in a meaningful way within the planning system, many of our efforts in trying to protect and save our local pubs will be wasted.
At the moment, we have the extraordinary situation that a free-standing pub—one that is clearly not connected to another building—that is not listed or in a conservation area and that has no other protection under planning law, can be demolished overnight. That can be done without planning permission, never mind consulting the community, something that my hon. Friend the Member for Selby and Ainsty (Nigel Adams) highlighted in his Protection of Local Services (Planning) Bill, a private Member’s Bill that was supported by the all–party group. I shall speak a little more about that later, and I am sure that my hon. Friend will want to contribute to the debate.
Similarly, it is perfectly legal under the planning system, overnight and without any consultation with the community, to turn the local pub into a Tesco, a betting shop, a restaurant or a café—businesses that do not have the same community function and that are not a community hub in the same way that a pub is.
Mr John Leech (Manchester, Withington) (LD)
Does my hon. Friend agree that large supermarket chains are using pub buildings as a way of getting around the regulations that require them to have permission for an additional store. Often the pubs are quite large, bigger than something that a supermarket would otherwise require permission for.
Greg Mulholland
My hon. Friend is absolutely right. I call it predatory purchasing. The supermarkets deliberately target pubs because they are a soft touch. The Government have said that they want to be a pro-pub Government, and I am proud of that, but they also want to be a decentralising Government who believe in localism. As part of that, they will have to show that such things are not acceptable without the community being consulted. That is happening because the planning system is weak, and Tesco and the other supermarkets know that and exploit it.
The scandal goes on. Pubs are being closed every week that are not only viable in terms of making a profit, but are successful and profitable at the time of closure. Those closures often happen against the wishes of the small businessmen and women who run the pub and making a living from it. That is a scandal, and it must be stopped.
John Woodcock (Barrow and Furness) (Lab/Co-op)
I congratulate the hon. Gentleman on securing this debate and on his ongoing work on the matter. Does he agree that an examination of the planning regulations and their potential weakness should extend to those bowling greens that are connected to pubs? Many are being sold off without consultation, leaving many bowlers with no place to practise their prize sport.
Greg Mulholland
I thank the hon. Gentleman for raising that point. The all-party save the pub group would be interested to talk to him, because such bowling greens are often part of our heritage, and another community facility that is associated with the pub.
Julian Sturdy (York Outer) (Con)
I congratulate my hon. Friend on securing this important debate. I give an example of the problem from my constituency. A successful pub was recently threatened with closure because a local housing charity had targeted it specifically for housing. Thankfully, the pub and the community won the day, and the pub was saved. The pub was targeted because the charity saw a loophole in the planning system. It must be closed. I thank my hon. Friend for raising the matter; it is an important point that we must press.
Greg Mulholland
I thank my hon. Friend and near constituency neighbour. He is absolutely right. As with all successful pub closure campaigns, I congratulate him and his community on having the courage to fight that campaign. Sadly, given our weak planning laws, such campaigns are often not successful.
The Government have said that they will take action on restrictive covenants, which I warmly welcome. I am sure that the Minister will say a little more about the Government’s proposals, but I understand that a consultation will be held this year. I hope—I have no doubt—that it will lead to the abolition of this extraordinary practice, whereby the owner of a pub, whether it is a brewery or pub company, can slap on a covenant that says that it must never be a pub again, with the community having no say on the matter. It is absurd. It is anti-competitive and anti-community, and it must be outlawed.
I bring to the Minister’s attention one of the other many tricks used. I call it the restrictive covenant by the back door. My hon. Friend the Member for York Outer (Julian Sturdy) was lucky in his campaign, but we often see pub companies or individuals deliberately choosing to sell the pub for non-pub use even though they have received viable market-value offers from those who wish to continue running the pub and serving the community. There is nothing to stop that, but the effect is the same. The community loses its pub even when someone wants to buy it.
We have some wonderful small breweries, and some fabulous small pub companies are popping up, with real entrepreneurs taking on pubs throughout the country in small numbers. It would be a far greater number if the larger companies were not able to ignore offers from the community or other pub companies. That problem must be addressed. In Otley, in my constituency, there was a pub called The Woolpack, which had served the community for many years and had considerable historical merit. It was sold for non-pub use even though there were companies that wanted to buy it and run it as a pub. The decision to end that pub’s service to the community was entirely taken in the boardroom of a company, which must be wrong. Often, such decisions are made even when the company or individual who wants to continue to run the pub puts in a higher bid. That is because an organisation deliberately wants to shut that pub—in the same way as restrictive covenants—so as to lessen the competition for the other pubs that it may have in that area.
Nigel Adams (Selby and Ainsty) (Con)
My hon. Friend hits on a key point. Very often, profitable pubs run into such a situation. Does he not agree that there are many pubs that are not economically viable, and, in some cases, they probably need to shut. The real scandal, however, is the closure of pubs that are profitable and could have a long-term future. The key issue is that local communities should have a say as to whether such buildings are razed to the ground.
Greg Mulholland
I thank my hon. Friend and look forward to continuing to work with him on this issue. I know that our hon. Friend the Minister is listening to us. Let me be clear that no one is suggesting that those genuinely failed pubs—those pubs that cannot make a living and no longer have a community that wants them—should not change. No one is even suggesting that there should be significant barriers stopping their conversion or redevelopment. I want to make that absolutely clear to the Minister, and I hope to convince him that there are ways in which we can do that by, for example, putting halts in the planning process. My hon. Friend is right. There is only one way in which we can determine whether a community wants a pub and that is to ask the people who live in that community. Very few councils do that. As I will discuss later, the issue of viability is very often not established, or it is simply established because the current owner claims that the pub is unviable.
The Minister may say that pub campaigners can sometimes be a little over-sentimental. As a member of the save the pub group, I refute that charge. Why do we not say more about pubs also being small businesses that actually make an incredibly valuable contribution to the national economy, which is, of course, eroded every time a pub closes? The tax-take from those pubs is also eroded every time one closes. Pubs are small businesses, with an individual, a couple or a family earning a living and employing people in the local economy. The new economics foundation has suggested that twice as much as every pound spent in a pub goes directly to the local economy, compared with half of that for every pound spent in a supermarket. Often, as we have said before, supermarkets are replacing pubs.
Jason McCartney (Colne Valley) (Con)
I congratulate my hon. Friend on securing this debate. He hits on a very good point there. My local pub, The Coach and Horses, in Honley village has just reopened having been closed for three months. My hon. Friend was right to talk about the employment opportunities. The pub employs bar staff, the manager, the entertainment that it is bringing in on Friday and Saturday night, the cleaning staff and the catering staff. Whenever we hear about a small supermarket moving into an area, people always talk about the employment opportunities. We need to emphasise the employment opportunities that pubs can bring to rural villages and remote areas. I should like to congratulate my hon. Friend on making that point.
Greg Mulholland
I thank my hon. Friend and fellow Yorkshire MP for making that point. It is easy for people in planning applications—I have seen it as I am sure have other hon. Members—to present the pub as something that is of the past and that is no longer wanted by communities. They deliberately ignore points such as employment opportunities. They suggest that a business that has served a community for 50 years or even 100 years and contributed to the economy should be replaced by a set of flats that will make a one-off profit for a business, or a supermarket that will do things in a different way. It is so important that we do not lose sight of that point.
Let me outline the framework for pubs in planning law and why, sadly, pubs have so little protection. Planning policy statement 4, which applies to villages and local centres—already it is rather ambiguous because there are pubs that are in areas that do not qualify—replaced planning policy statement 7. That was a change made by the previous Government in December 2009 and was a cause for concern. PPS 7 was stronger and made direct reference to supporting the retention of local facilities such as public houses. The new policy simply refers to planning applications affecting shops and leisure uses, including public houses or services in local centres.
The Government are thinking of replacing that planning policy statement with a new framework. I urge the Minister, who is a genuine supporter of pubs, to ensure that when that statement comes out it includes a direct reference to the importance of public houses so that councils can take that into account. Without such a reference, councils will not do that.
Stuart Andrew (Pudsey) (Con)
My hon. Friend will be aware that in a former life, I was on the planning panel of Leeds city council. That was exactly the problem that the panel faced with a pub in his constituency that was closed down. Does he not agree that to give councillors that extra power, such a reference is exactly what is needed in legislation?
Greg Mulholland
I thank my hon. Friend and neighbour for that point. I was coming on to that exact case. To some extent he is right, but the unfortunate reality is that councils can, as things stand, adopt pro-pub planning policies. The scandal of that case is that Leeds city council did not even seem to realise that it could and should have adopted such a policy.
John Pugh (Southport) (LD)
Is it not the case that under the sustainable communities legislation passed in the previous Parliament, there are opportunities and levers that are currently not being used?
Greg Mulholland
That is the case, yes, but there is another issue that relates to The Summercross pub in my constituency. I had a phone call from a legal officer at Leeds city council who said to me, “What is this Sustainable Communities Act and what relevance does it have to pubs?” Clearly, there is a large job to do in communicating with councils. Some councils are good—I will mention them in a minute—but some do not appreciate what is already there at the moment that could make a difference. Existing legislation does not go far enough, but if the guidance were clearer, it could make a difference.
Let me briefly relate the sad story of The Summercross pub, because it is a classic example of the problem here. The Summercross was one of my local pubs in Otley. It had been a pub since 1871 and it was the only pub of that name in the UK, so it represented a little bit of British history. It had gone through the usual story of changes of ownership and successive tenants. Every time the pub did well, the rent went up. Rather ominously, it was bought by a London-based developer, but the tenant who came in did a very good job of turning around the pub and making it successful and profitable again. It attracted the customers back by serving excellent local independent beer. However, a deal was struck over his head, initially without his and his wife’s knowledge, to sell the pub to a Leeds-based developer for a very large profit—something like £1 million for that one sale. The London-based developer, Phase 7 Properties, had bought the pub as a predatory purchase, seeing it as a potential development opportunity because of the weakness in planning law. Scandalously, the landlord and landlady were give a few weeks to clear out of The Summercross, which was their home as well as a small business, a community pub and a popular live music venue.
A campaign was launched to try to save The Summercross. However, the London-based developers, who went off with £1 million in their pockets after owning the pub for just two years, said, “Sorry guv, nothing to do with us any more. You’ve got to speak to Chartford Homes in Leeds.” Then Chartford Homes said, “Well, it’s nothing to do with us, because we didn’t close the pub, but actually now we want to build houses on it.”
Then a battle ensued. The community conducted a vigorous and well run campaign, and they managed to fight off the first planning application. They obtained figures to show that the pub was profitable and viable, and so the first application was kicked out. However Chartford Homes was cunning and, frankly, it had an awful lot of money—£1 million more than was clearly sensible—tied up in the pub. So it transferred the ownership, or at least proposed at that stage that the pub be taken over by a company called Westwood Care, its sister company with shared directors. Westwood Care then came back with the wonderful, cuddly proposal to turn this historic building into a care home.
Sadly, that proposal went to the plans panel of Leeds city council. What happened next fits exactly with what my hon. Friend the Member for Pudsey (Stuart Andrew) has talked about. The members of the plans panel in Leeds felt that they could not refuse that application in planning law. I am afraid that the main reason was that Leeds city council has no policies in place that recognise the importance of pubs, so it is Leeds city council’s fault that The Summercross closed.
The actions of Leeds city council can be compared with those of Bradford city council. Just up the road from Otley is Ben Rhydding, a suburb of Ilkley. Bradford city council stood by the community there and was prepared to take on the owner of the Wheatley, the local pub—in that case, it was Punch Taverns. The council won and the Wheatley is now a popular and thriving pub again. But Leeds city council is frankly clueless when it comes to the protection of pubs and planning policy, and it needs to address that failing.
It was incredibly frustrating during the planning process to hear the chair of that plans panel whispering to officers, “Pub viability is not a planning consideration, is it? We can’t consider that.” The chair also said, “The only planning protection policies that exist are to do with rural villages, aren’t they?” Both those statements are incorrect and both were made in what is supposed to be a quasi-legal setting.
Pub campaigners and other members of the local community in Otley saw planning officers present the developers’ own proposal. It was a PowerPoint presentation from the developers. The word that local people used when they saw that presentation was, “Corruption.” They said, “Surely this can’t be right? It’s corruption.” I said, “No, it isn’t corruption. There is no corruption there.” However, it is the farcical reality of the planning process, which means that a set of planning officers can present exactly what the developer wants to do and make some comments on it. And what does the community get? They get three minutes to make a few comments. I am afraid that the decision to close The Summercross ignored the reality that it was a profitable pub. The figures to that effect were presented. Instead, the members of the plans panel said, “There’s nothing we can do in planning law to stop that.” I am afraid that that sort of thing is happening up and down the country.
I want to issue a challenge to my hon. Friend the Minister today. I appreciate that this is a difficult issue in planning law. However, we all agree that there is some moral ownership of a local pub by the local community. Surely, if we believe in everything that we say, there must be such moral ownership. As my hon. Friend the Member for Selby and Ainsty has said, the community must have a right to have a say over the future of its local pub, especially when the pub is successful and, as in the case of The Summercross, other companies are knocking on the door and phoning me to say that they want to take on the pub but are unable to do so because of the grubby deals that have gone on between two developers behind the backs of the landlord and the local community.
The London-based developers, Phase 7 Properties Ltd, owned The Summercross and allowed a tenant to run it for two years. I do not think that it ever visited the pub themselves, which it had an agent to run. Does it have the complete right, as the legal owner of the building, to do what it wants over the heads of the community that, as I have said, must have some moral ownership? I say that it does not have that right. That situation must be recognised, in a realistic way, in the planning process.
Nigel Adams
Does my hon. Friend agree that such a small change in planning law would also put a very large tick in the box for the Government’s localism agenda?
Greg Mulholland
It will not surprise my hon. Friend to know that I will discuss the Localism Bill very shortly. As my hon. Friend the Minister knows full well, because I have written to him about it already and will continue to do so, that Bill is a huge opportunity and the save the pub group must also see it in that way. It is a huge opportunity to address these issues that we and our local councillors face day by day. We find that our views, expressed as elected representatives and councillors, are rejected. Otley town council objected to the closure of The Summercross pub, but its objection was regarded by the plans panel as not being remotely of interest. So the Localism Bill is an opportunity, and I will go on to say that it is a positive thing but it needs to do an awful lot more.
There are other issues. One that I want to touch on briefly is the issue of pub interiors. I was very lucky and privileged to have been asked to launch the new book by the Campaign for Real Ale, “Yorkshire’s Real Heritage Pubs”, at the stunning Garden Gate pub in Hunslet, which is in Leeds. Frankly, that pub is only there because of the campaigns by Leeds CAMRA and other people, and because the wonderful Leeds Brewery has now taken the incredibly courageous decision to buy it and make it its fourth pub as it expands its portfolio. The Garden Gate pub is not in my constituency. It is in the constituency of the right hon. Member for Leeds Central (Hilary Benn). However, I am sure that the right hon. Gentleman and I would be delighted to take my hon. Friend the Minister there at some stage, because it is a stunning example of pub interior design that has been preserved.
The reality is that only 2% of pubs in Yorkshire and the Humber region retain their original interiors. Those pub interiors are part of our heritage. We would not see our castles or our stately homes being vandalised and demolished in that way. There has been some great work done by CAMRA and English Heritage, operating together, on this issue. However, there needs to be clearer advice from the Government, including from the Minister’s Department, about what councils can and should do in terms of listing pubs and about the criteria for listing pubs. Sometimes, even though something is clearly worth preserving, it does not actually tick the right boxes. I hope that that is another conversation that my hon. Friend the Minister and I can have, perhaps over a pint of Leeds Best in the Garden Gate or one of the many other pubs featured in CAMRA’s national and regional guides.
I have said that I would discuss the good councils as well as the bad, and it is incredibly important that I do so. My hon. Friend the Minister rightly said that councils have a key role. Neither I nor the other members of the save the pub group are saying that the Government can or should solve all those problems. I also want to make it clear that we are not saying that the Government should impose everything. As is suggested in the private Member’s Bill promoted by my hon. Friend the Member for Selby and Ainsty, it is more a case of giving local councillors the powers, so that they do not feel that they simply have to give the nod to plans that they know, in their heart of hearts, are wrong.
There are some very progressive councils. At the moment, 40% of councils make specific mention of retaining pubs in their local planning policies, which is impressive. In addition, 20% of councils do not specifically mention pubs but none the less have strong policies on protecting community facilities in general. However, 40% of councils are bad in terms of providing protection for pubs. They have no policy whatsoever that would assist communities to retain pubs. I am ashamed, and I hope that my hon. Friend the Member for Pudsey is also ashamed, that Leeds city council is indeed one of the 40% of councils that do not have policies to protect pubs. There are many examples around Leeds and the surrounding area of how the council has simply let things happen, and we have lost important community facilities as a result.
Merton borough council has a very positive policy on pubs:
“The Council will not permit the redevelopment or change of use of established public houses to other uses except where:
(i) The applicant can show that the public house is no longer economically viable
(ii) The applicant can show that reasonable attempts have been made to market the site as a public house [and]
(iii) There is alternative provision within the local area.”
Mike Weatherley (Hove) (Con)
The hon. Gentleman has mentioned on many occasions the lack of “viability” as being one of the criteria by which community pubs are allowed to close. Does he agree that there is a whole raft of legislation that should be enabled to ensure that, first, “viability” is enhanced and, secondly, that we do not hide behind “viability” as an excuse? For example, live music in pubs is known to increase takings by about 40% on average, and I hope that my recent “Rock the House” project goes some way to increasing awareness of that. However, does he agree that the Minister must consider the whole raft of licensing issues that go along with planning issues, to ensure that the concept of “viability” does not become something to hide behind?
Greg Mulholland
I pay tribute to my hon. Friend for his work with “Rock the House”, which the all-party save the pub group formally backs. We look forward to working with him, and to getting as many MPs as possible behind that initiative. He is absolutely right that licensing is another issue and, as the Minister has cross-departmental responsibilities, I know that he will be having conversations with Ministers in all Departments that deal with pub-related issues. The licensing regime has certainly become over-bureaucratic and too expensive, and he and I strongly agree that some of the changes that were made a few years ago have been detrimental to the encouragement of live music. The wonderful annual Otley folk festival, which largely takes place in Otley’s public houses, is a celebration not only of folk music but of the public house, and is a great example of the harmony that is there.
Returning to the councils, Oxfordshire and Mid Sussex councils have positive policies, but it would help if the Government provided more guidance, perhaps on what the policies should say. At the end of my speech, I will challenge the Minister by saying that I hope that that can happen in the new national framework.
Now it is time to talk about the Localism Bill, which I am sure we all support, and which sounds like the sort of thing for which many of us have been campaigning for many years. It is the kind of thing that can, and surely must, be used to stop this scandal of profitable, successful pubs being closed against the wishes of the local community. Will it, though? I know that the Minister will talk about the proposed community right-to-buy scheme, and let me make it clear that the all-party group warmly welcomes that proposal and looks forward to considering its details and to working, hopefully, with the Minister and his team to ensure that the scheme works. Unfortunately, although the proposal is positive, it will not have a substantial effect in preventing closures of profitable and wanted pubs, first and simply because unless the Government finally get rid of the absurd loopholes, whereby a pub can be demolished or turned into a café, restaurant, betting shop, payday loan shop or supermarket without planning permission, a huge number of pubs will still be at the whim of the companies making those decisions. I therefore urge the Minister to close those gaps not only on demolition but on change of use, because otherwise there will not be many pubs for communities to try to buy.
Secondly, I think that the Minister has to accept that what is in the Bill is not a community right to buy; it is a right to try. I ask the Minister, again, to consider the model in Scotland, which contains a genuine right to buy. Here, there is a right to put together a bid, to trigger a delay—a moratorium—but there is not even genuine encouragement for the owners, let alone the obligation that I would like to see. Without that, how many communities will realistically be able to raise perhaps hundreds of thousands of pounds from share options, fundraising or local businesses, if at the end of that period—the length of which the Minister has not yet specified; CAMRA has suggested a very sensible six months—the owner might say, “Well, actually, I’m going to sell to Tesco anyway, for slightly more”? As we have already said, the pub company might want to get rid of the pub, because of competition between its pubs in the area. If the proposal is genuine, that issue has to be considered, because otherwise not many pubs will be saved and the closure of profitable pubs against the community’s wishes will not be prevented, which is surely something that the Minister and the Government want to prevent.
What should be done? I want to continue, and I want the save the pub group to continue, to be part of an ongoing dialogue with the Minister. We seek to help, as we were invited to do by the previous pubs Minister, the right hon. Member for Wentworth and Dearne (John Healey). We were happy to meet with him and his civil servants. Some of our proposals clearly need to be looked at, and they might not necessarily do what we think they will, but we want to work through them and be part of that conversation to get to the end result that I think we all want, which is to give viable, profitable pubs some protection in planning law.
So, what should be done? The Government have to commit to closing the loophole on demolition, and I have been encouraged by what the Minister has said. There have been positive conversations during the passage of the Protection of Local Services (Planning) Bill between him and my hon. Friend the Member for Selby and Ainsty, and also with me. I am encouraged that the Minister has suggested that he and the Government are minded to stop the scandal of pubs being demolished, but I have to use a phrase that has been used with me—do not be a half-a-job Harry. I know that the Minister would not want to be one, but if the demolition loophole is closed and nothing is done about people being able to continue to turn a pub into a Tesco, a betting shop or a restaurant overnight without planning permission, only a small gap will be plugged and the other scandal will not be stopped.
Nigel Adams
Given that an estimated 39 pubs a week are closing, and that CAMRA estimates that about a third of those are demolished, we have an urgent problem. I appreciate my hon. Friend’s support for my private Member’s Bill, but does he agree that the best route for offering protection for pubs would be for the Government to adopt an element of that Bill in the Localism Bill?
Greg Mulholland
I absolutely agree. That is essential if the right to buy is not to appear tokenistic. I stress, however, that the issue is not only about demolition, and I urge the Minister to stop it being okay to turn the Red Lion or the White Swan into a Tesco, just because a deal is cooked up between a distant unaccountable pub company and Tesco headquarters. That cannot be right, because the community, never mind the small business person, has no say over whether it wants the pub to continue.
There is a separate use class order, A4, for pubs, bars and other licensed premises, but it is currently perfectly allowable to change that to one of various other use class orders—A1, A2 or A3, I think—and the Government could, very simply, stop those conversions without planning permission. I am not talking about when a pub is no longer viable or wanted and it might be a good idea to turn it into a solicitors office. All the Government have to do is to say that there are no conversions from A4 to anything without planning permission being obtained through the normal process. If the pub is no longer viable or wanted, it will change use within a reasonable and normal time period, as with all planning applications, but the community should at least have the right to comment.
I briefly wish to mention the wonderful work of Pub is the Hub and the Plunkett Foundation. No one suggests that it is possible for the Government to provide huge amounts of money to back up the community right-to-buy scheme, but there has to be better and clearer Government advice about the realities of setting up a community co-operative and putting a bid together.
I would be interested if the Minister told us what progress the asset transfer unit has made on coming up with a genuine package of guidance and support for communities that wish to do that.
My big idea, which I have shared with the Minister, is a moratorium. Imitation is the sincerest form of flattery, and I have taken the Government’s idea for a moratorium and extended it. It would be possible and desirable to have a moratorium before any permanent change of use or demolition. Six months would be a reasonable period and would allow us to see whether other companies or individuals wanted to buy the pub. It is a scandal that there are often companies knocking at the door that want to take on the pub, but they are simply not allowed to do so.
As the save the pub group has consistently said since its formation, two things should happen in this six-month period. First, there needs to be a genuine, independent community consultation, which must be carried out by the local authority, as the planning authority. Some developers put surveys through people’s doors with leading questions—we are all politicians, so we know about leading questions—and the answers are presented as the community’s view. People are asked, “Do you think Otley needs more care homes?” or “Do you think old people should have a good quality of life?”, and when they say yes, the developer says, “There you go. Everyone wants a care home instead of a pub.” There must be genuine consultation to establish the will of the local community and the need for the pub.
There should also be a proper, independent viability test of the pub. Some councils have the courage to carry out such tests, although it is mainly rural councils at the moment. In the case of The Summercross, the developers’ agents prepared a huge glossy document and presented it to the plans panel, saying that it proved that the pub was not viable. How can someone prove that a pub is not viable when it was trading profitably in the years before? That is absolutely absurd. There must be an independent viability study, which should, again, be carried out by the local authority, as the planning authority. There is also the CAMRA viability study, so a model exists, and I hope the Minister will consider suggesting it in guidance to local authorities when they put their policies in place. In that respect, I hope that Leeds city council and others will finally get round to doing that, so that 40% of councils are no longer without policies on pubs.
My moratorium could work in two ways. The Minister and I have discussed this, and I realise that he has views about how the moratorium could work, but I want to give him two other suggestions. The six-month moratorium could be part of the forthcoming national planning policy strategy, which could suggest what should happen in the case of conversions from A3. It could also be covered in supplementary guidance to councils that are putting together supplementary planning policies.
Another suggestion that I have already raised with the Minister, and which I know would take some work, would be to look at whether we need a separate definition of a community pub and whether such a definition is possible. We would need a proper study to see whether we could separate community pubs, which clearly have a community function, from a lot of bars and nightclubs, which do not. It would be exciting if that was possible, because it could lead to a different rateable value. As one of my colleagues said, community pubs sometimes, but often do not, get sufficient payback from their community work and the community role that they play.
Justin Tomlinson (North Swindon) (Con)
I am delighted to support that point. All too often, the community pubs my hon. Friend is referring to are the last standing community facility in the local area. All too often when I am in an area, I will see the former post office, the former dairy and the former school house. It is right to separate community pubs from the rest of the trade because they have an additional role to play in the market.
Greg Mulholland
I thank my hon. Friend. I hope that he will help me, CAMRA and the Institute for Public Policy Research, which is looking at this issue, to see whether that would be possible. Such a step would make it easier in planning law to do some of the things that we want. I hope the Minister and his team will seriously consider that point and that it will be part of the dialogue we have.
Even without such a change, it is possible, as I said, to require any change of use from A4 or any demolition to involve a moratorium that includes the three things I mentioned: allowing the pub to continue where there is a genuine business and making sure, if not requiring, that the genuine, independent market value be considered; holding community consultation; and carrying out a viability test.
Finally on the suggestions from me and the save the pub group, let me return to pub listings. We still have a few wonderful pub interiors, and I am glad to say that there are a number in London, which it is worth going to see. They are important to tourists, who will walk into a pub such as The Mitre and realise that such things are unique to this country. We should be proud of that.
Nigel Adams
I, too, received a copy of the wonderful book on Yorkshire’s heritage pubs, but was my hon. Friend, like me, not a little surprised that there were not more entries from Tadcaster, given that it is the most prominent brewing town in the country, as all Members present will agree? I hope that he will raise that with his friends at CAMRA the next time he sees them.
Greg Mulholland
All I can say is that CAMRA has strict criteria. As my hon. Friend well knows, anyone travelling up the A1(M) will come to a sign pointing to Tadcaster one way and Otley the other. One is a famous pub town and the other is a hugely famous Yorkshire brewing and pub town. There are some synergies there, and it is probably appropriate for me to visit Tadcaster to see some of its pubs for myself.
As the Minister will know, councils have the power to compile local lists of historically important buildings. At the moment, however, that power is toothless because it affords no extra protection. Will the Minister find a way to ensure that buildings that are put on these local lists by the good councils that recognise the importance of pubs such as The Whitelocks in Leeds can be protected in the planning process? It is great to have them listed, but listing seems to achieve nothing in the planning process.
Those are the main recommendations that the save the pub group is making for now as part of the conversation we are having. We will have a lively debate about the right way forward, but there is one thing the Minister and the Government must not fall into the trap of doing. I sit on the coalition Government Benches and I support what the Government are trying to do. Like the Minister, I do not want more regulation, and I certainly do not want more regulation on pubs in the licensing system—in fact, I want to see less. However, it is quite wrong to suggest that giving communities the right to have a say over their local pubs and the important local services they provide is regulation, because it is not; it is simply about ensuring that there is a proper process to enable communities to have a say. That will not prevent pubs from being converted to alternative and positive uses when their days as a pub are numbered because of the area they are in or the local population.
I agree with the Minister that we want competition and a free market. As everyone in the pub trade and associated trades knows, however, there is no free market, because of the huge distorting impact of the fact that half the pubs in the country are owned by the largest pub companies, which tightly control prices and dictate rents. That is a separate issue, and the Government are looking at it. However, entrepreneurs—the up-and-coming small brewers and small pub companies—are delivering great pubs, but they are not getting access to the market because of the planning system. If the Minister wants genuine competition, as I do, he needs to make it much easier for not only communities but entrepreneurs to get their hands on pubs. At the moment the Government are not saying that.
Of course, the Minister will hear from the pub companies, developers and supermarkets, who want carte blanche to do what they want with the community’s pubs. They will tell him, “You must not do this; it is not in the spirit of the free market. It is anti-competitive. It is regulation.” It is not. The Government have a clear ideological choice. Do they really want to empower communities to have a say over local pubs, or do they want to back the developers, the giant pub companies and the supermarkets, to let them do whatever they like with their pubs? It is as stark as that. I know what I believe in as a localist, a decentraliser and a real fan of pubs, and I hope the Government will choose the right way.
The matter is linked, of course, to that of the big society, which is a huge issue. There has been a lot of coverage of the big society this week. People say it is a concept no one can disagree with: we want more power for communities, and local people doing things for themselves. The issue has been about the costs and whether it is affordable. However, much of the big society can happen without the Government spending a penny, and what I am talking about presents one opportunity for that. If the Government make the right, bold decisions they can stop the closure of profitable pubs happening against the wishes of communities. That surely is the big society at a local level.
I have a few questions for the Minister and, because this is a dialogue, I do not ask him to reply now.
Greg Mulholland
Before I put my questions I shall give way to the hon. Gentleman, who represents Burton, another famous brewing town.
Andrew Griffiths
I thank the hon. Gentleman for bringing this important debate to Westminster Hall, and for recognising the importance of Burton. As he says it is the home of beer and Britain’s No. 1 brewing town. He talks with some force—and I agree with what he says—about the need to protect our community pubs. Does he also recognise that many brewers and pub companies are trying to reverse the decline of pubs by opening new pubs every day of the week? Marstons in my constituency has just opened The Dapple Grey in Uttoxeter, which is thriving. I was in there a few days ago and it was heaving with people. We need to allow pubs to grow and flourish, and the hon. Gentleman’s viability test is the most important element of that.
Greg Mulholland
I thank the hon. Gentleman. We work closely together, because the all-party save the pub group works closely with the all-party beer group, of which he is the vice-chairman, and we look forward to continuing with that. He is right to say that viability is a key issue. He is right to say that some pubs are opening; but sometimes that is used as an excuse to close other pubs that owners or pub companies want to dispose of because of their huge indebtedness, some of which they need to claw back to please their shareholders and foreign creditors.
The issue that the hon. Gentleman raised is important, but there was a case in Otley where a brand new pub opened—a wonderful little free house called the Old Cock—because it was not possible for Lee and Linda, who run it, to get one of the pubs owned by the pub company. They had to set a pub up in what used to be a café, and now offer a wonderful range of independent beers that they could not afford to buy through the pub company. That is why I say to the Minister that there is no free market or way to do that. The tragedy is that The Woolpack, which I have already mentioned, is a mere 50 yards from the Old Cock. If the system worked, Lee and Linda would have bought it, and would be operating that free house from its wonderful historic building. Instead, it has closed and is being converted. The Old Cock is a brand new pub. All I am saying is that we need to assess viability and first ask communities whether pubs are still wanted. That would answer all the problems that we agree exist.
As to my questions to the Minister, I want to nail him down—not today—on whether he agrees with, and whether he and the Government will commit to, the principle that no profitable and wanted pub should be permanently closed against the wish of the community, without that community having any chance of a say on its future. To me, that is the overriding fundamental principle that we must get to as a localist and decentralising Government—and, hopefully, a pro-pub Government. I also ask the Minister to provide an assurance today, if he can, that the Government are committed to extending planning control to cover the demolition of pubs, as he has suggested he is minded to do. Will he also seriously consider doing the obvious thing and making an A4 use class order subject to planning permission for any change of use? That would make a big difference and stop conversions to Tescos, betting shops, restaurants and cafés with no community right to consult.
Will the Minister consider that the forthcoming national policy framework should include not only the idea that retaining pubs is important—it must do that, and I am sure he will ensure that it does—but the idea of a six-month moratorium? That could say, as guidance rather than diktat, that there should be a six-month period to allow other people to buy the pub and allow for the viability test and the independent community consultation. Will he seriously consider strengthening the right to buy, at the very least to prevent an owner unreasonably refusing a bid from a community? Indeed, in my opinion that should also cover a bid from a small brewery such as Wharfebank brewery in my constituency, which has just taken on its first pub. Perhaps the Minister will consider that and work with us to try to strengthen it and make it meaningful, so that communities feel it is worth putting bids together.
Justin Tomlinson
When new schools are built, local authorities must put competition arrangements in place to allow different organisations to bid. Those that bid are given huge amounts of advice and support, to turn enthusiasm into a practical and credible bid. I should be interested to see what support could be offered to those in the community who want to defend the community pub, to turn their enthusiasm towards finding the considerable amounts of money and huge commitment that can be needed to make that a realistic dream.
Mrs Anne Main (in the Chair)
Order. Before I ask Mr Mulholland to respond to that intervention, I remind the House that we should begin the winding-up speeches at about 3.30. Perhaps I may ask that the hon. Gentleman draw his remarks to a close. If no other hon. Member wants to speak—and no one has indicated a wish to do so—I want to call the shadow Minister at 3.30.
Greg Mulholland
I am, Mrs Main, on my last question, as the Minister will be relieved to hear. I shall send him a copy of my questions, to be helpful.
My hon. Friend the Member for North Swindon (Justin Tomlinson) must be a mind-reader, because my very last question to the Minister was to be on exactly the point he raised. Does the Minister accept that the Government’s asset transfer unit needs to examine, and considerably expand, the support it offers to communities on the possibility of community buy-outs? That is essential, and if the Localism Bill is to bring about decentralisation, localism and the big society, it must happen. It would not cost a huge amount of money—which we cannot provide—but it can empower communities.
I appreciate your indulgence, Mrs Main, and that of the House. The subject is complicated and it needs to be considered as a whole. As I hope I have explained, there is often scant real protection—and there are many loopholes in it—for the great British pub that we all, including the Minister, purport to support and value. That must be changed. We must stop the scandal of profitable, wanted pubs being closed willy-nilly every week. I am delighted that the Minister, and the Prime Minister, have said that they want the Government to be pro-pub. I shall judge the Government on several issues: the reform of the beer tie, dealing with irresponsible pricing in supermarkets, licensing, regulation and a host of other things. Above all, if the Government are to be pro-pub and save pubs throughout the country, they must put the rhetoric into practice and say, “Yes; not only are pubs important but the planning system will say they are and will reflect that.” They must make sure that finally, communities will get a say when someone says that they want to close the local pub.
Chris Williamson (Derby North) (Lab)
It is a great pleasure to serve under your chairmanship, Mrs Main. I congratulate the hon. Member for Leeds North West (Greg Mulholland) on securing this debate on an issue that is important and unites the House. I will start with a confession that I hope hon. Members will not hold against me: I am a teetotaller and rarely frequent local pubs. However, I recognise their importance and the central place that they occupy in many communities around our country. It is a matter of great concern that we have lost so many pubs in recent times and continue to lose them at an alarming rate. Between 25 and 40 pubs around the country close every week, which is a source of great concern.
The hon. Gentleman discussed the need for an ongoing conversation about the issue. It is clearly important to return to that as the new Government develop their policy on this and a range of other matters. I thank him for his work on the issue. Hopefully, his questions to the Minister and the ongoing campaign with which he is involved will have some impact on the Government and enable them to make policies that address the concerns that he outlined.
I share the hon. Gentleman’s concerns and was appalled by the scandalous examples that he gave of the sharp practice in which certain unscrupulous, well-heeled business people indulge, leading to the closure of all too many of our community pubs. He is right to say that a local pub is a small business that generates employment opportunities, particularly in the more remote communities in our country. Pubs are a valuable source of local employment.
I hope that hon. Members will forgive me for making a political point. I am concerned about the implications of the massive cuts that the coalition Government have agreed to implement. In particular, the cuts of up to 30% that local authorities face over the next four years, and cuts in other public services, will lead to the loss of almost 500,000 jobs in the public sector. According to research by PricewaterhouseCoopers, at least a further 500,000 in the private sector will lose their jobs as well.
Hon. Members are looking at me; they may be wondering what on earth that has to do with this debate. [Hon. Members: “Hear, hear!”] I will enlighten them: it has absolutely everything to do with it. If people do not have money in their pockets, the hospitality trade will inevitably suffer as a direct consequence. Not only the hospitality trade but the leisure trade and many other service industries will be detrimentally affected by the cuts supported by Government Members in the Chamber during debates on the comprehensive spending review and other spending matters.
Karen Bradley (Staffordshire Moorlands) (Con)
I apologise for missing the beginning of this debate; unfortunately, I was in a Bill Committee, but I came as soon as I could. The hon. Gentleman is making a point about people not having money in their pockets. Is it not therefore even more important that we deal with below-cost selling of alcohol in supermarkets—
Mrs Anne Main (in the Chair)
Order. That is not the subject of this debate. We are on winding-up speeches now. I request the shadow Minister to continue with his remarks, which I hope will also address the topic of the debate.
Chris Williamson
Thank you, Mrs Main. They will and they are. It is central to the future viability of pubs around the country that we recognise the implications of other decisions taken by the Government and the Members who vote for them.
Hon. Members have referred to the community right to buy. On the face of it, I have no difficulty with it—indeed, I think that it is probably a good thing and will be beneficial in certain circumstances—but when we scratch the surface, it is a little bit of a pig in a poke, is it not? No funding is attached to it. How will a deprived community where many are unemployed, have modest incomes from low-paid employment or are losing their jobs as a result of the cuts to which I referred be able to exercise the community right to buy if the people there do not have the wherewithal to do so?
Before the election, the Conservative party gave a commitment on the community right to buy that the community would be given the right of first refusal. As I understand it, that commitment has now been withdrawn. I would be interested to hear the Minister’s comments on that point.
The hon. Member for Staffordshire Moorlands (Karen Bradley) made a point about supermarkets. I take the Chair’s guidance that it was not directly related to the topic, but it is important to acknowledge that competition from supermarkets is having a detrimental impact on the viability of community pubs. Again, the Government have failed to take decisive action to tackle the minimum price. They should have gone somewhat further to address it.
The hon. Gentleman discussed the need to strengthen planning legislation. I agree absolutely, but he slightly contradicted himself in the latter part of his speech. In his conclusion, he said that more regulation was not required; I think he said, “We don’t want more regulation.” He will correct me if I am wrong, but he said that stronger planning powers are needed. I agree with him, but what is that if not greater regulation? I accept that regulation can be a force for good in certain circumstances, but over-regulation of the sector can be problematic and a barrier, as can set-up costs, and those issues need to be addressed. I support his aims, but there is perhaps a weakness in his argument. He might consider that, because I know that he feels strongly about the issue and has done a lot of good work to lead the charge on it.
I am also interested to hear the Minister’s comments about the regrettable decision to scrap the Labour Government’s proposed community-owned pubs support programme, which would have provided resources to enable communities to save community pubs from closure.
Graham Evans (Weaver Vale) (Con)
Does the hon. Gentleman agree that planning law should be strengthened? You just mentioned that it should be.
Mrs Anne Main (in the Chair)
Order. I have not mentioned anything about planning laws, but I hope that Chris Williamson will respond to that.
Chris Williamson
I was merely referring to the hon. Member for Leeds North West, who discussed the need to strengthen planning laws to give local authorities greater powers over the closure of community pubs. I support him on that. The point that I was making is that strengthening planning powers for local authorities amounts to greater regulation, so in certain circumstances, stronger regulation can be a force for good. It can be beneficial in helping promote the campaign that he is pursuing.
The community-owned pubs programme has been scrapped. The Government had set aside £3.3 million—not a huge sum, but significant—which would have gone a long way towards assisting many community pubs to remain open. The chief executive of the Plunkett Foundation, which was charged with administering the fund, said about the decision to scrap the programme:
“This is devastating news for each community that had hoped to save their local as a co-operative. The government has turned its back on communities that were looking to take more responsibility over their everyday lives.”
It seems that the Government propose to replace a meaningful Government initiative, which would have provided resources for practical action to save a considerable number of community pubs, with a mere information leaflet, which will be distributed to local communities. That is no substitute for a properly funded initiative that would have gone a long way in saving community pubs. That was a mistake, and I would be interested to hear the Minister’s comments on it. He is quoted as saying:
“"Pubs don’t want state handouts. The new government is to give local communities new powers to save local pubs.”
However, as I have already pointed out, the Government’s proposed power will be meaningful only in those communities that are relatively well heeled and that therefore have the wherewithal to provide the resources necessary to exercise a community right to buy.
Nigel Adams
Is it not the case that the previous Government had 13 years to do something positive about protecting pubs? People had money in their pockets then, but the previous Administration failed to do anything.
Chris Williamson
I do not understand the hon. Gentleman’s intervention. I have already made the point that the previous Labour Government set up the community-owned pubs support programme, which his Government have scrapped. We did take positive action. I accept that too many pubs closed and that perhaps more could have been done. We can always do more, but we took appropriate steps and ensured that people in the public sector were in employment and that we kept unemployment lower than it would otherwise have been. As I have already said, unless people have unnecessary money in their pockets, the hospitality trade and community pubs will suffer as a direct consequence.
Nigel Adams
Will the hon. Gentleman enlighten Government Members on when that much-vaunted policy was announced?
Chris Williamson
The hon. Gentleman is trying to make a cheap point, because he knows very well that it was towards the latter end of the previous Government. [Interruption.]
Mrs Anne Main (in the Chair)
Order. Will hon. Members please not make remarks from a sedentary position? I would like to hear what Chris Williamson has to say.
Chris Williamson
Thank you, Mrs Main. The reality is that we took action. On another point, we took the necessary steps to stop the economy going into a complete tailspin. I repeat the point that I have already made and make no apologies for doing so: people need income in their pockets from employment, and the measures that we took to keep unemployment lower than it would otherwise have been helped ensure that more pubs did not close. I regret to say that this Government’s measures have taken away the direct support by scrapping the community-owned pubs support programme. They are also introducing new powers that only relatively affluent communities will be able to utilise, and are taking economic decisions that will have a much bigger impact on the future viability of community pubs, because unemployment will certainly increase and many more pubs will close as a direct consequence.
I do not want to take up much more time, because that would eat into the time for the Minister’s wind-up speech.
Jason McCartney
I would be interested if the hon. Gentleman could name a single pub in Yorkshire that was saved by that scheme. Dozens of pubs closed in my constituency during his Government’s last five years.
Chris Williamson
I hope that the hon. Gentleman will forgive me for not knowing the names of pubs in Yorkshire. I am a Derby MP and, as I said at the outset of my contribution, I am teetotal and very rarely frequent pubs. Pub names are not one of my strong points. I could not even name too many pubs in Derby, but I recognise the central role that they play in the local community.
I will finish by addressing the comments made about the big society. The notion that, somehow, the nebulous concept of the big society will be the saviour of community pubs and that Ministers on the white charger of the big society will ride to the rescue is, in reality, a fantasy. In my view, the big society is nothing more than a 21st-century version of the Poor Law. If hon. Members view that as the way to protect community pubs, I am sorry but they will be sadly disappointed.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
It is an absolute delight and pleasure to serve under you, Mrs Main. I also warmly welcome this debate and congratulate my hon. Friend the Member for Leeds North West (Greg Mulholland) on securing it, on the constructive way in which he made the case for assisting community pubs, and on the excellent work that he rightly does as part of the all-party save the pub group. I also pay tribute to my hon. Friend the Member for Burton (Andrew Griffiths) and the all-party beer group. All such groups and bodies are important players in the conversation that, as my hon. Friend the Member for Leeds North West has said, we are having, and I promise him that we will continue to have it. It is an important issue. I appreciated the seriousness with which a number of my hon. Friends intervened to raise examples to reinforce a number of my hon. Friend’s legitimate points.
I will say this as gently as I can, but the shadow Minister, the hon. Member for Derby North (Chris Williamson), may not have quite caught the mood of the debate to a nicety. It was not a partisan debate. If people want to play it along partisan lines, I can point out that, in 13 years of the previous Government, the situation developed, got worse and not much was done—an initiative 12 weeks before the general election was scant and shoddy recompense.
The hon. Gentleman did, however, remind me of a story about John Costello, the former Irish Prime Minister. He had lost a general election and was driving with his Attorney-General to the presidential palace to hand in his resignation. Their car had to stop at a crossroad, on to which a fight spilled out from a public house. Costello turned to his Attorney-General and said, “Do you know, I’ve never been in a pub in my life,” to which the Attorney-General replied, “Well, if you had, we might not be going to hand in our resignations now.”
I do not have to confess—I think it is well known—that I occasionally use a public house. I have certainly assisted my hon. Friend the Member for Burton in adding to the heaving numbers in a public house in Uttoxeter. I am conscious, from my own constituency as well as from my visits around the country since my appointment, that public houses are a key part of the community. We have vibrant pubs in villages, in suburban areas such as mine, and in inner-city areas, some of which I see when wearing my hat as the Minister with responsibility for the Thames Gateway.
Of course, as my hon. Friend the Member for Leeds North West has rightly said, changing circumstances mean that, because pubs are businesses as well as community assets, they will sometimes come under pressure and some will not be sustainable. I have mentioned the east end of London. I visited some old friends in Poplar, where demand for pubs has declined due to the change in the demographic of its population, so not all its pubs are likely to survive. It is important to recognise—I am grateful that my hon. Friend did—that we have to bring that balance into the equation. Equally, I think we have all come across the sort of cynical behaviour whereby viable public houses are sold, sometimes over the heads of the tenants, the landlords or the community. My hon. Friend has quoted a number of examples and, during a Localism Bill Committee sitting, I referred to one in my own constituency. The absentee landlord of The Broomwood pub, in Sevenoaks Way in Orpington, has deliberately run it down so that its value as an asset is diminished, in order then to seek planning permission to turn it into a McDonald’s. I am no more likely to frequent a McDonald’s than the shadow Minister is to frequent a pub. It would certainly not have been a good result for that community, and I think there is common ground between us on that point.
Justin Tomlinson
That can also be the case before a pub has even been built. In new developments—a lot of my constituency is new development—space is allocated in the master plan for a community pub. The developers deliberately do not sell it—as is the case with our local brewery, Arkell’s—and they then try to come back and say that the only demand is for additional housing.
Robert Neill
My hon. Friend is right. I shall refer to some of the planning proposals we are seeking to make, which I hope will deal with some of those situations.
The Government are seeking to approach the matter against the background of recognising that there must be a sensible balance and that, of course, it is sometimes legitimate to regulate to protect community interests. However, we are also dealing with businesses that need to be kept viable and remain attractive for investment, so as my hon. Friend the Member for Leeds North West said, it is important that we deal with the matter in reasonable and proportionate way that does not build in inflexibilities that might discourage people from investing in the public house trades. We must get the balance right and I am grateful to my hon. Friend for his contribution to helping us do that. I would rather deal with the matter in a considered way than engage in grandstanding, because there are opportunities that will come to us.
Let me consider some of the points that were raised. It is worth saying that the current national policy—planning policy statement 4—is perhaps not used as fully as it could be. I accept that point, and outside this Chamber I will happily take up with my hon. Friend ways in which we can ensure that local authorities are made aware of their existing scope. For example, PPS4—planning for sustainable economic growth—asks local authorities proactively to plan and promote competitive town centre environments to support shop services and other things that have small-scale economic uses. That can be taken to include public houses. My hon. Friend indicated that some local authorities are doing that, and I applaud them for doing so. Some of the public houses we have referred to might be in conservation areas or might have a particular merit, such as listing and so on. There are other forms of protection.
When determining applications affecting premises such as pubs, current policy also enables local planning authorities to take into account the importance of the facility to the local community or the economic base in the area. However, I acknowledge that that is not doing enough to slow down the attrition rate of pubs. Therefore, we are determined to simplify the system. My hon. Friend is right: the national planning policy framework is the appropriate vehicle for doing that. Since the Town and Country Planning Act 1947, most planning policy has been dictated by guidance rather than through primary legislation, which has tended to be enabling. That is the route we intend to adopt.
We are committed to taking the existing protections that it is appropriate to continue with, simplifying them, amplifying them where appropriate and publishing a comprehensive, single, streamlined national planning policy framework. We are aiming to do that by April 2012. We will start to consult on that later this year, and I very much hope that my hon. Friends and the organisations in their constituencies concerned about the issue of planning and public houses will contribute to the consultation. That will also include planning for community and other leisure facilities. The linkage about encouraging live music, for example, that my hon. Friend the Member for Hove (Mike Weatherley) referred to, is absolutely right. That is why, separately, the Government are proposing to reform the licensing law to make it easier for live entertainment to take place without some of the bureaucratic licensing requirements, particularly in smaller venues. I hope that that will add to viability, which is an important consideration here.
Two matters are important in relation to the Localism Bill. First, we are introducing neighbourhood planning, which will give neighbourhood communities a greater chance to shape their area in planning terms. Communities will be able to set policies for the development of their area, subject to the constraint that what they say must be in general conformity with the overall strategic policies of the local authority’s development plan, and that it will be subject to the national policy set out in the NPPF I referred to. Within those constraints, communities will be able to say what sort of developments—within reason—are acceptable or not acceptable and where. That is an important tool, and I hope it will enable people to have greater protection.
Such an approach will also give communities greater flexibility in expanding. Sometimes that is right because, for example, there might be a demand for additional housing in a village area. Incremental growth is not easy to achieve under the current planning system, so there is a greater pressure to convert the use of a public house to housing. Our proposals will make it easier for a neighbourhood to expand organically and therefore, I hope, to still keep the public house in existence.
Robert Neill
Yes, of course. I think I know what the right hon. Gentleman is going to ask about, although I have to say that he has not been present during the debate.
Mrs Anne Main (in the Chair)
I was just about to say that the Minister is winding up. This is an hour-and-a-half debate and the right hon. Gentleman has not been here for the entire debate. However, the Minister has given way.
Robert Neill
I have given way, but I hope that the right hon. Gentleman will be brief.
Mr Lammy
The Minister is aware that I have been concerned about these issues for some time. Will he say a little bit more about the legal status of the neighbourhood plan? He will be aware that The Oakdale Arms on Hermitage road, Tottenham is facing demolition in March, and there is real concern that the local community has not been involved.
Robert Neill
We have already set out the proposals we are intending to make, and there should be a referendum—an independent check—to make sure that the neighbourhood plan, once it is in place, is in conformity with other policies and that there is support from the community. The details are available in a guide to neighbourhood planning, which is on the Department’s website. When the right hon. Gentleman has looked at that, perhaps other hon. Members who are interested in the matter will have the chance to look at it.
As well as neighbourhood planning, there is the community right to buy. That gives a fair chance for communities to bid to take over assets and facilities that are important to them. Community right to buy is triggered by assets being listed, so it is an important power for community groups to take the initiative to list them. I do not pooh-pooh the community right to buy, as the hon. Member for Derby North did. Potentially, it is a powerful tool, and there are good examples where it has already been taken on. We have published a consultation document setting out details of how that scheme works. It will be underpinned by regulations to deal with the process. That consultation ends on 3 May and as I said, I hope that hon. Members and interested groups will contribute to it. Some of the details that my hon. Friend the Member for Leeds North West fleshed out are exactly the sort of issues I promise him we want to take on board during the consultation.
I understand my hon. Friend’s point about the moratorium, and I would like to consider the matter in that context. The only query is whether too rigid a moratorium could itself create injustice in certain circumstances—for example, where the legitimate collapse of a business through commercial misfortune, as sometimes happens, triggers the need to realise assets quickly. It is about getting the balance right. I would not want to discourage people from investing in pubs, which might happen if they thought they could not always get their assets out again. However, there is more work that we can and will do on that.
On change of use, as was said, when used properly, there is already an ability to import viability into the test. Local authorities can remove committed development rights under the existing use classes order through what is called an article 4 direction. However, as part of our reform of planning policy, we intend to consult more generally on reform of the use classes order. Again, there is an opportunity for that conversation to continue. Similarly, as my hon. Friend says, we have announced a review into the use of covenants, which can be used to prevent a fair playing field for communities when public houses are sold on.
On the question of demolition, I pay tribute to my hon. Friend the Member for Selby and Ainsty (Nigel Adams) for his private Member’s Bill. In the past, demolition has been excluded, but we are prepared to look carefully with my hon. Friend and other hon. Members at whether there is some means by which we can, perhaps in the context of the community right to buy, extend planning control to the demolition of community assets. That might be a means by which we can achieve a proportionate solution. I hope the door is open to my hon. Friend in that regard.
I am sorry that there is no time for me to say more. However, I hope I have shown that we take the comments of my hon. Friend the Member for Leeds North West in the spirit in which they were intended. I congratulate him on what he has done. We will continue to have a conversation on those specific points.
Renewable Energy (The Humber)
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Andrew Percy (Brigg and Goole) (Con)
It is a pleasure to serve under your chairmanship, Mrs Main.
I would like to begin by thanking the Minister, who has already provided a huge amount of support to the Humber MPs in our campaign to make the Humber a renewable energy centre. He is already aware of much of what I will say today and we are grateful for the support that he has given. There are a couple of issues on which we would like to pin the Minister down, in the best sense of the phrase, as we try to move our campaign forward.
The campaign has support across the Humber and I assure you, Mrs Main, that the absence of other Humber MPs is not due to lack of interest. My neighbour, the hon. Member for Scunthorpe (Nic Dakin), is at a Select Committee hearing outside Westminster today. My hon. Friend the Member for Beverley and Holderness (Mr Stuart) is away on parliamentary business, as is, I believe, the hon. Member for Great Grimsby (Austin Mitchell). However, this is a campaign that enjoys strong support across the banks of the Humber in north Lincolnshire and east Yorkshire. We are concerned primarily with doing what we can, as local MPs, with the support of our local councils and businesses, to ensure that we become a centre for offshore wind, and potentially a centre for wave and tidal power and other renewable energy opportunities, such as bioethanol. With your permission, Mrs Main—I have had contact with the Minister on this—my hon. Friend the Member for Cleethorpes (Martin Vickers) will speak for five minutes of my time.
Andrew Percy
Thank you, Mrs Main. I will focus most of my comments on wave and tidal technologies and the bioethanol industry.
I think that we all agree, across the House, that we want to ensure that the UK plays its part in the renewable energy sector and that we are not left behind as we have been in the past, particularly with onshore wind. Our campaign on renewable energy, as broad as it is, does not extend quite as far as onshore wind. The Minister is aware of our particular issues with onshore wind locally, but I just place them on the record again. As a country, however, we have missed the boat on manufacturing for onshore wind and we do not want to fall behind with the new technologies.
Why the Humber? Well, apart from the fact that everybody knows it is the best area in the UK in which to invest, has the best people and is potentially represented by some of the best people—I exclude myself from that; I talk of course of my neighbours—in the past 10 years the area has not made the progress it should have done, and as other parts of the country have. We lost private sector jobs in the past 10 years at a time when the economy was growing, and we remain one of the poorest parts of the UK. We have, however, a great deal going for us too: deep sea ports, plenty of land for development, an excellent motorway infrastructure that is not congested in the way that it is in other parts of the country, and a long history of manufacturing and manufacturing skills on which to build. As I mentioned, we also have strong support for this campaign from across the local area, including from some of our key stakeholders, MPs and councillors, but also from local newspapers. The Scunthorpe Telegraph, the Grimsby Telegraph and the Hull Daily Mail have been running their own campaign to support bringing more renewable energy projects to our area.
Jason McCartney (Colne Valley) (Con)
I congratulate my hon. Friend on securing the debate. On the matter of support, he also has plenty of support from Yorkshire MPs, myself included. Offshore wind is important for my inland constituency, so that we do not have to have onshore wind farms dotted all over the beautiful countryside of the Colne and Holme valleys. It is also important because David Brown Engineering in Lockwood, Huddersfield, has a major contract to make the gears for offshore wind turbines. Hopefully the Humber will also play an important part in cutting our carbon footprint, as part of the array of carbon capture and storage that may go into the North sea, and bring jobs. My hon. Friend has plenty of support not just in the Humber region, but across the whole of Yorkshire and the north of the country. Thank you for this debate.
Andrew Percy
I thank my hon. Friend for that glowing pledge of support for the Humber, and that demonstrates a point I will go on to talk about. The supply chain for this industry will not be limited to the Humber—it will benefit UK plc. There will be jobs through the development of the renewable sector across the whole of the UK in manufacturing. I know that he will be at the forefront of campaigning for those jobs to go to his constituency of Colne Valley.
What we seek from the Minister is continued support in selling the Humber—I know he has responsibilities for the whole of England—and England, internationally. We would also welcome support from the Government in terms of the pressure they can apply to ensure that once agreements have been made, as they have been with Siemens, there are no glitches in the system. I also seek clarity about the framework in which we are operating. I will turn to that point first, in relation to wave and tidal technologies.
In terms of R and D, the UK is at the forefront of these technologies and there are huge opportunities, not only because we are an island, but because of the skills we have. There are massive opportunities along the Humber, which is served by several other tidal rivers including the river Aire, which I live next to, the Ouse, the Trent, and what we call the Dutch river, but which is the Don to everybody else. It is estimated that marine power has the potential to bring approximately 10,000 jobs to the UK by 2020.
There is a project on the Humber at the moment, the Pulse Tidal project, which is one of those great British entrepreneurial technologies. It started in someone’s garage. After 10 years of working in someone’s garage, that has now developed into a machine that is operating on the Humber, just off Immingham dock. It was funded 50% by the Government and 50% by private funds, and has been operating successfully since 2009. It cost £2 million to build, but the beauty of the project is that it used Corus steel and is maintained by another local company, Humber Work Boats. The next step of the development is a commercial scale machine, rated at 1.2 MW, which will be installed by 2013. There the good news tails off a little. It is likely that the commercial scale machine will go to Scotland, because the renewable obligation certificate scheme is more generous there. In fact, Bob Smith the CEO of Pulse Tidal, tells me:
“The single biggest funding issue for us today is the market pull—at present there is nothing to incentivise investors to support a tidal power project in favour of a wind power project—they both receive 2 ROCs. Given that tidal is early in its development, comparable to wind about 15yr ago, it is more expensive than wind, and higher risk. Hence no investor would put money into tidal projects. With 5 ROCs in place for tidal, there is sufficient incentive to bring investors to the sector.”
I know that there is a review of that scheme, but will it consider the current disparity between England and Scotland? The scheme is currently in favour of Scotland and we are at a disadvantage, so will the review recognise that?
I hope the Minister will consider the need for extra support for these emerging technologies, so that we remain at the forefront. We have had all that R and D. We have successful projects up and running, but we risk losing them overseas and missing out, just as we did with onshore wind technology.
What are the Department’s plans for the longer-term capital support for this sector? The marine development fund is being phased out. Will that be replaced and what will be put in its place? There is a need for capital and revenue support to ensure that we do not miss out. I am sure that we will get that, because I know the Government are certainly committed, but we seek a clear commitment from the Government on the future of wave and tide.
Mike Weatherley (Hove) (Con)
On losing industries overseas, does my hon. Friend agree that, given our heritage of petrochemical skills and a highly efficient agricultural base, it makes sense to have a bioethanol base here in the UK?
Andrew Percy
I will be coming on to talk about that exact point. As with the wave and tidal technologies, where we have the skills base and the R and D, the same applies to bioethanol. I seek those commitments in relation to wave and tidal. My hon. Friend’s intervention moves me beautifully on to bioethanol.
The question, of course, is why bioethanol and why the Humber? My hon. Friend made the comments that I would have made about the petrochemical skills heritage in this country, so I shall not repeat them. We also have mandated targets for biofuels, so whatever people’s individual views about biofuels are, the reality is that if we do not produce them locally in the UK, and specifically in the Humber, they will be produced elsewhere, and the jobs will be elsewhere.
As with wind—and, potentially, wave and tide, if we are not careful—the UK has been lagging behind. In 2008, France had 15 operational plants, Germany had nine and the UK had one large and one small plant. There is huge potential: as with wave and tidal technologies, the predictions for the industry are impressive. It could be worth as much as £3.25 billion to the UK by 2020, and could employ some 14,500 people. There is huge potential, in the Humber in particular, for the reasons that I have outlined in respect of infrastructure.
Two plants are coming to the Humber: Vireol will be running an industrial-scale wheat-based production plant in Grimsby from 2013, which should produce about 44 million gallons of bioethanol a year. I am told that that is the equivalent—my science was never very good—
Julian Sturdy (York Outer) (Con)
I congratulate my hon. Friend on securing this important debate. I add my support to his campaign for the Humber, especially as I am a big supporter of wave and tidal. He makes a key point about bioethanol: it will be a huge economic driver for our region if we get it right. However, I add a note of caution, and would like to know what he thinks about it. Commodity prices are growing rapidly at present—
Mrs Anne Main (in the Chair)
Order. Interventions should be brief. The hon. Member for Brigg and Goole wants to hear the Minister’s response.
Julian Sturdy
The intervention is about commodity prices and the impact on food security.
Andrew Percy
It is an important point, and I will come to it. It is one of the criticisms—a misunderstanding, in my view—of what is actually happening. I shall first finish with the plants that are coming to the Humber. The effects of Vireol’s production of bioethanol will be the equivalent of taking 60,000 cars off the road, and Vivergo will produce at a plant in Saltend.
My hon. Friend knows that we have not only in the Humber region but across North Yorkshire—on his patch—some of the most productive agricultural land in the country, so there is huge potential locally to benefit from bioethanol production. The concern he raises is one that many people raise, which is that we are taking land that could be used to produce food to feed our cars instead. However, the process that will be used at the Vireol plant will produce as a by-product a high-quality animal feed, and there is a difference between biodiesel and bioethanol.
The global annual production of the big four oil seeds that are used for biodiesel is about 120 million tonnes. To meet our 2020 target, 24 million tonnes would have to be used for biodiesel. For bioethanol, it is 1.7 billion tonnes of the big three grains, of which only 60 million are needed to produce bioethanol. There is a prediction that the UK could increase its production volumes up to about 20 million tonnes. That could be done while ensuring food security, and, as I said, the wheat-based process that will be coming to the Humber produces a high-quality animal feed by-product, so it is a win-win situation. We already export wheat for animal feed or bioethanol production overseas.
I have two quick questions for the Minister on bioethanol—I am conscious of the time. What in particular will he do to continue to support this important sector, which has the potential to bring many jobs to our region? And when, specifically, will the Government renew the 2020 targets, which are for 10% of our fuel production, so that the bioethanol industry can continue to secure investment?
I have cut down as best I can. With that, and with your permission, Mrs Main, I would like to hand over to my hon. Friend the Member for Cleethorpes.
Martin Vickers (Cleethorpes) (Con)
I congratulate my hon. Friend the Member for Brigg and Goole (Andrew Percy) on securing this timely debate. It has come at a time when north Lincolnshire, in particular, stands ready to take full advantage of the opportunities for jobs and growth. Many local companies, some of which were previously involved in similar activities such as supporting our offshore oil rigs, are well positioned to take full advantage of the development of offshore turbines. New training opportunities are being developed by local colleges, training providers and businesses, and there is massive public support following a particularly successful focus on the industry, which my hon. Friend mentioned, by local newspapers the Grimsby Telegraph and the Scunthorpe Telegraph.
My hon. Friend has articulated successfully the role that tidal and biofuels—
Martin Vickers
I was praising the Grimsby Telegraph and the Scunthorpe Telegraph, which is always a wise thing to do, especially as their reporter is present.
My hon. Friend the Member for Brigg and Goole has articulated the future impact of tidal, wave and biofuel energy, but I want to highlight the region’s potential for placing the Humber at the centre of the offshore wind sector, not only in the UK, but in Europe and globally.
The area is ideally located. The Immingham and Grimsby dock complex is the largest in the UK, measured by tonnage. Since the decline of the fishing industry, Grimsby dock has been seeking a new role, and offshore wind could be the vital opportunity. Only a few miles away, Scunthorpe has steel production, and everything possible must be done to ensure that the various contracts filter down to small businesses, many of which have been struggling in recent months.
The region has several examples of where short-term investment could result in long-term growth and regeneration. For example, the regional growth fund is currently reviewing proposals, made in association with North East Lincolnshire council, to modernise, improve and update port infrastructure, which would provide for the construction of tailor-made facilities for the offshore wind sector. Such improvements, requiring investment of £1.8 million, would lead to real improvements within a planned 12-month time frame and to several potentially major contracts being finalised, possibly resulting in the creation of hundreds of long-term, sustainable jobs. Such contracts would directly affect investment and job creation, arising from the emphasis and support given to the Humber region.
One of the most exciting developments is proposed by Able UK on a 300 hectares site close to East Halton and North Killingholme. It could make northern Lincolnshire the capital of the offshore wind industry and provide the potential for thousands of jobs over the next decade or so. Many of those jobs will come fairly soon with construction projects, and when linked to this country’s commitments to increase dramatically our environmentally friendly energy supplies, green technology has the potential to create many new opportunities.
The production of renewable electricity in the UK has been growing by 11% per year since 2000, and the offshore renewables industry has been gearing up for growth. The Crown Estate has announced the successful bidders for each of the nine round 3 offshore wind zones within UK waters, and that will occupy the industry for at least the next 10 years. It has been brought to my attention that there may be some delay to round 3, but I hope the Minister will allay those concerns in his reply. Opportunities for growth opened up to the area with the supply chain for the Humber gateway site—the Able UK development—and also with the massive round 3 Hornsea site that is within 12 miles of Hull. When finished, it could generate up to 14% of the UK’s total energy needs.
I urge the Minister to give a cast-iron guarantee that northern Lincolnshire and the Humber will receive Government support equal to that for other areas. Private enterprise stands ready to invest, but it cannot do it alone. We welcome the opportunities offered by port development grants, but the earlier we receive confirmation that the A160 into Immingham docks will be upgraded, the better. I appreciate that that is not within the Minister’s brief, but it is yet another opportunity for me to mention the issue.
There is also the seemingly never-ending debate about Humber bridge tolls. The Treasury review into the tolls is a major step forward, and we look forward to its conclusion later this year. If the labour market is to function freely in the renewables industry—and other industries—and allow local workers to take all opportunities available, we must consign the debate on tolls to history.
Potential investors and current stakeholders remain concerned about long-term financial commitments and the speed at which planning applications are implemented. In a report on the potential of the UK’s renewables sector, the offshore valuation group stated the requirement for new financing structures that complement the fundamental features of renewable energy infrastructure and are able to support the scale and speed of industrial growth. That is necessary to secure the UK as a centre for the global renewables industry.
So far, the Government have done a lot, which is greatly appreciated by local councils and other representatives from the industry. Nevertheless, we cannot do it alone. There is the possibility to create a great number of job opportunities in an area that has been in recession for too many years, and I urge the Minister to do everything in his power to help the area.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
It is a privilege to serve under your chairmanship, Mrs Main, particularly on a subject that I know is dear to your heart. I congratulate my hon. Friend the Member for Brigg and Goole (Andrew Percy) on securing this debate and on returning to a theme that he has become accomplished in discussing in this House. He and my hon. Friend the Member for Cleethorpes (Martin Vickers) make a powerful duo, and they are eloquent and dedicated advocates for the interests of their constituencies. They have worked hard to create a broad coalition on both sides of the House and of the Humber, and to bring together the interests of the local authority, the business community and the political representation in the Greater Humber area. That will ensure that we take maximum advantage of the benefits that undoubtedly exist. Contributions from other hon. Friends concerning how such opportunities can benefit their constituencies have also been encouraging, and we have heard from my hon. Friend the Member for Colne Valley (Jason McCartney), and about the interest in bioethanol from my hon. Friends the Members for Hove (Mike Weatherley) and for York Outer (Julian Sturdy).
This is a timely debate because we are looking at the potential for a huge regeneration in parts of the country that have been badly affected by economic decline over many years. One of the most exciting aspects of the renewable sector is the potential that it brings for economic prosperity in areas that have suffered badly. We must put this debate in the national context. The Government are committed to a major roll-out of renewables, because we believe that it will help to secure our long-term energy interests, help tackle climate change and meet our renewable energy targets for 2020 and beyond. It will also deliver many green jobs across the United Kingdom, revitalising our manufacturing sector.
The 15% target for renewable energy by 2020 is challenging, but we are sure it is achievable. We are on track for the first interim target of 4% renewable energy by 2011-12, and we have 25 GW in the renewable electricity pipeline. We should look at the resources around us—we have heard about how such resources play out for the Humber. Around these islands we have 40% of Europe’s wind and some of the highest tidal reaches in the world. We are already global leaders in the offshore wind sector, with 1.3 GW of installed capacity.
This debate takes place against the background of the Government’s commitment to localism, and we expect communities that accept renewable energy developments to receive distinct and specific benefits. We have mentioned the localisation of business rates, and we are looking at other ways in which communities can benefit from hosting facilities on behalf of the wider national interest.
My hon. Friend the Member for Cleethorpes discussed offshore wind. The Carbon Trust has estimated that the offshore wind sector could create 70,000 jobs by 2020. Last week, I was delighted to announce the grant of consent for the Humber gateway offshore wind farm, which will generate enough clean electricity for 150,000 homes. We put in place the offshore wind developers forum specifically to identify barriers. We are determined to drive that process forward as fast as possible, identify potential barriers to investment and do what we can to ensure that they are dealt with and do not become insuperable. We still need an acceleration in deployment and technical advances to realise the potential of offshore wind.
UK manufacturing activity will be key to realising the economic potential offered by offshore wind across the whole supply chain, and I am confident that the offshore wind sector will grow substantially in the coming years. We are determined to avoid mistakes that we have seen in the past, where although our waters contain some of the largest offshore wind farms in the world, the jobs and contracts go to mainland Europe or the far east. In taking forward the next stage of offshore wind development, we must ensure that those jobs come to the United Kingdom.
We are the world’s leading market, and any company that is keen to invest in the offshore wind manufacturing chain should be looking at Britain. The contribution made by Siemens, and its determination to build in the UK, and the interest we are seeing from Gamesa, GE, Mitsubishi and other companies shows the extent to which Britain will be a global leader in this technology.
We are looking at making larger turbines than have been developed before. They need to be more reliable than those used for onshore wind, and to have deep foundations and undersea cabling. That means that they will be harder to transport than some of the turbines used for onshore wind, and there is a strong case for that manufacturing to be done locally to market.
I support the work that has been done on both sides of the Humber and, indeed, in other parts of the country to showcase the benefits of this technology for potential investors. It is also interesting to see the work that well-established local companies are doing to give themselves a new direction. For example, Cosalt, which was originally known as the Great Grimsby Coal, Salt and Tanning Company when it was founded back in 1873, now provides engineering, safety and inspection services to the wind energy sector. That typifies the economic development thinking in the area. There is no doubt that such activity should provide a major boost to the British economy, and there is every reason for us to hope that the ports along the Humber will be able to develop from that.
Of course, this issue is not just about wind power. One of the most exciting aspects is how the renewables sector brings together in specific locations a raft of different technologies and the contributions that they can make. Biomass is part of that. In 2009, biomass electricity provided 87% of total renewable generation in the Yorkshire and the Humber region. There is no doubt about the significance of the contribution that it can make.
My hon. Friends spoke about the importance of bioethanol and the leadership that Britain ought to be looking to establish in this sector. Bioethanol offers one of the few options in the short term for tackling greenhouse gas emissions and for meeting our renewable energy targets in the transport sector. We are considering the opportunities that can be provided through eligibility to benefit from the renewable transport fuel obligation and the renewables obligation. As my hon. Friend the Member for Brigg and Goole set out in opening the debate, we are looking at the renewables obligation, and this issue can be part of that process, although as he will understand, it is my colleagues in the Department for Transport who lead on those issues.
We are also committed to harnessing the benefits that a successful marine renewables sector can bring to the UK generally and, within that, to the Humber area. The schemes to which my hon. Friend referred show some of the thinking that is going on. This is a fast-moving sector. As he has said, the struggle is in getting things to a commercial scale. What we have seen in looking at the schemes that were in place already—the marine development fund and particularly the deployment fund—is that the bar was set too high to be relevant to the stage that the industry is currently at.
We have examined how we take the technology further and faster. Its development is an explicit written element in the coalition agreement, which is at the core of what we are trying to do in the Department of Energy and Climate Change. The benefits go well beyond providing us with secure, clean electricity, because there is an opportunity to build a new manufacturing sector in the UK, which will create new jobs and grow economic opportunities both at home and globally.
That will happen only if we ensure that we capitalise on the hard work that the sector is doing already and ensure that the right foundation is in place on which to build success. We have established a marine energy programme, and we now want to ensure that small, dynamic companies have every reason to stay in Britain by putting in place a network of marine energy parks around the UK. That will enable us to take forward the technology and ensure that those emerging companies want to develop in the UK, rather than, as we have seen too often in the past, taking their technologies elsewhere in the world.
We have brought forward the banding review for renewables obligation certificates by a full year, so that we can provide much greater certainty to investors. The difference between different parts of Britain—the difference between ROCs support in England and in Scotland—will feature in that, although of course the level at which support is set in Scotland is a matter for the Scottish Government and the same applies in Northern Ireland.
We can offer a real opportunity to take forward these technologies in this country. Our objective must be to remove barriers, to encourage investment and to ensure that we identify where the challenges are, so that the potential throughout this country can be achieved. This has been a short but important debate. The Humber has a very important contribution to make to the renewable energy future of this country, and I again pay tribute to the Members of Parliament who are representing the area for the determination and assiduity that they have brought to its cause.
Financial Mutuals
(14 years ago)
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Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I am grateful to Mr Speaker for offering me the opportunity to have this debate. At the outset, I need to declare that I have a mortgage with Northern Rock. I am privileged to be chair of the Co-operative party and one of the party’s 28 Labour/Co-op MPs. It is in that spirit and with their support, but from the Back Benches, that I have sought the debate.
Yesterday, as the Minister will recognise, was business as usual for banking. Barclays bank was carrying on as if Ministers had never been worried about its bonuses or its profits. This is also the week for yet another re-launch of the big society. It is a concept in crisis, unloved by many of the Minister’s colleagues and viewed with profound scepticism by many people in the charity world. What better time, then, for the Minister to offer up a vision—and, crucially, the action to back it up—of the big society that is not an excuse for an attack on public bodies and hard-working public servants, but that instead leads to real change in an area of the corporate world, financial services, where the whole country has wanted a change in culture and behaviour?
Despite a coalition commitment to help mutuals, thus far in financial services there has been little of note. Mutuals and financial mutuals in particular are proof that there is another way—that, important as the public and shareholder-led private sectors both are, there is a way to combine the best of both traditions, to drive enterprise, to foster ambition and to cherish community throughout our country. Financial mutuals, building societies, friendly societies and credit unions were not responsible for the global financial crisis. They do not have a culture of large dividends or excessive bonuses, and they have much more, surely, to offer, but astute Government regulation will be required to foster and encourage the sector.
Both my parties—the Co-operative party and our sister party, the Labour party—were right to call for the remutualisation of Northern Rock at the last election, and I urge the Minister now to set out clearly the Government’s position on that issue. The Banking (Special Provisions) Act 2008 allows state-owned banks to be converted into mutuals. That could be by sale, merger with an existing mutual or the creation of a new entity.
The long-term ownership solution for Northern Rock should take into account some key principles. Taxpayers should not be out of pocket as a result of the change. Hard-working families and small businesses should be protected. The institution that emerges should be secure and responsible and add to the financial stability of the UK economy. The new organisation should act in the long-term interests of its customers.
Jonathan Evans (Cardiff North) (Con)
The hon. Gentleman knows that I share his interest in the promotion of mutuality. I am therefore a little disappointed by this being couched in Labour terms. Does he not think it would be helpful if the proposition put to the Minister were that there should be a proper review and examination of the opportunity of mutuality in relation to Northern Rock, rather than it being asserted to him that that is the only option? We should be examining it as fully as we examine any other option.
Mr Thomas
I end up at the same point as the hon. Gentleman, although I took a different journey to get to that point. I will come back, if I may, to the excellent work he has been doing in chairing the all-party inquiry into financial mutuals.
An expert think-tank based in the university of Oxford set out in September 2009 how and why Northern Rock could and should be remutualised, ensuring that its debt to the taxpayer was paid down, creating a stable financial services provider and constraining it from making the previous mistakes, while helping to secure a more competitive retail financial services market.
The next step, which the hon. Member for Cardiff North (Jonathan Evans) hinted at, would be a full feasibility study examining in detail the financial, governance and leadership issues in respect of a remutualisation. Will the Minister encourage such a feasibility study to be undertaken, either as a Green Paper examining the issues in all their complexity or, if the Treasury wants to maintain some distance, requiring UK Financial Instruments to do that instead? In short, will he now actively investigate the feasibility of the case for remutualisation?
In 2003, PA Consulting Group—not a body that one would naturally think of as being on the left—published an interesting analysis of the relationship between the profits of commercial banks and the market share of mutuals. In short, as mutuals gain market share—in other words, as competition between the various private banks and their mutual competitors increases—bank profits from the retail banking market come down. Potentially, that gives the Minister a significant opportunity to deal with the criticism that, under a Tory-led Treasury, it is business as usual for the banks; he can promote greater competition through the growing mutual sector.
The biggest advantage that mutuals can offer is their long-term view. They are not faced with the short-term need to secure profits. Indeed, Nationwide estimates that the mutual pricing benefit that it enjoyed between 1997 and 2007 because it did not have to put shareholders ahead of members totalled some £3.7 billion. New research, using the published accounts of six shareholder-owned insurers, shows that more than £2.2 billion was paid to shareholders in dividends. That is the dividend drag—the loss incurred by all who seek insurance as a result of buying from a business owned by shareholders. That helps to explain why mutuals, which do not suffer that drag, typically pay higher investment returns, provide better standards of service and pay more claims.
Treasury and Financial Services Authority orthodoxy appears to be that corporate form does not matter, but that what counts is what those various corporate bodies do for their consumers. Such a view is simplistic and not sufficiently considered to warrant the hands-off approach to corporate diversity that often appears to characterise the approach of the FSA and the Treasury. Let me be clear: I do not advocate a mutual-only way, but robust diversity is important in ensuring real competition and giving consumers a real series of options in the market.
New capital rules being introduced in the wake of the global financial crisis may give rise to insufficient care being given to protecting and increasing the remaining strength of the building society movement. The FSA’s new interpretation of the rules on capital may, over a number of years, bring about the end of friendly societies. Both sets of draft capital requirements could profoundly damage the competitiveness of financial mutuals, and they do not reflect the fundamental difference between financial mutuals that are run for members, and the basic banks or private insurers, which are run for shareholder gain.
The European capital requirements directive is designed to enable financial services businesses better to absorb losses following the introduction of the new Basel standards. I accept that that is an important part of the response to the global financial crisis; it focuses on improving the quantity and quality of capital, particularly what is called core tier 1 capital. Over the last 20 years, building societies’ capital reserves have been supplemented by permanent interest-bearing shares. However, they will not meet more demanding definitions for core tier 1 capital.
I recognise that building societies need to have access to new ways of securing capital that are permanent and that fully absorb losses. At the moment, the rules are being framed with only one type of corporate form in mind—the private bank. They do not recognise the fact that mutuals are structured and function differently, providing value to their customers over the medium and longer term. If building societies are forced to adopt plc-like capital, they will have to adopt plc-like behaviour. Building societies are trusted, safe and responsible precisely because they are not part of what “St Vince” calls the casino economy. Surely it would be a mistake to force upon them a new type of equity capital that would import excessive risk-taking.
I realise that there has been movement in the discussions between building societies and the Government on this matter, but I ask the Minister what progress has been made—and, just as important, what has he done personally to move things forward with his European counterparts?
There has been less progress in discussions with friendly societies. The FSA, revisiting its own rule book, seems hellbent on clinging to a piece of legal advice that has not been shared with the industry and which is at odds with every legal opinion that the industry has received. It seems to be based on a ministerial view from the mid-1990s that the then Minister publicly acknowledged was not intended for mutuals. Why cannot the FSA share its legal advice with the industry? If its motivation is that it does not want to damage friendly societies, why cannot a joint solution be found? If a solution cannot be found, mutual insurers would have to pay out a significant proportion of the capital held in their organisations; the consequence of that could be that they had little or no working capital and would have to shut up shop or demutualise.
I am grateful that Hector Sants attended the inquiry of the all-party group on building societies and financial mutuals, but frankly I doubt whether he has yet grasped the seriousness of the situation that friendly societies face as a result of his organisation’s proposal. Even now, I hope he will agree to an urgent review of the FSA’s legal advice and step up efforts to find a solution. If he does not, and if the Minister does not intervene, consumers will have less choice, plcs will take greater profits and customers will face higher charges. I would welcome the Minister’s response.
The Minister is responsible for ushering in changes to financial services regulations. They offer the opportunity to lock in a new requirement to champion corporate diversity and, crucially, new structures to ensure that we have people of sufficient calibre and status in the regulatory landscape to deal with building societies and friendly societies. Will the Minister support a requirement to promote corporate diversity in financial services when bringing forward the Bills to set out new arrangements for the City? What action is he taking to ensure that mutuals will be the responsibility of those high enough in the pecking order to make a difference when needed?
I turn to credit unions. The Minister will recognise that there is widespread concern about high interest rates for consumer credit and the activities of illegal loan sharks. I hope he realises the opportunity that properly managed credit unions can provide in meeting the needs of those wanting relatively small sums of money at affordable rates. Access to credit unions in the UK has been growing. For example, I understand that Wales has a credit union in every part of the country. That is not the case in England, although things have been slowly improving in recent years.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
My hon. Friend may be aware that access to credit unions in Scotland has improved of late. I hope he will join me in paying tribute to Hamilton credit union, which is developing financial services for children and young people to help get them into the culture of saving, so that in future they will be more financially responsible.
Mr Thomas
I welcome the progress that has been made in Scotland, and particularly the work of the Hamilton credit union outlined by my hon. Friend. What action will the Minister take to champion the further growth of credit unions across the UK?
Mutuals make a vital difference by generating more competition in financial services, and they help to create more value for the consumer, as opposed to the shareholder. I look forward to the Minister’s response to my questions.
The Financial Secretary to the Treasury (Mr Mark Hoban)
It is a pleasure, Mrs Main, to serve under your chairmanship for the first time.
I congratulate the hon. Member for Harrow West (Mr Thomas) on securing this debate. He roots his support for financial mutuals in the co-operative movement, which he represents in the House. Many on the Government Benches would see financial mutuals as a coming together of communities to meet the needs of their members, which may be an early articulation of the big society.
We should not forget the role that mutuals play in providing financial services. They hold about 20% of UK retail deposits, and provide financing for 17% of outstanding UK mortgages—including mine. They employ 70,000 people and half of the UK’s population are members of mutuals. The one member, one vote ownership model sets mutuals apart from their plc peers, as it enables them to focus solely on the needs of their members. It is unsurprising that mutuals frequently rank highly in surveys of customer satisfaction. As we know, many mutuals operate in areas of economic and social deprivation throughout the UK. They provide services that would be seen as sub-scale for big banks, including as the small loans offered by credit unions whose customers might otherwise turn to doorstep lenders.
The hon. Gentleman made an important point about access to credit unions. When I read the transcript of a recent debate on high-cost credit, I was struck by the fact that one of the challenges is to increase access to credit unions as an alternative to doorstep lenders. In a moment, I shall discuss some of the measures that we will take. It is the importance of mutuals and the choice and diversity that they provide that drives our commitment to see them thrive and prosper.
The causes of the financial crisis have been stated many times, and I do not intend to rehearse them here. None the less, it is important that we learn from the crisis and take steps to ensure that the same mistakes are not repeated in the future. The Government want to create a financial services sector that works differently and is driven by different values, which is why we are committed to implementing measures that will foster diversity in financial services, promote mutuals and create a more competitive banking industry.
The Government have established an Independent Commission on Banking to make recommendations on both structural and non-structural measures to change the banking system and promote stability and competition for the benefit of both consumers and businesses. A strong sustainable mutual sector, which has the ethos of working in the interests of members, can support that.
We must be realistic and recognise that the financial crisis and the subsequent economic climate have posed many challenges for mutuals. Those challenges include greater competition for retail deposits, more intensive supervision and tougher capital requirements. I do not apologise for the tougher regulatory environment that we are now in. Adapting to this new world has been, and remains, a key challenge for financial mutuals as well as for the whole financial services sector. The Government are keen to ensure that the legislative framework is in place to enable mutuals to fulfil their role.
There are number of changes to which we are committed to help create a more equal playing field in financial services. Let me turn now to the point about capital that the hon. Gentleman rightly raised. We are committed to achieving high capital standards across the financial sector, including for mutuals. At the same time, it is right that we have capital requirements that are appropriate for mutuals. The Government seek to address that issue in negotiations on the capital requirements directive. This is a matter that the Treasury and I take very seriously, and we are leading the debate on this in Europe to ensure that the specific nature of mutuals is taken into account while, at the same time, not compromising the quality of capital in the banking system. We expect a proposal from the Commission on that later in the year.
I say to the hon. Gentleman that one of the driving forces behind our reforms on capital is that we want to ensure that financial institutions never again turn cap in hand to the taxpayer for financial support in a financial crisis. That is why it is important that all deposit-taking institutions, regardless of their form of ownership, have access to loss-absorbing capital.
Capital is a key issue for mutual insurers, too, which is why the FSA is considering the use of with-profits funds. It will be publishing a consultation paper on that shortly. I do not want to pre-empt the proposals that have been made today, but having extolled the virtues of the mutual model, it is reasonable to expect that mutual with-profits policyholders should expect at least as favourable an outcome, if not a better outcome, than proprietary with-profits policyholders. It is important that mutual insurers ensure that they treat their with-profits policyholders fairly, too.
Jonathan Evans
The hon. Member for Harrow West (Mr Thomas) alluded to the previous ministerial statement. He knows that it was a statement that I made, but it related to the position of stock-owned companies. It deliberately excluded the position of mutuals, because it was an assessment of what policyholders’ reasonable expectations were and it was based on previous experience. Those factors have been erased from the way in which the FSA has taken the matter forward, so will my hon. Friend agree to revisit that area?
Mr Hoban
My hon. Friend makes an important point and it is one that he and I discussed before this debate. His argument, which he has expressed publicly, is that his statement was not intended to be applied to all forms of with-profits funds. The FSA is aware of that view. None the less, it is important that this issue is treated very carefully. I am well aware that for many mutual insurers, their capital comes from with-profits funds. Without that with-profits fund, they would not be able to function in the way in which they do now. It is also fair to say that for a proprietary-owned business, the with-profits fund belongs to its policyholders. We have seen a number of firms go through a reattribution process in recognition of the fact that those funds belong to the members of that fund. There is a challenge there that we need to address and we need to be very careful about the impact of decisions on the ecology of the mutual insurer sector.
Mr Thomas
As I suggested in my remarks, the FSA’s position appears to be based on a particular legal opinion that it has secured. Will the Minister ask the FSA to revisit that legal opinion, bearing in mind that all the other legal opinions that the industry has received are at odds with that opinion? Will he also specifically ask the FSA to share that legal advice with the industry, as part of the process of trying to facilitate a solution?
Mr Hoban
The best route for resolving this is through the response to the consultation paper, which the FSA will publish later this year. It is for the FSA to decide whether or not it should disclose legal opinions, because it is an independent regulator. The consultation paper is an important way in which to resolve these issues.
I was talking about the need to create a modernised legislative framework for mutuals, and capital is part of that. The Government are also implementing legislation to allow mutuals to modernise the way in which they communicate with their members and to enable them to prosper. The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2010 has been a long time coming. It will be re-laid before Parliament next month and will introduce many quite basic, yet far-reaching reforms that will enable credit unions to modernise and grow.
Mr Hoban
I know that my hon. Friend, as chairman of the all-party parliamentary group on credit unions, will have a great deal to say on this matter, but may I just finish my point? I may even be able to answer his intervention before he makes it.
One of the biggest changes will be to allow credit unions to admit corporate bodies to their membership. Those new members will be able to deposit in and borrow from their local credit union, which provides opportunities for investment and growth in communities. Alongside that, various deregulatory measures relax the rules on age limits for memberships, year-end dates and the ability to offer interest on deposits. These proposals should increase the appeal of local credit unions to the local community and increase their steadily expanding membership still further.
Damian Hinds
Many of us are waiting with excited anticipation for the legislative reform order. What expanded role does the Minister see credit unions potentially playing as a result of the changes in the legislative reform order both in a big society context and in encouraging enterprise because of being able to work with corporate bodies as well as individuals?
Mr Hoban
It would be a way for credit unions to make the greatest opportunity of this. We are trying to open up more possibilities for the financial and mutual sector through a number of our measures. I go back to the debate about capital. One of the challenges that I put to the building society sector and others is that if it had the opportunity to raise more capital, what would it do with it. How would it benefit more people as a consequence of having that flexibility? I say to my hon. Friend that corporate members could include charities and voluntary groups, and their deposits could help credit unions to expand their base, so that they can lend more to local communities. There is an opportunity there for the voluntary service to help expand that base. That will also help to create a much more viable credit union sector. Like me, my hon. Friend will have had conversations with Mark Lyonette, who wants to make sure that we move the credit union sector on to a much more stable and viable footing, enabling it to take deposits from others and pay interest on them.
Chris Evans (Islwyn) (Lab/Co-op)
The Minister may be aware that in Wales everybody has access to a credit union. Has his Department made any study of the policy of the Welsh Assembly in that regard?
Mr Hoban
That point about access to credit unions in Wales was made before the hon. Gentleman came into Westminster Hall for the debate. We need to learn the lessons. The Treasury is very open to new ideas and any thoughts that he has about why Wales has that degree of access to credit unions would be much appreciated.
We will also implement the Co-operative and Community Benefit Societies and Credit Unions Act 2010 once the legislative reform order comes into force. That will modernise the industrial and provident society name and the powers available to update the legislation in the future. Other reforms include a consultation on the use of electronic communications in the mutual sector. That consultation closed at the end of January, and we will lay an order shortly to enable mutual societies to have the option of using electronic communications to engage with their members, which would reduce their costs.
Before I go on to talk about the regulatory framework, let me address the issue of Northern Rock. That issue was raised in the Treasury Committee, and I am aware of the work that has been done on it by Kellogg college. There is a degree of elegant circularity about remutualising Northern Rock, given its antecedence. But of course the responsibility for managing the Government’s investment in Northern Rock rests with United Kingdom Financial Investments Ltd. UKFI gave evidence to the Select Committee, and if the hon. Member for Harrow West reads the transcript of that sitting, he will see that it is open to ideas about the remutualisation of Northern Rock. The principal objective of UKFI is to promote and create value for taxpayers from its management of our stakes in banks, but it also has to pay due regard to financial stability and act in a way that promotes competition. Clearly a remutualised Northern Rock might help it to do those things.
Mr Hoban
Before I give way to the hon. Gentleman, I will just say that the taxpayer has a £1.4 billion stake in Northern Rock, so any solution in terms of remutualisation would need to identify a clear way in which the taxpayer would receive a return on that investment. Furthermore, it is not clear how a large Government shareholding in a mutual would affect mutual status.
Mr Thomas
As I said in my opening remarks, I absolutely acknowledge the point about the taxpayers’ interest in Northern Rock. However, rather than just allowing the people at UKFI to sit there waiting for ideas, will he write to them and specifically ask them to conduct a feasibility study into the remutualisation of Northern Rock, addressing the taxpayer issue that he quite rightly mentioned as well as other wider issues? Will he take proactive action on this issue?
Mr Hoban
If the hon. Gentleman reads the transcript of the evidence given by UKFI to the Treasury Committee, he will know that remutualisation is very much on its agenda. In conjunction with Northern Rock, it is about to appoint advisers to advise it on the disposal process. I know that UKFI is looking at remutualisation. However, I have yet to see a proposal that demonstrates why remutualisation is in the interests of taxpayers. Nevertheless, we are open-minded on this issue, and we will wait to see a viable proposal emerge.
Regarding the regulatory framework for mutuals, we will bring Northern Ireland credit unions within the regulatory structure that is in place in the rest of Great Britain. That will enhance consumer protection and ensure that those credit unions become part of the Financial Services Compensation Scheme, which will enable their members to appeal to the Financial Ombudsman Service. It will also enable those credit unions to seek approval to enter new markets and therefore help them to grow. In addition, we are looking at the registration and regulation of industrial and provident societies as part of our review of the regulatory architecture. I know that that is a concern of the co-operative movement and we will seek views on it shortly.
The hon. Member for Harrow West raised the issue of an objective on diversity for the new regulatory structure. Again, that point has been raised with me before. My concern is to ensure that the new regulators, learning from the mistakes of the past, focus on what matters—confidence in financial services, and the stability and soundness of institutions. That should be their driving force and I do not think that an objective on diversity would fit within the new framework.
We want to see mutuals grow and thrive. We are introducing measures on legislative reform and new capital levels, and we are offering greater support to the mutual sector. Mutuals have a big role to play in the future development of financial services, and this Government are keen to do all we can to ensure that they continue to provide an important service to communities across the UK.
Question put and agreed to.
50th Horserace Betting Levy
The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)
On 1 November 2010 the Chairman of the Horserace Betting Levy Board (“the HBLB”) informed me that the HBLB had been unable to approve a recommendation from the Bookmakers’ Committee as to the terms of the 50th levy scheme. Under section 1(2) of the Horserace Betting Levy Act 1969, therefore, it falls to me to determine those terms.
I have considered the parties’ submissions, taking into account their representations on what target amount would reflect the capacity of bookmakers to pay, what it is reasonable to expect bookmakers to pay and what the reasonable needs of horseracing are in all the circumstances.
Under section l(3)(a) of the Act, I have decided to determine a new levy scheme for the 50th levy period (running from April 2011 to March 2012), under which the following terms will apply:
The headline rate of levy will increase by 7.5% from 10% to 10.75% for licensed betting offices (“LBOs”) as well as for telephone and internet betting operators (including betting exchanges).
The “threshold” level beneath which LBOs pay an abated rate of levy will be reduced to £50,000.
The levy will continue to be payable only in respect of profits arising on bets placed in relation to British horseracing.
The rate of levy for bookmakers who derive their gross profit from spread betting businesses will increase by 7.5% from 2% to 2.15%
The flat fee for on-course bookmakers will increase (in line with RPI) to £210, whereas those bookmakers standing solely at point-to-point events, harness racing and/or trotting the flat fee will increase (in line with RPI) to £166.
The amount payable in advance by LBOs, telephone and internet betting operators will continue to be calculated on the basis of their liability under previous schemes—subject to an uplift of 7.5%.
I estimate that this will produce levy proceeds of between £73.7 million—£80.8 million (with a mid-range figure of £77.25 million), and believe that terms outlined above represent a fair deal for bookmakers and horseracing.
I am today writing to the Bookmakers’ Committee, British horseracing and the Government-appointed Members of the HBLB to thank them for their submissions and explain my decision in more detail. I will also ask that the HBLB finalise the operational details of the scheme as a matter of urgency.
With the determination concluded, I would like to re-state my disappointment that the relevant parties were not themselves able to come to terms and I would strongly encourage them to develop a less adversarial relationship going forward. I have tried to be fair by listening to the advice of the independent members of the levy board and I will continue to be guided by their advice in future years until what should be a straightforward commercial negotiation can be taken permanently out of the hands of Ministers.
Chemical Weapons Convention (Protective Programmes)
(14 years ago)
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The Minister for the Armed Forces (Nick Harvey)
The UK’s chemical protection programme is designed to protect against the use of chemical weapons. Such a programme is permitted by the chemical weapons convention, with which the United Kingdom is fully compliant. Under the terms of the convention, we are required to provide information annually to the Organisation for the Prohibition of Chemical Weapons (OPCW). In accordance with the Government’s commitment to openness, I am placing in the Library of the House, a copy of the summary that has been provided to the organisation outlining the UK’s chemical protection programme in 2010.
Defence Infrastructure Organisation
(14 years ago)
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The Secretary of State for Defence (Dr Liam Fox)
I am announcing today that I intend to set up a new defence infrastructure organisation (DIO) on 1 April this year. We will now launch a consultation process with the MOD trade unions.
The new organisation will bring together some 7,000 staff currently working on construction, maintenance and utilities management and the disposal of land and buildings across the Department.
By making these changes we expect to save about 2,500 posts by 2014 and some £1.2 billion over the first four years alone, without reducing the effectiveness or reliability of the service we deliver. This measure will make a significant contribution to the civilian staff reductions and efficiency measures set out last October in the strategic defence and security review.
This is the first such change emerging from the work of the defence reform unit under Lord Levene designed to overhaul the structure of the Department. It is a significant change, and demonstrates the radical approach to reorganisation and resourcing which we are taking to ensure that we maximise the amount of the defence budget made available for the front line. I hope to announce further such changes in the near future.
General Affairs Council/Foreign Affairs Council
(14 years ago)
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The Minister for Europe (Mr David Lidington)
The Foreign Affairs Council and General Affairs Council will meet in Brussels on 21 February. My right hon. Friend the Foreign Secretary will attend the Foreign Affairs Council. I will attend the General Affairs Council.
General Affairs Council (gac)
February and March European Councils
Ministers will discuss follow-up to the February European Council, which covered energy, innovation and Egypt. Following the Council, the Prime Minister reported the outcomes to the House in his statement on the “EU Council and North Africa”. The statement can be found at the following link:
http://www.parliament.uk/business/news/2011/february/statement-on-eu-council-and-north-africa.
The conclusions of the February European Council meeting can be found at:
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/l 19175.pdf.
They will also discuss preparation for the March European Council. The formal agenda has not yet been published. However, we expect discussions at the Council to focus on:
legislative proposals for economic governance in the eurozone;
European Council decision amending article 136 of the treaty on the functioning of the European Union and intergovernmental arrangements setting up the European stability mechanism.
These were agreed at the December European Council, see link:
http://www.consilium.europa.eu/uedocs/cms data/docs/pressdata/en/ec/118578.pdf.
Cohesion
Ministers will review the fifth cohesion report and the ongoing public consultation. The report and details of the public consultation can be found at:
http://ec.europa.eu/regional_policy/sources/docoffic/official/reports/cohesion5/index_en.cfm.
The Government are in the process of forming a response, which will be presented to Parliament in due course.
Foreign Affairs Council (fac)
EU-UN
Ministers will be briefed on informal consultations held in New York on 14 February between EU member states and the wider UN membership on the draft EU resolution on the “participation of the EU in the work of the UN”.
EU human rights
Baroness Ashton will brief Ministers on the EU’s priorities for the forthcoming session of the UN Human Rights Council. These are likely to include securing Council adoption of strong resolutions expressing concern at the human rights situation in Burma and the DPRK, and resolutions promoting children’s rights and freedom of religion.
EU Southern Neighbourhood (Egypt/Tunisia)
This is an opportunity for Ministers to follow-up the February European Council debate on Egypt and Tunisia and take stock of the recent momentous events. Baroness Ashton is visiting the region this week and will set out her thoughts on the way ahead for the EU. A number of options for EU support to the region are being considered, including election monitoring and a re-evaluation of the European neighbourhood partnership (the EU’s main vehicle for promoting reform in the region). We want to see an ambitious package of support to the region, but would also like to see more conditionality attached to this assistance; as the Prime Minister emphasised to Parliament on 8 February when he reported back on the February European Council.
Bosnia and Herzegovina (BiH)
We expect Baroness Ashton and Commissioner Fule to follow-up the discussion in last July’s FAC (which I reported in my written ministerial statement) of a reinforced EU presence in BiH, by providing more information about EU planning in this regard. The Government agree that there should be a reinforced EU presence in BiH, able to deploy deterrents as well as the incentives inherent in the EU accession process. We will therefore support proposals for the development of an “EU toolbox” of positive and negative measures. We believe that in parallel, the civilian executive (“Bonn”) powers need to be retained, that the conditionality for eventual closure of the Office of the High Representative continue to apply, and that the executive mandate of the EU military force, EUFOR Operation Althea, should be upheld. We will continue to insist on these points in EU and wider international negotiation.
Sahel
We expect Ministers to be presented with a draft security and development strategy for the Sahel region, which they requested at the last October’s FAC. The murder of two French nationals in Niger in January and the kidnap of an Italian in Algeria this month underscore the severity of the terrorist threat in the region. Baroness Ashton reacted to the first event in the following statement on 19 January:
http://www.europa-eu-un.org/articles/en/article_10584_en.htm.
Somalia
Baroness Ashton is expected to give an oral presentation of the outline of the EEAS’s Horn of Africa strategy. The strategy is expected to focus on regional and cross-cutting issues, looking in particular at the main causes of conflict and poverty. There will be a more substantive discussion at the March FAC, where we expect the adoption of formal conclusions.
Freedom of Religion
Following discussion at the 31 January FAC, we expect conclusions to be adopted on the issue of “Intolerance, discrimination and violence on the basis of religion or belief”. We believe these conclusions should send a strong statement of the Council’s concern at instances of persecution or discrimination based on religion and its commitment to upholding the right to freedom of religion or belief.
Iran: human rights
EU member states will discuss the deteriorating human rights situation in Iran, particularly following the unacceptable execution of dual Dutch/Iranian national Baahrami. Baroness Ashton released a statement on behalf of the EU on 27 January:
http://www.consilium.europa.eu/uedocs/cms Data/docs/pressdata/en/cfsp/118966.pdf.
Middle East Peace Process
Baroness Ashton is likely to provide an update on preparations for the March Quartet meeting and report on her recent visit to the middle east. There is also likely to be a discussion of the implications of wider developments in the region for the MEPP.
The Foreign Secretary will also brief his counterparts on his visit to Tunisia, Jordan, Yemen, UAE and Bahrain. Related press releases can be found on the Foreign and Commonwealth Office’s website: www.fco.gov.uk.
Zimbabwe
There is a possibility of a short discussion of Zimbabwe, following the adoption of renewed EU targeted measures. A full written ministerial statement on this will be laid before the House shortly.
Hungarian Presidency (Priorities)
(14 years ago)
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The Minister for Europe (Mr David Lidington)
I am keen to keep hon. Members fully informed on the European Union. I would therefore like to draw hon. Members’ attention to a letter to the Chair of the European Scrutiny Committee and note on the priorities of the Hungarian presidency of the European Union, which have been placed in the Library of the House.
I have deposited a copy of the Hungarian presidency strategic framework, and a calendar of forthcoming events from the presidency.
Legalisation Office
(14 years ago)
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The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)
From 1 April 2011 the Foreign and Commonwealth Office (FCO) legalisation office in Milton Keynes will only accept applications received by post and will process all straightforward applications within 24 hours (excluding postal times). Updated guidance on how to submit applications will be on the legalisation office website from 1 March.
A majority of customers already send their applications by post—they will see the turnaround time halved from 48 to 24 hours. A third of customers come to the office in person—they will now need to submit their applications by post.
Ten per cent. of customers are businesses who currently have their applications processed within 24 hours. Business customers who submit large volumes of documents on a daily basis can pre-register to have access to a drop-off and pick-up facility at Milton Keynes with the same 24 hours turnaround. There will be no charge to customers for this service. There will be no change to the service offered at the legalisation office at Centre Point in central London which serves business customers only.
This change is driven by a desire to ensure that we can provide the most efficient service possible. At present these three different service levels are offered all for the same price. This change moves to a single service level for a single price. Over time the changes may also deliver efficiency savings by removing the costs associated with maintaining a public area.
Legalisation is the official confirmation that the signature, stamp or seal on a UK document is genuine. The legalisation does not certify the authenticity of a document or give Foreign and Commonwealth Office approval of its content. Legalisation is usually required by foreign authorities before they will allow a UK document to be used for official purposes in their country. The legalisation office is the only competent authority in the UK to issue legalisation or apostille certificates in the UK.
Pope's Visit (Costs)
(14 years ago)
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The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)
I wish to inform the House that the Foreign and Commonwealth Office (FCO) is today publishing a report of the non-policing costs handled by the FCO on behalf of Her Majesty’s Government and the Catholic Church during the Visit of His Holiness Pope Benedict XVI to the United Kingdom which took place from 16 to 19 September 2010.
This was an historic visit, as the first ever official visit by a Pope to the UK, and an important milestone in the relationship between the UK and the Holy See. It was on a far bigger scale than a normal state visit: police estimates suggest that 500,000 people saw the Pope either during events or along the Pope mobile routes. Approximately 3,000 media representatives were accredited to cover the visit. The combination of official events, pastoral events, through which the Pope engaged with Britain’s Roman Catholics, and meetings with the Church of England and with people of other faiths, made this a visit that was out of the ordinary in every way.
The visit programme included both state and pastoral elements. HM Government agreed with the Catholic Church that costs would be shared accordingly, with all the costs of the pastoral elements of the programme met by the church. HM Government met the costs of events which were entirely part of the state visit programme and contributed to the costs of other events in relation to measures necessary to meet HM Government’s responsibility for the safety and security of the public and of the Pope. The Scottish Government also contributed in relation to these measures for the Scottish part of the programme.
The report consists of:
An exchange of letters and an agreement on division of costs for public events signed by Lord Patten of Barnes and Archbishop Nichols prior to the visit. The second appendix is not attached as it is a draft budget which is superseded by the summary of expenditure attached to this statement (referenced below)
A summary of expenditure made by the FCO on behalf of HM Government and the Catholic Church. To date, all these costs have been met by the FCO. The bishops’ conferences of England and Wales and Scotland on behalf of the Catholic Church have undertaken to refund its share of these costs by the end of February.
This report does not include the estimated £3,800,000 for costs paid direct by the Catholic Church. Neither does it cover any expenditure met by local authorities nor staffing costs incurred by other Government Departments.
In addition to the costs outlined in the report the Scottish Government also contributed towards the cost of the Scottish part of the programme.
I am placing the report in the Library of the House. It will also be published on the Foreign and Commonwealth Office website (www.fco.gov.uk).
The visit paved the way for further co-operation between the UK and the Holy See on a number of international issues where we share a common goal, including addressing the challenge of climate change, promoting multi-faith dialogue, as a means of working for peace in the world, and fighting poverty and disease. These were among the issues discussed both in bilateral meetings during the visit and at the working dinner with the papal delegation hosted by my right hon. Friend the Foreign Secretary.
The success of the visit was a testament to the close co-operation and effective joint working by the Catholic Church, HM Government and many other organisations and individuals throughout the UK. I wish to place on record HM Government’s gratitude to all those who worked together to achieve that success.
Zimbabwe
(14 years ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
The EU has announced today its decision to roll over the Zimbabwe restrictive and appropriate measures. Following an in-depth assessment the UK and its EU partners have unanimously agreed to the renewal of the measures for a further 12 months, while removing 35 people from the list of those subject to an EU visa ban and asset freeze on the grounds that they are no longer involved in human rights abuses or undermining democracy or the rule of law.
Although this amendment reflects the progress made by the Government of Zimbabwe on economic issues and in delivering public services it also reflects our strong concern that this has not been matched by equivalent political and democratic reform. Essential reforms to promote the rule of law, human rights and democracy, as agreed under the global political agreement, have not yet been implemented. We are particularly concerned at the upsurge in political violence and intimidation in recent weeks. We have, therefore, extended the travel restrictions and asset freeze applicable to the remaining 163 people and 31 economic entities for a further 12 months. The arms’ embargo remains in place and EU and UK bilateral development aid will continue to be channelled directly to the people of Zimbabwe through the UN and non-state actors, rather than through the Government of Zimbabwe.
The UK and our EU partners emphasise our willingness to revisit the measures at any time should there be further concrete developments on the ground in Zimbabwe. In this context, we fully support the Southern African Development Community and its member states in their effort to facilitate agreement amongst the parties in Zimbabwe on creating an environment conducive to the holding of free and fair elections.
Britain remains a committed friend to the people of Zimbabwe. We gave our largest ever aid package to Zimbabwe last year and the DFID Secretary of State recently signalled that the UK would significantly increase its development effort in Zimbabwe over the next four years if there are free and fair elections and a reforming Government in place.
Acupuncture, Herbal Medicine and Traditional Chinese Medicine
(14 years ago)
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The Secretary of State for Health (Mr Andrew Lansley)
The issue of whether or not practitioners of acupuncture, herbal medicine and traditional Chinese medicine should be statutorily regulated has been debated since the House of Lords’ Select Committee on Science and Technology’s report in 2000 recommended statutory regulation for the first two of these groups.
We have today published an analysis of the 2009 consultation by the four United Kingdom Health Departments which sought views on the possible regulation of practitioners of acupuncture, herbal medicine and traditional Chinese medicine. This factual report has been placed in the Library and can be found on the Department of Health’s website at:
www.dh.gov.uk/en/Consultations/Responsestoconsultations/DH_124337
Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
I can now set out how we intend to take forward the regulation of herbal medicine practitioners and traditional Chinese medicines practitioners, specifically with regard to the use of unlicensed herbal medicines within their practice. As this matter is a devolved matter in Scotland and Northern Ireland we have had discussions with Health Departments in the three devolved Administrations which have been constructive and we are committed to a unified UK-wide approach to the regulation of these practitioners.
When the European Directive 2004/24/EC takes full effect in April 2011 it will no longer be legal for herbal practitioners in the UK to source unlicensed manufactured herbal medicines for their patients. This Government wish to ensure that the public can continue to have access to these products.
In order to achieve this, while at the same time complying with EU law, some form of statutory regulation will be necessary and I have therefore decided to ask the Health Professions Council to establish a statutory register for practitioners supplying unlicensed herbal medicines. This will ensure that practitioners meet specified registration standards. Practitioner regulation will be underpinned by a strengthened system for regulating medicinal products. This approach will give practitioners and consumers continuing access to herbal medicines. It will do this by allowing us to use a derogation in the European legislation to set up a UK scheme to permit and regulate the supply, via practitioners, of unlicensed manufactured herbal medicines to meet individual patient needs.
The Health Professions Council is an established and experienced statutory regulatory body which has the necessary experience to be able to successfully establish and maintain a statutory register for practitioners wishing to supply unlicensed herbal medicines. Subject to parliamentary approval, such practitioners who wish to supply unlicensed herbal products will be required by law to register with the HPC.
The four UK Health Departments will consult jointly on the draft legislation once it is prepared. This will give practitioners and the public the opportunity to comment. Subject to parliamentary procedures we will aim to have the legislation in place in 2012.
Until the new arrangements are in place the Medicines and Healthcare products Regulatory Agency (MHRA) will continue to take appropriate compliance and enforcement action where products are in breach of the regulatory requirements. In line with the MHRA’s normal approach, the action taken will be proportionate and will target products which pose a public health risk. Guidance issued by the MHRA makes clear their view that, where practitioners hold stocks of unlicensed products on 30 April 2011 that legally benefited from transitional arrangements under the European directive, the practitioner can continue to sell those existing supplies to their patients.
The 2009 consultation also looked at practitioners of acupuncture. The practice of acupuncture is not affected by the EU directive and, therefore, compliance is not required. I am confident that acupuncturists have their own voluntary regulatory measures in place which are sufficiently robust. Additionally, local authorities in England have powers to regulate the hygiene of the practice of acupuncture to protect against the risk of transmission of certain infectious diseases. Similar measures are also in place in Scotland, Wales and Northern Ireland.
I am pleased to say that this decision resolves a long-standing issue, to the benefit of both practitioners and the public who use herbal medicines.
Health Care Workers, Social Workers and Social Care Workers
(14 years ago)
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The Secretary of State for Health (Mr Andrew Lansley)
Safe, respectful and effective care is essential and should be what all users of health and social care services experience.
The vast majority of those who work in health and social care are committed individuals with a strong sense of professionalism who aspire to deliver the highest standards. However, where there is poor practice or behaviour that presents a risk to the public, it is vital that swift action is taken, whether by employers, or by national regulatory bodies.
Ensuring a strong and effective system for regulating health and social care professionals is one of the cornerstones of our strategy for delivering improved outcomes for people who use health and social care services. The current system of professional regulation helps to ensure this by setting high standards of education, training, conduct and ethics and by taking action to remove unsuitable workers in the rare cases when things go wrong. Regulation of health care workers and social workers therefore makes an important contribution to safeguarding the public, including vulnerable children and adults.
However, the regulatory framework is also complex, expensive and requires continuous Government intervention to keep it up to date. More generally, reducing regulation is a key priority for the coalition Government. By freeing society from unnecessary laws, the Government aim to create a better balance of responsibilities between the state, business, civil society and individuals, and to encourage people to take greater personal responsibility for their actions.
While regulation of some professionals is vital to ensure high standards of care, it is only one component of a wider system of safeguards, controls and clinical governance and ultimate responsibility for the provision of high quality services must rest with employers and those contracting with health and social care workers. We believe that the approach to professional regulation must be proportionate and effective, imposing the least cost and complexity consistent with securing safety and confidence for patients, service users, carers and the wider public.
I have today laid before Parliament a Command Paper, “Enabling Excellence—Autonomy and Accountability for Healthcare Workers, Social Workers and Social Care Workers” (Cm 8008) setting out the Government’s proposals for how the system for regulating health care workers across the United Kingdom and social workers in England should be reformed, to sustain and develop the high professional standards of those practitioners and to continue to assure the safety of those using services and the rest of the public.
The reforms, many of which are being progressed through the Health and Social Care Bill, will give greater independence to those who work in health care across the UK and social care in England, to their employers, and to the professional regulatory bodies; balanced by more effective accountability in how they exercise that freedom.
We will seek to drive up standards for some groups of unregulated health and social care workers to improve service users’ experience through a system of assured voluntary registration. Employers and commissioners will be able to give preference to workers on voluntary registers to ensure that they contract with suitably skilled and qualified workers. In line with the Government’s overall social work reform programme, the proposals will also strengthen social work as a profession in England.
“Enabling Excellence—Autonomy and Accountability for Healthcare Workers, Social Workers and Social Care Workers” is available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
Access to Elected Office Consultation
(14 years ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
Today the Government are publishing a consultation paper, co-produced with Equality 20251 and disability organisations, which seeks views on the additional support which can be offered to disabled people who wish to become elected representatives.
We want to ensure that our democracy is diverse and that we have a political system which better reflects the people it serves. To this end, the coalition programme contained an important commitment to introduce additional support for disabled people “who want to become MPs, councillors or other elected officials”. This commitment was borne from the recognition that the 10 million and more disabled people in the UK are under-represented in public life. It also follows the recommendations made by the cross-party Speaker’s conference in January 2010 on how to improve the representation of women, disabled people and minority ethnic people in the House of Commons.
In order to produce an effective strategy, we need to establish the practical support needed by disabled candidates to encourage greater participation in public and political life. This consultation is an opportunity for us to seek a diverse range of views, from disabled people themselves and others, on the measures which would make a real difference.
The consultation paper sets out a range of proposals including the establishment of a fund to support disability-related costs. This will not, however, replace existing obligations for parties under the Equality Act 2010/Disability Discrimination Act 1995. In addition to helping break down financial barriers, the proposals are intended to address some of the wider obstacles faced by disabled people who seek elected office, for example introducing measures to raise awareness and tackle attitudes which might discourage disabled people from putting themselves forward for election.
The proposals will apply to: English local elections, Greater London authority (GLA) elections, English mayoral elections, police and crime commissioners and all candidates from all parts of the UK who are seeking elected positions at UK Westminster elections. We would continue to work with colleagues in the devolved legislatures to help best practice from this strategy to be embedded in the electoral practices for their elections.
The consultation will run for a period of 12 weeks, until 11 May. A consultation document and instructions for responding can be found on the Government Equalities Office website at www.equalities.gov.uk and a copy has been placed in the Library of the House.
A summary of the results of this consultation will be published on the Government Equalities Office website within three months of the end of the consultation period.
1Government’s advisory body on disability issues
Information Commissioner
(14 years ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
My right hon. Friend the Minister of State, Ministry of Justice, Lord McNally, has made the following written ministerial statement:
“On 7 January 2011, the Government announced their intention to enhance the independence of the Information Commissioner as part of a wider package of measures to extend the Freedom of Information Act. Additionally, I wish to announce to the House today that the Government will strengthen the role of Parliament in the appointment of the next Commissioner in 2014. For this appointment, the Government will offer the Justice Select Committee a pre-appointment hearing with the preferred candidate and will accept the Committee’s conclusion on whether or not the candidate should be appointed. This will make the appointment process more open and transparent and enhance the independence of the office.
The Information Commissioner plays a vital role in promoting transparency and protecting the rights of individuals in relation to their personal data. The Government are fully committed to an independent Commissioner and the critical role he plays as a champion and protector of information rights.
The Commissioner is already entirely independent in the decisions he takes to enforce the legislation he regulates. However, the provisions to be included in the (Protection of Freedoms) Bill will further enhance his day-to-day corporate and administrative independence. The Commissioner will no longer need to seek the consent of the Justice Secretary on issues relating to staff appointments, charging for certain services, or before issuing certain statutory codes of practice under the Data Protection Act. Changes will also be made to the terms of the Commissioner’s appointment and tenure to increase transparency and protect against any potential undue influence.
Taken together, these steps—to be underpinned by a revised framework document outlining the day-to-day relationship between Government and the Information Commissioner—will result in a real and tangible enhancement to his independence”.
Crossrail (Woolwich Station)
(14 years ago)
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The Secretary of State for Transport (Mr Philip Hammond)
I am pleased to inform the House today of a positive conclusion to discussions with Berkeley Homes on the funding of Woolwich station box.
In 2007, an initial agreement was reached between Crossrail Ltd, the Department for Transport, Transport for London and Berkeley Homes. This agreement stated that Berkeley Homes would build the basic box structure of a station at Woolwich and subsequently construct their own extensive mixed-use development above it. This would be done at Berkeley Homes’ cost and risk, to the specification laid down by Crossrail Ltd, in a way that ensured that the Woolwich station box did not add to the current cost of Crossrail. This agreement was outlined to Parliament by the then Secretary of State for Transport in March 2007.
The Department for Transport, Crossrail Limited, Transport for London, and Berkeley Homes, have in recent months been working urgently to turn this initial agreement into a final, legally binding, agreement.
I am therefore pleased to inform the House today that a final agreement has now been reached by all parties. This means that engineering work on Woolwich station box can now proceed and the benefit of Crossrail investment can be secured for the residents of Woolwich.
In due course, fit-out of the Woolwich station box would be required to bring it to operational status. The Government are clear that, in line with the 2007 agreement, no additional public sector contribution can be made available to fund the fit-out of the station box. Instead, the fit-out is conditional on receiving sufficient funding contributions from developers and businesses operating in the area. Berkeley Homes has an obligation to enter into discussions with Department for Transport, Transport for London, Crossrail Ltd and Greenwich council, in order to provide for the subsequent fitting-out of the station box. All parties, including Berkeley Homes, have made clear that they understand and support this position.
I shall update the House as and when progress is made in relation to the private sector funding of the station fit-out.
Informal EU Transport Council
(14 years ago)
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The Minister of State, Department for Transport (Mrs Theresa Villiers)
I attended the Informal Meeting of EU Transport Ministers, organised by the Hungarian presidency in Budapest and Gödöllo on 7 and 8 February. The theme was: “TEN-T revision: towards a long-term, well-balanced European transport network”.
In the plenary debates, I put forward the UK view that the future TEN-T budget should take account of the aftermath of the financial crisis and the need to put recovery on a strong footing. EU funding will be limited and should be focused on projects that deliver real benefits to the network. Cost benefit analysis should inform funding decisions. Member states should aim to do more with less, concentrating on projects that deliver the best value for money. We think that the current model should be followed, focusing funding on the core network, with some funding also available for the comprehensive network.
In the debate on the role of PPPs, I pointed out that PPP is only appropriate in selected circumstances, implementation can present challenges and requires a high level of commercial skills, and particular attention needs to be paid to the long-term budgetary consequences of its use. I cited the M6 toll road and River Severn crossings as good examples of private investment enabling major pieces of infrastructure to be constructed and the cost returned through tolling. I said that the UK Government are open to tolling as an option for brand new alignments, with potential private sector investment, but noted that we have ruled out the introduction of a national road-user charging scheme (except in relation to heavy goods vehicles).
In the margins of the event I was pleased to be able to have a meeting with the vice president of the European Commission responsible for transport, Mr Siim Kallas, to discuss a range of current issues.
During my discussion of airport security scanners with Mr Kallas, I welcomed the Commission’s general approach to the deployment of scanners. We now need to move quickly to amend existing European legislation to give airports the flexibility to deploy scanners effectively and efficiently. The decision on whether to deploy security scanners should be for member states. We acknowledge health, data protection and privacy concerns and believe that these can be addressed through existing European and national laws.
I also discussed the transport aspects of transposition of the air quality directive with Mr Kallas. I pointed out that, although we are fully committed to improving air quality, and we recognise the part that transport has to play, we are keen to ensure that the air quality targets are properly targeted at improvements in health, and are consistent with our ambitious goals to reduce carbon and to create growth.
Basic Carbon Tool (Local Authorities)
(14 years ago)
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The Parliamentary Under-Secretary of State for Transport (Norman Baker)
To complement the local transport White Paper “Creating Growth, Cutting Carbon”, my Department has been working on a basic carbon tool for local authorities to assist them in demonstrating the carbon benefits of transport interventions in their areas.
Today, I am pleased to announce the publication of the draft basic carbon tool for local authorities on my Department’s website1.
The tool fully supports local authorities in making their own decisions about the carbon benefits of small-scale interventions and enables them to input their own assumptions and data from best estimates of take-up and effects for their areas. The tool also brings together in one place central research on local transport and carbon, improves access to national transport data which can impact on emissions and simplifies carbon appraisal guidance.
The tool can assist authorities in demonstrating the carbon benefits of bids to the local sustainable transport fund, but it is for local authorities to decide what tools and evidence best meet the criteria and objectives of the fund in the context of their overall bids.
My Department plans to publish the final tool in the summer.
My officials have sent a letter to all local authority chief executives inviting views on the tool. A copy of this letter has been placed in the House Library.
1The web address is: http://www.dft.gov.uk/pgr/regional/policy/carbon-tool/xls1/tool.xls
Monetary Policy Committee
(14 years ago)
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The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, Her Majesty’s Government have no proposals to change the relationship between the Chancellor of the Exchequer and the Governor of the Bank of England in his capacity as chairman of the Monetary Policy Committee.
Lord Barnett
I welcome the Answer from the noble Lord, but does it include what the Chancellor told the Treasury Select Committee; namely, that he is going to follow the policy of the previous Chancellor, which would not prevent him reducing or increasing quantitative easing, although he has the powers? Then again, the governor also said in his letter to the Chancellor, published on 14 February, that he believed that inflation would have been below the 2 per cent target if it had not been for three exceptional factors. Does the noble Lord agree with that because the Chancellor’s letter is somewhat unclear to say the least? As to the balance of risk that the governor was writing about, he seemed to be worried about the problems for growth and employment if he increased interest rates. Does the noble Lord agree with that?
Lord Sassoon
My Lords, first, it is for the Bank of England to make any proposals on quantitative easing if and when it wants to, and the Chancellor will then look at them. I am certainly not going to deconstruct and provide a commentary on the exchange of letters yesterday. However, the noble Lord, Lord Barnett, indeed identifies some of the points made by the governor in the letter, where he clearly sets out the downside risks and refers to questions about the “margin of spare capacity”. On the other side, he refers to possible “upside risks”, particularly in relation to inflation expectations. However, I suggest that noble Lords read the letters, rather than have me interpret them.
Baroness Kramer
My Lords, the Minister will be aware of recent remarks by my right honourable friend Vince Cable on the importance and benefits of low interest rates to businesses at this stage of the recovery. Will he comment on that and explain whether it feeds into the decisions made by the Bank of England?
Lord Sassoon
My Lords, I can confirm to my noble friend that sustainable and low interest rates are absolutely what businesses need to enable them to invest and to support the recovery. I will make a further point before the noble Lord, Lord Myners, jumps up. Last week he chided me for not giving the data on relative interest rates. However, the context then was not relevant. It is very relevant to the Question this morning. The latest data from yesterday on our performance on relative interest rates—the 10-year sovereign borrowing rate since the general election—show that the UK continues to outperform the US. We have narrowed our spreads against the 10-year bund by 39 basis points since the general election at a time when the French, for example, have widened their spread by 10 basis points. Therefore, on relative interest costs, which are a key indicator of whether the markets believe the Government are on their economic course, the news continues to be that we have the confidence of the markets.
Lord Peston
Will the noble Lord confirm that it is vital never to confuse the price level with the inflation rate? If the price level goes up as the result of a deliberate policy by the Government to raise VAT, there is no reason to interpret that as a rise in inflation. Therefore, it would be entirely idiotic for the MPC to raise interest rates at any time solely because the Government had raised VAT. Does the noble Lord agree?
Lord Sassoon
My Lords, again, I do not want to be drawn into either economic debate with the noble Lord, Lord Peston, or commentary on the governor. The governor indicates that the rise in VAT was one factor behind the rise in inflation, but I should point out that the rise in VAT to which he was referring was the one under the previous Government and not the present rise to 20 per cent. However, I take the noble Lord’s point about the nature of one-off rises such as that.
Lord Myners
My Lords, the Minister has now introduced the new protocol of answering my questions one week later, but I suppose that that is better than the previous policy of not answering them at all. Is not the reality that the Government’s fiscal policy is pushing the UK back towards recession—a direction which no other major economy in the world is currently following—and that the only thing supporting demand at the moment is very low interest rates? Business welcomes that, although savers are less enthusiastic. However, we are taking big risks on inflation as a consequence of the policy which the Bank of England is having to adopt in order to counterbalance the fiscal policy of this Government.
Lord Sassoon
Absolutely not, my Lords. The direction of the Government’s fiscal policy and the stability of that policy is one of the fundamental certainties which enable the Monetary Policy Committee of the Bank of England to set a firm course for monetary policy. The worst thing we could do to make the MPC’s task harder would be in any way to create uncertainty in government fiscal policy. Therefore, what my right honourable friend is doing in getting the deficit under control with very clear and early measures enables the MPC to do its work in relation to the inflation target.
Lord Davies of Stamford
Does the Minister agree that, although the Monetary Policy Committee has a single target imposed on it—the 2 per cent inflation target—in practice it has been behaving as though, like the Federal Reserve, it has a multiple target, with responsibility not merely for price stability but for stabilisation or employment? It may be a very good thing that the Bank of England has not been increasing interest rates, as it might have done if it had been following a single price stability target over the past couple of years, but are the Government not concerned at the discrepancy between the formal position and the actual practice on which our monetary policy is currently based?
Lord Sassoon
My Lords, I refute that suggestion completely. The Bank of England Monetary Policy Committee is following to the letter not only the direction of the Chancellor in terms of the target but also what it is obliged to do under Section 11 of the Act, and that is what it continues to do.
France: Bilateral Defence Co-operation
(14 years ago)
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Lord Anderson of Swansea
To ask Her Majesty’s Government whether they have any proposals to build on the recent treaties with France on bilateral defence co-operation by exploring initiatives for diplomatic and foreign policy co-operation.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, our relationship with France, further strengthened by the November 2010 UK-France summit, is one of our most important bilateral relationships. Since President Sarkozy visited London for the UK-France summit, we have also welcomed the Prime Minister, the Foreign Minister and the Europe Minister. Bilaterally, we work on a range of foreign policy and European issues, as well as immigration, counterterrorism, climate change, employment and social affairs. France is also an important trade partner. It will host the next UK-France summit later this year.
Lord Anderson of Swansea
My Lords, surely the logic of sharing defence assets is that we need a foreign policy agreement on where to deploy those assets. Now, when both countries are experiencing similar financial stresses, should we not look at the collocation of embassies, sharing diplomats and co-ordinating policies in areas such as West Africa? Will the Minister also consider the possibility of encouraging our Commonwealth partners to look at a new dialogue with La Francophonie, which, again, would be in our mutual interest? Where are the new proposals in preparation for the summit to be held later this year?
Lord Howell of Guildford
My Lords, the noble Lord’s line of thinking is extremely positive and constructive. Although the francophonie and France’s interest in its former colonies in Africa are rather different in character from those of the Commonwealth —its origins are quite different—there are clearly some areas of common interest. In fact, I am told that the two secretary-generals of the organisations meet quite regularly and the noble Lord will remember that President Sarkozy addressed the previous Commonwealth Heads of Government Meeting in Trinidad and Tobago last year. I hope that that kind of liaison will develop. It will indeed be on agendas for the next UK-France summit. The sharing of embassies in some convenient areas comes up from time to time, both in an EU and a national context, as does sharing embassies with other Commonwealth countries. As was mentioned, Australia wishes to share some embassies with the UK. Common sense and common organisation, particularly in more remote and difficult posts, point to some sharing of facilities and that makes perfectly good common sense.
Lord Lee of Trafford
What mechanisms would be used to monitor the progress of the constituent parts of the recent defence treaties? Will there be an annual report to Parliament on this area?
Lord Howell of Guildford
I would have to check with my noble friend on the precise nature of the monitoring but this is a very elaborate set of two defence and security treaties which carry affairs a long way forward in a number of areas, not just defence but also in civil nuclear development and in other crucial security areas. I shall check precisely the arrangements and come back to my noble friend.
Lord Morgan
Although my noble friend makes an excellent point, as of course does the Minister, on defence matters, and although I yield to none in this House in my francophilia, not least because my wife is French, I hope that we shall be very selective in our international collaboration with the Sarkozy Government. A catastrophic record in Maghreb was associated with the discredited departed regimes in Tunisia and Egypt and it would be very damaging to be linked with that.
Lord Howell of Guildford
I am sorry to hear the noble Lord’s comments on the French policy on record at the time. It is not for me to defend or to elaborate on France’s policy. All I can say in the present situation is that we are working in very close co-operation with our French friends. We regard them as close friends, and certainly in relation to Tunis and the other problems in north Africa, we are finding excellent co-operation.
Baroness Gardner of Parkes
Does the Minister know that today the French ambassador in London is saying farewell after a very successful term of office here? Does he think that that was an important example of diplomatic relations, which we hope will continue?
Lord Howell of Guildford
Most certainly I do. He has been an excellent ambassador for his country.
Baroness Symons of Vernham Dean
The Minister is quite right to describe these as elaborate treaties. Perhaps I can press him a little further on the defence treaty, which talks about extending bilateral co-operation on the acquisition of equipment and technology, such as complex weapons systems, submarine technology and satellite communications, and developing stronger defence industrial and technology bases. I applaud all that in theory. Does that mean the end of competition between our respective companies which deal in defence equipment? My experience has been that competition was always very fierce indeed and, if there is this degree of co-operation, it will be interesting to know how that is to be resolved.
Lord Howell of Guildford
As I suspect the noble Baroness fully realises, the answer falls in two parts. In some areas, competition will and must continue in the interests of the Government getting a good deal and not becoming vulnerable to having one supplier and therefore confronted with one price and one deal; but in other areas, which were specified in the two treaties—including developing capabilities and equipment, common support for the A400M and a joint user group to develop the A400M training systems, construction of nuclear hydrodynamics facilities at Valduc and a whole range of detailed technical operations—there is bound to be co-operation. I applaud the noble Baroness’s concern to keep up competition; that is right, but in some areas co-operation will secure major economies and efficiencies, which we should support.
Baroness Falkner of Margravine
My Lords, given that France is hosting the G20 summit, and given that by the end of this year 1 billion people will be chronically undernourished, are the Government discussing the French proposals to stabilise world commodity prices through an international mechanism?
Lord Howell of Guildford
Yes, we have discussed with a number of our close allies the problem of food and commodity prices now. We must face the fact that this is a global issue and that markets are very powerful agencies which somehow produce their own solutions despite what Governments attempt to do. However, these are matters of great concern to us and, as my noble friend rightly says, of very great concern to millions, if not hundreds of millions, of people who face severe jumps in commodity prices, food prices, energy prices and other prices—all with major political implications for the future.
Visas
(14 years ago)
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Lord Clement-Jones
To ask Her Majesty’s Government when they expect to make a decision on the criteria for granting tier 1 post-study work visas, following the recent consultation paper.
Earl Attlee
My Lords, a consultation on the student immigration system closed on 31 January. The consultation sought the views of respondents concerning the future of the tier 1 post-study work route and the effect of the proposals. The outcome of the consultation will be announced shortly.
Lord Clement-Jones
My Lords, I thank the Minister for that reply and declare an interest as vice-chairman of the All-Party Group on China and chair of the council of the School of Pharmacy, University of London. Only yesterday, the Minister said that the Government were determined to protect overseas students, so why are business, universities, research charities and student bodies all lined up against the current government proposals drastically to reduce those tier 1 post-study work visas? Not only will we let down our current overseas students, we will reduce the attractiveness of Britain as a study destination. Is that any way to foster good links with important countries such as China and India?
Earl Attlee
My Lords, the noble Lord asked about the situation with academic institutions. The answer is that they are not yet convinced of our good intentions. The UK’s education system is world-renowned. We remain the second most popular destination of choice, second only to the United States; and we intend to maintain that position. Post-study work is an important component of that.
Lord Hunt of Kings Heath
My Lords, the noble Earl says that universities are not yet convinced. Surely the reason is that universities have done the analysis and looked at the consultation, and it is abundantly clear to them that under the Government’s proposals, many of them will be severely harmed financially. Today, the noble Earl’s department announced a climbdown on the immigration cap. When can we look forward to a climbdown on the student immigration consultation?
Earl Attlee
My Lords, we will not climb down on our intention to avoid the abuse of the student route. We want to maintain the UK as a world-class academic destination, but we are not prepared to tolerate abuses of the system, which, as the noble Lord knows very well, take place.
Baroness Hamwee
Yesterday, in response to a Question on the student immigration system, the Minister used the term,
“the brightest and the best”—[Official Report, 15/2/11; col. 575.]
in relation to those we want to attract and it is a term used in the consultation paper. Does he agree that there is not a single spectrum capable of objective application and that people have different views of the attributes that make for the brightest and the best? Does he agree that the language as well as the concept is not uncontentious?
Earl Attlee
My Lords, I am sure the noble Baroness is right, but it is for the academic institutions to select their students.
Lord Soley
Does the Minister accept that, like him, we all want to maintain this country in second position, but that we will do so only if the policies are right? They are not right because they are not working for the universities, which are also suffering additional costs. We are well on course to reduce the impact of British universities around the world. We really need to rethink this policy.
Earl Attlee
My Lords, I am quite happy to take noble Lords’ concerns back to my honourable friend the Minister for Immigration, but noble Lords have not explained to me where the difficulties lie, and we have not announced the results of the consultation.
Lord West of Spithead
I declare an interest as yet another chancellor of a university. The Minister explained that the Government have very good intentions in this. It is quite clear from all those in universities to whom I have spoken, and from the concerns of those involved in universities, that they do not understand that from what they have seen of these proposals. I ask the Minister to get them together and explain these good intentions so that we can clarify whether they are or not. At the moment, those involved are not at all persuaded, and I find the proposals difficult to understand as well.
Earl Attlee
The noble Lord makes a useful point. We clearly need to do more work to explain the situation to the academic institutions.
Lord Phillips of Sudbury
I am yet another university chancellor declaring an interest. I am chancellor of the University of Essex which has more than 40 per cent of its students from abroad. Have the Government really taken sufficiently into account the special financial standing of overseas students who disproportionately contribute financially to the universities to which they come? Are we not scoring an own goal in constructing a new regime that will deter that benefit?
Earl Attlee
My Lords, if we deter foreign students from attending UK universities and bona fide courses, we will have failed. We are concerned about bogus courses—for instance, bookkeeping courses where overseas students are doing course after course when in reality they are just working in the UK.
Baroness McIntosh of Hudnall
Will the Minister pay special attention to the impact of these proposals on small specialist institutions? I am thinking particularly about music conservatoires where not only is this issue likely to cause difficulty for the reasons indicated by the noble Lord, Lord Phillips of Sudbury, but because they are already facing particular problems in respect of tuition fees due to the uncertainty about specialist funding?
Earl Attlee
My Lords, the noble Baroness makes an interesting point, and I will ensure in discussions with the Immigration Minister that her points are taken into consideration.
Lord Patel
Does the Minister recognise that for some courses, such as pharmacology and medicine, post-study work visas for experience are absolutely necessary? Does he think that such courses require a special arrangement?
Earl Attlee
My Lords, I fully accept that post-study work is essential to courses such as pharmacology. Actually, our proposals are more generous in that the post-study work has to be at graduate level, but does not need to be in the discipline read for the first degree.
Egypt: Mubarak Family Assets
(14 years ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Baroness Williams of Crosby
To ask Her Majesty’s Government what steps they have taken to freeze the financial assets of the Mubarak family held in the United Kingdom.
Lord Oakeshott of Seagrove Bay
My Lords, with the permission of the House and at the request of my noble friend Lady Williams, who is attending a funeral, I beg leave to ask the Question standing in her name on the Order Paper.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, for well established operational reasons, the Government cannot comment on individual asset-freezing cases. The Government have received a request from the Egyptian Government to freeze the assets of several former Egyptian officials. We will of course co-operate with this request, working with EU and international partners as we have done in the case of Tunisia. If there is any evidence of illegality or misuse of state assets, we will take firm and prompt action.
Lord Oakeshott of Seagrove Bay
My Lords, I accept the point about individual cases, but will the Minister say how long he would expect SOCA normally to take to assess and approve a request of this kind? In particular, will the firm and prompt action that the Foreign Secretary has promised in this case be firmer and prompter than in the disgraceful case of President Daniel arap Moi of Kenya, who looted hundreds of millions from his people, and indeed of British taxpayers’ aid, left a lot of it in London banks, and eight years on has still not had to pay back a penny?
Lord Sassoon
My Lords, there are a number of potential courses of action, but the principal one now is working with our EU partners, following a similar route to the one that was adopted in relation to Tunisia. My right honourable friend the Chancellor discussed the issue with his colleagues in the context of the ECOFIN meetings earlier this week. EU diplomats are discussing the issue this week and it will be on the agenda of the Foreign Affairs Council meeting on Monday 21 February. It could decide to request the Commission to draw up a regulation similar to the one that was drawn up on Tunisia, which would be enforceable in all EU member states.
Lord Campbell-Savours
The Minister referred to evidence of misuse of assets. Has any evidence of that nature been drawn to the Government’s attention?
Lord Sassoon
My Lords, it would be wholly wrong to discuss individual cases. Indeed, it is a matter for the police and the Serious Organised Crime Agency, because in parallel to what I have described as the EU route is the principal relevant UK legislation, the Proceeds of Crime Act 2002. Under that Act, it is for the police and SOCA to initiate as they see fit, and not for the Government to direct, any action on criminal activity that relates to proceeds of crime or money laundering.
Lord Carlile of Berriew
My Lords, given the many assertions that the Mubarak family and their acolytes are the ultimate beneficiaries of substantial funds that are now held by British financial institutions, does my noble friend agree that it might be timely to remind those financial institutions and their compliance officers of their obligations to report suspected money laundering so that those institutions might fully exercise their part in ensuring that any criminal funds are found and released in the appropriate way?
Lord Sassoon
I am grateful to my noble friend. I have explained two parts of the construct: the EU angle and the Proceeds of Crime Act. Of course, it is highly relevant that banks are obliged under their normal reporting rules to file relevant reports if they see any suspicious activities. That relates particularly to any engagement and due diligence that is necessary in relation to politically exposed persons. This is a good opportunity, prompted by my noble friend, to remind the banks of their obligations under those ongoing rules, which I know the banks take extremely seriously.
Lord Davies of Oldham
My Lords, the House will have gained a great deal of reassurance from the Minister’s replies, particularly his first one, on this important topic. We all appreciate that additional requests could come in as the situation in Egypt evolves. Is the noble Lord able to give the House the full reassurance that the Government will be able to meet any request that should come in, given the degree of information that we have under the money laundering legislation?
Lord Sassoon
My Lords, I am grateful to the noble Lord for recognising that the Government are actively on the case. Of course, in relation to requests that come in, it is then up to the appropriate investigating authorities to do whatever is necessary to gather the evidence. Our agencies are well able to do this, although we should recognise that there are always enormous challenges in these cases in tracing assets if that is what is required.
Lord Foulkes of Cumnock
My Lords, will the welcome action that the Minister describes be extended to cover our home and overseas dependent territories?
Lord Sassoon
It is important that the overseas territories recognise, as they do, and have a desire to be fully compliant with, international best practice in these areas. We encourage them to take any action in parallel with that taken domestically.
Arrangement of Business
Baroness Anelay of St Johns
My Lords, my noble friend Lady Neville-Jones will today repeat a Statement on the case of F and Thompson. It has been agreed that the Statement will be repeated after the speech of the noble Lord, Lord Low of Dalston, during the course of the Second Reading of the Postal Services Bill.
Control of Donations and Regulation of Loans etc. (Extension of the Prescribed Period) (Northern Ireland) Order 2011
(14 years ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Shutt of Greetland
That the draft Order laid before the House on 17 January be approved.
Relevant Documents: 13th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 February
Parliamentary Voting System and Constituencies Bill
(14 years ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
12:46 - Division on Amendment A1 to Motion A. - Ayes: 277 / Noes: 215 - Amendment A1 to Motion A agreed.
14:08 - Division on Motion B1 - Ayes: 241 / Noes: 242 - Motion B1 disagreed.
Lord Wallace of Tankerness
That this House do not insist on its Amendments 1 and 8 to which the Commons have disagreed for their Reasons 1A and 8A:
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, we have now come to the consideration of the Commons response to your Lordships’ amendments. Perhaps two or three weeks ago, some of us wondered whether, or at least when, we would see this day. However, we considered the Bill in some detail, which we then sent to the other place. This House rightly took a view on important issues in the Bill and made amendments to the Bill, as the House saw fit, which asked the Government and the other place to think again on a number of issues.
The other place considered—it surprised me to see the number—104 amendments from this House. Many of those were of a technical nature, but even some of the technical amendments proposed by the Government were responding to points that had been made in both Houses on, for example, absent voting in the referendum, co-ordinating work, encouraging participation in the poll and adding clarity to some of the boundary provisions. However, a number of those amendments were significant concessions. Last night in the other place, the Government wholly accepted the principle of this House’s points by recognising as an exception the Isle of Wight.
Lord Wallace of Tankerness
I remember the vote very well. This House voted most emphatically, and the Government have listened.
We also listened on the matter of the date of the referendum and incorporated into the Bill the other famous amendment of the noble Lord, Lord Rooker. On public hearings, we agreed with the spirit of the points made and changed the Bill.
The other place having considered our amendments, two issues remain outstanding. The first is a decision by the other place, in relation to Amendment 1 and subsequent Amendment 8 that were successfully moved in this place—the former on Report and the latter at Third Reading—by the noble Lord, Lord Rooker. As the House will recall, the purpose of those amendments was to make the referendum result not binding, or indicative, should the turnout fall below 40 per cent. The Government resisted the noble Lord’s amendment on principle and because of the practical difficulties that it posed, to which I shall return in a moment. Following that debate on Report, the amendment was carried by 219 votes to 218. At Third Reading, the noble Lord, Lord Rooker, tabled Amendment 8, which sought to remedy some of the defects in his earlier amendment. As I made clear in my response then, the Government appreciated the making-good spirit behind the noble Lord’s amendment, which the Government accepted pending consideration of the whole issue in the other place.
That consideration took place last night. Our colleagues in the other place voted to disagree with the noble Lord’s amendment by 317 votes to 247—a majority of 70—which, I hasten to add, was a majority that comprised not only the coalition parties but Members from the SNP, Plaid Cymru, the SDLP and the Green Party. This House must now decide whether to insist on the amendments that it passed or to accept the message from colleagues in the elected Chamber.
Before we do so, let me return to the key arguments. I acknowledge that we will hear, as we did on Report, some strong and persuasive arguments from those who favour thresholds. I understand why many in the House found those arguments compelling, but I believe that, in the context of this Bill, they are misplaced and I shall do my best to explain why. I understand that, when considering this issue previously, many of your Lordships felt that the proposal of the noble Lord, Lord Rooker, was reasonable because, unlike most turnout thresholds, his proposal would not definitively have prevented the referendum from being implemented if the threshold was not met. Indeed, the noble Lord suggested that his proposal did not even amount to a threshold.
However, I cannot believe that this is quite right. The amendments would make the referendum result indicative, should the turnout fall below 40 per cent, rather than rule out implementation altogether—I hope that that is a fair assessment of it. However, that seems to me to set a threshold for interpretation of the result. In every real sense, it is a threshold. As the Minister in the other place said yesterday, it would mean that when people go to the polls on 5 May, they could not say that they would get what they voted for if the majority favoured changing the system. By definition, there would have to be further consideration of the matter. We would be saying that people might get what they vote for, provided that Parliament does not overrule or disregard the vote. That is a somewhat dispiriting message to give to the public.
One of our objectives in this and other constitutional reform legislation is to bring back into the political process members of the public who have lost faith. People have become disengaged not least because they feel that the process lacks the ability to deliver what they want. I want noble Lords to consider that, if we imposed a threshold which left in any sort of doubt the effect of people’s votes cast, people might well lose faith because they would not know what the outcome would be if the people delivered a majority yes vote.
Lord Elystan-Morgan
Will the Minister cast his mind back to the 1975 vote on joining the European Economic Community? That was not a mandatory but an indicative vote. There was no protest then of the nature that he describes, so the argument does not follow.
Lord Wallace of Tankerness
My Lords, that vote was not on a threshold. In the one case where there was a threshold, in Scotland in 1979—which I accept involved a different kind of threshold and consequences that were different, but it was nevertheless a threshold—those who of us voted yes felt, for at least the ensuing 18 years until there was a yes vote again in 1997, that we had been cheated. I do not think we treat the electorate well by providing for a situation where they may vote yes but that yes vote may not be translated into action.
Lord Lea of Crondall
Is the noble and learned Lord aware that the Government are very keen to have thresholds for trade union recognition votes?
Lord Wallace of Tankerness
My Lords, I am not sure whether the noble Lord is advocating that kind of threshold.
As I have indicated, one of the most convincing reasons for not having voter turnout thresholds is that, in a referendum which poses a yes/no question, the turnout threshold effectively makes every abstention a no vote. Under the amendments of the noble Lord, Lord Rooker, there might still be this effect because abstentions could mean that a majority yes vote might not be upheld. People might abstain from voting in a referendum for any number of reasons, including apathy and ambivalence. Given that the electorate as defined would also include the dead, by definition such people would not be able to vote. [Laughter.] Noble Lords may laugh, but that is the case. People with double registration, who would be allowed to vote only once, would also be included in the definition of the electorate. Under the amendments of the noble Lord, Lord Rooker, abstentions could mean that a yes vote may not be upheld.
The turnout threshold could incentivise people who favour a no vote to stay at home rather than to vote. The honourable Member Mr Mark Durkan of the SDLP made an interesting speech in the other place last night. He made the case that, in some of the referendums held in the Republic of Ireland, one of the campaign slogans was, “If you do not know, vote no”. He said that if this threshold amendment was to be passed, the message would be, “If you do not know, stay at home”. One of the many admirable things about our political culture in this country is that parties unite to encourage people to vote. Indeed, when my noble friend Lord Phillips of Sudbury proposed an amendment that the various authorities—the Electoral Commission, the counting officers and registration officers—should encourage participation, it was accepted on all sides of the Chamber. The noble and learned Lord, Lord Falconer of Thoroton, subscribed—and no doubt he continues to subscribe—to the principle and the objective that people should be encouraged to turn out to vote. The effect of the amendment could be to encourage people to stay at home or not to bother. “Stay at home on 5 May” is not, I hope, a message that any noble Lord wishes to hear at the hustings in the referendum.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, this is the Lords consideration of Commons amendments. There will be time for noble Lords to make their points in the debate. The noble and learned Lord, Lord Wallace, should be allowed to finish his speech.
Lord Wallace of Tankerness
My Lords, referendums are used only sparingly in this country but they provide an opportunity for people to have their say on issues of significance. We accept that a change of the voting system is an issue of significance. However, holding a referendum sets a higher hurdle for this constitutional change than is often the case in a number of other constitutional changes. To introduce the even higher hurdle of a threshold would dilute the democratic will of the people and would undermine the simplicity and strength of the referendum result. Insisting on the amendments would not only compromise this principle but would render the legal and practical positions far from straightforward.
I do not want to dwell on the technical difficulties of giving effect to the noble Lord’s proposal. Some of those difficulties were aired on Report and at Third Reading, but others were not, including in particular the question of what kind of process would follow a non-binding yes vote. I do not imply criticism of the noble Lord, Lord Rooker, but, although his original amendment appeared simple and straightforward, the detail is far more complex. When we considered its key provisions for the first time, the amendment was agreed to by the slimmest of margins. The other place has now had two opportunities to consider the issue of a threshold and has decisively rejected it on both occasions.
As I have said, the arguments in favour of a threshold are respectable, but they are wrong—not least because it would undermine the principle that, if the majority of the people vote yes, that is what should be delivered; it should not be “yes but, if” and subject to further political wheeling and dealing or Motions in either House. If the people vote yes on 5 May, a yes vote should be delivered. I beg to move.
Amendment A1 to Motion A
Lord Rooker
As an amendment to Motion A, leave out from “House” to end and insert “do insist on its Amendments 1 and 8”.
Lord Rooker
My Lords, I do not propose to rehearse the arguments again, although I thank the Minister most sincerely, because that is the first time that anybody has ever officially explained what my amendments to the Bill do. In the Political and Constitutional Reform Select Committee in the other place, nobody challenged the point. What the Minister has said also contradicts this morning’s Times leader, which is completely inaccurate. Frankly, that contradicts the reasons that we have been sent from the Commons. The Commons say:
“That the outcome of the referendum should be determined by those who vote in it and should not depend on how many do not vote”.
That is simply not true as a reason. I have said all along that if the turnout was less than 40 per cent, the House could decide to implement AV, and I would not argue with that.
I am seeking support for the request that the Commons have another short look at the issue. Yesterday, the Commons turned up for half a day’s work on this Bill, to add to the seven days they have already done on it—somewhat less than this House has done. The debate on my amendment to the Bill lasted 45 minutes, most of which was taken up by the Minister who was almost seeking to talk it out—
Lord Rooker
One can look at Hansard—the estimated time is about 14 minutes of debate. That was the first time the Commons have debated this issue. This is not the issue that they debated last November, of a “killer, fatal threshold”, although those are words I would refrain from using as that is not what it is.
The Minister’s comments about the electoral register, notwithstanding the debates that we have had, show that we are in a complete and utter mess as a democratic country if we cannot say that we have a national register that measures the electorate for a particular ballot. That is one criticism of my amendment to the Bill, because we do not know what the electorate is. The electoral register includes foreigners, who may vote in some elections but not others, the dead and those who have moved home or who own a second home. The fact that we have no national electoral register prevents any serious discussion about the mechanism of our democracy. That has been thrown into a starker light than it ever was before. However, I do not want to go down that road, as I want to be quite brief.
I submit that the issue of substance lies not in the figure of 40 per cent—that could have been any other figure that was thought to be reasonable, whatever people might have said—but in whether the referendum should be binding, without any constraint whatever. We have never done this before in this country, and a precedent is being set. That is the point that I am seeking to make with my amendment to the Bill—not to argue against the result of the AV referendum one way or the other. The serious problem is that we are creating a major precedent in our constitutional arrangements, which the other place has not addressed. That is why I ask, even at this late stage, for the Bill to be sent back so that the other place can address this issue to the degree that it should.
I am not against reform of our constitutional arrangements, but such reform is likely to be sustainable if there is a degree of consensus. With proper debate—White Papers, Green Papers, Joint Committees—we get a consensus about these things and we test the ideas. That has not been done in the case of the proposed binding referendum, the legislation for which would be in place to be activated, whatever the result and whatever the turnout. However, that consensus has not been achieved, although I know there has been cross-party voting, including last night—the Minister declined to mention that several Tory MPs voted for my amendment to the Bill, but I will not make a major point about that.
My point is that, as I face the Chamber, the two oldest political parties in the country are joining together to rewrite our constitution on a daily, as-you-go-by basis. In other words, we do not know what is happening next. This cannot be the right way to operate; it cannot be the right way in which to bring in a major constitutional change of the first ever binding referendum in the UK. There is no big picture by which we may judge this part of the constitutional changes—we know that there are others on the conveyor belt—and that is a major difficulty.
My amendments to the Bill were made in the spirit of compromise. Frankly, they say that the referendum shall be binding if more than 40 per cent turn up, and that is a compromise on my part. I do not think that a binding referendum ought to operate in a parliamentary democracy. The Minister said yesterday, in the context of the Isle of Wight issue, that it is not the opinion of this House that counts, but the strength of the opinion of this House that counts. I accept that, on the Minister’s test, the majority of one may be a bit shaky, but I have to say that that was on a 40 per cent-plus turnout of this House. While the level of the majority may not meet the Minister’s test, it certainly meets the test that we are actually voting for. I seek to move to strengthen the opinion of this House so that that can be taken on board.
There is plenty of time, but I know that a lot of time will not be spent on it. When history comes to be written and when this issue operates out there among the public, the question may be asked, subject to the result, “What on earth was Parliament doing?”. I want to be able to say that we used all the time available to test this issue to get them to think again. Today is an opportunity to do that. I beg to move.
Lord Lloyd of Berwick
My Lords, listening to the noble Lord, Lord Rooker, I am reminded irresistibly of the last occasion when we had before us a major constitutional Bill. I refer, of course, to the stages leading up to the passage of the Constitutional Reform Act 2005. There were then two main issues on ping-pong, just as—leaving aside the Isle of Wight issue—there are two main issues today. The first of the two main issues in 2005 was whether the Lord Chancellor should continue to be a Member of this House; the second was whether the Lord Chancellor should be required to be a lawyer. It was a Lords Bill, which of course this Bill is not. The first time round, the Government lost on those two issues by a substantial margin. The majority against the Government was 215 to 199. When the Bill came back from the Commons, the Lord Chancellor speaking on behalf of the Government said:
“Of course our power is to make the other place think again. They have thought again… Our job is to make the other place think again. Once we are satisfied that they have done so, then we should pay proper regard to their views”.—[Official Report, 21/3/05; col. 38.]
The question that I ask the noble and learned Lord, Lord Falconer, is whether he still abides by the principle that he stated so clearly on that occasion. They were the very last words that he uttered after a very long, drawn-out affair, which he will remember as well as I do, but they were the words that carried the day on that occasion. The Government won by 203 votes to 191.
The question I then ask is whether that principle should not be applied today. It seems to me that the case for applying that principle today is far stronger than it was when the noble and learned Lord, Lord Falconer, stated it, for on that occasion the Bill affected this House. It affected it because it would have abolished the office of Lord Chancellor—had that proved to be possible, which it did not—and ejected from this House the Law Lords, where they had been for 150 years or more. Nevertheless, on that occasion this House yielded to the other place. On this occasion, by contrast, the Bill seems to relate almost exclusively to the other place, not to us. Surely, if ever there was a Bill on which we ought to yield to the elected House, seeing as it relates to election to that House, it is this one. When the time comes, I shall therefore vote with the Government.
Lord Lawson of Blaby
My Lords, on this occasion I am unable to support my noble and noble and learned friends and I find myself, after an intermission of something like 35 years, when we were in another place, in alliance with the noble Lord, Lord Rooker. I agree entirely with everything that he had to say, which means that I shall not need to detain this House long. I realise that the House has been debating this Bill for a very long time—far too long—so I shall do my best to be brief.
I do not agree with the noble and learned Lord who has just spoken, for a number of reasons. We are perfectly entitled to ask the House of Commons to think again and look at this further. After all, it had a threshold amendment at an earlier stage in its proceedings and the majority against the threshold shrank from well over 500 to 70, so things are moving in the right direction. It may be that with a little more momentum there the right result will be obtained.
There is another point which I have to tell the noble and learned Lord, Lord Lloyd. He seemed to say that this is not a matter for this House. We are talking, certainly on the AV issue, about what my right honourable friend the Deputy Prime Minister has said is a potential constitutional change of the first importance. If this House does not have a role as the watchdog of the constitution, it has no role at all. I cannot possibly accept the argument made by the noble and learned Lord, Lord Lloyd.
I was also disappointed if not, if I may say so, slightly shocked by the poverty of the argument presented by my noble and learned friend the Minister, which boiled down to two issues. First, if I understood him aright, it seemed to me that he was concerned that the consequence of the amendment moved by the noble Lord, Lord Rooker, might be, “If you don’t know, stay at home”. I think that was what he said. He seemed to think that was terrible but if you do not know, what should you do? You cannot go and vote, “don’t know”; there is not an option on the referendum ballot, as far as I am aware. We have not exactly been told that but if there is a “don’t know” option, it is a different matter. Perhaps my noble and learned friend can tell us but I do not think there is. So, is it: “If you don’t know, toss a coin”? I listened attentively to my noble and learned friend’s speech because I was hoping to find something in it but I could not.
Secondly, the only other argument that my noble and learned friend used was that the very idea of a threshold was improper and an insult to democracy. In pretty much every other country in the world, notably the United States, when there is a major constitutional change there are special provisions. You cannot just get anything through on a majority of one, however low the turnout and whatever the conditions. Special provisions are always put in for major constitutional changes to set a higher hurdle, as there should be when the constitution is being fundamentally changed. Is the Minister saying that the United States is somehow not a proper democracy—that its arrangements are somehow improper and insulting? I will not enumerate all the other countries; my noble friend Lord Lamont did so in an excellent intervention in Committee, citing all the examples.
I make two final points. First, the Government implicitly accept that there needs to be a high turnout. That is why they decided to hold the referendum on the same day as the local elections. We know that it was not to save a few million pounds; it is because they believe that it will ensure a higher turnout. They are right and that is proper. This amendment helps the Government. It is in the same spirit as what the Government are doing by trying to ensure that there is a high turnout.
Secondly and finally, I say to those of my noble friends who are uncertain as to whether the amendment goes against the coalition agreement: the constitutional status of the coalition agreement is somewhat obscure. Nevertheless, one should always play safe. I have studied the coalition agreement very carefully and spoken to some of my right honourable friends in the other place. It is clear that the amendment of the noble Lord, Lord Rooker, in no way contravenes the coalition agreement. Therefore, I hope that this House will have the backbone to tell the other place that this is something of major constitutional importance; and that this House, as the watchdog of the constitution, would like the other place to look at this again.
Baroness Butler-Sloss
My Lords, I want to ask the Minister a very basic question, to which not only I but possibly other Peers do not know the answer: are we allowed to vote in the AV referendum?
Lord Higgins
My Lords, I have not previously intervened in the debates on this Bill, although I have voted several times—in, I feel bound to say, both directions. I begin by making a procedural point. One of the most damaging things done by the previous Labour Government was to change the situation with regard to guillotining Bills. The old procedure was always that if the Government felt that there was undue delay or something was urgent, there would be a guillotine Motion debate for half a day and a vote at the end of it. This was replaced by programming, which was carried out throughout the previous Labour Government. Regrettably, it is continuing under the coalition, with the result that we will no doubt continue to have Bills arrive in this place with some parts having been very quickly considered. I very much hope that the Government will abandon programming from now on.
The reality is that the programming on this Bill has meant that debate in the other place has been severely curtailed, not least in respect of the amendments made by this House. The amendments that we are discussing today were given four hours of debate, and on this important constitutional amendment the debate lasted for 45 minutes or rather less. It is difficult to see how the other place can consider our amendments and think again in the course of a debate of that length. The fact that the other place has sent the measure back here needs to be considered in that context.
I turn to the substance of the amendment of the noble Lord, Lord Rooker, which I enthusiastically support. My view throughout my time in the House of Commons—this remains my view—is that Members of the Commons are there as representatives, not delegates. As I said to my former constituents many times, that means that I will not vote as I would vote if I knew how a majority of my constituents would vote. I will consider their views and take them into account and then I will vote having taken all that into account. A referendum strikes fundamentally at that principle. Therefore, I have always been opposed to referendums but, as the noble Lord, Lord Rooker, points out, they have always been advisory. Therefore, I am totally opposed to the idea not of an indicative referendum but of a mandatory referendum, which is what we have been considering.
I strongly supported the noble Lord, Lord Rooker, and voted in favour of his amendment in which he made the basic point that the referendum should not be mandatory. Alas, that amendment was not carried. However, as he rightly points out, the amendment he is now putting forward constitutes a compromise. Although I am totally against a mandatory referendum altogether, I certainly enthusiastically support the noble Lord’s amendment. I very much hope that your Lordships will return it to another place with a large majority. Once one has considered these issues, it seems to me that the case for having a threshold is very strong indeed.
In the very short debate that took place in another place, Mr Winnick intervened in the Minister’s speech. He asked:
“At what point below 40%—10%, 15%, or 20%—would the Government conclude that the result did not carry any credibility whatever?”.—[Official Report, Commons, 15/2/11; col. 902.]
That is the situation. We have no idea what the turnout may be, but it may be very low indeed. We may have a very small majority on a very low turnout. We will then find that the law is changed automatically on a major constitutional point without any reference back to the House of Commons whatever. I believe that that is completely and totally wrong. I shall support the noble Lord in the Division Lobbies.
Lord Phillips of Sudbury
My Lords, initially, I was inclined to support the amendment of the noble Lord, Lord Rooker. However, as time has gone by, I have to confess that my view has changed. I say at once that the arguments are evenly balanced—I think that many noble Lords agree with that. The noble and learned Lord, Lord Lloyd of Berwick, could have added to the strength of his already strong case by referring to the fact that the alternative vote referendum was a major plank of the manifestos of both the Liberal Democrat and Labour Parties at the recent general election.
I come back to the issue of a deterrent to voting at the forthcoming referendum, assuming that we get this Bill through. I disagree with the noble Lord, Lord Lawson; my understanding is that if we accept the amendment of the noble Lord, Lord Rooker, the probability, rather than the possibility, is that it could inadvertently act as a deterrent and a disincentive to vote. It is true to say that at many of the forthcoming local elections there will not be a 40 per cent turnout. There is no suggestion that local government comes to a halt if 40 per cent of the electorate do not turn out to vote for anybody. Indeed, the noble Lord, Lord Rooker, said that more than 40 per cent of this House voted for his amendment the first time round. But how many votes in this House reach the 40 per cent figure? What would happen if his amendment were passed and the referendum turnout was 39 per cent, with two-thirds of that 39 per cent being in favour of AV? What would then happen if the measure were to come back to this place? Noble Lords may say they can improve it, but you may not get even a 40 per cent turnout in this House.
What do the public think about a situation where we say, “We sort of trust you. This is, sort of, the decision which the public should make. But in the end, if 40 per cent of you don’t turn out, we will decide”.? There will not be a lot of understanding of that by the public, especially given that there is no more partisan issue imaginable than that of the voting system.
Lord Phillips of Sudbury
Absolutely. I am perfectly willing to accept the decision of the British people, whatever that is and whatever the turnout is. I really do not understand how you can, if you like, push the partisanship completely out of account by saying that if there is not a 40 per cent turnout, we will decide. At this forthcoming referendum, the majority of the Conservative Party will be against AV; and although it was in its referendum, I sense that the Labour Party will be against it. Partisanship will rule.
Lord Myners
The noble Lord spoke about the referendum of the Labour Party, but I think he meant the manifesto. Perhaps I may correct him; he described AV as being a major plank of the Liberal Democrat manifesto. In fact it was not. AV was described by the leader of the noble Lord’s party as a “miserable little compromise”.
Lord Phillips of Sudbury
My honourable friend Mr Clegg may call it what he likes.
Lord Phillips of Sudbury
It was a major plank in the Liberal Democrat manifesto and that is a fact. And so—
Lord Phillips of Sudbury
No; no more. That is quite enough. For those reasons, I will vote against the amendment of the noble Lord, Lord Rooker.
Lord Elystan-Morgan
My Lords, the noble and learned Lord, Lord Lloyd of Berwick, speaks from the very heart of reason and common sense when he says that the real role of this House, in a situation such as this, is to invite the House of Commons to think again. That, however, does not mean that that should happen only once. In the circumstances of this case, as has been so clearly shown by the noble Lord, Lord Lawson, the House of Commons has thought twice about the matter and come to totally different conclusions—although in both cases it happened to reject the proposition that we are discussing. In the first instance, the other place voted by 540 votes against and 31 votes for a threshold in the referendum. Last night, the vote against was carried by about 65 per cent to 70 per cent. The curve is clearly pointing in one direction. But be that as it may, one cannot say that the other place is expressing a consistent and monolithic view on the matter. That does not in any way defeat what the noble and learned Lord, Lord Lloyd, is saying, but to some extent it qualifies it in the special circumstances of this case.
One can summarise the issue in this way. We are dealing here, I think, with a balance of risks. The noble and learned Lord, Lord Wallace, is perfectly correct to say that when you invite the public to partake directly in a decision such as this, there is a risk that Parliament could be seen—in some way or other, without intending it—to be spurning that decision. That is a real risk. No one spoke very much about that risk in 1975 when the referendum was indicative or consultative. I have read the Act and there is clearly no suggestion that that referendum would have been mandatory in any way at all.
I urge noble Lords to consider another risk. A derisory turnout would deprive this vote of any sovereignty or realism as an arbitrement of the people. That is a massive risk. It is very unlikely to happen. It does not matter a great deal which of these proposals one chooses; I tabled one myself which might not have been quite as meritorious as the one now before the House. They are insurances against a failure that is unlikely to happen, but which could happen. A person insures his house against fire not because he knows that it is going to be destroyed—unless he has criminal intentions—or because he believes that it is likely to be destroyed. He does so because he considers that there is a slight chance that it could be destroyed. The more one thinks about something, the less likely one is to be prepared to take even the slightest risk. I am sure that that is our attitude to the families we love. Here the risk is small, but it can be covered by a small, modest and reasonable premium.
Lord Lamont of Lerwick
My Lords, I voted for the amendment of the noble Lord, Lord Rooker, the first time, and I intend to vote for it again today. It is true that there was a significant majority in the Commons yesterday, but the result disguised the fact that 20 Conservatives voted for the amendment and 25 abstained. The large majority was accounted for to a considerable extent by the nationalists voting in support of the Government.
I was shocked by the brevity and paucity of the debate. Very few Back-Benchers were able to get in. One point that was made—as it was in this House—was that we have not had thresholds in referendums before, with the exception of the first referendum on Scottish devolution. Of course, we have had very few referendums in this country. Although the first was as long ago as the first referendum on Scottish devolution, they are still something of an innovation. I was struck by the argument made by one Conservative Back-Bencher yesterday that perhaps there should always be a threshold in constitutional referendums, as there is in so many countries of the world. My noble friend Lord Strathclyde mentioned that France does not have this threshold, but it is about the only country in Europe that does not. All other major countries do and, as my noble friend Lord Lawson said, the United States has a different sort of threshold via representatives and state legislatures.
The Minister in the Commons—and my noble and learned friend today—said that a threshold would give people an incentive to vote no. First, that cannot be asserted with absolute clarity. One can argue it both ways. A threshold gives a very positive incentive for people to vote yes if they are worried about the turnout. Secondly, somebody who is really against the proposition would have to worry that the threshold might be met; he would have to know what the turnout would have to be if he was really certain about the situation.
Leaving that aside, it is not unjustified or unfair that if there is great apathy, the proposition should fall. That seems common sense and reasonable. The proposition has been put a number of times that there might be a 38:1 vote that falls just short of the 40 per cent threshold. In Germany, there was a referendum with a majority of 10:1, but because the turnout was only 10 per cent the proposition was rejected—and quite right, too. Constitutional change affects us all; it lays down the rules of the game by which politics is conducted and by which we representatives live; and it should be made only when it is clearly the wish of the people that it should happen. There are great dangers in making major constitutional changes which have uncertain consequences. People who are in favour of AV argue that its effects would be this or that, but the truth is that what would happen is highly unpredictable. I do not believe that we should take this leap into the dark unless there is a proven desire for change supported by the British people giving it their full-hearted consent.
Lord Tyler
My Lords, I am not sure whether the noble and learned Lord, Lord Falconer, intends to speak on this. I hope that he does because it would be very important for your Lordships’ House to hear precisely what the attitude of Her Majesty’s Opposition is. He and I have enjoyed each other’s company over many long hours throughout the passage of this Bill. I am not going to give him my views but I should like him to comment on the views of his colleagues. In the other place, Mr Christopher Bryant said:
“I do not agree with the hon. Gentleman about thresholds in referendums because, broadly, they are not a good idea”.—[Official Report, Commons, 2/11/10; col. 846.]
There is nothing there about indicative referendums or definitive referendums but all referendums or referenda. I am disappointed not to see the noble Lord, Lord Lipsey, in his place, because all of us who attended the long hours of Committee and Report very much respect the work that he has done on the Bill. He said just last week on Report,
“I do not support a threshold”,
and, again, there is no definition of what the threshold might be. He went on to say:
“Thresholds are arbitrary, they introduce bias, they distort debate and they have absurd consequences”.—[Official Report, 7/2/11; col. 106.]
Amen to every single one of those. He then argued his point in detail. I very much hope that if the noble and learned Lord, Lord Falconer of Thoroton, is going to respond to this debate, he will explain why he completely disagrees with his noble friend Lord Lipsey, who, as I think he will agree, has studied this Bill more than any of us.
Lord Forsyth of Drumlean
My Lords, I do not wish to detain the House but I agree with every word that the noble Lord, Lord Rooker, said. I do not think that in all the years we have engaged in exchanges I have ever been able to say that before, but I certainly agree with him now. He offers a warning to this House. I am not sure whether noble Lords will have had a chance to read the debate in the House of Commons. The Minister’s speech was extraordinary because it did not address the substance of the amendment before him. It addressed the idea of having a drop-dead threshold. In fact, he made exactly the same speech as Mr Bill Cash made on his own amendment, which would have introduced a 40 per cent cut-off point. If it did not reach 40 per cent, that would be the end of it.
With reference to the noble and learned Lord, Lord Lloyd of Berwick, I am very conscious that I am not elected and therefore I do not want to challenge the elected House, the House of Commons. However, this amendment has the effect of leaving it to the House of Commons to decide, and therefore it is very difficult to say that this House should not cajole the other House into putting itself in the driving seat on a major constitutional change.
I find it very difficult to understand why my coalition colleagues have not accepted this amendment. I shall not embarrass them by naming them but they have suggested to me that this is because of the coalition agreement. My noble friends Lord Lawson and Lord Lamont have dealt with that point. This amendment does not in any way threaten the coalition agreement, and I think we have had confirmation from the Front Bench that an amendment of this kind is not contrary to the coalition agreement. When I raised this matter with senior colleagues, they said, “Yes, it’s not in the agreement but it’s what we have agreed with the Liberals”. If we are to have agreements, they have to be transparent, and if our parliamentary democracy is to function, people need to know what agreements have been made behind closed doors and they need to look at the arguments.
I asked another senior Liberal strategist—again, I shall not name them in order to avoid embarrassing them—what they thought the turnout might be in London, where there are no elections. All the pressure on the Bill has been focused on having the referendum at the same time as the Scottish parliamentary elections and the local government elections, and I think that that is a bit dodgy. It is an attempt to try to get a higher turnout. That suggests to me that people are worried about the turnout. As my noble friend Lord Lawson said, if you do not know what you think about something complicated, the wise advice is not to participate in it—not to express a view. We are 10 weeks away from this referendum. Have we seen any of the arguments? Do we believe that the electorate have had a chance to consider all the arguments, or that that is likely to happen with Easter intervening?
Lord Kilclooney
My Lords, I have watched the Bill’s progress over the past few weeks with increasing concern because of the way in which matters affecting the constitution of the United Kingdom are being dealt with by the present coalition Government. We read criticism of the Opposition, and quite rightly so, and of their lengthy and sometimes very boring speeches in this House. But I can understand why they did that—because when we look at the Conservative Benches, we find bony-faced silence on their faces, and when we look at the Liberal Benches, we find faces of total embarrassment.
This is a major constitutional issue and it should not be dealt with in the way in which it is being dealt with by the Government at the moment. Why is it happening? It is because they have this coalition agreement. We now have the first example of that coalition agreement. It means that Parliament does not give proper consideration to the issues before it. There is criticism of the other place for not giving enough time to this debate. A lot of time was given to the subject in our House, but there was very little participation by the government Benches—the coalition Benches. There was not proper debate in this House either.
I am increasingly concerned at the way in which this subject is being dealt with. I understand that the leader of the Liberal Democrats, Mr Nick Clegg, like a schoolmaster, summoned a selected number of individuals from the Cross Benches within the past few days to tell them what he thinks of them. That is absolutely disgraceful. For those reasons I would be very unhappy in supporting the Government, so I shall support the amendment.
Lord Trimble
My Lords, I know that we are getting towards the end of this debate but I want to make just one short point. I understand the argument for this threshold—it is the fear that there might be a yes vote on a very low turnout, and the wish to have this protection against it—but if that did happen, we would be repeating what happened with the Scottish referendum in the 1970s.
Lord Forsyth of Drumlean
There is another point that is being missed: the idea, which the Minister repeated in the other place, that this threshold would be the same as the one in the Scottish referendum. In the Scottish referendum there was a threshold not on turnout but on the result, which is why it caused such resentment. A 40 per cent threshold on that would of course be unacceptable. So the comparison is a bogus one.
Lord Trimble
I will make the point none the less, and I am glad that the noble Lord, Lord Forsyth, has given me assistance in making it. I take the point with regard to voting rather than turnout, but we are getting into the same territory; and, as the noble Lord, Lord Forsyth, said, it caused great resentment. Will noble Lords please consider whether this device, if it works as intended, will not also cause great resentment? I have strong views on AV and look forward to the campaign against it. I wish that we could get on with that instead of wasting our time on this matter.
Baroness Trumpington
Many of us, I believe, voted for the Government out of loyalty to the Government, and not for the matter on which we were voting in the last round. I have listened to all the arguments today and I am thoroughly convinced by the amendment of the noble Lord, Lord Rooker, and by the speakers who have spoken. I fully intend, for the first time, to vote against my Government.
Lord Falconer of Thoroton
My Lords, we have had an absolutely scintillating debate on this issue. The issue for the House today is whether we should ask the other place to think again. I believe that that is an interaction of two issues: first, the extent to which we think it has been given adequate consideration already; and secondly, the importance of the issue. As for whether it has been given adequate consideration already, this proposal first emerged as a matter of debate a week ago last Monday, when the noble Lord moved his amendment and it was passed. It went to the other place yesterday. It was one of 104 amendments, of which more than 95 were not debated at all. This amendment was debated for 46 minutes. Of those 46 minutes, more than 30 were taken up by Mr Mark Harper speaking on the issue. I say in parenthesis that there may be times when Mr Mark Harper should emulate his near namesake Harpo Marx rather than Mr Mark Harper himself.
So Mr Mark Harper discussed it for more than 30 minutes, but in the course of his statements he misstated the effect of the amendment on a number of occasions. In relation to a vote in favour with a turnout of under 40 per cent, he said:
“So, even if the public had expressed a clear preference, it would not count”.—[Official Report, Commons, 15/2/11; col. 899.]
That was wrong. The same mistake was made this morning in the Times, which stated in its leader:
“In an attempt to derail the referendum on the alternative vote … system, Labour peers, led by Lord Rooker … and with the connivance of some Conservatives, have defeated the Government on an amendment stipulating that the result of the referendum should only be permitted if at least 40 per cent of the electorate turn out to vote”.
Again, that is wrong.
The position is that if less than 40 per cent of those entitled to turn out do so, it becomes an advisory referendum in exactly the same way. That deals with the critical issue: if there is a derisory turnout in favour of the alternative vote system, is it right that this country should then change its voting system, a voting system for which there would not be a majority in either House of Parliament? The legitimacy of a change of that importance must depend on getting more support for it than a normal change in the law, rather than less.
In my respectful submission to this House, it is pretty plain that this issue has not been properly considered either publicly or in the other place. It is pretty plain that it is a very important issue. It is pretty plain—and I pray in aid the very last speech we heard —that the argument in this House has been comprehensively won by those who support my noble friend Lord Rooker. In those circumstances, we on this side of the House will vote in favour of my noble friend's amendment.
Lord Wallace of Tankerness
My Lords, yet again, we have had a useful debate, with some powerful arguments made. I anticipated at the beginning of the debate that strong points would be made, but, nevertheless, we cannot depart from the central point. We are being invited to include in the referendum process a mechanism whereby, if a majority of the people vote yes, it will not necessarily deliver a yes outcome. I take the point made by my noble friend Lord Trimble. Although my noble friend Lord Forsyth was right to say that the 40 per cent rule in the Scottish referendum in 1979 is not the same as that proposed by the noble Lord, Lord Rooker, nevertheless, the point made by my noble friend Lord Trimble still holds. If people turn out and there is a yes vote, serious resentment would then be felt if somehow that was overturned by this House or the other House. At a time when we are trying to restore trust in the political process, to set aside the majority view of the people would be very serious.
The noble Lord, Lord Rooker, said that his amendment would not affect the outcome. I cannot accept that. It would not affect the result, but it could affect the outcome. Clearly, without his amendment, if there is a yes vote, the outcome is that the order would be laid to implement the system of an alternative vote for the next general election. His amendment could result in a different outcome, because if there was less than a 40 per cent turnout, it would not follow that an alternative vote would be used at the next election. Let us not shy away from the fact that his amendment would affect the outcome of the referendum in that important sense.
I take the point made by my noble friend Lord Lawson, who said that I had argued that it was a “stay at home” amendment. The “no” campaign could very well encourage people to stay at home to reduce the turnout. Because 84 per cent of the country will already be entitled to go to the polls on that day for the Scottish Parliament, the National Assembly in Wales, the Northern Ireland Assembly and local government elections in Northern Ireland and all parts of England bar London, if people want to vote no, we want them to turn out to vote no. We should not be giving people an encouragement to think that if they stay at home, they have the equivalent of a no vote, in as much as the yes vote may not bear fruit.
The Bill offers simplicity, clarity and certainty. It honours the promise to the electorate that they will decide how they return their representatives to the other place. They will do that as the result of a referendum without artificial barriers, without further complex, as yet undetermined, procedures and without political wrangling. It means that when they go to the polls on 5 May and want to vote yes, the outcome will not be “yes, maybe” or “yes if”. If they go to the polls to vote yes, it will count. Whatever the issues on the day are, their vote should be heard, listened to and given effect.
Lord Rooker
My Lords, I am incredibly grateful for the support for the amendment to ask the other place to think again. We have just spent a bit longer on it—seven minutes longer—than they spent on the whole of it last night, including the vote. I have made my point. I beg to test the opinion of the House.
Lord Wallace of Tankerness
That this House do not insist on its Amendments 16 and 19 to which the Commons have disagreed for their Reasons 16A and 19A:
Lord Wallace of Tankerness
My Lords, these amendments relate to amendments that were moved by the noble Lord, Lord Pannick, on Report. The House will be aware that the Members of the other place disagreed with them. The purpose of the amendments is to allow the Boundary Commissions to propose constituencies at plus or minus 7.5 per cent of the electoral quota where they consider that there are exceptionally compelling geographical circumstances or local ties. The Government remain of the view that these amendments should not form part of the Bill. A clear and unequivocal view was expressed in the other place on the matter, which is fundamentally about arrangements for elections to that House. The argument advanced by the noble and learned Lord, Lord Lloyd of Berwick, in the previous debate has an equally persuasive force in this debate, too.
The issue of variation from absolute parity dominated many of our debates throughout our deliberations and in quite a lot of other discussions. I believe that the House has performed an important role in focusing on the issue and indeed in trying to find some way that might command support on all sides of the House. The House made an exception in the case of the Isle of Wight and the Government have accepted that. However, it is important to make a distinction between the exceptions to the parity rule in the Bill that Parliament has decided should be exceptions—the Orkney and Shetland seat, the Western Isles seat and now the Isle and Wight seat—and the exceptions from the parity rule that would be determined by the Boundary Commissions.
It might be helpful if I set out the Government’s objection to the amendment. The Government’s proposal, as I have indicated, is for a 5 per cent range on either side of the UK electoral quota. That, of course, means a band of 10 per cent. We believe that that band has a clear rationale. It is the closest that we can get to achieving equality; I think that everyone recognises that absolute equality and no flexibility whatever would not be a proper way of proceeding. We believe that a 5 per cent range on either side is a way in which we can achieve equality in the weight of the vote and an equal say for voters in the outcome of a general election and at the same time allow the Boundary Commissions, particularly the Boundary Commission for England, to continue their practice of using wards as the building blocks of constituencies.
Let us remind ourselves that wards are drawn up with local factors in mind. We have had many debates about their importance in this regard and it would be unfortunate not to mention in this final set of debates Professor Ron Johnston, who has been quoted considerably. We will give him another airing. In his contribution in his first evidence session before the Political and Constitutional Reform Committee, he noted that much local political activity and engagement is based on the ward structure. The secretary to the Boundary Commission for England, in his evidence to that same committee, said that under the rules in the Bill it would be possible to allocate constituencies using wards in the majority of cases. While an absolute prohibition on splitting wards would not be appropriate, not least because in some cities the wards are so large that it might make more sense for local communities to be divided, we accepted arguments made in this House that the commissions should be explicitly empowered to take wards into account. Indeed, we tabled an amendment to that effect.
As I indicated, wards offer a clear rationale for striking a balance between the competing principles of one elector, one vote and local flexibility at 5 per cent of the quota. The figure of 7.5 per cent lacks that objective rationale and would increase the variation that was permitted, compromising more the principle of equally weighted votes in doing so. In particular, it is worth remembering that a 7.5 per cent variation on either side would not resolve the issue of the exceptional constituencies that has been raised in a number of our debates. It would not preserve the Argyll and Bute constituency and it would not guarantee the Tamar as a border, the borders of historic counties or the Isle of Wight comprising whole constituencies.
In debates, your Lordships concluded that there was a special case for treating the Isle of Wight as an island constituency. At the time, the Government expressed a different view, but we have now recognised the strength of cross-party support and have brought forward provisions to treat the island in a manner that is consistent with other island exceptions in the Bill. Therefore, Parliament, as I have indicated, has concluded that the Isle of Wight is a special case. We believe that that is the right approach.
The alternative approach before us would place the decision in the hands of the Boundary Commissions and open the door to further variations in a way that could cause practical difficulties for the review. We do not agree that the use of discretion will be as unusual as perhaps some of those who support the amendment think it might be. The noble Lord, Lord Pannick, sought to reassure us on this point on Report and has drafted the amendment with the benefit of his considerable expertise and in such a way as to protect commissions from successful judicial review. However, that is not the same thing as limiting the use of the discretion, as those who have practical experience of the way in which reviews operate and of the role played by political parties would testify.
The flaws in the 1986 legislation and the merits of the rules in the Bill as drafted were set out clearly in the British Academy report on the Bill. Those experts, who have the benefit of many years of practical experience in these matters, said that,
“the rules set out in the Bill are a very substantial improvement on those currently implemented by the Boundary Commissions (they have a clear hierarchy and are not contradictory)”.
Our concern is that, at a stroke, the clarity and fairness of the rules would be undone by this amendment, since theoretically there could be 600 claims for exceptional local ties. Even if there were not 600 claims, one could still anticipate a considerable number. In at least one part of the debate yesterday in the other place, one could already hear some of the arguments that were beginning to be worked up.
Local ties are genuinely important to communities. That is why, within the 10 per cent range that is provided for in the Bill, the Boundary Commissions can take them into account, as they always have. However, we all know, and the evidence is clear, that these are the means by which parties disguise arguments in their electoral interests. As we know from Professor Ron Johnston’s evidence to the Political and Constitutional Reform Committee in October last year, these inquiries were “dominated by political parties” and,
“very largely an exercise in allowing the political parties to seek influence over the Commission’s recommendations”.
There is also the risk of complex and often unknown knock-on effects; I think I described some of them when we debated this on Report. The knock-on effect of flexibility is applied, and not necessarily to the immediately neighbouring constituency. Again, I reference Professor Johnston, who has many years of experience in this. When studying the practical impact of the rules in the 1986 Act, he noted that it would be a problem, especially if the Boundary Commission proposed constituencies for an area within the 5 per cent constraint and then someone came up with an extremely compelling argument for 7.5 per cent, and that the knock-on consequences could ripple right through a region, indeed right through a country. He said that the Boundary Commission would then have to re-jig all the constituencies in that region, which would undoubtedly delay the process. Would they make the deadline?
To those who argue that the same argument applies to a 5 per cent band of tolerance as it does to 7.5 per cent, I would say that that is true up to a point, but the Government propose from the outset that all areas will be treated the same and that the options for boundaries in a specific locality will therefore be available to all those involved. If a change is made, particularly at later stages, under our rules it would still fall within the original 95 to 105 per cent range, but that would not be the case if a knock-on effect arose from a tolerance of up to 7.5 per cent in exceptional circumstances, because by doing that the envelope would be made smaller in some respects and the other constituencies would have to fit into that smaller envelope.
There is also an important distinction of principle to be made. The amendment asks the commissions to create a special band of electors who are outside the rules that apply to everyone else and whose votes might therefore carry more or less weight than elsewhere. That stands in contrast, as I have indicated, to the approach that has been put forward by the Government, which ensures that the overwhelming majority of UK parliamentary constituencies are treated on an equal footing, except those exceptions that Parliament has decided—the ones originally in the Bill and the one proposed by this House on the Isle of Wight, which has been accepted by the Government and voted for in the other place.
In conclusion, I believe that our House has had the opportunity to consider the amendment put forward by the noble Lord, Lord Pannick. It has been an important issue. The noble Lord, Lord Pannick, I think, would acknowledge that quite a lot of effort was made to see whether we could find a way forward. In that respect, a considerable amount of work was done—not only during the passage of the Bill through your Lordships’ House—in response to your Lordships’ clear views. The other place has also now had the opportunity to consider this amendment. A clear view has been expressed in the other place. Members of the other place have considered this and there were majorities of 67 and 71 respectively rejecting these amendments. The other place has expressed a clear view on these matters, which relate to its function and its membership. Your Lordships’ House asked it to think again. It has done so. I therefore urge caution before we ask it to consider the issue once more. I beg to move.
Amendment B1 to Motion B
Lord Pannick
As an amendment to Motion B, leave out from “House” to end and insert “do insist on its Amendments 16 and 19”.
Lord Pannick
My Lords, I apprehend that the House will not want me to rehearse the merits of the substantive amendment to Clause 11 and respond to the criticisms of it. Your Lordships heard that debate last week. It was a very full debate and the House voted by a healthy majority to accept the amendments.
I listened to the debate yesterday afternoon in the other place. All the points that were made by the Minister, Mr Mark Harper, and the points that were made again today by the noble and learned Lord were ones that I sought to address and answer in the debate last week. I will not repeat any of that. Nothing new was put forward yesterday or this afternoon.
I should also mention—it was a point made by the noble Lord, Lord Higgins, in the debate earlier today—that on the Commons consideration of the Lords amendment yesterday the time for debate on this issue was limited to one hour. Of that one hour, the Minister, Mr Mark Harper, spoke for almost 40 minutes. Admittedly, there were interruptions during that time, but that is what happened. The actual debate from other Members of the other place—on what we all agree is an important constitutional issue and on which this House has expressed a very clear view—lasted 20 minutes. I take the view—other noble Lords will take their own views—that this is highly relevant to the question of whether or not this House ought to ask the other place to look again, and to look again seriously, at this issue.
Before I turn to the two points that I want to make, I suggest to the noble Lord, Lord Kilclooney—I am sorry that he is not in his place—that he might, on reflection, consider that he was a little unfair to the Deputy Prime Minister in the debate this morning. I was one of the Cross-Benchers invited to meet Mr Clegg to discuss the substance of my amendment. I very much welcomed that and the opportunity that I have had throughout our consideration of this Bill to discuss these matters with the noble and learned Lord and with the Bill team. I thank them for the exchanges that we have had. I understood the invitation from Mr Clegg to be a recognition—and a very proper recognition—that on the Cross Benches we put forward amendments when we think it appropriate. Each one of us considers them on their individual merits; each one of us, without being whipped, votes as we think is appropriate on that particular matter. I put on record our gratitude—I am sure that I am not the only Cross-Bencher who thinks in this way—to the Deputy Prime Minister for taking the time and trouble to meet with us. It is not appropriate for him to be criticised for doing that.
Baroness O'Neill of Bengarve
My Lords, I put my name to the relevant amendment on Report. As I did not have the opportunity to speak then, I shall say why I think that it would be important for the other place to consider it again. The amendment is extremely helpful to the coalition—it has not interpreted it that way—for the simple reason that Boundary Commissions are being asked to take on a complex task. There are some clear rules, but it is difficult and we do not know what position they may find themselves in. Other amendments before your Lordships’ House proposed that the regular band within which constituencies might vary should be widened. I did not support any of those. I agree with the Government that it is important for democratic reasons that, in so far as constituencies can be made equal, they should be made equal. However, in reality, Boundary Commissions may face an intractable task.
There are situations in which sub-division is not as simple as we might think in considering the application of rules. As is said in primary schools, sometimes three into two won’t go. For that reason and to enable the Boundary Commissions to carry out their task well —not for them to make a mass of exceptions; with good luck, they will make no exceptions—we should respectfully ask the other place to consider the amendment again.
Lord King of Bridgwater
I begin by saying how much I admire the ability of the noble Lord, Lord Pannick, to make another most interesting and persuasive speech without repeating the speech in any great detail that he made on the previous occasion. I respect that. He said that the amendment that we discussed on Report was carried by a healthy majority; I point out that it was a quarter of the majority carried after the debate that we have just had, so I do not know what we would describe that as.
It is important to remember where we are. I would like to think that the whole of this noble House was agreed on two points: that seats should be as equal as possible, and that a more equal distribution should be in place by 2015. Some people on the opposition Benches—certainly not the noble Lord, Lord Pannick, and his colleagues—may be keen not to see more equal distribution by 2015; they must speak for themselves. However, it is certainly the objective.
I do not think that the noble Lord, Lord Pannick, challenged this point when I made it previously: his amendment allows for less equality than presently proposed by the Government. Maybe some noble Lords, including those on the Benches opposite, were not quite aware of what the Government had proposed. I do not agree with where the Government started from. They proposed 10 per cent; I had some heckling when I mentioned that last time, because people did not realise—they thought that it was 5 per cent, but of course it is 5 per cent either way, a 10 per cent spread. The amendment proposes 15 per cent. I think that 10 per cent is too high. I recognise that the Government realised that there had to be a compromise when they drew up the Bill—that some allowance had to be made for latitude by the Boundary Commission in its work. The amendment is a compromise on a compromise, because moving to a 15 per cent spread means a difference of perhaps 12,000 people between different constituencies. That is too great. That is my first point.
My second is on the other thing done by the amendments on which the noble Lord, Lord Pannick, is inviting the House to insist. He effectively conceded that 15 per cent was a big variation, so he covered himself by inserting the fact that it should be used only in exceptional circumstances. As was recognised by certain noble and learned Lords, exceptional circumstances then allow further consideration and opportunity for challenge and further chance of judicial review. That is why the amendment fails my second test by making it more likely to mean that we do not get a new and fairer electoral arrangement by 2015.
In the light of today’s previous debate, we might have expected what the noble Lord, Lord Pannick, then said when he set this up as a great constitutional issue. I do not want to discuss the previous debate—I did not speak in that—and I understand entirely why the arguments might be made in this case. However, surely the purpose of our electoral system—which we all support—is that there should be equal value in equal votes, so far as possible. I do not consider that a great constitutional change which needs great pre-legislative scrutiny. Of course he talked about pre-legislative scrutiny and further public consultation—perhaps public hearings—in advance of any proposals from the Government. That would certainly scupper any chance of the electorate being able to vote at the next election, if it is in 2015, with a new and more equal distribution of votes.
The noble Lord flattered this House very adeptly—we all enjoy a bit of flattery—by saying that it has a considerable reservoir of knowledge, and that many of us have stood in many different elections and experienced boundary changes and changes in constituencies. That is absolutely right. However, I thought that he was getting perilously close to saying that, on this issue, this House was entitled in some way to be superior to the other place.
Lord King of Bridgwater
He did not go that far, but there was an implication of it in what he said. I listened from elsewhere, with the advantage of television, to the speech on the previous amendment of the noble and learned Lord, Lord Lloyd, who said that it was right that this House should ask the other place to think again. The noble Baroness, Lady O’Neill, made the same point. However, on whether votes should have an equal value as far as possible in each constituency and on ensuring that the next election takes place on fairer boundaries, this House has already asked the other place to think again. The other place has replied that it does not wish us to insist on our amendment. Our ability to challenge the other House is a very important power; it has to be used responsibly; it has to be used with great care. I respectfully suggest to the House that this amendment, very ingeniously and properly moved by the noble Lord, Lord Pannick, is not the sort of issue on which we ought now to challenge the other place for a second time.
Lord Lloyd of Berwick
My Lords, I voted against the amendment of the noble Lord, Lord Pannick, on Report. It seemed to me then, and it does so now, that a Bill which aims at equality as its underlying principle but which allows a margin of 5 per cent either way is both clear and logical. To allow a further margin of 2.5 per cent in very exceptional circumstances is neither clear nor logical nor, I suspect, necessary for the purpose of creating viable or workable constitutions. The noble Lord may have in mind specific instances of where it would make all the difference, but if there are such specific instances, they should have been dealt with as such in the Bill, as have been the Isle of Wight and Orkney and Shetland.
I asked myself throughout the original speech of the noble Lord, Lord Pannick, and what he has said today, the following question. Let us suppose that the Bill had originally allowed a 7.5 per cent margin either way of equality. Would the noble Lord then have tabled an amendment saying, “Oh, no, we had better allow an extra 2.5 per cent just in case”.? I do not believe that he would have argued that and, if that is the case, I cannot see how he is entitled to make the point that he makes in relation to 5 per cent.
I do not propose to pursue that argument—I may do so later with my learned friend and I have no doubt that he would beat me to it—because there is the more important question here, which I tried to develop during debate on the previous amendment. The noble Lord, Lord Pannick, has been severe in his criticism of the Government’s conduct throughout the passage of the Bill, and in many respects he may be right. However, to use those immortal words, we are now where we are, and I am unable to see how the noble Lord’s amendment, even if it were ultimately accepted by us, will cure the criticisms which he has made of the Government.
Of course it was our duty to examine the Bill with great care, all the more so as it is a constitutional Bill. The noble Lord, Lord Lawson, referred to this House in the previous debate as the protector of the constitution. That may be so, but we are not the sole protectors of the constitution; so is the House of Commons. The constitutional point raised by this amendment seems, as the noble Lord said, not to be of very great importance, although it is obviously of some importance. We have given the other House the chance to reconsider this point; it has done so; it has decided against the amendment of the noble Lord, Lord Pannick; and we should now accept its view.
Baroness Finlay of Llandaff
My Lords, before coming to the House today—and I hesitated before intending to speak—I felt that I should go back and look at the figures for the electorate of the whole of the UK and try to do some modelling on the sums. My conclusions have been based on fairly simple maths. It may be that we are where we are, but it is clear that we have lost 25 per cent of MPs from Wales and that Wales, Scotland, Northern Ireland and England will have their own areas. There have been arguments about Cornwall and rural constituencies in particular. I wanted to look at whether there might be unintended consequences of the legislation. In other words, are we really legislating for what we want to do, or do we run a risk of an unintended consequence? My noble friend Lady O’Neill put it succinctly. The point of the amendment is to allow a margin, in exceptional circumstances, so that the Boundary Commission is not locked into a difficult situation by the legislation if it comes across circumstances where the population has moved or the size of the electorate has changed and where it is suddenly faced with a constituency which does not fit within the relatively narrowly margin of 5 per cent. The principle of equality was in some ways abandoned over the Isle of Wight. That was a decision of both Houses. It was agreed that exceptional circumstances applied there. This amendment is about exceptionality. It would put a safety margin in the Bill. It would not undermine the Bill’s overall principles of a more equal distribution of votes and a reduction in the other House’s size.
It was the relative brevity of the debate in the other place that prompted me to pull out and go through the figures last night and early this morning. I have come to the conclusion that we should supply the Boundary Commission with a safety margin for it to provide workable constituencies so that the people of this country are well represented in the other place. Therefore, I support the amendment.
Lord Armstrong of Ilminster
My Lords, as one who also attached his name to the amendment of the noble Lord, Lord Pannick, I support him in inviting the House of Commons to think again. The amendment does not fundamentally undermine the principle of equality of constituencies. It does not undermine the 5 per cent margin in any serious way. As the noble Baroness, Lady Finlay, just said, it provides a safety margin should cases arise that we do not now foresee of the kind which have caused the coalition Government to make exceptions for Orkney and Shetland, the Western Isles and now for the Isle of Wight. We cannot exclude the possibility that such circumstances will arise. The extra discretion which the amendment would allow may never need to be used, but it should be in the Bill as a safety valve because I do not think that we would want the two Houses to come back to the matter in a single case. I therefore hope that the House will support the noble Lord, Lord Pannick, and invite the House of Commons to think again.
Lord Mackay of Clashfern
My Lords, I appreciate the efforts of the noble Lord, Lord Pannick, in connection with the amendment. The result has been an amendment which has been drafted as precisely as possible. On the other hand, it has practical consequences to which I shall come in a moment. I support what the noble Lord said in relation to the responses—or the lack of responses—of the Government to the two Select Committees to which he referred. This is deplorable and it is right that this House should express that view. I hope the Minister will take back from the House the opinion that that conduct should not be repeated and that, in future, we expect the Government to respond within the time that, after all, they have set for responding to Select Committees so that reports and the Government’s response can be considered within an appropriate time. I also agree that pre-legislative scrutiny and public consultation can be of considerable assistance.
I understand, and the noble Lord, Lord Pannick, has made it clear that he understands, that at the beginning of this Parliament we hoped to get something in place in time for the next election—the suggestion is that that will be five years from the original election, although some people think it may be quicker—and the Boundary Commission has said that the task it has been set in the Bill is within its capability, although it is a tight schedule. However, the circumscribed discretion which the noble Lord, Lord Pannick, has drafted and which was approved by this House on Report, contains a quite considerable possibility for argument. Suggestions have been made about what these arguments might be, but I consider that the margin given in the discretion is very much subject to argument. The result of that will be—as the noble and learned Lord, Lord Scott of Foscote, said on Report and which I support—that the chances of judicial review in relation to this kind of discretion are much greater than they are in respect of the 5 per cent. This is because there is argument available about the precise meaning of the limitations contained in the discretion.
I know that these limitations are as precise as we can make them, but no one who has had any experience of judicial review would rule out the possibility of ingenious constructions being mooted and seriously considered by judges on judicial review. If the amendment were to remain in the Bill, there would be a greater risk than before that the Boundary Commission will not be able to complete its work within the period before the next election. Although I was not here on the previous occasion when the amendment was voted on, I was very much taken with the efforts of the noble Lord, Lord Pannick, as he knows. However, having considered the matter as carefully as I can, I have come to the conclusion that one of the consequences of the amendment may well be that the Boundary Commission would not be able to complete its task before the next election. For that reason, we would be wise to accept the decision of the House of Commons.
I admit that the system in the House of Commons requires a guillotine. Fortunately, our self-restraint is such that we do not require such a device or a timetable of the kind used in the other place, which, as has been said, was instituted some time back. However, it has been continued and, although it is not for me to tell the House of Commons how to go about its business—I have enough to do to conduct my own—it might be for the advantage of Parliament generally if a reconsideration of these timetable arrangements was introduced. At least the amendment of the noble Lord, Lord Pannick, received longer consideration than the previous amendment of the noble Lord, Lord Rooker, so we should be thankful for that.
I am not in favour of sending this amendment back to the House of Commons for a second time.
Lord Butler of Brockwell
My Lords, perhaps I may ask the Minister to address one point which is material to the issue. He said that the 10 per cent margin—5 per cent each way—would make it unnecessary to break up any ward in an existing constituency. If that is the case, the risk that one would need greater flexibility than the 5 per cent is either non-existent or very materially reduced. Can he clarify that point? It is relevant to whether we need the extra flexibility provided by the amendment of the noble Lord, Lord Pannick.
Lord Desai
My Lords, the Government have asked the Boundary Commission to fit 597 out of 600 seats within a 5 per cent margin either way. I have tried to argue before that, in terms of statistical distributions, this will be an immensely difficult task because a standard deviation of 1.7 per cent is too small.
If the Boundary Commission were allowed to fix 95 per cent of the seats within the Government’s favoured margin of 5 per cent and the remaining 5 per cent of seats—30, perhaps 25, seats—were allowed to fall under the amendment of the noble Lord, Lord Pannick, it would make the tasks of the Boundary Commission and the Government simpler. The noble Lord, Lord Pannick, has not tried to subvert anything the Government want to do; he has been very helpful in making it much easier for the Government to achieve what they want to achieve. Otherwise it will be very difficult to carry out the task.
Lord Falconer of Thoroton
This is also an important debate and, again, the question is whether or not we should ask the other place to think again. We on this side of the House think it is right that we should do so.
Again, there is an interaction of two issues: first, the extent to which the matter has been properly considered by the other place; and, secondly, the extent to which it is an important issue. On whether the Commons has had a proper opportunity to consider the issue, this debate was an hour long in the other place. In winding up for the Opposition, Mr Sadiq Khan pointed out that Mr Mark Harper had taken up two-thirds of the time available. Right across the debate there was the repeated theme that the Government were not listening and that there was not clarity about what was happening. I shall not quote from Labour Members but from coalition Members.
When addressing Mr Mark Harper, Mr Mark Field said:
“Does my hon. Friend not appreciate the concern that when we are discussing whether there should be any variance, be it of 5% or 7.5%, it is important to know how the process operates? … If we do not have at least a basic understanding of how it will operate, it will be difficult for us to make any value judgment as to where the variance should lie, which is the subject of amendment 19”.—[Official Report, Commons, 15/2/11; col. 864.]
That is what we are now talking about.
Mr Andrew George, a Liberal Democrat Member, said:
“Given the nature of some of the questions that the Minister has been asked in the past few minutes, does he agree that perhaps there should be an opportunity to review the wisdom of going ahead on the basis that he is describing?”.
Later again, the same Member—a coalition Member—went on:
“My hon. Friend is absolutely right, but I think that the inflexibility of the proposals will result in much more significant changes across the country … All I am asking is that the Government take a less intransigent and more flexible approach”.—[Official Report, Commons, 15/02/11; cols. 865-8]
One Labour Member is worth quoting. Mr Paul Murphy, who had a distinguished career and was Secretary of State for Wales, said:
“I do not understand why the Government and the Minister are being so rigid and fundamentalist on this issue”.— [Official Report, Commons, 15/02/11; col. 869]
The mood around the House, from reading Hansard, is that inadequate answers were given, that the Government were being unnecessarily rigid and that there was no proper understanding of how it would work. That is perhaps not surprising, because this amendment first saw the light of day—in the sense of it being passed by this House—a week ago today. The material in the other amendment is going back to the other place for further consideration. In my respectful submission, it would obviously be wrong if this did not go back with it.
Is this an important amendment? In my respectful submission it is. I do not know how many of your Lordships were present when the noble Lord, Lord Armstrong, told the story of Procrustes; or when the noble Lord, Lord Pannick, went through the detail of the work that he had done with the Government to get to a place with this extra 2.5 per cent. He was the only person in that debate—including the Government—who had done the work and thought through what the consequences were. For example, in relation to the point made by the noble Lord, Lord Butler of Brockwell, there are some wards that are so large that they will not be protected by 7.5 per cent, so obviously there will be even more wards that will not be protected by 5 per cent. The answer to the question put by the noble Lord, Lord Butler of Brockwell, is that more wards will have to be broken up under 5 per cent than under 7.5 per cent. I hope that blocks the retreat for the noble Lord, Lord Butler of Brockwell, at this particular point.
As far as the overall position is concerned, the noble and learned Lord, Lord Wallace of Tankerness, referred to the academics and the people involved in the area. Professor Johnston, the leading academic in relation to this issue, said he did not normally support public inquiries; however, what the noble and learned Lord, Lord Wallace of Tankerness, did not say was that he thought that, in the context of such a far-reaching change as is envisaged by this boundary review, there is a strong argument for the ability to make changes. Robin Gray, the former chairman of the Boundary Commission, said that some flexibility in addition to the 5 per cent was required.
In relation to the issues that were being considered in the previous debate, we considered the issue of judicial review in detail. Of course I respect the noble and learned Lord, Lord Mackay of Clashfern, in relation to the issues that he raised, but the noble and learned Lord, Lord Woolf and the noble Lord, Lord Pannick, both expressed the view that most judicial reviews, even on this, would fail. I also make the point that the courts, in looking at these issues, would be well aware of the deadline, which would be sometime in October 2013. These issues would arise during 2012, so the courts, in my respectful submission, would be well able to have timetables that would ensure that the deadline of October 2013 was met. They would not be faced with these issues late on in the process, but much, much earlier on. The application for leave for judicial review would take place at such a time that the court could deal with them quite smartly. The noble and learned Lord, Lord Scott of Foscote, made the point that hopeless applications for judicial review take time—which is absolutely true—but a court keen to meet a deadline set in statute would in my respectful submission be able to deal with that.
The final point dealt with in the debate in the Commons was the statement that it was not possible to craft a genuine exception—a point I should say that was not made by the noble and learned Lord, Lord Mackay of Clashfern, in this debate; but which was referred to by Mr Mark Harper, who cites a case called Al Rawi and others v Security Service, a case about the extent to which you can have a special procedure for terrorists. It is hard to imagine a case more different than the sort of case the courts would be dealing with here, and it may be an indication of the difficulty in finding support for that proposition. I do not ask that this House reaches a firm conclusion; all I say is that it is the right thing to do for this House to ask the other place to think again. That seems very little to ask. We support the noble Lord, Lord Pannick.
Lord Wallace of Tankerness
My Lords, once again I thank noble Lords who have participated in this debate on what is an important issue, as has been recognised many times during the passage of the Bill through your Lordships’ House. I start by picking up the points made by both the noble Lord, Lord Pannick, and my noble and learned friend Lord Mackay of Clashfern with regard to the lengthy delays in responding both to the report from the Political and Constitutional Reform Committee in the other place and to your Lordships’ Constitution Committee. I am not in a position to offer any explanation, but I do recognise that the time that was taken cannot have assisted either House and I therefore wish to apologise. Responding to the point made by my noble and learned friend, I will certainly take it upon myself personally to make sure that the comments made in your Lordships’ House—and indeed I will reflect the force of them too—will be conveyed to colleagues.
It has been argued that the role of the House in asking the other place to think again, and indeed in asking the Government to think again, has been well discharged in respect of these amendments. As has been acknowledged, the Government did engage to see whether there were ways in which we could find common ground and indeed there has been an opportunity for consideration in the other House. However, before inviting the House to send the amendments back again for further consideration, it is important that we perhaps reflect as to what this supreme constitutional principle that we are asking the other place to think about is. Is it just 2.5 per cent? One of the principles of the Bill, referred to by my noble friend Lord King of Bridgwater, is that of equal votes—one vote one value—as best we can throughout the United Kingdom. That is an important principle and one we believe is reflected in the Bill and which, bar the two issues that are now outstanding, has been accepted by both Houses. It is not slavish arithmetic, as I sought to explain. The 5 per cent variation, which gives 10 per cent in all, was not just conjured up—indeed my noble friend thought that it should have been lower than that. In response to the question from the noble Lord, Lord Butler of Brockwell, we believe that the 5 per cent is the closest we can get to achieving equality in the weight of a vote—I am repeating myself but it is important to do so—and an equal say for voters in the outcome of a general election while allowing the Boundary Commission for England to continue its practice of using wards as the building blocks of constituencies in England. I remind the House that the wards themselves are drawn up with local factors in mind.
The contribution of the now much quoted Professor Johnston, in his first session before the Political and Constitutional Reform Select Committee, noted that much local political activity and engagement was based on the ward structure. Crucially, the secretary to the Boundary Commission for England, in his evidence to that committee, said that under the rules in the Bill it would be possible to allocate constituencies using wards in the majority of cases. I did say, in my opening remarks, that an absolute prohibition on splitting wards would not be appropriate because there are some places—Birmingham is a case in point—where some wards are so large that it might not be possible not to split them. In these cases, the wards may even be so large that it might make more sense for local communities for them to be broken up to get a more readily identifiable sense of community. The basic point is that in the vast majority of cases it is believed that wards will be the building blocks for the constituencies in England. That is why the 5 per cent was chosen. We have yet to hear, with all due respect, a rationale for 7.5 per cent. I have sought to explain why 5 per cent is right and why there is a rationale behind it, but we have not yet heard a clear rationale for 7.5 per cent.
Lord Pannick
I am grateful to all noble Lords who have spoken in this interesting and important debate. The noble Lord, Lord King, suggested that I had come perilously close—I think that that was his phrase—to suggesting that we enjoy some sort of superiority over the other place. I am very sorry if I gave that impression to the noble Lord. That was certainly not what I said and certainly not what I intended. My suggestion, which is I think a modest one, was that in all the circumstances that I indentified in my earlier remarks, it was appropriate for this House to ask the other place to think again about this matter.
The noble Lord, Lord King, and the noble and learned Lord, Lord Lloyd of Berwick, along with the Minister, asked what the constitutional importance is here and why we should be worried about this matter. The constitutional importance is that we are debating a Bill that addresses perhaps the most fundamental aspect of our election law, such as questions of constituencies and the size of constituencies as well as questions on the electoral quota. The constitutional significance is whether this House really should approve an inflexible formula—that is what it is—that prevents the Boundary Commission going outside the 5 per cent quota whatever the circumstances it may find in any particular case.
The noble and learned Lord, Lord Mackay of Clashfern, expressed a concern that the substantive amendment would create a real risk of the boundary reviews not being completed by October 2013. I have enormous respect, as he knows, for his views and judgment—and that is not something that I say about all those whom I have represented in judicial reviews, as I did when he was the Lord Chancellor. However, I do say to him and to other noble Lords that in the context of the task already being imposed on the Boundary Commission, the additional discretion to avoid this inflexibility cannot cause real practical problems. The Boundary Commission will, in any event under Clause 11, be obliged to look at precisely these geographical factors and local ties in order to assess in its judgment whether it should move up to 5 per cent. All the amendment does is to give the Boundary Commission discretion when it has carried out that exercise and, because of the exceptionally compelling nature of the circumstances, thinks that it should move to 5.1 per cent, for example, to avoid some arbitrary barrier.
I understand the concern about judicial review, but the Administrative Court is quite capable of hearing cases speedily when that needs to be done. It does it every day. It recognises, because it does it every day, that public bodies should be left themselves to decide on the application of narrow exceptions given them by Parliament.
The noble and learned Lord, Lord Mackay, expressed agreement with my criticisms of the Government’s conduct in relation to the Select Committee reports. I suggest to noble Lords that this is surely relevant when they are considering whether we should take the view that the Government and the other place have not yet adequately considered the views of this House and whether the matter should be looked at again.
The noble Lord, Lord King, congratulated me on making what he described as a persuasive speech earlier this afternoon. I suggest to noble Lords that sometimes a speech may be persuasive because it is actually right. I ask noble Lords to accept that it is appropriate for this House to ask the other place to think again on this matter. I wish to test the opinion of the House.
Lord Wallace of Tankerness
That this House do not insist on its Amendments 17 and 20 to which the Commons have disagreed, and do agree with the Commons in their Amendments 20A to 20E in lieu.
Lord Wallace of Tankerness
My Lords, during the passage of the Bill through your Lordships’ House there was a very important Committee debate on the Isle of Wight. As I indicated on behalf of the Government at that time, the fundamental principle underpinning the Bill is that one elector should mean one vote. At that stage the Bill was subject to only two exceptions. It was our view that a cross-Solent constituency, comprising part of the Isle of Wight and part of the mainland, was practicable as the island does not have the challenging geography of the other preserved constituencies. However, the arguments made in that debate, not least by my noble friend Lord Fowler, carried the day in this House. It did so by some margin and with considerable cross-party and Cross-Bench support. This undoubtedly gave us reason to reflect, and we have come to the view that the case against a cross-Solent constituency is persuasive.
That was the objective of the amendment proposed by my noble friends Lord Fowler and Lord Oakeshott. However, their amendment left open the question of whether there should be one seat or two on the island. That was left up to the Boundary Commission for England. There are practical reasons why we have reservations about that. The noble Lords’ amendment did not provide the Boundary Commission for England with any instruction on how it should determine the number of seats to be allocated to the Isle of Wight. Nor was any consequential amendment tabled to deal with the matter. The Government consider that if an exception is to be made for the Isle of Wight, it would be consistent and fair for it to be made on the same basis as for the other preserved constituencies in the Bill.
The amendments passed by the other place following a Division provide certainty for the commission by requiring that the island has two seats, and by taking those constituencies outside the formulae for the allocation of seats to parts of the United Kingdom and the calculation of the electoral quota elsewhere in the Bill. Two seats of around 55,000 electors each would be much closer to the electoral quota than one seat of around 110,000. That is consistent with the underlying principle of equality. Furthermore, I understand that the population of the Isle of Wight looks set to increase. Two seats would be likely to move closer to the quota, whereas one seat would move further away from it. It is practical and, as the honourable Member for the Isle of Wight in the other place confirmed in his speech yesterday, it respects the wishes of those who mounted a vocal and, as we have seen, effective campaign to prevent a cross-Solent constituency. I beg to move.
Lord Fowler
My Lords, I will be brief. I thank the Government for listening to what the House of Lords said on my amendment and for the decision that they have taken. My amendment was special in that we were dealing with an island that has only ferries connecting it to the mainland. I said in moving the amendment that it would allow there to be one or two constituencies on the Isle of Wight. The Government have decided to be specific and make two, and that is the right decision.
The only other options would have been to have one massive constituency on the Isle of Wight or, alternatively, a cross-Solent constituency. That cross-Solent constituency would have meant there being one constituency on the Isle of Wight itself, with the remaining 35,000 electors put together with part of, say, Portsmouth on the mainland. It would be divided by 10 miles of the Solent, with expensive ferries being the only means of communication. The constituency would be partly on the mainland and partly on the island. It is all very well to talk about community but the natural centre of that constituency would have been in the middle of the sea. There is no doubt that such a solution was rejected decisively by the people of the Isle of Wight. Eighteen thousand people signed a petition against it. The councils were against it, as were all the parties—the Liberal Democrats, Labour and the Conservatives.
In our previous debate the Minister suggested, without overstating his case, that there were some who had written in support of a cross-Solent solution. Very courteously, as always, he offered to investigate how many had done so. Unfortunately his reply was not entirely convincing. In his letter of 7 February, he said:
“You asked how many representations received about the Isle of Wight were in favour of the Bill’s original proposals and how many were against. The Cabinet Office does not record correspondence in a way that would enable us to readily identify whether the authors were for or against particular issues”.
Perhaps that is just as well in the Minister’s case, although it raises a few questions about the value of writing to the Cabinet Office on any issue. To be fair, the Minister went on to say that he,
“was not seeking to claim that there were an equal number of representations received both for and against the Bill’s proposals”.
The Minister was absolutely right. I congratulate him and the Government on reaching the decision that they have.
It has been a very long process but the Government have listened at the highest level and the Commons has decided. I thank all those concerned with this campaign, particularly the excellent Member of Parliament for the Isle of Wight, Andrew Turner, who has worked long and hard to achieve this outcome. No one could have done more. I also thank my supporters in the vote on 19 January from around the House—from all parties and the Cross Benches—including those who found pressing engagements when the vote was called and abstained. I thank the opposition Front Bench; it is the first time in my political career that Labour Whips have provided Tellers for any Motion or piece of legislation that I have introduced over the past 40 years.
I make just one further comment. Given the progress of the Isle of Wight debate, no one can be happy with the heavy timetabling in the other place. I know that it is inherited from the previous Government but it prevented the island’s MP putting the issue to the vote before it came to the Lords, and virtually prevented him making a speech. I hope that the Government will now look anew at that procedure. Having said that, this amendment, which the Lords have carried and the Government have accepted, seems to me to carry out the traditional function of asking the Commons and the Government to think again. They have done so and I congratulate them on their good sense and on the outcome.
Lord Falconer of Thoroton
My Lords, I congratulate the Isle of Wight on this great achievement and the noble Lord, Lord Fowler, on the work that he has done to secure it. I wish the people of the Isle of Wight well in relation to the conclusion that has been reached. It is a decent outcome. It could have applied to other places but now is not the time to dwell on that. I wish the Isle of Wight good luck. I assume that the conduct of the Government in relation to the Isle of Wight prefaces a good result later in the day on the amendment that we passed earlier.
Postal Services Bill
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, many of us in this House will no doubt be experiencing a mild sense of déjà vu. After all, it was less than two years ago that this House debated a Bill of the same name. That Bill, in the name of the noble Lord, Lord Mandelson, was thoroughly scrutinised and improved by this House. However, the previous Government were unable to take it further, thus we find ourselves debating the same issues once again.
The purpose of this Bill is to secure the ongoing provision of the universal postal service and to safeguard the future of the Royal Mail and the Post Office. Before I turn to the detail of the Bill itself, I wish to explain why we must now take action. The universal postal service is a vital part of our economic and social infrastructure. Individuals and businesses across the country rely upon it, as they have done for nearly 200 years. The United Kingdom has been a pioneer in postal services and it is our duty in this House to do justice to this proud heritage and to safeguard the universal postal service for the future.
The noble Lord, Lord Mandelson, stood before this House two years ago and declared that we were living in a digital age. He is right. Our means and methods of communication are changing, with traditional options, such as the letter, increasingly bypassed in favour of electronic alternatives such as e-mail. The previous Government recognised this and, in 2007, commissioned an independent review of the postal services sector, chaired by Richard Hooper. Hooper was unequivocal about the need for action to safeguard the universal postal service. With the letters market in structural decline, he identified an urgent need for the Royal Mail to modernise and increase its efficiency. To do this, he argued, Royal Mail needed access to flexible capital. Noble Lords then in Opposition, and now occupying these Benches, accepted the recommendations of Hooper’s excellent report in full and we were prepared to support the Bill that was subsequently introduced by the previous Government. Indeed, we were sorry that, having left this place, the Bill did not complete its passage through Parliament.
It should come as no surprise that one of the first actions undertaken by my colleague, the Secretary of State for Business, on assuming office, was to ask Richard Hooper to update his report. That update, published last September, confirmed that if we are to secure the universal postal service we need to do three things. Royal Mail needs access to private sector capital and commercial disciplines; it needs to be relieved of its historic pension deficit; and the regulatory framework under which it functions needs fundamental reform. But Hooper’s most worrying finding was that Royal Mail’s already precarious financial position has actually deteriorated in the 18 months since his original report. The fall in letter volumes has, in fact, been more dramatic than was predicted: we now send 16 million fewer items per day than we did in 2005—a fall of nearly 20 per cent—and experts are predicting further global decreases of 25 to 40 per cent over the next five years. This problem is not unique to Royal Mail but the latter’s financial state means that it is not able to respond sufficiently.
To meet the challenges of the declining market, Royal Mail must modernise. Despite some progress, Hooper concluded that Royal Mail is still some considerable way from being best in class. This view is reinforced by Royal Mail’s Chairman, Donald Brydon, who told Committee Members in the other place:
“Compared with any other postal operator of quality or substance in the world, the Royal Mail is at the end of the queue in its modernisation”.—[Official Report, Commons, Postal Services Bill Committee, 9/11/10; col. 15.]
I am sure we will hear from noble Lords who will argue that Royal Mail must remain under the protection of public ownership. However, I put it to your Lordships that it is the Government’s ownership of Royal Mail that has failed Royal Mail. This company needs to be freed from the constraints of government ownership if we are to give it a chance to succeed.
I turn now to the Post Office and address some of the concerns raised both in this House and the other place, in particular, the concern that this Bill could lead to loss of business for the Post Office, and ultimately to Post Office closures. The Bill will enable the separation of Post Office Ltd and Royal Mail to allow for the private investment that Royal Mail so badly needs while maintaining the Post Office in public ownership. Opponents of the Bill have sought to portray this as a threat to the future of the Post Office. On the contrary, it is an opportunity for the Post Office. Separation will give its management the freedom to focus on getting the most out of the branch network and growing revenue across the whole business. Two thirds of Post Office Ltd’s revenue is unrelated to postal services, coming from areas such as financial services, government services and telecoms. It is in these areas that the growth opportunities for the Post Office lie. Government are far from alone in seeing the benefits of separation. The move has been welcomed by the experts at Postcomm and Consumer Focus, and by Richard Hooper himself.
Opponents of the Bill have argued that a privatised Royal Mail might not use the Post Office, leading to loss of business. Scaremongering over this issue was perhaps inevitable but I refer noble Lords to commitments made by Donald Brydon, chairman of Royal Mail, and a man who knows what he is talking about when it comes to Royal Mail’s commercial decision-making. In his evidence to the Public Bill Committee in the other place, Mr Brydon was clear that before any privatisation occurs, a new commercial contract will be put in place between the two companies for the longest time that is legally permissible. This is not a vague statement of hope. We have the chairman of Royal Mail putting on record his commitment that the commercial relationship between the two companies will continue, regardless of who owns Royal Mail, and your Lordships may rest assured that the Government, as shareholder, will ensure that this commitment is fulfilled. So we can be sure that the strong relationship between the two companies will continue, but with the Post Office in an even stronger position with its own fully constituted board and sole focus on what is best for the network.
However, the Government recognise that as well as the freedom to focus on its future, the Post Office also needs the means and support to do so. That is why we have committed to providing £1.34 billion in funding to the Post Office over the next four years. This will enable Post Office Ltd to undertake a substantial modernisation programme for the network and to maintain the network at its current size. This funding will help to put Post Office Ltd back on to a secure and sustainable financial footing. Once it has a stable financial base, the Bill offers the opportunity for Post Office Ltd to be transformed into a mutual. We believe that a mutual could be the ideal way to meet the distinct social and economic roles that the Post Office plays, giving sub-postmasters, employees, customers and communities a greater say in how it is run.
I should like to make one thing abundantly clear: there will be no programme of closures under this Government. Throughout this debate, we must never lose sight of the real reason for safeguarding the Post Office network. It is not about politics; it is about the millions of British people who rely on the Post Office—in particular, the vulnerable and those in rural and deprived communities. It is about the hard-working sub-postmasters and mistresses—the real-life Dorcas Lanes—who selflessly serve people up and down the country and whose value cannot be measured by profit-and-loss accounts alone. A mutualised Post Office will give these people a real voice, and I hope that noble Lords on all sides of the House will support these provisions.
I turn to the detail of the Bill. Part 1 removes restrictions on the ownership of Royal Mail. This is to enable the much-needed injection of private sector capital and disciplines. As I have already made clear, Royal Mail urgently needs to modernise. Some progress has been made already, which we welcome. But Royal Mail will need to continue the process of modernisation and transformation if it is to succeed in a declining market. This requires both capital and commercial disciplines that the Government simply cannot provide. The taxpayer has already made available billions of pounds for the current modernisation programme, and yet this covers only the costs envisaged three years ago. As Royal Mail’s Chief Executive, Moya Greene, told the Bill Committee in the other place,
“When you are in a business such as this, which is in a market undergoing dramatic change, you need to have access to capital continuously to keep up”.—[Official Report, Commons, Postal Services Bill Committee, 9/11/10; col. 4.]
I think we can all agree that government is neither the most flexible source of funding nor the most timely. There are competing priorities to consider, and any funding we provide to Royal Mail must go through the European Union’s sometimes lengthy state-aid approval process. Besides, government funds are too often accompanied by the spectre of political interference. What Royal Mail needs is flexible investment and commercial disciplines. The private sector is best placed to provide these.
However, a successful company needs more still. It requires a motivated workforce. Royal Mail has some of the best employees in the world, as amply demonstrated in the recent bad weather, and they deserve a proper stake in the future success of the company. That is why the Government have included provision for an employee share scheme which will hold at least 10 per cent of the equity in Royal Mail in the future. This is the strongest legislative commitment and largest stake of any major privatisation, and I hope that your Lordships will support it.
In terms of pension provision, the Bill will allow for government to take on Royal Mail’s crippling and highly volatile deficit—a deficit that ballooned from £2.5 billion in 2007 to more than £8 billion in 2010. We should not underestimate what this means to members of the Royal Mail pension plan. Members are rightly concerned about the security and safety of their pensions. Under the Government’s proposals, we will stand behind their accrued rights, giving members the security and certainty they deserve. Royal Mail itself will be left in a much more secure position with a smaller, more manageable scheme going forward. This is a good outcome for employees, both in respect of pensions and in boosting the financial health of the company they work for.
The Bill will also enable fundamental reform of the regulatory regime. It will transfer regulatory responsibility from Postcomm to Ofcom. This measure is entirely appropriate, given the convergence of communication markets, and has broad support from stakeholders. Crucially, the Bill will ensure that the primary duty of the regulator in relation to postal services will be to secure the continued provision of the universal postal service. The previous Government recognised the need for this, and similar provision was made in the 2009 Bill. This Government, however, have gone further and have added the requirement that in performing this duty the regulator must consider the financial sustainability of the universal postal service. This will ensure that both the service and its financial health are at the heart of everything Ofcom does in relation to postal matters.
As for the meaning of the universal postal service, the Bill sets in statute the six-day delivery and collection of letters at affordable and uniform prices. Again, I should like to address some scaremongering on this issue. The Government have no intention of downgrading the minimum requirements of the universal postal service. On the contrary, this Bill introduces new safeguards: first, that any changes can be made only after Ofcom has conducted a review of user needs; secondly, that any changes are approved by a vote in both Houses; and, thirdly, that prices must remain uniform and there cannot be different minimum requirements in different parts of the country.
There was some debate surrounding the 2009 Bill as to whether it went far enough to ensure fair competition between operators. We have looked again at the relevant provisions and concluded that tougher tests should be met before Ofcom can mandate access to Royal Mail’s network. Thus the Bill before us today specifies that mandatory access can be granted only where it meets all of the conditions of promoting efficiency, promoting effective competition and conferring significant benefits upon users of postal services. This is a departure from the 2009 Bill, which allowed for mandatory access where just one of these conditions was met, and is a change that we feel is vital in ensuring the right balance between fostering competition and protecting the universal service. Our position is clear: competition is beneficial, but it should not undermine the universal service.
This Bill also reflects a deregulatory intent. We are clear that regulation should be imposed only where there is a need for it. We are confident that this Bill, combined with Ofcom’s existing duties under the Communications Act 2003, gives the regulator the tools it needs to ensure that regulation is focused and proportionate, and that it can deregulate rapidly where there is effective competition in the market. I look forward to debating the detail with the many knowledgeable and experienced Members of this House who are, or have been, involved in economic regulation.
Finally, Part 4 introduces a special administration regime. This will enable special arrangements to be put in place should the universal service provider be at risk of entering insolvency proceedings. Their objective will be to maintain the universal postal service. While we do not expect to use these provisions, they are a sensible and prudent additional safeguard for the universal postal service. The measures mirror those that have been taken in the energy and water sectors.
The Bill is largely based on the same evidence and independent analysis as the previous Government’s Bill. However, we have looked at the issues with fresh eyes. The result is a Bill that builds on the consensus surrounding its predecessor, but which also improves upon it. Thus we have a Bill that is better for consumers, who will benefit from a secure universal postal service, and a strong, stable post office network—one that is better for Royal Mail, giving the company the best chance of a successful future while relieving it of a crippling pension deficit. It is a Bill that is better for Royal Mail employees, giving them security over their accrued pension rights while offering them a real stake in the future success of the company through the largest employee share scheme of any major privatisation.
Some provisions before us today will be difficult for some noble Lords to accept. I do not ask them to change their political ideology, but I do ask them to reflect on the fact that the call for action is coming not from this Government alone. It came from the previous Government when they presented their 2009 Bill to the House, and it is coming from individuals who are intimately acquainted with the problems facing Royal Mail and who have no political allegiance, such as Richard Hooper, the independent adviser to both the previous and current Governments, and Royal Mail’s senior management.
We will spend many hours debating the detail of the Bill and I have no doubt that it will leave the House all the better for your Lordships’ attention. It represents not just the latest but the best chance of securing the future of the universal postal service. I beg to move.
Lord Tunnicliffe
My Lords, I thank the noble Baroness, Lady Wilcox, for introducing the Bill and explaining the Government's position. I will grasp the first note of optimism from her acknowledgement that the Bill will leave the House improved—which can only mean that she will lend a ready ear to appropriate changes. I, too, look forward to today's debate, and in particular to the maiden speeches of the noble Lords, Lord Empey and Lord Dobbs.
My researchers tell me that the Royal Mail was first made available to the public on 31 July 1635 by King Charles I. That certainly indicates a long heritage, but whether it was an entirely happy start only historians will tell us. Since then, it has delivered the post to homes and businesses across the United Kingdom, and has been run as an essential public service in the public interest. Today's Bill would change all that. It would lead to the total sale of the Royal Mail postal service and its separation from the nation's post office network.
We all recognise that the competitive environment for postal operators has changed dramatically. The impact of technological changes such as e-mail, mobile phones and all the other modern ways of communicating continues to be felt. The worldwide postal market is expected to decline by 25 to 40 per cent over the next five years. Of course, action needs to be taken.
There are a number of elements in this Bill that we broadly support, including the principle of employee share ownership, dealing with the historic pension fund deficit and the transfer of regulation to Ofcom. We also agree that the possible mutualisation of the post office network deserves positive examination. However, the central question that the House must ask today and in the coming weeks is whether the Government have made their case convincingly that the way forward proposed by the Bill is the best one available. Secondly, if Royal Mail is privatised, have they made sufficient safeguards for the public interest, in particular in relation to the universal postal service and the future of the post office network?
We believe that abandoning the commitment to keep Royal Mail as a publicly-owned organisation is wrong. Among other things, it would pose a threat to the universal service obligation and to the future viability of the network of post offices throughout the country.
It used to be said that Royal Mail could not change without an injection of private investment and management. However, an important agreement was reached in March 2010 between the Communication Workers Union and Royal Mail, supporting the £2 billion modernisation plan. Both the CWU and management should take credit for the start that has been made. Sir Richard Hooper acknowledged that corporate experience has been injected, not least through the appointment of a new CEO, previously the head of Canada Post, who seems to have attracted universal praise.
The Government propose rightly to relieve the company of the historic pension fund deficit, worth £280 million per year in annual payments. There is also general agreement that the access prices set for bulk mail sorters have placed Royal Mail at a disadvantage. The company estimates that the value of this is about £160 million per annum. Investment funds are in place to complete the modernisation programme. In these circumstances, the Government should explain the anticipated capital requirement and why a 100 per cent sale is necessary to achieve it.
Alternative measures to raise capital have been proposed by my party in the past, while other mechanisms have been proposed from elsewhere. There has been no explanation of how best value will be secured for the taxpayer. Will the Government publish an independent valuation? What do they intend to do with the sale proceeds? They have not made clear the timing of the changes. In what way do they intend to discharge their obligation for transparency and accountability to Parliament over the nature of the sale and therefore the type of Royal Mail organisation that will emerge?
The Government have made it clear that they are not interested in who the purchaser is, and have no objection to a sale to a foreign owner. Is there anyone to whom they would not sell? Will privatisation be by a general sale of shares, or by sale to another postal company or to a private equity group?
I turn to the universal service obligation. As the noble Baroness said, Clause 30 sets out the terms of the universal postal obligation. It includes letter and packet delivery, letter and packet collection, affordable and uniform tariffs, registered items, insured items, services to the blind and partially sighted, and legislative petitions and addresses—so far, so good. The Bill proceeds to provide for changes to the level of the USO. Ministers have said they intend to maintain the USO. I do not question their good intention, but why does the Bill not only permit but require Ofcom to review the level of the obligation after only 18 months? The Bill also provides, in certain circumstances, for more than one universal service provider. Ministers may protest they do not intend this, but why does their Bill provide for it? The regulatory framework encompassing the universal service obligation is a very important issue. We will need to consider carefully in Committee whether the regulatory framework designed for a publicly owned company remains as well designed for a privatised Royal Mail.
The Bill breaks the umbilical link between Royal Mail and the network of local post offices, prized by residents of communities up and down the country. It does so in a way that threatens the future of thousands of local post offices. I have no need to emphasise to Members of this House the social value of the nation's post offices. Local post offices are at the centre of many communities. Many thousands of pensioners still collect their pension from their local post office. A nearby post office is vital for many people with mobility problems or some form of disability. In many rural areas and poorer urban districts, the local post office is vital.
The postal service is also vital to British business, because 84 per cent of small businesses use Royal Mail to dispatch parcels or express items. The local post office is the usual point of access for them. Again, Ministers protest that they wish to maintain the current network of post offices. They have continued the previous Government’s social network subsidy to maintain a network of 11,500 post offices in four years’ time. For that, we commend them and thank them. However, there is no guarantee that after that point a privatised Royal Mail will have to use the current post office network to its full extent. As Consumer Focus says,
“following privatisation of Royal Mail, subsequent contracts would require a competitive tender process with no guarantee that [Post Office Ltd] would retain this contract”.
We would like to hear from the Government what guarantees can be given about the future of local post offices, not just in the next four years but in the medium and longer term. What are they doing to build up the government business that is done through the Post Office? Why was the case for a post bank rejected? The National Federation of Sub-Postmasters has supported the principle of the Bill but it has stated that,
“ministers must recognise that their plans will only succeed if they deliver on access to government and Royal Mail work at post offices. If they fail on this, not only will plans to mutualise the Post Office be doomed to failure; there will be no way back for the network and our post offices will face even greater jeopardy”.
Part 4 of the Bill sets out the provisions for taxpayers to step in through administration if a privatised Royal Mail becomes insolvent. That should put paid to the idea that, once Royal Mail is privatised, the taxpayer will no longer need to worry about or bear any expense for failure. It seems that we are to privatise profit but perhaps nationalise risk.
This is a very serious Bill. It must be considered seriously and in detail in the weeks ahead. Whatever the good intentions of Ministers and the leadership of Royal Mail—and I do not doubt their good intentions—there is no guarantee that the same people will be in place when the crucial decisions are made. We cannot simply rely on good intentions. If the Bill is flawed, as we believe it is, sufficient protection will not exist.
So far, the Government have declined the invitation to secure a 10-year inter-business agreement, which would underpin the link between Royal Mail and the post office network. They have rejected calls to strengthen the commitment to the post office network or the universal service obligation. The Government have still not made the fundamental case for the full-scale privatisation that they have proposed; nor have they addressed the concerns that exist. Like the Minister, I look forward to the Committee stage, when we will probe and scrutinise the Bill most carefully.
Lord Razzall
My Lords, the importance of the issues dealt with by the Bill could not be demonstrated better than by the number of your Lordships who have put their names down to speak in this very important debate. We also very much look forward to the maiden speech of my favourite political novelist, the noble Lord, Lord Dobbs, and that of the noble Lord, Lord Empey, to whom I had better not yet put an epithet.
We have of course been here before, as the noble Baroness said, and I am delighted to see the noble Lord, Lord Mandelson, in his place. Whether he is going to show the scars on his back that he obtained when he was here before, I know not. However, we have been here before and we gave very detailed scrutiny to the Bill that he brought forward when it came to this House but was then, as the Minister indicated, withdrawn before it reached the other place.
As the Minister indicated, the reasons behind the legislation have not really changed since the noble Lord, Lord Mandelson, felt it necessary to bring that Bill forward on the recommendation of Sir Richard Hooper. The competition for Royal Mail from e-mail and the internet continues, resulting in shrinking volumes in its business. I do not know whether noble Lords who received lobbying from organisations that wish to maintain Royal Mail more or less in its current format noticed how much of that lobbying came by e-mail rather than through Royal Mail. That could be no better indicator of the problems that Royal Mail has in competing with the internet. Losses are continuing and, unless they are stopped, they will ultimately be the responsibility of the taxpayer. Then there is the massive issue of the pension deficit, which overhangs Royal Mail’s balance sheet.
The noble Lord, Lord Tunnicliffe, was brave enough to accede that this Bill contains a lot of similarities to the Bill that we considered last year or the year before. First, the pension deficit is dealt with and taken on by the taxpayer, as was the case in the Bill of the noble Lord, Lord Mandelson. Secondly, there is improved regulation, and I am glad that the noble Lord endorses the transfer of regulation to Ofcom. As is clear from both Bills—this one and that of the Labour Party—we all believe that that will give better protection to the universal service obligation, which is absolutely at the heart of Royal Mail’s business. Thirdly, as in the Bill of the noble Lord, Lord Mandelson, although it goes somewhat further than that Bill, this Bill provides for Royal Mail to have access to private capital.
There are of course a number of additions to the Bill which I suspect the Labour Party will agree with, although they were not in the Bill of the noble Lord, Lord Mandelson. There are new safeguards in this Bill to protect the universal service obligation, as was mentioned by the noble Baroness. First, before any recommendation to alter the universal service obligation can be made, Ofcom is required to take into account the interests of the users. Secondly, there is an absolute ban on any alteration to the uniformity of the service, as the noble Baroness explained, so that different prices cannot be charged in different places and a different service cannot be provided in different places. Most importantly, particularly in the context of the last Bill that we debated—I am sure that this will commend itself to your Lordships—no change to the universal service obligation can be made without an affirmative vote of both Houses of Parliament. Therefore, there is parliamentary control of any change.
Perhaps I may apologise briefly to my coalition colleagues for the point that I am about to make. I cannot let the moment pass without recording the fact that there are a number of issues in this Bill which are dear to the heart of Liberal Democrats. Of course, a Liberal Democrat Cabinet Minister is responsible for this Bill and a Liberal Democrat Minister took the Bill through another place. The latter is Edward Davey, who has extensive experience of post offices and mail services throughout the world. Of course, there are issues in this Bill that we endeavoured, but failed, to persuade the previous Government to include in theirs. The first is a much bigger commitment to employee shares. As the noble Baroness indicated, if the Bill goes through in its current form, the employee share ownership in Royal Mail will be the largest of any UK organisation. Secondly, the Bill provides for mutualisation of post offices. Liberal Democrats have always been keen on the mutualisation concept. We believe that, when Post Office Ltd becomes a mutual, that will be massively in the interest of all the sub-post offices, which, as the noble Lord, Lord Tunnicliffe, indicated, are at the heart of many British towns and villages.
We have all been assailed by endless lobbying on the Bill, which demonstrates the importance of the issue to the public. There seem to be two overall objections to the Bill, which no doubt other Members of your Lordships’ House will voice. The first is that Royal Mail does not need to be reformed. The noble Lord, Lord Tunnicliffe, has said that there has been a significant improvement in labour relations and that the technological developments that are necessary to compete in the modern world can be introduced without any resort to private capital. I do not accept that and I do not think that the coalition accepts that. If we want a comparison we can look at the fact that during the previous Labour Administration, 65,000 jobs were lost in the Royal Mail, at huge personal cost to those individuals. However, if we compare that with what happened since Deutsche Post floated in 2001, Deutsche Post has made an investment of £11.6 billion over the past 10 years in forming and modernising its network. Those two statistics demonstrate very graphically why the Royal Mail needs access to private capital.
The second objection, which the noble Lord, Lord Tunnicliffe, put extremely effectively, concerns why the relationship between the Royal Mail and the Post Office Limited cannot be enshrined better in this Bill. The Government have used two arguments for this, which I expected. First, any attempt to put that on the face of the Bill could be open to legal challenge as regards the privatisation mechanisms and the competition mechanisms. Secondly, and more importantly, it is attempting to say in 2011 what relationship will be necessary between the Post Office and Royal Mail in future years. How can we predict? That must be a matter for commercial negotiation between the Royal Mail and Post Office Limited. It seems almost inconceivable that anyone running the Royal Mail would not want to take advantage of the network of sub-post offices out there to help to distribute the mail. What other network would they use? That seems to me to be entirely a matter for commercial negotiation as the two organisations move into the next five, seven or 10 years.
The critical issue for Post Office Limited, as the noble Lord, Lord Tunnicliffe, indicated, is how it develops new business. From the Liberal Democrat point of view, I do not think that we will take any lessons from the Labour Party or our colleagues in the coalition Government about closures of sub-post offices. Many of us have campaigned for years to try to keep sub-post offices open while both the Tory Government, under Margaret Thatcher and John Major, and then the Labour Government, under Tony Blair and Gordon Brown, presided over huge closures of post offices. In the commitments that have been made by the new coalition, first on the investment fund, which the noble Baroness referred to, and, secondly, on commitments to explore new ways of developing business for the Post Office, coupled with, as I indicated, the advantages once the post office network can become a mutual, I think that the future of the Post Office is much more secure than it has been for many years.
Lord Empey
My Lords, I trust that I might be permitted a little latitude as I make some opening remarks to your Lordships’ House. As someone who has been a lifelong believer in the union, I find it a great honour to come here, to this Chamber and to this building, and to see it adorned with all the symbols of the four home countries and the history that we have shared together over many centuries. It is also an honour to come here on behalf of those whom I have represented. I have had the opportunity to serve in politics since I was a student and I have spent the past 25 years as an elected representative serving at local, European and ministerial level in Northern Ireland. Coming here is a great honour and I look forward to making a meaningful contribution to the business of your Lordships’ House. I thank those officers of the House who have helped me both before and since I was introduced last month. Their guidance throughout that period has been most helpful.
Obviously, coming from my background, I have been involved in the peace process. I see at least one distinguished former Secretary of State for Northern Ireland in his place. We have worked together with others in this House over many years to try to improve the livelihoods and the quality of life of our fellow countrymen as they have faced huge challenges.
When it was made public that I was coming here, I had a number of comments from friends and colleagues and, especially when I arrived here, from a number of your Lordships. I was given some guidance on what to expect. I was told that we have here a concentration of expertise from all walks of life among people who are somewhat freed from the shackles of the day-to-day political cut and thrust that one sees in the other place. I must confess that my experience over the past few weeks has not quite measured up to that, as the circumstances in the House have been a little unusual. With tongue in cheek, I said last week when I was going home for the weekend that I was glad to go back to Belfast to some civilised politics. I am sure that this House will return to that which I was advised was the standard that I should expect.
I turn to the comments of the Minister. Having had a responsibility for Northern Ireland’s economy for a number of years as a Minister, I can say that Royal Mail and the Post Office are issues that perhaps go beyond the narrow confines. The general public do not distinguish between the Royal Mail and the Post Office; they see it all as the same thing. You put your letters in a red box and you used to make telephone calls in a red box. People do not understand the mechanics.
I think that we should look at the issue in this way. This is a serious piece of national infrastructure—it is just as important as broadband and it is just as important as roads and the electricity grid—because the service that it provides is vital in bringing our nation together. I cite Hooper, who said in the revised report in September last year that it,
“is part of the country’s social and economic glue”.
That is how I see it. If we wanted any evidence that that is the case, during the recent bad weather in December, before Christmas, how many businesses came on to the radio and television to say, “We can’t get our money in. We can’t do our business. We can’t get our products out”?
Although everybody understands the economics that Royal Mail and the Post Office face, we should not underestimate the significance of the service that is provided. We throw large amounts of public money at rural development policies. Indeed, European money comes in which we spend on rural development. We are trying to build up not only tourism but small manufacturing—cottage industries and so on. Many of them rely on Royal Mail services to distribute their products. Many of those businesses trade on the internet. Although they are in a rural part of the United Kingdom that does not have good transport access, they are able to get on a level playing field through the internet. Then they can distribute their products through the services provided by Royal Mail.
I have to say to the noble Baroness that there appears to be a little contradiction in some of the things that have been said. For instance, as the noble Lord, Lord Tunnicliffe, said, the 18-month review seems a little sudden. As I said, I have run a department and I know what a review means, or can mean. We have to be clear that we do not create an undercurrent of uncertainty within the business. We need to be careful about that. Secondly, coming from Northern Ireland, I know that population distribution is significant. We have a large geographical area where the population is spread thinly. That adds extra costs, but it is necessary to create a level playing field so that people in those more remote areas can compete. After all, we are trying to encourage business and to get people to compete and we are telling them that distance should not be a huge barrier to them in building up their businesses.
The population settlement patterns are different in different parts of the country. In some areas, they are concentrated in small villages and towns; in other areas, such as Northern Ireland, they are spread out. When the Government come to look at these issues, it is important that the universal service obligation means what it says. Equally, it is important that we understand that Royal Mail cannot be left with one arm tied behind its back, unable to compete, while allowing other operators to cherry pick the good bits, leaving Royal Mail as the deliverer of last resort. None of us would want that, because it will lead, ultimately, to a spiral downwards in revenues and profits. Therefore, the task in the Bill is to ensure that the USO survives in a meaningful way that frees Royal Mail from the shackles of debt and allows it to compete with its rivals, which are steadily eroding its current market base.
If we are serious about providing the meaningful infrastructure essential for the well-being of our economy in the years ahead, we would do well in the coming weeks, as the Bill goes through its stages, to ensure that the USO will survive, that there is certainty, that both customers and workforce fully understand where they are going and that the business is set an achievable target that will benefit all of the United Kingdom in the years ahead.
Lord Low of Dalston
My Lords, I count it a privilege to rise to offer the congratulations of the House to the noble Lord, Lord Empey, on what I am sure all your Lordships will agree was a most impressive maiden speech.
The noble Lord, Lord Empey, comes to us as a most substantial figure in Northern Ireland politics. He has been a Belfast city councillor for 25 years, as he told us, and mayor on two occasions. He is a Member of the Northern Ireland Assembly. He spent nine years on the police authority of Northern Ireland, which means that he must be blessed with a broad pair of shoulders and a tin hat—perhaps these will equip him well for the political rough and tumble in your Lordships' House. He played a prominent part in the Northern Ireland peace talks in the 1990s and was leader of his party from 2005 to 2010. What is most notable is that he is a man of moderation and a man of peace. He not only has a broad pair of shoulders but clearly has a wise head on them. I am sure your Lordships will wish to hear from him on many occasions to come.
Turning to the Bill, my noble friend Lord Empey talked about the need for certainty underpinning the provision of postal services and the need to secure and firmly anchor the universal service obligation. These issues will figure prominently in my remarks. The Bill clearly has a number of features one can welcome. It provides a basis on which it should be possible for Royal Mail at least to attain a degree of stability. The Government will relieve Royal Mail of the crippling burden of its pension deficit, which was put at £10.3 billion at the most recent actuarial valuation, and the lifting of the restriction on the sale of shares in the Royal Mail Group will provide the means of bringing badly needed capital into the business. It is perhaps a moot point whether this need could not have been addressed while retaining Royal Mail in public ownership, whether through borrowing from the Government or the market. Privatisation is certainly not popular with the public according to a YouGov poll last October, but at least the Bill, if it passes, as opposed to being stillborn like the previous Postal Services Bill, will point a way forward for the business.
My main concern is with regulation and the universal postal service. Royal Mail welcomes competition, but it maintains that the regulatory regime needs to achieve a more level playing field. That seems to be right. The access headroom rule already means that Royal Mail is competing with one hand tied behind its back. The regulatory regime means that Royal Mail’s competitors are guaranteed access to Royal Mail’s network at any point and enjoy a guaranteed margin. In other words, Royal Mail is regulated in such a way as to be forced to subsidise its competitors by 2.5p per item, which comes to a total of £160 million. Indeed, 80 per cent of the business is regulated. In introducing the Bill, the Minister pointed to the declining financial position of Royal Mail, but a good case could be made for saying that the draconian regulatory regime has a good deal to answer for in this regard. In order to be able to compete effectively, the proportion of the business that is regulated needs to be reduced so that Royal Mail can negotiate commercially, certainly with its larger customers. The postal service in no other country is regulated in this way. The Communication Workers Union agrees about this so, at a stroke, the Government have achieved the singular feat of uniting Royal Mail and the Communication Workers Union.
This is linked to the universal service obligation or the universal postal service, as it is now to be known. The Royal Mail is currently undertaking a vast modernisation programme costing hundreds of millions of pounds. This is based on the assumption that Royal Mail will continue to provide the universal service for the foreseeable future. Indeed, Royal Mail’s whole business plan is based on providing the universal service. However, the Bill designates Royal Mail as the universal service provider for a period of only three years. After that, the regulator can consider allocating the service to another provider or providers. This does not provide a stable planning horizon long enough to justify this level of investment. Something much more like 10 years would seem appropriate.
Such a short timescale also potentially undermines the interbusiness agreement with the post office network, 37 per cent of whose income comes from Royal Mail. Notwithstanding the Minister’s professions of good intent regarding the maintenance of the post office network, the loss of Royal Mail business could put many post offices at risk. The unpopularity of Royal Mail privatisation is as nothing compared to the hostility which would attend another round of cuts to the post office network, which is truly seen as part of the fabric of British society, as has already been underlined in the speeches that we have heard.
The universal postal service, a delivery and collection service for six days a week at a uniform and affordable price, is further put at risk, as the noble Lord, Lord Tunnicliffe, has pointed out, by the requirement in Clause 29 that Ofcom should carry out a review of the universal postal service within 18 months of Part 3 of the Act coming generally into force. A review of the universal postal service can go only one way: down, not up. The universal service obligation is loss making, and any private operator will inevitably seek to reduce the burden that it places on them. In the Netherlands, the privately owned incumbent, TNT, which has been mentioned as a possible investor for Royal Mail, has described the universal service obligation as a kind of Jurassic park that we should get rid of.
Ofcom, which will take over regulation from Postcomm, will have a primary duty to secure provision of the universal service obligation. In discharging this duty, it must give specific consideration to the financial viability and efficiency of the service. This contrasts with Postcomm’s primary duty to ensure provision of the USO, unqualified by considerations of finance and efficiency. This change is not in keeping with the public service character of the USO and can only tilt the balance in the direction of degrading it.
The Bill thus makes the universal service vulnerable, whatever the noble Baroness says. One reason—not the only one, but the one that I wish to highlight at a little more length in the time that remains to me—why this is of particular concern to me is that the universal service obligation is of particular importance to people with disabilities, given their greater reliance on and use of mail services. Postcomm recently carried out some research with Consumer Focus into consumers’ needs, which found that people with a disability are more likely to use mail services as a means of communicating than those without a disability, are more likely to rely exclusively on traditional means of communication such as mail, and are less likely to predict that their use of mail for communicating with family and friends will decline in the next three years.
The research also indicated that people with a disability are particularly vulnerable to reductions in the service or increases in a cost that a privatised Royal Mail is likely to push for. They are more likely to rely on second-class post, and are less likely to be willing to pay for specific delivery options or go to a delivery office to collect a package. They also receive less fulfilment mail—the more profitable items for Royal Mail. They also place greater value on the post office network, and use it more heavily for posting mail than those without a disability. There are also just under 4 million Post Office card accounts for the payment of benefits and pensions.
As I have already suggested, the separation of the post office network and Royal Mail could jeopardise the future of the Post Office. I am particularly concerned about the integrity of the universal service obligation because it includes the articles for the blind scheme. This stipulates that Royal Mail must provide, free of charge, first-class postage for packets of up to 7 kilograms in weight that contain letters, books, papers and a range of equipment designed for use by blind or partially sighted people. Nine million items were sent through the articles for the blind service in 2006-07, at a reported cost of £5 million to Royal Mail. A private operator is bound to wish to minimise such costs. The requirement for Ofcom to consider the financial viability of the USO is bound to come into play at this point.
When the previous Postal Services Bill was going through your Lordships' House, I managed to persuade the Government to include the articles for the blind scheme in the universal service obligation. Initially, the scheme was protected only by a complicated series of licence agreements, but I argued that it was not enough simply to rely on ministerial assurances. Ministers might fully intend, as I am sure the noble Baroness who has introduced the Bill today fully intends, the articles for the blind scheme to be safeguarded, but who can say what will happen in conditions of financial stringency?
Ofcom is currently consulting on abolishing its Advisory Committee on Older and Disabled People and merging this with its Consumer Communications Panel and the Advisory Committee for England into an advisory committee for the nations and communities. These individual committees were set up to support Ofcom’s specific duties to consumers under the Communications Act 2003. With no dedicated committee rooting for the consumer, the practical effect of these changes is likely to be a downgrading in the prominence given to these issues in Ofcom’s decision-making.
As we are constantly being reminded, we are experiencing conditions of extreme financial stringency. I can already hear the Minister’s words ringing in my ears, “Believe me, I would like nothing more than to be able to maintain the articles for the blind scheme. If it were up to me, how much I would wish it were possible to do so. But sadly it is just not sustainable in the current economic climate”.
The present USO is enshrined in statute, or at least it will be when this Bill is passed; I believe it should require an Act of Parliament to change the universal service obligation, or it should at least be guaranteed for a period of five or 10 years. I shall be seeking changes in the Bill in Committee to provide for this.
Sex Offenders Register
(14 years ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
The Minister of State, Home Office (Baroness Neville-Jones)
My Lords, with the leave of the House, I would like to repeat a Statement made earlier today in another place by my right honourable friend the Secretary of State for the Home Department.
“The sex offenders register has existed since 1997. Since that time it has helped the police to protect the public from these most horrific of crimes. Requiring serious sex offenders to sign the register for life—as they do now—has broad support across this House. However, the Supreme Court ruled last April that not granting sex offenders the opportunity to seek a review is a breach of their human rights—in particular, the right to a private or family life. These are rights, of course, that these offenders have taken away from their victims in the cruellest and most degrading manner possible.
The Government are appalled by this ruling, which places the rights of sex offenders above the right of the public to be protected from the risk of reoffending, but there is no possibility of further appeal. This Government are determined to do everything that we can to protect the public from predatory sex offenders and so we will make the minimum possible changes to the law in order to comply with this ruling.
I want to make it clear that the court’s ruling does not mean that paedophiles and rapists will automatically come off the sex offenders register. The court found only that they must be given the right to appeal. The Scottish Government have already implemented a scheme to give offenders an automatic right of appeal for removal from the register after 15 years. We will implement a much tougher scheme.
Offenders can apply for consideration of removal only after waiting 15 years following release from custody—in England and Wales there will be no automatic appeals. We will deliberately set the bar for those appeals as high as possible. Public protection must come first. A robust review, led by the police and involving all relevant agencies, will be carried out so that a full picture of the risks to the public can be considered.
The final decision on whether an offender should remain on the register will be down to the police and not, as in Scotland, the courts. The police are best placed to assess the risk of an offender committing another crime and they will rightly put the public first. There will be no right of appeal against the police’s decision to keep an offender on the register. That decision will be final. Sex offenders who continue to pose a risk will remain on the register and will do so for life, if necessary.
Where we are free to take further action to protect the public, we will do so. We will shortly be launching a targeted consultation aimed at closing down four existing loopholes in the sex offenders register. We will make it compulsory for sex offenders to report to the authorities before travelling abroad for even one day. This will prevent offenders from being free to travel for up to three days as they are under the existing scheme. We will force sex offenders to notify the authorities whenever they are living in a household with a child under the age of 18. We will require sex offenders to notify the authorities weekly as to where they can be found when they have no fixed abode. Also, we will tighten the rules so that sex offenders can no longer avoid being on the register when they change their name by deed poll.
Finally, I can tell the House today that the Deputy Prime Minister and the Justice Secretary will shortly announce the establishment of a commission to investigate the creation of a British Bill of Rights, for it is time to assert that it is Parliament that makes our laws, not the courts, that the rights of the public come before the rights of criminals and, above all, that we have a legal framework that brings sanity to cases such as these. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Hunt of Kings Heath
My Lords, I am grateful to the noble Baroness for repeating the Statement, although I have some concerns about the tone adopted in it towards the courts. As she said, the register has existed since 1997. Since then, it has helped the police to protect the public from these most horrific of crimes. Requiring serious sex offenders to sign the register for life, as they do now, has always had broad support from across the House. Our priority must be public safety. The indefinite period of being on the sex offenders register with no option for appeal is automatic for the most serious sexual offences. The register was implemented for a reason: the victims of these crimes have suffered and continue to suffer greatly because of the actions of these offenders. Offenders can still pose a threat to the public. The Supreme Court judgment in F and Thompson notes that Article 8 of the European Convention on Human Rights also applies to public safety and the protection of the rights and freedoms of others. With that in mind, we should consider the Supreme Court’s judgment and how Parliament should respond.
Clearly the priority must be public safety and the protection of our young and vulnerable people. Does the noble Baroness agree that, while the rights of an individual are important, including those who commit a crime, the rights of families and communities up and down the country are paramount? What is her assessment of the impact of the judgment on those currently subject to the notification requirements—how many offenders subject to them will this affect? What factors does she think will need to be taken into account in any review mechanism for those subject to the requirements? Does she agree that any such review needs to be extremely tough, given the seriousness of the offences and the need to have tough punishments in the eyes of the public? When does she expect Parliament to be able to debate the implications of the judgment? Could she also give me some indication of the timescale for when the changes have to be made?
I also ask the noble Baroness to explain the reasons for the decision of the Government that it is the police who will decide whether an offender should remain on the register with no right of appeal. What is the process? Will it be behind closed doors? Will the chief constable or the elected police commissioner take such a decision? Will the Government publish guidelines to the police and will those also be debatable in Parliament?
Finally, I would like to ask the noble Baroness about a couple of comments in the Statement about the role of the courts. The Statement starts by saying that the Government were “appalled” by the ruling of the Supreme Court and ends by saying that it is time that Parliament, not the courts, made laws and that a commission will investigate the creation of a British Bill of Rights. I rather thought that Parliament made the laws and that it was for the courts to interpret those laws. I hope that she will reflect on the rather intemperate words used in the Statement in respect of the courts; given her wide experience, I am sure that they are not hers. Ministers should be very wary of undermining the role of the courts. I hope that the Minister will take this opportunity to make it clear that that is not her intention. Does she accept that, while Parliament would be called on to enact any Bill of Rights, the courts would inevitably be called on to interpret such an Act in due course?
Baroness Neville-Jones
My Lords, perhaps I may deal first with the noble Lord’s last point about the attitude of the Government to the courts. Of course the Government respect the role of the courts. It is precisely because this is a law-abiding Government who respect the rule of law that we do not regard it as a practical option not to bring forward legislation to ensure that we are compliant with a ruling of the court. Nevertheless, there is extremely strong sentiment in the country, which the Government share, about the need to protect the public against the marauding activities of sex offenders, who display great ingenuity in the way in which they go about their offence. It is extraordinarily important therefore to have in place a robust system for the management of those offenders who are not in custody.
The noble Lord raised a number of practical points, which I shall try to answer. We certainly agree with him that priority should continue to be accorded to the safety of the public, which is the purpose of today’s Statement. We certainly agree that rights of families remain paramount. Damage can be done to young people by offenders of this kind which lasts for the whole of their lives. We must bear in mind these considerations when we look at the management of offenders in this category.
The noble Lord asked about the factors that would be taken into account in any review process. Perhaps I might explain how that might work. The offender will have the right under this scheme to ask for a review after 15 years. That review will be conducted by the police—it would obviously be a senior policeman—taking into account all the information that they have at their disposal about the behaviour of the individual, what assessment they are able to make of the likelihood of further offence, the gravity of the offence in the original instance and any other relevant consideration before coming to a view.
If the police reject the application for removal from the register, the individual will have the right to ask for that to be looked at again, but there will not be recourse to the court. They will be allowed to present any further factors that they consider the police have not taken into account in coming to their view. The individual concerned will therefore have an opportunity to say why they should be released from the obligations involved in being on the register.
The parliamentary process will be accomplished via remedial order in relation to the Human Rights Act. It will be a remedial order of a non-urgent kind. That means that an order will be made available for public examination as soon as the Government are able. The Joint Committee on Human Rights will have the opportunity, as will Members, to make comments and put across their viewpoint during that process. The Government will then take into account the views that have been put forward. The order will then be laid for another 60 days, after which there will be a normal parliamentary process by affirmative action before the order in whatever form it emerges is adopted. We expect that parliamentary process to be completed sometime in the autumn.
We are looking at the desirability of guidelines for the police. I agree that it would be sensible to have them.
I think that I covered the various points made by the noble Lord. If I have not done so, other Members of the House will no doubt pick me up on it.
Baroness Hamwee
I have the same concern as that expressed by the noble Lord, Lord Hunt, about the language used in parts of the Statement. We know how important language is in this area—for example, those who hear what they want to hear manage to ensure that paediatricians are driven out of their homes. One has to be terribly sensitive. On the review and the consultation, I hope that the language of the Statement does not indicate that the outcome of the review is entirely predetermined. Will the views of the trial judges—who, after all, have heard the facts of each case—and of NOMS, whose job, in part, is to assess prisoners for parole, be considered? The offences of those who are covered by the Sexual Offences Act and subject to inclusion on the register cover a very wide range; it must also be the case that there is very wide range of risk of reoffending.
Baroness Neville-Jones
It will be a proper consultation and, obviously, noble Lords and others will be free to put forward their views. On the evidence and information that will be taken into account by the police in the review, I can confirm straightaway that the MAPPA process, NOMS and those who have relevant information will be involved. It is right that NOMS has considerable experience of probationary periods, and the police will be under an obligation, which I am sure they will understand, to make the review both fair and thorough.
Baroness Kennedy of The Shaws
My Lords, it is deeply depressing to revisit this way of dealing with decisions made by the courts. It is familiar to those of us who are lawyers because we had to endure it under the previous Government, when tomorrow’s headlines dictated the way in which they responded to a wholly reasonable decision by the courts. In this case, the court decided that there should be an obligation to ensure that people have the right to appeal. It in no way suggested that paedophiles should be removed willy-nilly from the register.
There are occasions where someone should be able to appeal. For example, a young man in his 20s has sex with an underage girl and is put on the sex register. When he is a man in his 40s—married, with a family and holding down a job—it may seem reasonable to him that his name should be removed from the register on which it was placed for something that he did with an underage girl when he was in his early 20s. That is the kind of offence that the court envisaged when it said that there should not be a blanket situation where there can be no appeal whatever.
The reasonable response of the Government would have been to say clearly that an opportunity to appeal should be available, that it will be rarely used but that they support its existence. That is the position that the Government should have taken. I always get the feeling that there is something in the drinking water at the Home Office that makes sensible people lose their nerve and good sense when it comes to these matters.
As to the comment on the need for a Bill of Rights, how would the situation be any different if, as I have heard government Ministers say, all that is contained in the current European Convention on Human Rights would be in a British Bill of Rights, but with additional matters included? If that were the case and the Article 6 protections of due process, under which this kind of appeal, in given circumstances, is available, were included, how would it be any different? I suspect that this would be available in a British Bill of Rights, as it is now. Surely good sense should have been the response of the day.
Baroness Neville-Jones
The Government regard what they are doing as bringing them into compliance with their obligations under the Human Rights Act. Therefore we do not envisage that the work of the Commission—and of course the terms of reference have yet to be agreed—would be affected by what we are doing here.
The Government have put in place a review process. Sex offences are extremely difficult to make judgments about and we believe that those who are involved in their rehabilitation, NOMS and the police, who will have had the obligation to supervise their conduct in the interim, are better placed to do that than the courts. That is why we have instituted the review of the process that we have put in place. I also rely on London tap water—I find it keeps me entirely sane.
Lord Mayhew of Twysden
My Lords, I ask my noble friend to come back once again to the last sentence of this Statement and its rather combative tone, where it says that it is time to assert that it is Parliament that makes our laws, not the courts. Will she accept from me that I know of no case whatever in which a court has questioned, let alone rejected, that statement of constitutional functions; and that the court’s function is to apply laws, either made by Parliament or specifically adopted by it?
Baroness Neville-Jones
Indeed, and we are saying that it is the correct moment to reassert the constitutional principle.
Lord Prescott
There is no doubt, as has just been said, that it is Parliament’s right to make the laws and the courts’ to interpret them. However, what worries me most of all, as with the Statement in the other place regarding prisoners, is the difficult issue about private and personal rights and about freedoms. In our Human Rights Act, that is a balance between Article 8 and Article 10 as well as other articles. That is to be interpreted by the courts—in this case, our Supreme Court. Presumably they will not be saying similar things about the judges in this particular case as they said about the Council of Europe.
If a new bill of rights is to be considered, presumably that balance between the public and private interest has to be established. Who will determine what that balance is? Will it be the Government, reacting to the publicity about certain unpopular cases? Or will we leave it to the judges to make their decisions, and, if we disagree, change the law? At the moment the Government seem to be running before the publicity, and then, as with the prisoners’ case, saying, “We back the Court of Human Rights”. That is the judgment we are facing today. I worry about the attitude of this Government in respect of personal rights.
Baroness Neville-Jones
Perhaps I could point out to the noble Lord that this piece of legislation, which the courts have decided is not entirely proportionate, was passed under our predecessors, the Labour Government. This Government, in the light of the Supreme Court’s judgment, are now putting in place a mechanism that we believe will restore proportionality that evidently the courts thought was lacking.
Lord Carlile of Berriew
I apologise to my noble friend for interrupting her earlier. Given the real and perceived importance of this issue, will my noble friend help the House by explaining why the Government feel that it is best to deal with this by a remedial order, which, although there would be consultation, is not capable of any form of amendment? We have until the end of the year to deal with this and the matter could better, one might suggest, be dealt with by addition to primary legislation currently going through Parliament, which would be open to amendment by Members of both Houses. Furthermore, does my noble friend agree that the one thing the Government cannot and would not wish to do is to exclude the potential for judicial review, where a decision has been taken that is perverse or otherwise Wednesbury unreasonable?
Baroness Neville-Jones
My Lords, ideally, the police will be aware of the fact that their judgments in any given instance could be subject to judicial review. The law has not changed in that respect. As for the previous question about the alternative legislative route, I am not a lawyer and I hesitate to get terribly far into this terrain. I was advised that this was regarded—as there is no obvious legal vehicle in which to incorporate this particular bit of legislation—as related to our obligations under the Human Rights Act, and that it was a speedy and sensible way of bringing us into compliance.
Lord West of Spithead
My Lords, I have to say that I was rather depressed by this Statement. I had not intended to speak at all. When I was a Minister, I tried to produce things not for the Daily Mail but for the House. I have a feeling that this is for the Daily Mail, not for the House. On a number of occasions, I was pretty grumpy about decisions made in the courts, but I do not think that I would ever have allowed a piece of paper like this to come out. Some of the wording used is quite intemperate, and I think that that is very unfortunate. I know the noble Baroness well and I know that she would not have drafted it in this way. I do not know how we can go about tackling this in some way so as to make it clear that this is not the view, because what is being said about the courts is really quite stark. A number of noble Lords have spoken about this, and there is no doubt at all that it is up to the courts to interpret the law. I do not think that there is any doubt at all that Parliament makes laws, not the courts, as the noble and learned Lord said. That has never been disputed. I find this quite extraordinary. Is there some way in which to temper this Statement, because I do not think that it is the sort of Statement that should be made? I think it is very unfortunate.
Baroness Neville-Jones
The noble Lord made his point several ways round. The Government are acting in conformity with the principle that they must be in conformity with the law, which is why they have brought in this amendment to the law. We perfectly well recognise that the courts interpret the law and are acting on that principle.
Lord Macdonald of River Glaven
Will my noble friend acknowledge that there is great disappointment on these Benches, too, at the tone of this Statement? Some of us had hoped that the days when these sorts of Statements would be made about the judges and the courts had gone with the new Government, and are very disappointed to see that, perhaps, they have not. Why do the Government appear to believe that, with regard to appeals against the inclusion on the sex register, the police are better placed to do justice than the Queen’s courts?
Baroness Neville-Jones
My Lords, I think that I explained in response to an earlier question that it is very hard to judge the merits with these particular offences, particularly in relation to expectation about future conduct. Therefore, we feel that those closest to the individuals or offenders concerned, who have been monitoring their conduct, are best placed to take an informed view and come to an informed decision about the balance that needs to be struck thereafter between the freedoms that can be accorded to the individual and the rights of the public to safety. This is a very practical view of how to come to the best decision possible.
Baroness Farrington of Ribbleton
Can the Minister please explain to me—because I do not understand—why the Government in their Statement make the assumption that individual police officers in particular places will necessarily, or even ever, have detailed knowledge of the individual who is making the appeal? I have some limited experience in local government. The only time I have actually ever cried in your Lordships' House was on reading the story of the north Wales child abuse inquiry. The people who may be the most dangerous are often the most mobile and disappear all over the place, reappear and then get lost. Why the police? I am particularly concerned about that aspect.
Baroness Neville-Jones
My Lords, individuals on the sex offenders register are very closely supervised—and quite rightly. Therefore, the police, NOMS and others have very detailed knowledge of the behaviour of the individuals concerned. We keep on coming back to who is best placed to make what most people would regard as a fairly difficult judgment about likely prospects for the future, given the nature of the offence and the sort of people involved. It is for those very reasons that we feel that this is the best place to do it. The noble Baroness is quite right that people do try to disappear. That is precisely why, in severe cases, limitations are placed on people’s freedom of movement and why they have to notify before they go anywhere. That is one reason why the Government are taking the opportunity to strengthen that provision.
Lord Thomas of Gresford
My Lords, can I express my sense of shame at hearing the language that has been used in this Statement? It is precisely the sort of thing that we attacked for years when we were in opposition and I am very sorry to hear that this headline-grabbing language is being used again. Like the noble Baroness, I simply do not understand why applications for the removal of a name from the register should not be made in an open and transparent way before a court. After all, it is the court that imposes the sentence of 30 months, which is the threshold when a person is placed upon the register for life. I see no principle—I see nothing—in this Statement that would assuage my feelings about it.
Baroness Neville-Jones
The noble Lord has certainly made his point. I fear there is very little that I can add to what I have already said, by way of explanation to the House, on why the Government have taken the view that they have about the right place to take this decision.
Postal Services Bill
Lord Jenkin of Roding
My Lords, I can tell the House and my noble friend on the Front Bench that I very much welcome this Bill. I welcome the decision to separate Post Office Ltd from the Royal Mail; I welcome the prospect of Post Office Ltd becoming a mutual; I welcome the decision to privatise the Royal Mail; and I welcome the decision to transfer the regulation from Postcomm to Ofcom. However, as will become apparent, I am a bit concerned about the future of the competition which currently operates in the handling and sorting of letter mail. It seems to me that the Bill risks converting the Royal Mail from a state-owned business into a legislatively protected privatised monopoly and, if that is right, I cannot believe that that is in the full interests of users.
I speak with the experience behind me of having been the Minister who launched the process that led to the privatisation of British Telecom nearly 30 years ago. We had British Telecom as a nationalised monopoly and it became apparent that there was no way that it was going to raise the capital that it needed to finance its expansion and research, and all the rest. Therefore, we eventually privatised it. That was met with almost foreseeable opposition, particularly from the staff, who thought that it was almost the end of the world. The fact of the matter is that when it was privatised the staff happily not only took their free shares—of which there was a large tranche—but went into the market and bought the shares. I therefore take with some circumspection the opposition of the unions to the privatisation of the Post Office. I will return to the parallels in a moment, if I may.
Competition in the mail market was introduced in 2004. There is little doubt that that has led to more customer choice and to prices being lower than they otherwise would have been. It has certainly led to a slowing down of the reduction in volumes. As a number of speakers have mentioned, one of the really key issues here is the growth of e-commerce and e-communication. The introduction of competition has also led, particularly for businesses, to reduced postal bills. That has been to the advantage of customers. Above all, it has led to a considerable spur for Royal Mail to come to grips with a long legacy of inefficiency and the refusal to modernise systems to improve its service to customers.
It is also right to say—this has been established by independent research—that it has led to a significant boost to the UK economy. We have heard echoes of that in the debate. Royal Mail has argued and continues to argue that competition is a major cause of its woes. It is not competition from competitors that is reducing Royal Mail volumes; overwhelmingly, it is competition from e-commerce. As a user of e-mail with now limited outgoing mail, I entirely understand that. The figures that I have been shown suggest that for every £10 of reduction in the volume handled by Royal Mail, £9 is due to e-commerce—e-mail and so on—and only £1 to competitors. Furthermore, contrary to the arguments that one hears from Royal Mail, it does not subsidise its commercial competitors. This argument was also voiced by the noble Lord, Lord Low, and there were hints of it in the speech of the noble Lord, Lord Tunnicliffe. On the contrary, commercial competitors have to negotiate a price for the last mile of delivery so that their products can be handled by Royal Mail. It is a negotiated price, which is backed up by the legislative provision in the earlier Act for the right to access.
Therefore, the House may ask why I am concerned. I start from my firm belief that there needs to be a robust competitive framework in this as in other businesses and that it needs to be firmly at the heart of the Bill. I should have thought that the great majority of people would accept that. However, when one looks at the Bill itself and some of its details, to which we will want to come back at a later stage, there seems to be a marked shift away from the principle of competitive access to the Royal Mail that was inherent in the 2000 Act.
At this point I return to my experience of the privatisation of BT. BT was a natural monopoly—an almost total monopoly in line telecommunications. Therefore, regulation of prices was essential to protect the public. The formula of RPI minus X was developed and formed a central feature of that regulation. However, the second requirement was that there had to be access to the market for competitors, and that it had to be guaranteed. I stress that one cannot draw parallels too closely between Royal Mail and British Telecom but one result was the huge growth in telecommunications, including the growth of the mobile telephony system.
I was the Minister who refused to allow BT to become an operator of a mobile system, simply to make sure that there was competition. I heard the former chairman of Vodafone tell a meeting that his company was worth around £80 billion at that time. Someone asked him what he ascribed that to. He said, “It was the refusal of the Government to allow BT to become a mobile operator”. When I asked him when I would get my share I am afraid there was not a very happy answer.
However, that process was so effective in ensuring competition that in the end it was possible to dispense with the price controls on BT. There you have the example of a nationalised monopoly that turned initially into a privatised monopoly, subject to regulation but with free access to competitors, and then into a very viable system. No one wants to return to the previous monopoly. Very few people argue that Royal Mail should stay a state monopoly. We have not really heard that argument as we had the previous Bill introduced by the noble Lord, Lord Mandelson. I look forward to his speech.
However, far from encouraging more competition, this Bill seems to be dealing with the matter the other way round. There appears to be a good deal of pressure on the Government to limit and hamper the competition, as I am sure there was on the previous Government. Indeed, it may have led to the previous Bill being abandoned in another place. The CWU and Royal Mail have certainly tried to hamper the competition. I think that this has been partly driven by the recognition that the Royal Mail has found it extremely difficult to secure agreement to the necessary modernisation. One thinks particularly of the final stage of electronic sorting which happens in every other country but is still not happening in this country. I suspect also—I hope that my noble friend can reassure me on this—that there is a very natural desire on the part of the shareholder executive in BIS to maximise the price that it will get for the sale of Royal Mail by restricting the competition. That is what it looks like but perhaps my noble friend can reassure me that that plays no part whatever in the Government’s modernisation.
Nevertheless, the fact remains that some of the provisions in the Bill, especially Clause 37, which gives Ofcom, the new regulator, power to impose conditions on access to Royal Mail as the universal service provider, seem to be aimed more at restricting the access rights of competitors than protecting the consumer. I shall explain very simply how that works. Under the 2000 Act, Ofcom—it was then Postcomm—could not impose a USP access condition unless it appeared to it that the condition was appropriate for one or more of three purposes: promoting efficiency; promoting competition; and conferring benefits on the users. However, this Bill says that all three purposes have to apply, not just one of three. To gain access to the Post Office network, a competitor has to satisfy each of the purposes relating to efficiency, competition and benefits. In my noble friend’s speech from the Front Bench, I caught a hint that that was intentional. I therefore ask: can the Bill be said at the same time to be promoting competition; and if not, why not?
Clause 43 deals with the proposed universal service compensation fund. Perhaps it will be necessary to use that in the last resort but it most certainly must not be used simply to shield Royal Mail from the necessity of getting rid of its inefficiencies. Those are details to be discussed in Committee but I make a strong plea that the Bill should not risk losing the gains which have come since 2000 from the introduction of a competitive regime. It should not give the regulator powers that could materially prejudice the position of competitors.
With many others, I warmly welcome the prospect that Royal Mail should be able to operate in the private sector as a successful and profitable business, but it must be competing strongly and fairly. It must be right, from the point of view of mail users and the industry as a whole, not to risk the advances that have been made over the past 10 years.
Lord Christopher
My Lords, I certainly do not come to this Bill with particular hostility: it is easier to consider than the previous one. I suspect that that is due largely to the passage of time, and perhaps some lessons were learnt. I apologise to the noble Baroness on the Front Bench. Due to the excitement this morning I missed the first six or seven minutes of her introductory speech.
My concern is the problem of unintended consequences. I am lucky enough to live next to a farm that is approached by a road which is about three-quarters of a mile long. The local farmer is constantly called out because people’s sat-navs have directed them up that road. Come rain or shine, they get caught in the mud and snow. I am anxious that the Bill should not be a sat-nav and that we should try to ensure that it produces what we and the electorate really want.
The trailblazer in the privatisation of post offices was the Netherlands—although I find it easier to say Holland. That process began in 1989 when that country’s Government began to sell its post office in tranches, and by 1995 they had lost their majority control. There have been several changes in name of the Netherlands post—all prefaced by “Royal”, of course. It was called PTT Post, TPG Post and is now called TNT Post. It is run by the multinational company TNT. What has happened since then? These are the problems that I want to ensure we avoid. One of the issues is minor in a sense, but I suspect that it is also quite a populist one. That country’s red post boxes have become orange. I do not recommend that we change the colour of ours. We should make sure that it does not happen here, but I am not sure that such a provision should be in the Bill. We have similar problems with telephone boxes.
In the Netherlands, 90 per cent of the post offices have closed. I shall return to that issue later; as a Member on the Cross Benches has already mentioned, it is a key issue in the Bill. Post boxes in the Netherlands are now emptied only once a day. Ours are emptied certainly twice and perhaps three times a day. In the Netherlands there are considerable complaints about lost post. To some extent, we have similar complaints here. TNT has not been prepared to recognise some of these problems in the way that we would expect. On lost post, TNT is quoted as saying, “As a company we are not in a position to deliver the post on time, particularly on Saturdays or Mondays”. The Netherlands allowed competition. New firms are paying low wages that have markedly impacted on TNT’s profits. TNT is proceeding with a policy of employing part-timers and franchisees in order to reduce the working hours of its staff to three days a week. If we want to proceed with a different service from that, we may have to provide some form of continuing subsidy.
The managing director of TNT, Peter Kunz, said that the universal service obligation—this may have been referred to earlier—was,
“a kind of Jurassic Park and we should get rid of it”.
Do we want this here? I do not think so and, as I said earlier, my concern is that the Bill and the Act should ensure that this sort of thing does not happen.
I am not sure that the noble Lord, Lord Razzall, who is not in his place, was correct to say that Royal Mail was still making losses. If he did not say that, I am happy to be corrected. It may be making net losses, but it is certainly making a gross profit and the difference, if there is one, is the cost of maintaining the pension fund, which we know is being dealt with in the Bill.
I have no faith in golden shares or any of these things. We must ensure that the universal service obligation is effectively protected in perpetuity, because that is what the British people wish.
On the issue of regulation, according to the Post Office—or rather, Royal Mail; like lots of people, I see them as one—an effective subsidy of £160 million is being given to competitors who are cherry-picking what they want and requiring Royal Mail to deliver the rest. We must meet the objective of a level playing field, especially on price and across all postal business—this is not limited to letters.
I turn to the issue of shares to employees. I saw this with BT which, with respect to the noble Lord, Lord Jenkin, was a significantly different case from this. As the chairman of a modest investment company, I was faced with a dilemma by the then investment manager, who asked, “What do we do about the BT share offer?”. It was opposed by the TUC and the union. There I was, with a different hat on and different responsibilities. I said, “You’d better buy them. The worst that can happen is that they sack me”. Of course, they did not. The shares opened the next day at a significant profit and within weeks or months, all the shares given to the employees of BT were sold. I hope that, when this happens, in whatever form, we will ensure that the shares are held in a trustee fashion to benefit the working people, and not individually, because I assure the House that they will not keep them. There will be a significant change in that respect.
I see this as a bit of a comparator for British Rail. I am not arguing about scale or making a political point; it is water under the bridge and one would not do it today in the way that it was done. People were skimming off profit. A good deal was sold off during the exercise, and significant sums were pocketed by the ex-employees who had acquired it. There is also a continuing subsidy to the railways. As I meant to say slightly earlier, I do not expect answers from the noble Baroness to all the points that I have raised today because, with respect, I would much prefer more considered answers. However, I would be grateful if the noble Earl, Lord Attlee, who has responsibility for the Department for Transport, would let us know what has been paid to the railways in the form of subsidy since they were privatised. I think that most of us would be very surprised at the scale of the figure. I hope that my point will become clear as I go on.
The Bill must include clarity on the arrangements for the sale, or whatever else it may be. It must state its nature and limitations. The Bill is negative; there is no indication that there are limitations. I find it much easier to say who may not buy it than who might. I do not think that the queue to buy it is any longer now than it was in the days of the noble Lord, Lord Mandelson.
We must ensure that no asset-stripping occurs. Reference was made by, I think, the noble Lord, Lord Razzall, to the investment by Deutsche Post. That investment has been made in the parcels business—the one thing that is clearly growing and making profits in Royal Mail. If you sold Royal Mail to me, I would want to see how much capital profit I could make out of selling the parcels side of the business. I believe that these things have to be preserved in the totality of the business. What is the timescale of the sale? I am worried about it being done with some urgency, as I do not see the need for that.
I understand, informally, that a valuation of the business has been made. I have not seen anything about it but it is essential that we do see it. The coalition is about openness. I believe that the public, never mind your Lordships’ House, are entitled to know the valuation of what the Government are seeking to sell. What are the scale and scope of the valuation? Does it, for example, include land and building assets? When was it done and who did it? We know none of these things. If a valuation is not needed for any other reason, one is needed if Royal Mail is seriously going to be split from the Post Office, because assets owned by Royal Mail will go to Post Office Ltd. Therefore, I hope that we shall have some openness on this and that the details will be published so that the world can know exactly what we are seeking to sell.
With regard to post offices, the Crown offices are a complication. They are already in the position of securing a significant benefit from the subsidy that the Government have made available to post offices. A table has been produced by Post Office Ltd in relation to the different sorts of post offices. One huge group—local post offices—could by no stretch of the imagination be continued, either because of the government subsidy required to maintain them as things stand, or because post masters and mistresses will be unable to make sufficient income from them. Many of us love and support our local post offices but a typical local post office could lose 65 to 75 per cent of its income as things stand under the Bill. Thirty-seven per cent of their business comes from Royal Mail. Notwithstanding the need for competition and profitability, it seems to me that somehow or other we need to sustain that sort of business. Therefore, what is the hurry?
I am unclear, as I am sure is the noble Baroness, exactly what mutualisation of the Post Office means in practice. It is one thing to set up a mutual to run a building society or whatever, but dealing with 50,000 post offices owned in different ways is very much more complex. I think that we should have clarity on that before we decide that it is a road to go down. I do not wish Ministers to come back here saying, “Our intentions were good. We meant to do it, but”. That would be unsatisfactory on an issue of this importance to Britain.
Mr Hooper has already answered one of the questions that appeared in his first report about the capacity of Royal Mail to provide the skilled management required. He said that that has been done with the appointment of Miss Moya Greene.
We are left with two inescapable issues, one of which is achieving capital. Questions have already been asked about how much they want, when they want it and how might it otherwise be obtained. A lot of questions need answering before we can comfortably go ahead with this Bill as it stands. I ask the Government to think carefully before Committee stage. It would be unfortunate if we were to face a raft of amendments when common sense tells us that some of these things should be dealt with beforehand.
The point of my question to the noble Earl, Lord Attlee, was about the social value of the Post Office and Royal Mail network—no one argues with this—which has been put at more than £2 billion. We either want to ensure that that continues or we want to throw up our hands and say that it has nothing to do with us. I echo the noble Lord, Lord Empey, in this. I thought that his contribution was most helpful. We must try to get this Bill right. If we do not get it right, another generation will say, “They got it wrong”. Looking back 10 or 20 years, we can see other privatisations which we would all have wished to see done a little differently. We must not have an early cheap sale, with people walking away with money.
Perhaps I may offer a blue-sky solution to this: take time to think hard about a Post Office bank. I draw your attention to Northern Rock, which is now a bank. It is ripe for something to happen to it. What would be better, what would be more popular in this country than converting Northern Rock into a Post Office bank with a sort of holder-trustee role for the Royal Mail and Post Office network? I hope that the Government will think about that.
Lord Mandelson
My Lords, first, I extend my welcome to the noble Lord, Lord Empey. I knew him well. We worked closely together when I was Secretary of State for Northern Ireland. Judging by his maiden speech this afternoon, I believe he will make a very distinctive contribution to this House. I am also looking forward to the maiden speech of the noble Lord, Lord Dobbs. I was just talking to him outside the Chamber when a colleague of his came up and hailed us both as “the men of fiction”. I am not quite sure what he meant by that.
Some things never change. This Bill is a bit like the repeat of a bad dream with its unhappy ending. The noble Lord, Lord Razzall, who is not in his place, referred to the scars that I bear. I can assure the House that I bear them fairly lightly, but it is noteworthy that the scars, such as they are, were inflicted not by this House but by another.
Yet again we are debating the Royal Mail and the structure and regulation needed to secure the universal postal service which the public demand but which—this is the crucial factor—we all depend on much less because of digitalisation. We are debating the same, broadly unchanged, Royal Mail which can and should perform like a modern logistics company but which retains too many of the characteristics of a government department. There is nothing wrong with government departments—I miss them greatly—but they are not commercial organisations, which the Royal Mail needs to be.
The Royal Mail needs a settled existence, which is why I cannot go along with my noble friend Lord Christopher in suggesting that we should drag our feet for a longer indefinite time. To create such uncertainty for the Royal Mail would be a tremendous disservice to it as an organisation and to its customers. No, it needs a settled existence, but one different from the structure and the regulatory framework in which it is currently operating. That is why the previous Labour Government introduced their legislation, which shared the same aims and objectives as the Bill—indeed, I notice that many of the clauses are similar—albeit with one significant difference: we proposed to keep the Royal Mail in overall public ownership.
Others before me have described how digital communications have transformed the Royal Mail's world and its market. That does not need further elaboration from me. That means that the Royal Mail has to reinvent itself. It must rationalise and modernise, as almost every other postal service among developed countries has done. It must harness all the new technology available to it to adjust its cost base and show real enterprise and innovation in the services it provides.
The Royal Mail has started to do that, but is it really capable in its present form of changing in the way, to the extent and at the speed that is needed? My answer to that is no; the answer of the coalition Government is no; and the answer of the previous Labour Government was also no. It is just too unprepared, too unfit. It does not have the right commercial structure to operate it. It has a single company union, which is, frankly, too remote from the wider world. It has relations between management and workforce that must be further substantially improved to enable change to take place at a faster pace. The company has a single client regulator that is not only overly constraining, in my view—I will come back to that—but insufficiently versed in the wider digital world. It is dependent on state aid, which is, frankly, slow and inadequate for what it needs to do.
For all those reasons, the Government have no alternative—just as we found when we were in office—but to bring forward a Bill that enables a fresh start to be made. I am very sorry that Labour MPs came under considerable union pressure to derail the previous Bill. The CWU succeeded in its aim, which was regrettable for this reason above all. In defeating our Bill, the CWU paved the way for the Bill that we are debating today. Quite literally, the CWU has, through its actions, become the midwife of the Royal Mail's privatisation.
Lord Brookman
I thank the noble Lord for allowing me to make a comment. I know the leadership of the post office workers’ union—I have worked with them at the TUC for many years—and I do not acknowledge the picture that the noble Lord has painted of the Luddite trade unionists who work on behalf of Post Office and Royal Mail workers. They are good people doing their best for ordinary working people.
Lord Mandelson
I rather regret that my noble friend used the word Luddite in relation to the employees of the Royal Mail. I did not use that term, and I very much regret that it should be so misapplied, as he has misapplied it, to the overwhelming mass of employees of the Royal Mail who know that they need to embrace change but, I fear, did not and do not have the leadership of the union to enable them to do so in the way that they need and wish to.
The task now is to make sure that the new Bill secures the Royal Mail's future and the viability of its business model, underpins the universal letter delivery service that the public require and rely on and sustains the relationship between the Royal Mail and the nationwide post office network. This needs to be got right in this Bill. These goals are chiefly dependent not on the Royal Mail's ownership but on the new legislative framework of regulation which the company will operate within. I have no doubt this needs extensive rethinking. I say this frankly: Labour did not get the Royal Mail's regulatory regime right early on when we introduced legislation, and that is why we proposed extensive reform in our Bill.
In my view, the priority for debate and amendment in this House should concern chiefly the clauses of the new Bill concerning future regulation. This is the nub of the issue and where the greatest and most detailed examination needs to take place because we need regulation that enables Royal Mail to compete without both hands tied behind its back. This means regulation which recognises the unique role of the Royal Mail as the universal service provider and its need to be profitable in delivering the service. It must also provide the basis for attracting much-needed new capital to the company and experienced management who can provide skill and expertise.
I accept that it is at least arguable that under Labour's original legislative proposal for a strategic partner in a minority position in the company, it might have been hard to attract the required capital and management strength, and that, from this minority position, it might have been too difficult to bring about the necessary change to turn round the company. In any case, this is history. What I cannot accept, though, is that a so-called foreign presence in the ownership of the Royal Mail is somehow treacherous or bound to lead to disaster, as we have heard expressed again and again in the other House. Deutsche Post and TNT in the Netherlands have shareholders from across the world, including Britain, and international alliances between Europe's postal operators will be widespread in the future. We do not have a nationality test for investment in Britain. The previous Labour Government were implacably opposed to such a thing, notwithstanding the wider review of takeover rules that I initiated. We are successful in Britain at attracting inward investment. In former utilities, we now have EDF, RWE and E.On, for example, and many people's jobs in Britain depend on that investment and that ownership. So let us not have false, little-Englander sentiments injected into the debate.
Our examination of the Bill should focus instead on the detail of the new system of regulation, on which I hope the Government will be open to argument and persuasion. However, we cannot let this moment, an opportunity for reform, end in failure again. Royal Mail, once reformed, will then need stability and to be allowed to get on with its job, and in that context I welcome the fact that from Labour's Front Bench we have not heard a commitment to renationalise the Royal Mail should it pass out of state ownership. This is sensible. As with gas, water and electricity in the 1980s and 1990s, Labour moved from a position of flat-out opposition to change, to a decision not to renationalise, to an embrace of these utilities performing well in the commercial sector. I suspect that history will repeat itself should privatisation be achieved.
My last observation is only that there is probably a wider moral to the Royal Mail saga: that when difficult issues come along, we cannot just run away from them. There is a Labour way to change things, and for us that meant bringing in a new partner but in minority ownership. When that Labour way does not happen or is stopped, the issue does not go away. It comes back, sometimes with a solution in a less palatable form than we originally wanted. That is exactly what has happened here, just as the then Prime Minister and I warned would happen if our reform and our Bill did not go ahead. I am only sorry that our warnings fell on deaf ears at the time.
Lord Dobbs
My Lords, I rise on a somewhat nervous knee to address this House. The warmth of the welcome that newcomers receive here is well known, and I am immensely grateful for it. I have had the honour of being introduced here by two of my longest-standing friends in politics. I advised the noble Lord, Lord Hunt of Wirral, at the very start of his parliamentary career 35 years ago, and he is now returning that favour with his characteristic gentleness and humour. As for the noble Lord, Lord Tebbit, I have been a friend of his and his very special wife Margaret for almost as long. I began working closely with him at a time when he was referred to in another place as a semi-house trained polecat, and I was described as his baby-faced hit-man. Time changes many things. I am unsure whether that polecat has yet morphed into a pussycat, but the baby face has, I fear, melted into middle age. I am fortunate to have many friends of long standing in this place, but I would like to mention one in particular. I have been a colleague and friend of the noble Lord, Lord Sharkey, for a quarter of a century. Today we sit on different Benches, but when we started here together he was kind enough to send me a simple message: “Brothers in arms again”. Those words sum up beautifully the very special spirit of this House.
I crave one further indulgence, if I may, to say how superb has been the support given to me by the staff, particularly the Doorkeepers, whom even now stand at the ends of the Chamber like my own Praetorian Guard, discouraging both invader and deserter alike.
When I first heard from the Prime Minister that he wished to take the surprising risk of sending me here, I was standing in the queue at my local post office in the beautiful Wiltshire village of Wylye, which, like post offices in almost all rural areas, has faced the whirlwind in recent years. On a crowded afternoon such as this, it is not necessary for me to spell out in detail the ferocious impact that the closure of rural post offices has had on the central fabric of village life; the noble Lord, Lord Empey, and many others here this afternoon have already done that. I therefore applaud wholeheartedly the Government’s initiative in deciding to invest additional money in the post office network and, among the many other things in this Bill, their determination to sustain the rural post office network. Yet the additional funds, as generous as they are, will not be a panacea. Many rural post offices are hanging on by their fingertips. They still face immense challenges, and they deserve better than they have been given in recent years. In 2007, Post Office Ltd announced a massive closure programme. Many local communities were not properly consulted. I had plenty of experience of that failure myself and Consumer Focus, the statutory body for the post office consumers, concluded that communications from the public during this period were treated as nothing more than a necessary evil. Rural post offices are far too important for such a process to be repeated.
In welcoming this Bill, may I draw one point to the attention of my noble friend Lady Wilcox and offer one suggestion? The point is this: Post Office Ltd statistics suggest that we still have more than 11,000 post offices in this country. That is not correct. More than 800 of that total are not really post offices at all, but what might better be termed “postal outlets”, part of what is called the outreach programme. Many of them are former post offices that have been redesignated as outreach partners. They lack any real security. In the case of Wylye, for instance, we had a post office one day and an outreach partner the next. It offered almost identical services; the same personnel, the same premises and the same hours—even the same post box. The difference was that the income the shopkeeper received for this work had dropped by more than two-thirds. There is no longer any pension; no sickness pay; no holiday entitlement. In many rural areas, far from the post office subsidising the shopkeeper, it is the shopkeeper who is now subsidising the post office.
They do this because of their sense of civic duty—a desire to carry on serving the community. In that, they truly are the big society come to life. Yet, the good will on which many rural postal outlets survive is evaporating and one day will run out. Close the post office or outreach service and we will be forced to watch the disappearance of all the other associated services—many of which are entirely unpaid but are the sinews of village life.
I would ask my noble friend if she would take to heart the very different nature of these outreach services and keep a close eye on them. They are desperately vulnerable and the current reporting requirements contained in this Bill may not be adequate for that job. It would be futile to insist that there be no further closures—sometimes circumstances will dictate—but perhaps I may encourage her to consider the following. When a rural post office or outreach service is facing closure, a minimum of 16 weeks’ notice should be given to the local community—particularly parish councils—so that it can have sufficient time to come up with an alternative solution that might keep the postal outlet open and keep alive the host of other vital associated services. Rural communities are incredibly resilient. They can be very inventive. They should be given the chance to show what they can do to help themselves.
Post Office Ltd's own code of practice talks of a six-week consultation period, but its record of consultation is not good. Six weeks is not enough—not when so much is at stake. I would ask my noble friend Lady Wilcox to strike a blow for the rural big society and help strengthen village life in this way.
The red eye of the digital clock is staring at me, warning me that I must not overstay my welcome. Winston Churchill used to talk about having, “so much more still to do, and so little time to do it”. I believe he was talking about alcohol, but they are wise words for anyone making their maiden speech. I thank you for your patience. I look forward with tremendous anticipation to finding my place here among you, as a keen and enthusiastic supporter of this Government, if never quite their slave; and, most of all, as a patient, wholehearted and faithful servant of this House.
Lord Hunt of Wirral
My Lords, we have heard a brilliant maiden speech. Comparatively few of us follow in the steps of the great people of the past in creating phrases that become quoted and are everyday phrases in our lives, such as those coined by my noble friend. I was thinking:
“You might very well think that. I couldn't possibly comment”.
However, I know that we are all thinking what an outstanding speech that was—and I am the one who can comment on it, and I will. It was 35 years ago that the now noble Lord appeared in my life—I am reminded of the radio programme: “35 years!”; it seemed an age. I am not sure why the Guardian coined the phrase “baby-faced hit-man”, but this personality came into the by-election in Wirral to write my speeches, coin my phrases and take over the campaign, and suddenly I was transported into the other place with the largest Conservative majority anywhere in the UK, so I have known for some considerable time of his outstanding speech-writing and famed organisational skills.
As my noble friend Lord Tebbit knows too, my noble friend Lord Dobbs has gone on to be a successful chief of staff but, in particular, a superb writer of—I think—17 novels now. We got a sense of that in the speech that we just heard, and he is now a valued Member of this House. If I am allowed another phrase of his, I shall say that he has just given us a remarkably effective demonstration of his being the epitome of elegant elocution; the last word was slightly different in House of Cards. I am sure that we will hear many great speeches from him. Today was the first in what I hope will be a long line of effective contributions, for which we thank him.
I declare the interests shown in the register, particularly my being a partner in the national commercial law firm of Beachcroft, where I have in fact been a partner for 42 years. I pay tribute to the speech from the noble Lord, Lord Mandelson, my former close working colleague in the British Youth Council. It was a remarkable insight into what we are debating. Having heard the other, very effective maiden speech from the noble Lord, Lord Empey, I say what a debate we are having.
I suppose that we are a fortnight late for Groundhog Day; noble Lords may remember the film starring Bill Murray, in which the leading character was doomed to relive the same day again and again. As my noble friend Lord Razzall said earlier, this debate has a remarkably similar feel to it to many others that we have had. Of course, we had the Second Reading of a Postal Services Bill on Tuesday 10 March 2009. On that occasion all the Front Benches were in favour of it and, after some process, the Bill was improved. The three main recommendations of Richard Hooper in his excellent first report—private sector capital, pension reform and regulatory reform—were not only accepted but embraced by this House. The title of that report, Modernise or Decline, could not have been more apposite. Sadly those dissident voices that were heard from time to time, particularly in the other place, eventually won the day, despite the best efforts of the noble Lord, Lord Mandelson. For once, the noble Lord’s powers failed him. It was one of the few occasions on which a Bill with overwhelming all-party support was withdrawn. Now, almost two years on, we are here again.
So what has changed? As the noble Lord and other speakers have pointed out, we now find the Royal Mail in a financial situation that has deteriorated further. Its core market is declining at an even faster rate than predicted, and a dangerous chasm is opening up. The accounting deficit on the pension scheme has more than doubled and, to quote Sir Richard Hooper’s latest report,
“doing nothing is not a tenable option … without serious action, Royal Mail will not survive in its current form”.
I could not agree more.
It is no exaggeration to say that unless the serious structural problems are urgently addressed, the future of the universal postal service, or UPS, could be in serious jeopardy, which would be unacceptable. Despite its declining core postal market, the Royal Mail remains the only entity that can preserve the UPS. As Richard Hooper rightly observed in that second report on the future of the Royal Mail, commissioned by my colleagues in the coalition Government, the UPS,
“is part of the country’s social and economic glue”.
There has been a further development, which is acknowledged in the second Hooper report; namely, that the Royal Mail has changed in a positive direction its management. The need for private capital has intensified, but the need for private sector expertise has now been addressed. New management has brought with it a completely revised and revived sense of mission. I compliment Moya Greene, the chief executive, and her team on having achieved just that. The need now is not for some kind of hybrid, collaborative arrangement with external investors and expertise from the private sector, because Royal Mail possesses the necessary expertise. This new Bill, which I warmly welcome, offers privatisation rather than public/private partnership and is entirely fit for purpose.
I am also delighted that Ministers in the department have heeded calls to involve employees in the sale. The Conservative and Liberal Democrat parties have long agreed that a degree of co-ownership and employee involvement is essential in privatisations such as this. We supported the noble Lord’s Bill, but he may recall that we pressed him to be more explicit in ensuring that widening employee share ownership was an objective of the legislation. How to engage employees in an exercise of this kind is of critical importance, and balance must be achieved in a number of respects. Above all, as several speakers in this debate have pointed out, employees must be offered a genuine and meaningful stake in the new enterprise, but managers must retain the power to manage. An important firm such as this must never be vulnerable to being held to ransom by an unrepresentative cabal of activists, be they employees or whoever else.
The coalition agreement commits the Government to the following:
“We will seek to ensure an injection of private capital into Royal Mail, including opportunities for employee ownership. We will retain Post Office Ltd in public ownership”.
As my noble friend has just pointed out, the Royal Mail will become part of the big society. The details of this will be worked out by us all in Committee, but, in principle, it must be the best way forward. Many of us, of course, have had a hand in the privatisations of the past. I was the junior Minister given the responsibility of taking through the legislation to privatise British Gas. I confess to the House, privately, that I was never aware that the uncle of my boss, the late Lord Walker of Worcester, was actually Sid. So in appealing for Sid, I had not realised that I was appealing not only to the wide world. However, it became a successful privatisation in the spirit that my noble friend then always dreamed of. There is no need to reinvent the wheel and I am sure that my noble friend and her ministerial colleagues will draw upon the considerable expertise that is available and at her disposal in this House.
However, I stress that time is not on the side of Royal Mail. It was the height of irresponsibility for the previous Government to take up so much important parliamentary time with this legislation only to abandon it. We were never quite sure why it was abandoned but it seems to have been on the grounds of political expediency. It is very much to the credit of Vince Cable, Ed Davey and my noble friend the Minister, strongly supported by their Conservative colleagues, that they now seek to succeed where Labour lost its nerve and so signally failed.
The urgent need to address the secular decline of Royal Mail was first identified in the 1990s by the Major Government and then, through a parliamentary Statement, on 17 December 1998 by the Labour Government. We have wasted enough time. The time has surely come to give to the Royal Mail the opportunity that it craves, not only to survive but to flourish. I hope that all sides of the House will see that, by giving the Bill our constructive support, it could be on the statute book by the summer. Then, and only then, will the Royal Mail be transformed into the success story that it deserves to be.
Baroness Kennedy of The Shaws
My Lords, I, too, add my warm congratulations to our two maiden speakers, the noble Lords, Lord Empey and Lord Dobbs, who undoubtedly will add to the riches of this House. It is wonderful to have them here.
The Post Office plays a special role in our society. It is one of the best known and respected institutions and is vital not only to our economic life but to our social and community life. It regularly delivers to every address in this country—on average 75 million letters every working day of the year—and the nationwide network of post offices is visited each week by the equivalent of half the population. If noble Lords are reeling at the statistics, so did I.
I applaud efforts to modernise a resource which is so precious. I, too, want it to work ever more efficiently and effectively in our contemporary world, where there is an increasing reliance on electronic communications, on the one hand, and, on the other, a burgeoning of online shopping which increases package delivery. The Post Office needs to evolve new ways of working; it needs to be better at business. Technological advances should be absorbed and the local post office should be strengthened as a source of community cohesion.
I say immediately that there are pluses in the Bill. I, too, support the way in which the Government seek to deal with the pension deficit. I, too, am in favour of the transfer of regulation to Ofcom, although I would like to play a part in the detail of the regulations. I also welcome the idea of employee share ownership, as long as it is not just icing to make palatable a privatisation which may, in many ways, be distasteful.
However, I am alarmed at the route the Government are taking, and I am not alone. Polling has shown that the public do not want to see the privatisation of Royal Mail. They see it as the turning of a public service into a private monopoly. This is regardless of political party—it was interesting to see from the polling that members of the Conservative Party were just as concerned as members of other parties. A majority see this policy as a threat to the six-day delivery service and they suspect that private providers will not want to subsidise unprofitable parts of the universal delivery system. They believe that privatisation will lead to higher prices. The experience of the privatisation of other services, from rail to gas, supports their suspicion.
The noble Lord, Lord Empey, made an important point that, to the public, the Post Office and the Royal Mail are all one—the public fear that, despite promises that are being made by the Government, their local post office will be put at risk of closure. I know the Government have promised that there will be few closures of major post offices and they have made a commitment to maintaining 4,000 large post offices and 2,000 smaller outlets operating out of local shops. However, analysts have shown that the restructuring of the post office network through setting up mutuals will probably deprive post offices of, certainly, at least a third of their income unless other ways are found of filling that. I am very happy at the idea of mutuals—I like the John Lewis Partnership idea—but sub-postmasters who run sub-post offices out of retail shops, after discussion among retailers, have expressed concern that, without new business, the mutual concept will not make economic sense.
It was very entertaining to listen to the noble Lord, Lord Mandelson, rebuke the unions, Labour MPs and others who rejected his own Bill. However, what he seemed to forget was that a much more imaginative, radical and exciting proposal was made around the same time by the think tank Compass, which proposed that the Royal Mail be turned into an independent company, based on the structure that was created ultimately for Network Rail. A restructured Royal Mail and Post Office, operating as a not-for-profit company, would have the ability to borrow and to invest in new technology without affecting government borrowing limits. Creating such a not-for-profit company would have also put a halt to the ridiculous business of separating out the Royal Mail from the Post Office. However, as the noble Lord, Lord Tunnicliffe, has said, this is a classic case of selling off that which is profitable to the private sector but holding in national ownership that which is non-profitable. You privatise the money-making element and let the taxpayer carry the cost of that which is risky.
I did not hear the noble Lord, Lord Mandelson, mention the inadequacy of the management of the Post Office when he was criticising the current regime. The managers are, in many ways, lacking in entrepreneurial spirit, overpaid and part of the problem. I hope that the new man who is coming in to lead will make the changes necessary—
Baroness Kennedy of The Shaws
It is a woman, is it? Well I am sure that will be better. If it is a woman then it is bound to be an improvement.
All I can say is that, while there has been criticism of the unions, there seems to have been insignificant criticism of those who managed. When Compass came up with the proposals for a not-for-profit company, it was argued that the unions would have to come on board; that they would have to be willing to enter into a new and real partnership with new management, with the public and with Government; and that they would have to agree to new technology and abandon old practices in sorting offices. I am sure they could have been won round to that proposal, but sadly the Government opted for the sell-off that is in this Bill.
I have sat through many debates in this House in which noble Lords have expressed concerns about the destruction of communities and I have listened as they talked about the glue that holds society together. The social value of post offices cannot be underestimated, yet here we are with an opportunity to modernise the Post Office and Royal Mail in ways that strengthen those ties but we have baulked at taking that more radical way forward. A sense of community is reinforced by citizens in an area sharing certain resources whatever their social background—the local library, the primary school and the post office. A modern post office should be reinvented, as we have heard others say, as the shop window of local and central government as well as the provider of postal services.
When I chaired the Power report, one recommendation that we made was that there should be the creation of local democracy hubs as centres of information and advice about the working of our polity. Those hubs provide the public with the right channels for complaint or provide an opportunity to contribute ideas to good governance; they are a place to find out about local initiatives, and are where voter registration could take place. There is no reason why the Post Office could not take on that kind of role. It would also be the locus for passport and licence application and the local centre for pension and other social entitlements. All this could be added to the remit of large post offices, making them the interface between government and the citizen. They could house offshoots of Citizens Advice, providing advice on debt and advice on small legal problems. If communication is your raison d’être, why not introduce some computer terminals so that those who have no computers at home, including the elderly and disadvantaged, can send e-mails. With the assistance of someone in the post office, they would be able to use the new technology for which they do not yet have the skills. Post offices should be the centre of high street community life, as well as fulfilling the functions mentioned by the noble Lord, Lord Dobbs, in outreaching rural areas.
The big disappointment in this Bill is the failure to use the post office as the site of the people’s bank. I heard laughter when that point was made by the noble Lord, Lord Christopher, but whole sections of the public want only simple high street banking, with none of the high-risk casino components that put savings and mortgages at risk. They want banks like the old Trustee Savings Bank and the National Girobank, which were put out of business by the banking industry. A people’s bank could be all that many citizens want and, in addition, could lend like credit unions to poor but prudent citizens in need of small loans to keep them from the loan sharks. Those people’s banks could even be a way of exploring micro-financing in some communities, so that small groups of neighbours can come together to support each other’s borrowing to establish small, self-sustaining businesses. We see it working in other parts of the world and, in fact, being tried out in my home city, where the Grameen banking system is being used to help people set up in businesses that do such things as hairdressing, laundry systems, ironing services and clothing alterations. Those are small things that keep families together and help to sustain them.
If the big society has meaning, this Bill should really be rethought to encompass some of the ideas that are around, of which the Government have taken no account. I know that they have put a lot on their own plate, but this piece of policy could benefit from a great deal further thinking. I know that I will be going into battle with the coalition Government on the privatisation aspect of the Bill but, on the reinvention of the post offices, I hope that with others around this House I can make a more constructive contribution and help to see ways in which to revitalise the post office system.
Lord Kennedy of Southwark
My Lords, I add my congratulations to the noble Lords, Lord Empey and Lord Dobbs, on their excellent maiden speeches. I have had the pleasure of speaking to the noble Lord, Lord Dobbs, and I am sure that I will shortly have the pleasure of speaking to the noble Lord, Lord Empey. I look forward to their contributions in times ahead.
I have a number of comments to make on the Government’s proposals in this Bill. I have no issue with the injection of private capital or private finance into the Royal Mail. Noble Lords will be aware of the proposals made by the previous Government. As noble Lords have said, there are a number of similarities in the two Bills. I want to see a successful Post Office and Royal Mail. However, I am not clear about the employee share ownership scheme and hope that the Minister will be able to talk further about this when she responds. How will the shares be distributed, what can employees do with them and what are the benefits of the proposals?
I hope that during the passage of the Bill through this House we will explore the issue of protecting the name “Royal Mail”. I am sure that the Minister will say that there is no need to worry about that and that any new owner would be daft to change the name. Well, people do daft things all the time. I recall the short-lived Consignia, whose rebrand was reversed in haste in 2002. I am pleased that the Government are not proposing the sale of Post Office Counters.
At this point, I declare an interest as a member of the Co-operative Party and a big supporter of mutuals. The possibility of the Post Office moving to mutual status at some point in the future is interesting. Again, we need to explore that further as this Bill progresses through the House. It could be a welcome part of the solution to the problems of the Post Office. I know that the Minister is aware of my support for the development of credit unions in this country; we have had a conversation outside the Chamber and I recently asked her an Oral Question on that subject. I am very supportive of the link-up between the Post Office and credit unions. By developing the credit union back office, millions of people would gain access to credit union services at any post office in the country.
I contend—and I think that many noble Lords would agree with me—that the big society is in some trouble. We have again had a relaunch from the Prime Minister. It could be said that this would be a good example of the big society, as I understand it. I suggest to your Lordships that the passage of this Bill is an ideal opportunity to explore these proposals further. It is certainly one of the growth areas that the noble Baroness referred to when she opened the debate.
I am pleased with what the Minister said about protecting post offices and that there will be no further closures; I made a careful note of that. I am particularly pleased that noble Lords on all sides of the House recognise the central position of post offices in supporting communities. In any link-up, the Post Office needs to be successful both in rural communities and, just as importantly, in deprived communities in our towns and cities, as it is central to community life. I welcome the proposals to deal with the Royal Mail pension fund, as I do those to transfer the regulator’s obligations to Ofcom.
In concluding, I concur very much with the remarks made by the noble Lord, Lord Low of Dalston, about the universal postal service obligations and the Minister’s remarks that the Bill will benefit greatly from consideration by your Lordships’ House. I hope that we will be able to suggest amendments that will improve the Bill and that those amendments will be considered carefully and in some cases accepted before further proposals are brought back at Third Reading.
Baroness Howe of Idlicote
My Lords, I, too, congratulate the noble Lords, Lord Empey and Lord Dobbs, on their quite excellent maiden speeches. I also start by thanking the noble Baroness, Lady Wilcox, for the excellent way in which she introduced this government Bill. It is clear that the Bill is welcome in a number of ways; equally, it is clear that all of us share a number of concerns about how the future will work out for this service—this serious piece of national infrastructure, as the noble Lord, Lord Empey, put it so well—particularly for one of our nation’s most cherished institutions, the Post Office.
The Post Office is clearly valuable to all of us but it is uniquely placed to cater for vulnerable and deprived groups. It is also the largest retail network of its kind in the country, with more branches than the major high street banks combined. It has also gone above and beyond its statutory obligations to ensure that it provides accessibility and additional services for those who require them. This is especially true for their disabled and elderly customers.
The Post Office has recently conducted access audits across the whole of the branch network. A temporary team of 50 managers visited over 850 branches and talked with sub-postmasters about their plans to improve accessibility within their outlets. I enjoyed listening to the noble Baroness, Lady Kennedy of The Shaws, about the potential of her further ideas for how they could be even better used. Part of the audit showed that impressive information was gathered about accessibility and facilities, such as low payment counters, induction loops, alternative language availability and other services. Of course improvements are required but the erosion of this valuable network would be disastrous for those who rely on such services. Today I will consider how any deterioration in the network’s strength might best be prevented.
First, the Bill is a welcome attempt to address the dire situation facing our universal postal service—Royal Mail and the Post Office. Let us be in no doubt that the future of the two companies, though structurally separate, will be entwined after the passage of the Bill, thankfully. The Bill goes a long way to addressing the problems Sir Richard Hooper identified in the immediate crises facing these companies, as many people have referred to. Perhaps most importantly, it alleviates the crushing burden of the £10 billion historic pension deficit. This alone costs the company around £300 million a year, so that is a most welcome development. It also allows Royal Mail to continue on the long and sometimes tortuous path of modernisation—although at a faster pace, I hope.
Secondly, a healthy, vigorous Royal Mail is critical. I am sure your Lordships will be united in wishing to see the business look to the future with greater financial certainty and a substantial investment to meet the needs of rapidly changing consumer demands. Only by modernising and meeting the needs of modern consumers can Royal Mail generate the income to meet properly its universal service obligations. In turn, this should enable it to operate a commercially productive relationship with the Post Office long into the future.
Thirdly, the Bill attempts to address the regulatory landscape in which postal services operate, which the noble Lord, Lord Mandelson, and others have mentioned. There is wide agreement that the current framework has failed. However, I have my doubts as to whether the Bill does enough to provide change in this area. There is a bizarre situation, which others have mentioned, whereby the taxpayer and domestic mail users subsidise private companies to the tune of around £160 million a year through privileged access to the Royal Mail network. I am sure all noble Lords would like assurances that such a scenario does not continue. Again, if the bleeding of funds away from Royal Mail through such regulation continues, it will adversely affect its ability to put business through the Post Office.
I have spoken in support of the Bill as it stands, but what is of concern to those of us seeking to protect the national network of post offices is how little is included on the future of Post Office Ltd. The Bill makes provision for a possible mutualisation of the Post Office. Like others, I welcome that idea but how this will happen is unclear and very much a matter for the Government of the day, whenever that day comes. I believe the Minister for Postal Services has also stated in another place that this will be very much on the horizon some time after 2014. What is of concern to parliamentarians seeking to protect the post office network is the extent to which its future will be at the whim of the policy of the Government of that time, and not subject to the legislation before us.
The present Government have committed to a £1.34 billion funding package to transform the network, which is, of course, very welcome, as, indeed, is the commitment to maintain the network at its current level with no further programme of closures. Nevertheless, when Ministers are trying to tighten the reins on public expenditure, the level of government business being put through the Post Office becomes even more crucial. Until very recently, such business was the most important source of revenue for sub-postmasters. It also raised footfall through their branches and made their ancillary businesses viable. However, as we have all heard, government business has declined dramatically over recent years. Indeed, in 2008, the Government very nearly took away the contract for the Post Office card account—a critical source of revenue—but for the last-minute intervention by worried senior Cabinet Ministers at that time.
The current Government have promised to make the Post Office the “front office for government”. What I, your Lordships, sub-postmasters, consumers, and many other interested parties would, I am sure, like to hear are specific proposals and commitments on how this can be achieved, and when. Therefore, I look forward to hearing detailed assurances from the Minister when she replies.
Baroness Wheatcroft
My Lords, first, I welcome the maiden speeches that we have heard from the noble Lords, Lord Empey and Lord Dobbs. As a newcomer to this place myself, I am delighted to be in such illustrious company.
The Royal Mail is something that the British public hold in high esteem. It is not to be meddled with without great consideration. Many of your Lordships will have chosen to forget that unfortunate episode when, in a silly quest for change, the Royal Mail and post offices were subsumed into Consignia. That expensive exercise was later summed up by the BBC as:
“Nine letters that spelled fiasco”.
Consignia did not last long; new management tossed it on the pyre of corporate nonsense. As Ecclesiastes says:
“A good name is better than precious ointment”,
and, despite its occasional problems, the Royal Mail undoubtedly retains a good name because it delivers a remarkable service.
However, the need for change in the business is pressing. The Bill enables that change. It seeks to separate Royal Mail from the network of post offices. They are separate businesses with a trading relationship that we are assured will remain. However, guarantees of that, at least for the medium term, might be appropriate. The current chairman of Royal Mail has given his absolute assurance of that continuing relationship, and there is every reason why we should trust Donald Brydon. However, as part of our review of the regulatory framework, we might, for the benefit of post offices, seek something stronger. Even the best chairmen do not last for long in corporate Britain.
I wish to make two points, one on each of the organisations which will emerge. The first concerns the crucial proposal that the Royal Mail should be sold entirely. Its need for a new life freed from the constraints of the public sector is clear. There is a future for Royal Mail despite declining volumes. Direct marketing may be junk mail to some of us but is potential revenue for Royal Mail, so is much that is purchased via e-commerce, the business which has taken over from mail order. The picture is not all gloomy.
The universal service obligation must be maintained but we have to be realistic about this. The Bill gives Ofcom the right to review the sustainability of that obligation. It needs to be measured against genuine demand. A recent survey found—admittedly by a narrow majority—that individuals and small businesses would consider a move to a five-days-a-week service if reliability could be upheld. We should remember the outcry at the loss of the second daily delivery. I contributed to that outcry. Some said that it would be impossible to live without that second delivery. Life went on and business did not, on the whole, suffer.
My plea now is that we should aim to float the company through an IPO, rather than to sell it to a corporate bidder, almost certainly from another country. That is not because I echo the “little Englander” views that the noble Lord, Lord Mandelson, said were far too prevalent these days, but we need to try once more to create the share-owning democracy that was part of the ambition of the noble Baroness, Lady Thatcher. We have heard reference to the successful flotation of BT. What happened afterwards was not entirely wonderful but was nevertheless part of obtaining a bigger shareholding base in this country.
Yet, since the success of those early privatisations, the proportion of UK-listed shares owned by individuals here has been on a downward trend. From a height of 54 per cent, it had by 2006 sunk to 13 per cent, and the most recent figures from the Office for National Statistics put the proportion at just 10 per cent. The Bill makes provision for employees to become shareholders, but as we heard from the noble Lord, Lord Christopher, employee shareholders do not always hang on to the stock. A solid core of private investors, however, makes for good corporate governance. These people invest for the long term and take an interest in the company far more than institutional shareholders. Private shareholders turn up at annual meetings and ask questions. Institutional investors are too often the absentee landlords of British business.
An army of “Sids” subscribing to shares in Royal Mail would not be able to turn back the tide of correspondence migrating from letters to e-mails, but they might make a difference. They would see the merit in doing business with the company they owned. They might decide to send greeting cards through the post, rather than merely pressing the button on that abhorrence, the e-card, which is a poor replacement for an enticing envelope arriving through the letter box. For that and for more fundamental reasons, I hope that as the sale of Royal Mail approaches the possibility of an IPO will be top of the list of favoured options. I know that the Government’s position is that the sale is open to all comers, but an IPO would get my vote.
My second point relates to the post office network, which this Bill promises will not be sold, although it could be mutualised. Like the noble Lord, Lord Christopher, I should like to hear more details of the proposed mutualisation. Nevertheless, as we have heard, post offices remain a remarkable retail business, each week serving more than 21 million customers. That puts the organisation on a par with Tesco. The Post Office is a trusted brand. Compare that with the banks. The annual trust barometer recently published by Edelman showed that the UK’s trust in banks had fallen to just 16 per cent—a 30-point reduction over three years. Hence, I agree with those who this afternoon, led by the noble Baroness, Lady Kennedy, have said that the Post Office is, and should be, an alternative bank. Noble Lords may recall Girobank, launched in the 1960s, but it was not properly nourished and was eventually sold in 1990. Today’s climate would surely be more welcoming to such a venture.
The Banking Commission, when it reports later this year, will undoubtedly highlight the need for greater competition in banking. The Post Office could provide it. That is not a novel thought. The previous Government came up with the name, the “People’s Bank”, although that may have overtones with which some noble Lords do not feel entirely comfortable. However, the concept of building up the Post Office as a trusted bank is surely worth pursuing. It already offers mortgages and credit cards. Some might argue that as a major owner of bank shares, the Government would not wish to encourage more competition in the marketplace—but competition is required and it is coming. The Post Office is surely well placed to provide it. I take this opportunity to add my voice to those asking the Minister to look again at the possibility of building up the banking business of the post office network.
Baroness Drake
My Lords, I, too, congratulate the noble Lords, Lord Empey and Lord Dobbs, on their maiden speeches. Perhaps I should advise the House that I represented telecom workers, including those in BT, and following union mergers became an employee of the CWU as deputy general secretary of its telecommunications sector.
I am concerned about the regulatory framework within which a privatised Royal Mail will operate and the implications for investment in the company and for the universal service obligation. There is a broad view that the regulation of Royal Mail has been harsh. That is clearly Moya Greene's view. Richard Hooper stated in his report that he was,
“struck by the depth and range of disagreements between Royal Mail and Postcomm. Even the most basic facts are disputed”.
He also concluded in his updated review that,
“The overall burden of regulation should be reduced”.
The compulsory regime of access to Royal Mail’s network, particularly downstream access—local delivery in the last mile—results in Royal Mail subsidising its competitors. As my noble friend Lord Christopher and the noble Baroness, Lady Howe, said, Royal Mail makes an average loss of 2.5p on every letter that it delivers on behalf of a competitor. The subsidy is of the order of £160 million a year.
Richard Hooper, in his evidence to a committee in the other place, commented:
“Cherry-picking is a big issue ... It basically means that somebody comes in and starts delivering two days a week to Liverpool, Birmingham, Manchester, Edinburgh, Glasgow and Cardiff, and then expects the rest of his or her mail to be delivered by Royal Mail to all the nasty places that cost lots more money”.
I am advised that Royal Mail has now lost 60 per cent of the upstream bulk mail market to competition in this way, and the figure keeps rising. It is also subjected to significant price regulation even in the most competitive parts of its market. That regulation has an asymmetrical feel about it. It will not sustain a viable business model; it will not secure major capital investment; and it will not deliver the requisite universal service.
It is clear that a truly universal national service that ensures delivery at affordable prices and meets the country's social and economic needs requires cross-subsidisation. If Royal Mail ceases to be a publicly owned body and becomes a private company, there will be a need for considerable confidence that the Government are giving to Ofcom both the instruction and the power to prevent cherry-picking damaging the universal delivery service, levels of investment and the viability of Royal Mail itself. If the conditions set by the regulator for competitors' access to Royal Mail's network disadvantage the company, a private buyer will struggle to see a business model that is in their commercial interest, and will certainly be reluctant to make the significant levels of investment necessary to deliver modernisation, develop new digital businesses and get the company to best in class.
Market conditions for postal service operators are challenging because of the growth of e-substitution and digital media, as any potential buyer will know. The regulatory settlement must allow the owners of Royal Mail to succeed commercially and bring capital and investment to the company in a manner that meets the needs of the users and sustains the universal service. Ofcom has a good reputation, but experience teaches us—the evidence is there—that regulators do not always get it right, and certainly not first time, when they set the terms and price for network access. This can undermine the level of capital investment in the major network provider. Equally, determining the definition of universal access and service requirements and the extent of the cross-subsidy can be greatly contested, particularly in changing and challenging market conditions, and the citizen’s national strategic interest can be lost in that debate.
In postal services it is important that the response to this challenge—because that challenge will be there and Ofcom will have to address it—is not to reduce the extent of the universal service and the products delivered. In fact, in our e-commerce world there is a powerful case for strengthening the obligation. If the new regulatory regime is to place postal regulation within the broader context of the communications market, it is important to remember that for many small businesses, certainly in rural and remoter communities, a universal postal service is as important as broadband access to their ability to participate nationally and internationally in an e-commerce world. The statistics confirm, for example, that internet sales are a growth area in the mail market, with internet shopping estimated to be worth £60 billion a year.
If the Bill does not unequivocally secure a meaningful universal service for all communities across all geographies in the country, many will be disenfranchised from areas of the mainstream—whether that is a cluster or hub of companies in Cornwall or the Highlands or a grandmother receiving a birthday card at her door. More than 10 years ago, I and many others argued passionately for universal access to broadband when regulators and civil servants were saying that such a proposition was unachievable; now, the debate is about speed and the need for universal access is simply taken as a given. Many people and companies cannot universally engage in e-commerce without the logistical back-up of an efficient and affordable universal delivery service.
The Bill sets the primary duty of Ofcom in relation to postal services as securing the provision of the universal postal service, but it also gives the regulator the authority to review what it considers must be provided by such a service. The Bill potentially weakens the universal service obligation. For example, it allows Ofcom to assess the financial burden of the universal service on Royal Mail and to make recommendations on how to alleviate that burden, which could include a recommendation that the minimum requirements in the Bill be reduced.
Indeed, Ofcom is directed to review the minimum requirements within 18 months of the passage of the Bill, which coincides with the time period over which the Government are looking to make a sale. A private company interested in acquiring Royal Mail will act in its own commercial interests and may well seek to push for a narrower definition of requirements or resist a lock-in to the post office network. Governments keen to secure a buyer will be under pressure to maximise freedom for the purchaser. A great deal is left to regulation. There is a real risk that the rigour of a regulatory review in the interest of the citizen and the consumer will be a casualty of the forces of political pragmatism, for whom the necessity of achieving a sale will be paramount.
The House of Lords Delegated Powers and Regulatory Reform Committee, while recognising that many of the delegated powers in this Bill are the same as those in the earlier Bill from the previous Government, drew to the attention of this House that the Bill gives a significant power to the Secretary of State to alter the minimum requirements for a universal postal service. This indicates that parliamentary oversight of changes to the requirements should be strengthened, and certainly that Ofcom’s review under Clause 33 should be laid before Parliament in a report. This, I believe, would be consistent with the recommendations in the 2008 Hooper report.
In conclusion, I have stressed what I believe to be both the economic and the social value of maintaining a universal delivery service. However, I certainly do not have in mind Charles I—not known for his willingness to be accountable to Parliament—who, my historian husband assures me, used his Royal Mail officials to regularly open and illegally copy diplomatic mail from the French.
Lord Cotter
My Lords, I am glad to be able to welcome the Postal Services Bill here today. I also welcome the two excellent maiden speeches given by the noble Lords, Lord Empey and Lord Dobbs. When I heard the speeches of the noble Lords, Lord Mandelson and Lord Hunt, I had a sense of déjà vu, which the noble Lord, Lord De Mauley, might share. I hope that on this occasion we shall see a successful conclusion to our deliberations. I apologise to the Minister for not being present for a few minutes at the beginning of the debate. I heard most of her words and shall read the rest in Hansard.
As has already been made clear, everyone expects that some action has to be taken to improve the current situation with the Royal Mail and the Post Office. The Bill addresses that and is designed to improve the current problems that the services face. It is also important to note that the Bill takes a major step forward in committing to at least 10 per cent of share ownership by the employees. That will ensure that there is not a total privatisation. The unsuccessful Bill introduced by the previous Government did not contain such a provision for shared ownership.
It is important that the Post Office diversifies and opens up its services by encouraging new initiatives. Those will include post offices in rural areas perhaps, developing services tailored to customers’ needs or providing a one-stop shop for government services in inner-city areas by offering services such as the verification of documents and the processing of benefit payments. I know that there are many other ideas about how to use the Post Office in the future. I welcome the fact that the present Government have committed funds to support this process. We must encourage an entrepreneurial spirit to ensure the Bill’s success and generate innovative ideas.
It is a pity that the post bank initiative has not been carried forward in the Bill, as there is room for alternative systems in light of the banking crisis. I ask the Minister to clarify any role that a post bank or similar could have in the future. It is certainly very useful that the consumer can access the big banks’ services through post offices, but it will be good if other initiatives can come forward. Recently there has been quite a lot of talk about the expansion of credit unions, for example. The noble Baroness, Lady Kennedy, and the noble Lord, Lord Christopher, spoke about that aspect of the future for the Post Office. Where you have local post offices, it is very important indeed that people feel that they can use them in some form as a bank.
Coming from a small business perspective, I know that the Royal Mail and the Post Office have played an integral part in the running of businesses on a day-to-day basis. Like many others, I welcome the fact that the Bill reinforces the universal service, which ensures that small business’s needs are listened to and considered. Some 77 per cent of small businesses say that they use the Post Office to send their parcels to their clients and customers. It is so important that this Bill will be part of the process to ensure that we get good delivery of the mail and a good service locally for businesses and people in all parts of the country.
Mutualisation has been mentioned, and I know that that will be developed when we discuss the Bill in Committee. It is another very important aspect of the Bill in terms of the changes that we can and should make. I welcome the Bill. I believe that it lays down the necessary framework to ensure the future success of the Royal Mail and the Post Office.
Lord Rowe-Beddoe
My Lords, I support the Bill, which, in principle, I welcome warmly, as indeed I supported in principle a Bill on similar matters which the then Government introduced in 2009. The Bill has in many respects cured certain significant defects in the 2009 version.
Before I go further, I welcome and thank my noble friend Lord Empey and the noble Lord, Lord Dobbs, for their excellent contribution to our proceedings this afternoon.
As many noble Lords have said, there is much probing to be done as well as the tabling of amendments at later stages to ensure that the sale of Royal Mail achieves optimum value for the taxpayer, on the one hand; and, on the other, that it secures a universal postal service which is appropriately enshrined in statute. At the same time, increasing flexibility on pricing, and hence on margins, is needed over substantial parts of the current business which are controlled by the regulator. I refer to large packets and large parcels, for example, which have already been mentioned, which, as often as not, are contracted to third parties who finally utilise the distribution network of the Royal Mail at subsidised prices.
Responsibility for the universal postal service within a private entity must receive greater protection than the Bill provides. Accountability to Parliament needs to be strengthened, and your Lordships may also wish to consider a requirement for primary legislation before any changes to the service can be made.
I welcome the proposal to allocate equity to employees, and I am very pleased to note the considerable improvement in labour relations within the Royal Mail since the arrival of new management. Longer periods between the review of the universal postal service must also be considered both to assist the attractiveness to a purchaser and to provide greater confidence to the public and to Post Office Ltd.
I turn briefly, therefore, to the part of the Bill dealing with the transfer and establishment of the Post Office company. Assurances have been given in the Department for Business, Innovation and Skills document CM 7946 of October 2010. On page 3, it provides six government commitments. I draw your Lordships, attention to the statement:
“We are clear that there will be no further programme of Post Office closures”.
I suggest that we will need to understand the precise definition of the word “programme”.
I echo what some of your Lordships have already said this afternoon. Some provisions of the Bill are too short term for either the new company, Royal Mail or Post Office Ltd to have confidence in their respective business plans. They need an interbusiness agreement of a longer duration than that in the Bill. Whereas I appreciate, as the noble Lord, Lord Razzall, said, that such matters should be more properly negotiated commercially between the two parties, it is the duration of that agreement that gives me concern. I believe that that is crucial to stability for both parties and for the public. Indeed, the duration of any further amended agreements should be considered.
I hope that the Government will consider strengthening their commitment to maintaining the current number of post offices. In her introduction, the Minister referred to certain “myths”. Within the current stable of our post offices, I understand that there is some confusion about definition. For example, of the current number up for sale, how many are being blighted by the uncertainty about an interbusiness agreement? How many of those up for sale are classified as “long-term temporary closures”? In regard to Crown offices, am I right in understanding that the guarantee for them expires at the end of this year?
Finally, I am sure that we are all relieved that the pension deficit will be removed. However, perhaps the Government will at some stage inform us of what is planned for the assets of the pension fund, which I understand are estimated at around £26 billion.
Lord Selsdon
My Lords, I think that I have to admit that I am standing here today only because of the Post Office. As a hereditary Peer, I have to recognise that a peerage was conferred on our family probably entirely because my grandfather was Postmaster-General, although I was later elected here. It is strange that you should have an affection for things that your ancestors have done. Before this debate, rather than going to the Library again and reading all the regular documentation, I read through the 365 entries in Hansard where my grandfather, as the longest serving Postmaster-General in history, had to deal with things. I looked first and foremost at Postmasters-General. They all had a charter. What it said was:
“We do by these Presents give and grant unto the said”—
in my case—
“Sir William Mitchell-Thomson full power and authorities to execute all the powers of any Act now in force or which shall hereafter be in force”.
In my grandfather’s case, I do not think that it was ever rescinded, so I have to feel that I may have some legal obligation to take the powers offered by this Bill. I will probably look at that with an international lawyer. However, today I shall be supporting not the Government—because, quite frankly, of this strange coalition agreement; I have considered forming a Select Committee to scrutinise the coalition agreement—but my noble friend Lady Wilcox, for whom I have great admiration. She is without doubt the best person to be in charge in this event.
As my noble friend will know, the greatest number of questions asked of my grandfather related to post offices in Cornwall: why there were not three deliveries a day, why there should not be more post offices, why a letter posted in Padstow should not arrive in Tre—something beginning with T—within so many hours. So I had a look and thought, what is the change now that we are introducing a Bill? First, however, I should say that this has been the best debate that I have listened to for a long time. I wish that all the other stuff that has happened over the past few days had been put down at the bottom of the pile. I was the one who also supported the Isle of Wight, which also should have more post offices.
I have had dealings in the communications world—and do not forget that the Postmaster-General was in charge of absolutely every form of communication, including the telephones, the cables under the Atlantic and so on. I think that we should bring back the role of Postmaster-General. Perhaps I would apply. Perhaps the Minister can tell me who the current Postmaster-General is. Is he part of BIS? All the names get changed. All these mnemonics that I cannot understand should go out of the window. The thing about modern technology is that Cornwall, Wylye or anywhere else, even Egypt, is only a button-press away. Distances no longer apply if you are using the latest technology. You therefore have to say on the one hand, is it not wonderful that Royal Mail still has a good image for security, trust and confidence? Is it not wonderful that each post office sub-postmaster also has an image and a reputation? All they are lacking is turnover and facilities. You have to look at what could be done. What could be done has already been suggested today, but the real opportunity lies not in following the path but in looking anew. Of course you have to deal with the £9 billion pension deficit, but practically every company in the land has ended up with enormous, great pension deficits. You have to wipe things out and to some extent to start again. The worry about that word “privatisation”—I hate every word that ends in -ation—is that it is the wrong image, the wrong thought.
The Post Office and everything that goes with it is a public service, no matter who owns it. It is an essential part of any institution. Without it, you can have revolution; communication is everything. I was trying to think of how we could change it around another way. I thought: let us look at what starts new businesses. We used to call them enterprise zones. Perhaps every post operation should be an enterprise zone. Perhaps the tax allowance system should apply in every regional area. That could provide benefits. Perhaps those who invest in it could do so tax-free with pension money.
I had all sorts of thoughts about communication. I am secretary to the Parliamentary Space Committee, and I rang up a few of my friends and said, “I want two satellites that will provide instant communication for all the sub-post offices and post offices around the country”. The reply was: “No problem, my dear friend. It’s easy”. They could have a little station in each of their operations, where old Mrs So and So who wants to be able to talk to her grandchildren can go in, press a button and there it is, without having to sub-contract or to try to learn some of the modern communication systems that we have here.
Your Lordships are pretty advanced in a way; perhaps 50 per cent of you know how to use the internet properly. The Government make an automatic assumption. You press a button and you have sent out a document showing the Prime Minister shaking hands in a coloured environment, but you find that the time to download it is not there. “Am I meant to vote?”. You do not understand. You then watch people trying to use their new system without knowing whether it is proper or correct. It is somehow an educational problem.
For me, the post office structure is a simple matter. It has an unknown value; you cannot put a capital value on it. If you privatise it, you move very quickly around the historical route. You find that various investment banks suggest to foreign investors that here is a reliable cash flow that can be used to hypothecate certain debt so that they can come in and buy the business out of the country’s own money, probably disposing of it at some sort of profit at a later date. These are what you often call financial instruments, but most of the privatisations in this country have ended up in foreign ownership. That might not matter, but most foreign ownership, with the exception of the United States, is not English-language anyway.
We have the great advantage that the English language is spoken by 3 billion people around the world. We should look at our postal system’s ability to communicate directly. Historically, it was part of the empire. We should not forget that the Postmaster-General was also responsible for laying the cables that went off across the Atlantic and to Australia. We had that technology, and in microtechnology and robotics, and particularly in space, we are one of those very advanced nations.
I commend the Bill but not its details. I commend the Minister because I know that she is one of those people who will fight her way through any of the obstacles that come up. If noble Lords have nothing better to do one day, I will arrange for them to have direct internet access to all the great speeches made by Postmasters-General over time.
We have too much direct mail and undesired communication. I have calculated how many tonnes and the cost of what we have to throw away. We worry, too, about our identity. We are buying more and more shredders to put our names and addresses into so that no one can send us things. All I would say is that this is a worrying aspect, because security is critical and Royal Mail probably has an image that could stand that security.
I end by referring to a question that was put to my grandfather, the Postmaster-General:
“whether he proposes to take any action to stop the sending of moneylenders' circulars by post?”.
The reply was:
“Under existing legislation I am not in a position to stop such circulars in the post. A Bill for amending the law so as to prohibit the sending of unsolicited circulars of the kind has been before the House”.—[Official Report, Commons, 16/12/1925; col. 1455W.]
That was in 1925.
Baroness Kramer
My Lords, it is intimidating to follow a Lord who has the postal services in his DNA, but I am delighted today to be able to welcome this Bill. Like, I suspect, many in this House who hugely value the whole range of services provided by Royal Mail and the post offices, I have watched with dismay over the last decade as the Post Office and the Royal Mail seemed to go into a slow death spiral, watched over by a Government unable or unwilling to intervene. I commend the Government and Ed Davey, the Minister in the other House, for their courage in tackling what was always regarded as a step too far. Matters have been left to the point that the Royal Mail and the Post Office have been left in an utterly precarious financial situation such that action is vital and urgent.
So many remarks have been made on the Floor of this House—it has been a comprehensive debate—that I will confine myself to commenting on three particular areas. First, on the post office network, I understand that the Government have committed themselves not to have a new closure programme. I want to ask whether they agree that it is necessary to reopen or re-establish post offices in some areas—I am not talking wholesale—given that 7,000 post offices have been closed over the past decade.
In the early years of the closure programme, very little attention was paid to the impact on coverage, on need or on the service provided in the community because of where other post offices were located. In effect, as we know, sub-postmasters who were willing to close were offered a bounty—of about £40,000 on average, I think—which was taken by people who were close to retirement or who had a buyer for the premises. The consequence was random closures across the country.
For example, in my old constituency of Richmond Park, the most deprived ward of all—the Ham ward—lost all its sub-post offices in that period, so there is now not a single post office in the entire ward. I remember very clearly a meeting with senior officials from Post Office Counters who proudly produced a map and pointed to a post office in nearby Teddington, which they explained people in Ham could go to. However, they failed to recognise that the blue line separating Ham and Teddington was the River Thames. While I greatly admire the citizens of Ham, their ability to walk on water is extremely limited. That kind of nonsense was repeated, and elderly and vulnerable communities now have no post office service as a consequence.
There have frequently been discussions around the needs of rural communities, as we have heard again today, but I remind the House and the Government that these issues can apply just as much to urban and suburban communities. If a post office cannot be reopened, the kind of project that is being discussed—of integrating post office services into, say, shops or other kinds of enterprises—should be just as available in urban and suburban areas as is beginning to be the case in rural areas. I put down a marker on that issue.
The second issue I would like to address very quickly—this is now switching over to the Royal Mail side—is that of regulation. On this, I can be very brief because the noble Lord, Lord Low of Dalston, who left just before I got to my feet but who is respected by all for his wisdom, clearly raised some of these issues. Many of us are concerned that, historically, the regulator has in effect required Royal Mail to subsidise its competitors in the bulk sorting business in the way that it has set the headroom price for delivering letters over the last mile, which of course is done only by Royal Mail. That is one example of where regulation has had the effect of undermining the financial viability of the universal service provider. All of us, I believe, see that as a situation that cannot continue.
I am very positive about the shift of regulatory responsibility to Ofcom, which has a much broader commercial experience, but it will be novel for Ofcom to regulate a business in which the underlying activity is in decline. Therefore, there are some real questions around that.
I very much recognise that one task of the regulator is to protect the consumer and to keep prices as low as possible, but the financial viability of the universal service provider has got to be a significant and major consideration. While that is mentioned in the Bill, there is some scope to discuss how we might strengthen the regulator’s role in the Bill. That might be particularly urgent given the importance of engaging new investors as early as possible and given that uncertainty is the enemy of new investment. To be able to engage with new investors to make sure that money can be brought to Royal Mail as early as possible to achieve the modernisation that we all want, we have to make sure that regulatory uncertainty is constrained as much as possible. Again, that was an issue that I wanted to underscore and bring to the attention of the House.
My last set of issues is around what I think is a lost opportunity. A number of people have spoken of their regret that nothing in the Bill brings forward a Post Office bank. We now recognise that the post office has a community importance, which will be supported financially by the Government, but that role has not been used to fill a gap that exists in our financial services. Members of this House will be well aware that everybody has the right to a basic bank account, but most banks on the high street provide that facility on sufferance. Such facilities are currently extremely limited and do not seek to draw individuals who are in more vulnerable financial circumstances into genuine financial inclusion. That role could be picked up by the Post Office.
Ed Davey, the Minister, has talked about the importance of using the Post Office to link much more with credit unions. ABCUL, which is in effect a trade group for the credit unions, has been positive about that. If that moves forward, individuals will be able to join a credit union through their post office and perhaps have a small line of credit with a credit union that they could then access through the post office, and there would be some services. That would be beneficial. However, the credit union world in the UK is highly fragmented, with extensive services in one area and none in another. In each neck of the woods, credit unions are different in how they are constructed, in what they offer and in their remit. Therefore, what has been suggested is hardly a comprehensive solution.
A post bank could offer a much more comprehensive solution. Consumer Focus has done some good work—I commend it to the House—in both consulting and reporting on that option. I understand the difficulties because of the relationship with the Bank of Ireland, but we should pursue this. Consumer Focus comes to the conclusion that at least 1 million people who are financially excluded could be included through a Post Office bank. The Post Office is an institution that people trust, and that trust is worth a great deal. Also, a post bank could have the kinds of accounts that no major bank would ever consider, such as adapted versions of accounts that allow people on low incomes to do direct debits. That would let people access the best rates for electricity, gas or other services, from which they are currently excluded because, as noble Lords will know, basic bank accounts offer no direct debit capability.
There is a whole range of options that the Post Office could offer because of its trust, its customer base and its reach, if we wanted to bring new financial services into it. Financial inclusion was an important issue for the last Government—I assume that it is still for the Labour Party—and it is certainly important for my party and, I understand, for the coalition. Here is an opportunity to pursue that goal, so I hope that the Government will consider it seriously. During this period of change, I hope that this opportunity will not be lost.
Lord Brooke of Alverthorpe
My Lords, I congratulate the noble Lords, Lord Empey and Lord Dobbs, on their excellent maiden speeches and look forward to listening to them again in the not-too-distant future.
I was one of those who spoke strongly in favour of the Labour Government’s 2009 Bill, notwithstanding my trade union background. I did so principally because of my experience in working with the NATS public/private partnership—to which I shall return in a moment—but also because the Hooper report demanded that action needed to be taken if all the things that we treasured about the Royal Mail and the post office network were not to be gravely put at risk in the future.
I supported that Bill for several reasons. First, it would have provided much needed private capital investment. Secondly, it proposed to change the regulatory regime. Thirdly, it would have safeguarded the universal service obligation, which is potentially under threat. Fourthly, it would have safeguarded the staff’s pension fund and other entitlements. Fifthly, it would have speeded up modernisation—with capital coming in, as well as new management, which would have injected new approaches. Additionally, there was the opportunity for providing what I felt was a potentially greater chance for more employee involvement and participation than had previously been the case. I bow here to the noble Lord, Lord Hunt, and acknowledge that he was at the forefront of pressing for changes in that regard—indeed, our proposals were modest by comparison with what is before us now.
Those were the overall issues that I looked to be addressed in the 2009 Bill. When I try to make an assessment of the new Bill before us, I see that much of that is being delivered in one way or another. There are concerns in a number of areas where people want further reassurances, on safeguards for the universal service obligation and so on, but I anticipate that, as we take the Bill through its stages in this House, we will move a lot closer to a good deal of agreement on those outstanding issues.
However, one topic which still disturbs me and on which I will pose a number of questions is the difference between what we were seeking in 2009 and what is now on offer before us. In 2009, a part-privatisation, or PPP, was proposed; now we have what I understand will be a straightforward, 100 per cent privatisation. I have not as yet heard the case made for going 100 per cent rather than having a partial privatisation. I looked at the Liberal Democrats’ manifesto when they went to the country. They were elected on the basis that they would go for a mutual and would look for a 49 per cent stake remaining with the state. I looked at the Conservatives’ manifesto when they went to the country. They said nothing on this—quite wisely, since the nasty party, as it is alleged to be by some people, does not go around offering possible privatisations when general elections are coming up. In the Labour Party, we have heard some different views expressed today. As I see it, my Front Bench are broadly as open-minded and as willing to embrace change as they were in 2009. I am not sure, however, that we are convinced that we should go all the way with 100 per cent privatisation.
In 2009, we would have kept the Royal Mail and the Post Office structure as a British business. It was interesting to hear the noble Baroness, Lady Wheatcroft, who I am sorry is not in her place but who made a very radical speech for the Benches from which she comes, touch on the importance of where organisations fit into society, what communities are like and what needs to be done to try to get communities back together again.
I do not think that it is being a little Englander to take this perspective, so I take issue with the noble Lord, Lord Mandelson, on this. I am a European at heart—probably not as much as he is—but I am also interested in what other Europeans do and how they look after themselves, their communities and their businesses. We find that very few of them run at the front with the liberalisation as we do in this country and offer themselves openly for anybody to come and take them over. Among the population at large, there is an increasing resentment at the way in which the political classes sort things out and ignore their views in a given area. We have to be cautious about this.
I return to the subject of NATS, a PPP for which full privatisation is contemplated. NATS has had all the freedom it needed to raise all the capital it wanted; it has brought in people from the private sector to run the show and has been run entirely without the Government interfering in its operations. NATS even has an element of overseas money invested in it. CAA has 4 or 5 per cent of the shares but, as that is now a Spanish company, NATS is not wholly British owned. If NATS, a strategic part of safeguarding this country, was fully privatised, it could possibly end up in the hands of people overseas. If we go that way, I would bet any money that the German air traffic service will take over the British air traffic service. What an irony that would be. I say no more than that.
On Royal Mail, I want to ask my friend the Minister—we are very friendly, and we have exchanges on a number of issues—this question. What will be the difference between going for a public/private partnership, in which the majority of shares go into the private sector and the Government hold 25 per cent—a golden share—and going all the way with a 100 per cent privatisation? The papers are almost encouraging foreign money to come in and take over Royal Mail. That is seen as inward investment and something to be encouraged. What is the difference? I listened to my noble friend Lord Hunt and to my noble friend Lord Mandelson, who described what had changed in his mind between 2009 and now, but I did not hear the total case of why we had been unable to bring in money on the kind of scale that was needed to keep Royal Mail going. He did not say that, because he did not get far enough down the road.
The British public need to be persuaded because a policy is being pursued on which no one has legitimate backing from the public at large. No party went to the country with a manifesto proposing what is now before us. We should recognise the ill feeling that people in certain quarters have towards what is happening with some companies and utilities which, bit by bit, have now been taken over by foreign companies.
CAA is a typical example. Having bought as much as it could of this country’s airports, CAA has over-reached itself and now has to meet phenomenal interest payments and cut corners wherever it can to ensure that its profits are sustained. We saw the results of this before Christmas when Heathrow did not have the equipment it needed to keep this country running its business. Why? If the Government still had a small stake in CAA, they would have been in a position to say, “This will not happen again”. Indeed, they would have been in a position to say, “This should not have happened in the first instance”. That is the kind of approach we should be looking for with the development of these companies. Can the Minister set out carefully the real raison d’être for why a PPP of the kind I am talking about is not appropriate?
If there is privatisation, will subsidies continue to be paid to Royal Mail plc in the future in the way in which we continue to subsidise many utilities which have been privatised? Again, many people feel very unhappy about what is going into these privatised utilities, especially when they see the profits that are being made by them.
On the sale of shares, I shall try to be as helpful and as constructive as possible. I give the Government support for their effort to try to get greater staff involvement, perhaps by selling shares to them at a discounted rate. Whichever way they decide to tackle this issue, I await with interest to see the approach they adopt to the share ownership scheme. A number of options are open but, as yet, their approach is unclear. However, in general terms, I welcome it.
There may be some merit in the Government contemplating serious discussions in an area where, on occasions, there has been great difficulty in moving forward, to see whether they can persuade the CWU to have a stake in the new company. If so, the question is whether they could fund that entirely on their own or whether the Government might make an offer to go in partnership with it into this private limited company, or even offer shares at a discounted rate as with employees. We need a new initiative on that front. Simply bringing in new management with new money may not necessarily resolve some of the problems of the past, even though many people believe it will change it overnight. We need to have a change of attitude within the union too, if we can persuade it, to get it more involved and playing a bigger part, which would lead to growth rather than the continuing diminishment of the operation.
Lord Sawyer
My Lords, I also begin by congratulating the noble Lords, Lord Empey and Lord Dobbs, on their very good maiden speeches. They were delightful to listen to and I look forward to hearing much more from them in the future.
There was an inevitability about some kind of privatisation of the Royal Mail because, given that the previous Labour Government were intent on that, it was not unexpected that this Government would follow suit. I remember when Patricia Hewitt was the Secretary of State at the DTI, she got very close to a deal with TNT for privatisation, but a small number of factors—including, sadly, the then not very satisfactory industrial relations—prevented TNT from taking it forward. Some kind of privatisation was always going to be on the cards and I guess this Bill in some form will go through.
My noble friend Lord Mandelson then took on the next Bill for the Labour Government. He was thwarted by the votes in the House of Commons and certainly laid some of the blame—if that is the right word—on the CWU and its lobbying. However, the CWU had an absolute right to lobby and members of the Parliamentary Labour Party would claim their independent judgment when making their own political decisions. I am sorry that the noble Lord, Lord Mandelson, is not in his place to hear me say that.
I am slightly disappointed about the Government’s decision simply to dust down the Hooper report with some added modifications. I was hoping, based on the Liberal manifesto, that we might see a wider look at how we might own—or who might own—the Royal Mail. I was also, to be honest, quite interested in the things that David Cameron has said about ownership and different forms of ownership and about the involvement of charities and not-for-profit organisations. Perhaps between the synchronisation of those two points of view we might have had a slightly different approach, which Members have spoken of this afternoon—for example the not-for-profit approach of the kind that was suggested by the noble Baroness, Lady Kennedy, in her speech. Nevertheless, time is very important and the business has to modernise and go forward. Maybe there has not been time for that longer consideration.
One of the things that disturbs me most of all is this idea that the Royal Mail should be separated from the Post Office completely, and that the Royal Mail should be sold to a private buyer and the Post Office should perhaps be some kind of a mutual. In the medium to long term, this could have very serious consequences because they would become very different kinds of organisation. Although there is an intention in the Bill to make sure that they co-operate for a period of time, if you think several years ahead, the Royal Mail could be owned by a very aggressive private company, which might or might not be British—we do not know—but the Post Office could be a very British mutual with mutual values. The standards that would be held very dearly inside both those businesses would be very different.
There is a little bit of a problem on the government Benches in that they have little or no experience of what it means to run a mutual. I was for many years, although I am no longer, the director of a big mutual, and I can tell you that your job is to guard the mutual ethos. You are looking for trading partners who are going to think, act and behave in the same way as you do. If you are faced with a multinational company that has very different standards and approaches—as may well be the case—towards investment, to where it invests its pension funds, to how it treats its staff and to who it trades with, you could be in some difficulty trying to get those two organisations to work together in five or 10 years’ time. You need to think not just about what is happening today but what it might be like with a fully privatised Royal Mail and a fully mutualised Post Office. That is something that we need to think about.
I have listened to both Moya Greene and Paula Vennells, the respective chief executives of both businesses, on platforms saying that they support the idea of separation. However, I personally did not feel that their answers to questions were really wholehearted, or that their total support was there for the idea. I hope that Ministers might be able to look at this again and possibly think about keeping both parts of the business together, perhaps even in some kind of mutual or not-for-profit ownership.
On the privatisation of Royal Mail, I accept that we need to keep modernising and going forward. I do not know whether that is possible with the present ownership, but I would like to think that it is. I have read extensively about Moya Greene’s contribution. I have never had the pleasure of meeting her, but she has a tremendous reputation and she seems to have done a really good job. Of course, her board of directors is almost totally out of the private sector and has massive private sector business experience. I do not know what you would expect the board to look like in a privatised company, but it might not look very different from the one that we have now.
My view on where to go with the privatisation of Royal Mail remains open. I would like to see Royal Mail remain in the public sector. I am impressed by the modernisation agreement that the unions and management have been able to agree. They are going forward, and some of the processing that they are doing now is some of the best in the world. Industrial relations have improved, with people working together. There is not as yet a satisfactory answer to how to access capital. Noble Lords have said that that may be possible under different forms of ownership, but I would need to be convinced that any model that was not in the private sector to some extent had the ability to access the capital that it needs to go forward. I certainly hope to think and learn more about that as the Bill makes its way through Parliament.
My final point is on culture change, which is something I have always been interested in with regard to the Royal Mail. I had an opportunity to work with both sides on that for some time. Regardless of whether Royal Mail or the Post Office are public or private, the good industrial relations are to be welcomed, but the real question is whether the control and command management that dominated the industry has really changed. Has Moya Greene got hold of that and made significant progress? I do not know the answer—nobody does—but I hope that that is happening. It is fundamentally important, wherever the business ends up, that we continue to build trust between the people who work in the industry and those who manage it and that the two sides work together on problems. That is something that has not happened in the past, which has often frustrated the management. Ways need to be found in which people can work together and sort out problems jointly. If we do that, we will make the right progress.
Lots of noble Lords have talked about the share ownership issue. The noble Lord, Lord Brooke of Alverthorpe, has greater knowledge and experience of it than I have. His point about engaging with the union and seeing whether we can get the unions on board with some kind of scheme is a very good one and well worth taking on board. We must not write off the union or think of it as a backward-looking organisation. I tried to persuade the union, as did others, that it should come to an agreement with the Labour Government on the last attempt at privatisation, but it chose not to do that. That was the union’s business. In a funny sort of way, the union is more open to reaching an agreement now than it was with the Labour Government in power. There is a certain irony about that, but I think that it is true. Also, if you are going to offer shares to the workforce, you should ask the workforce whether it wants the shares. It is untenable to give people shares when they have never been asked whether they want them. There should be some kind of mechanism for doing that, along with talking to the trade union.
I have listened to noble Lords with business experience in this Chamber and the politicians who have spent a lot of time trying to remedy the wrongs, and a lot of emphasis is placed on capital and modernisation. However, the postal service is about engaging with people; it is massively a people business. We must not lose sight of the fact that, no matter what we say about things, it is people who really matter. Capital, the commercial aspect and discipline are all very important, but at the end of the day it is a people business and we must ensure that we never lose sight of that.
Viscount Tenby
My Lords, we have been blessed with two excellent maiden speeches today—I say that even though I am breaking the unwritten rule by mentioning them. There is safety in numbers, probably.
Considering the amount of discussion there has been about our postal services over past years, it is perhaps surprising how this Bill was almost unchanged during its passage through the other place. I suggest that this, in part, reflects the fact that all sides accept the need for fundamental change to present arrangements and because of the parlous state of Royal Mail finances. With all these historic institutions, ranging from the Post Office to the railways, I am often struck by the disparity between the people at the sharp end—postman, ticket clerks and the like—and the executives further up the chain. I firmly believe that the front-line staff which these organisations have are a priceless asset and I pay tribute to them today.
Time is short, so I will confine myself to one aspect of the Bill today. That is the effect that these proposals might well have on what is by far the largest group in the Post Office retail chain, namely: the 6,000 or so sub-post offices, which form such an important part in the life of rural communities. Indeed, if there has been one central vein throughout this excellent debate, it has been the emphasis on the social importance of such an organisation. These franchises—for that is in effect what they are—cater for an often elderly population which relies on them for a whole host of postal, financial and administrative services ranging from insurance to the purchase of car tax. Those facilities are there, on the doorstep, for the many unable to get into neighbouring towns regularly and, it should be added, for the many unable to access these necessities via the internet. Incredible as it may seem, there are some like that.
The Government have already stated—and I applaud them for it—that they will not engage in any compulsory closures within the network. I especially welcome that news in view of the estimated 5,000 closures in recent years. Yet there is such a thing as death by a thousand cuts. Take away the ability to pay one’s car tax or, say, to remove the opportunity to send a package over a certain weight and one is relentlessly chipping away at the already extremely slender profit margins that such businesses have to put up with.
For the year 2011-12, the Government have promised a grant of £180 million but I wonder whether the Minister can tell me what percentage of that figure is swallowed up by the flagship or Crown offices where, as I am sure she will agree, the social benefit is considerably less than that generated by the sub-post office network. She will not have the answer to that and I apologise for bowling it at her tonight but, since I am in the mood, perhaps I might ask the Minister a further question. A considerable sum has been earmarked to reform the current network. Can she confirm that this reform includes the conversion of as much as two-thirds of the network into Post Office Local and basic and outreach facilities?
It is all very well to promise an end to the closure programme but, on reduced incomes—some have calculated the reduction to be as much as 75 per cent—many sub-post office franchisees will regretfully decide that they are unable to carry on. The possibility of future mutualisation, perhaps based in some way on the John Lewis profile, has received a cautious welcome across the board. Yet whatever the final solution, what surely cannot be denied is that the 6,000 Post Office local outlets should be adequately represented—I stress, adequately, not by a token representative—on any Post Office board. I would welcome the Minister’s assurance that the Government fully accept this vital requirement. After all, many franchise holders have considerable entrepreneurial skills that are not always replicated in the higher echelons of the Post Office itself, even though I am sure that other attributes are present in abundance. It would be folly not to take advantage of that readily available asset.
There are many important matters to discuss and settle in this Bill. I am aware of that but I make no apology for concentrating on this one point. In times past the Conservative Party has emphasised its pride in and devotion to the rural economy and the countryside. This emphasis on the community is a worthy feature of Liberal traditions as well. I can think of no better way of affirming these values than by helping to ensure that small communities throughout the length and breadth of this country retain their village shops and services. I ask the Government, through this Bill, to be sensitive and imaginative in dealing with these needs.
Lord Cope of Berkeley
My Lords, I will not begin by congratulating the two maiden speakers. It is a written rule in the Companion that that should be done only by the speakers following the maiden speakers and by the Front Bench. It was extremely effectively done by the noble Lords, Lord Low and Lord Hunt, respectively, so I shall reserve my congratulations to the maiden speakers for outside the Chamber.
I support this Bill and the changes that are proposed for Royal Mail, the pension fund and so on. My concern, like that of the noble Viscount, Lord Tenby, is about the post office aspects of the Bill, particularly for the sub-postmasters—the archetypal small business people in our country. We need them to flourish for all the reasons that the noble Viscount touched on and which others spoke about earlier in the debate. It is not obvious from the report and accounts of the Royal Mail holding company but sub-post offices—not the Crown offices that we often think about—are, by different measures, the largest part of the Post Office. The two types of business are, in some respects, in direct competition.
I live in the beautiful city of Bath. Not long ago, the Post Office drew a circle that centred on the Crown office in the middle of the city and compulsorily closed all the sub-post offices within that circle. The result is that now we all have to queue at the Crown office. I am glad to say that the Crown office has installed a sophisticated electronic queueing system, which is a great help. I am very thankful for that but the wrong decision was made earlier. Fortunately, the Minister repeated the coalition Government’s pledge to maintain the network. It is a most important pledge, to which I am certain they will be held by many people, not only me.
One important point is that a Crown office can lose money and still keep going, whereas a sub-postmaster who cannot make money will see his business collapse and close. He loses not only his job but his own money and investment, and his staff also lose their jobs. Sub-postmasters cannot keep going if they are not flourishing. Sub-post offices are not the poor relations of the Crown offices; they are the real engine of the Post Office itself. They are the part that works financially and, incidentally, the part that is popular with the public.
I said that the annual report and accounts do not distinguish between the contributions of the two types of post office, but I understand that about 80 per cent or 85 per cent of the Post Office’s turnover comes from the sub-post offices, of which there are around 11,000. The rest comes from the 373 Crown offices. It is clear that the Crown offices collectively make the loss that the Post Office has suffered in the past year or two—or longer than that—and the sub-post offices make a profit over and above what is retained by the sub-postmasters as their income.
We all know, as has been said several times this afternoon in various forms, that the way forward for both Crown offices and sub-post offices lies in new types of business, particularly government business—the government front door, as it were—and financial and banking business, which my noble friend Lady Wheatcroft and others have spoken about. This should in my view be available to all types of post office. More flexible franchising arrangements are desirable. Some pilots are being run of what I understand is called the Post Office Local model. That is a fairly ridiculous name as all sub-post offices are local, but I let that pass. The terms of the new franchises are said to be very restrictive. Post offices should in my view—they are not, apparently—be allowed to have more flexible opening hours. Why should all sub-post offices not be allowed to open and close when they and their customers wish them to do so? Not all offices at present offer all post office services. That is fine; I understand that. The vast majority run alongside a shop offering far more than the things a Crown office will offer, from cornflakes to whatever they like. The decision about whether a particular office should offer a particular service on the terms that are allowed to it is for the sub-postmaster concerned in my view, just as it is his or her decision whether to offer to sell every other type of product in the shop part of the business.
All this is the background, as it were, to the post office aspects of the Bill. The Bill provides in Clause 4 and the related clauses a framework for the mutualisation of the Post Office. I support employee involvement in general, including share ownership. However, as the noble Lord, Lord Christopher, indicated, the sub-postmasters and their staff are not in a comparable position to the employees of the Post Office in the Crown offices and in the headquarters and the regional offices, and the same arrangements will not be applicable to both groups of people. I believe that the Post Office has some 5,000 staff in total. There are twice as many sub-postmasters and sub-postmistresses and each employs their own staff. They may employ four or five members of staff, depending on the size of the office. They are not employees of the Post Office and it would not be right to provide for employee participation without providing for the participation of the franchisees comprising sub-postmasters and their staff who far outnumber the Post Office employees and who actually generate the profits.
I find it difficult to see how you can mutualise through a share scheme on the lines of the BT scheme—that was mentioned earlier, particularly in connection with the Royal Mail, where different considerations apply—in respect of the Post Office. How can you equate someone who has a job in the Post Office with someone who has their own business, is responsible for the staff they employ, has invested their own money and money they have borrowed, and for whom, in most cases, post office business is only part—admittedly, a vital part in many cases—of the service that they provide to the public? How do you measure what value of shares to give to one compared with the other? What about the staff of the sub-post offices? They are doing the same job as the Crown office staff; they are serving behind a post office counter. Will they get the same treatment under the mutual arrangements whether they are standing behind a Crown office counter or a sub-post office counter? It is difficult to see how you can work out a share scheme which will be fair in all these circumstances. That, of course, has led to the idea of a Post Office trust above the Post Office board, owning the shares of the Post Office itself, if that is the way it is arranged, with the duty of ensuring that the whole enterprise flourishes and that the interests of Post Office customers, staff, franchisees and the sub-postmasters and their staff are properly balanced.
The Bill does not settle these matters and I am by no means suggesting that it should. I have been a legislator for more than 35 years so I understand the limits of legislation and how much harm can be done by trying to cover all the eventualities in detail, trying to anticipate trends in a fast-moving world and, above all, by its unintended consequences. Legislation in a field such as this should provide an enduring framework within which detailed arrangements can be made and, if necessary, varied over years to come. However, I am concerned to ensure that the Bill enables the sort of solution that I have been speaking about, through some sort of trust, and we will look further at that.
I welcome the Bill and urge the Minister to do her best, as I am sure she will, to ensure that sub-post offices and their staff are treated well in all this. They are, in a wider sense, part of the decentralisation of power and services that is part of our much wider aims for this country.
Baroness Turner of Camden
My Lords, I welcome the opportunity to participate in the Second Reading of the Bill. I am a former trade union official and therefore have some sympathy with the views of the CWU, the Communication Workers Union.
At the time the previous Bill was debated, it was reported that labour relations were at a low level. However, that does not now appear to be the case. The business transformation agreement between the union and Royal Mail means that agreed modernisation is proceeding. The pensions deficit issue has also apparently been resolved. All this is contrary to the claim of my noble friend Lord Mandelson this afternoon that the union is not giving effective leadership to its members.
The Hooper report, which was under discussion at the time of the previous Bill, has been updated. The union informs me that what now remains is the need for Royal Mail to access capital for investment. It is said that this is needed to maintain and sustain the universal postal service. The Government believe that this can be done only if Royal Mail is privatised—hence the provision in the Bill for Royal Mail shares to be sold off, apparently without any remaining shares left to the Government. The union disputes the Government’s view. It believes that the problem of capital could be addressed if the Royal Mail remained in the public sector, whether through commercial loans from the Government or through Royal Mail having access to borrowing from the financial markets. I understand that one organisation, not a union, has suggested that Royal Mail could be turned into a not-for-profit company like the BBC or Network Rail, as was suggested by my noble friend Lord Kennedy.
The union disputes the Government’s claim that the universal service operation, which everyone is anxious to maintain, is secured by the formulation in the Bill. The union cites a number of examples in which the USO is being undermined and weakened, including the introduction of criteria that base the USO on commercial, rather than service, provision. The union says that the need for stability and coherence is key. It cites the need for a five-year guarantee before the Ofcom review and a 10-year guarantee for Royal Mail as a single universal service provider. It is possible to examine these issues further in Committee.
A number of issues arise concerning accountability and transparency. The Bill makes it clear that the Secretary of State will make arrangements for the sale of the Royal Mail and then make a report to Parliament after the decision has been taken by the Secretary of State. What about an independent valuation? This has been raised by a number of noble Lords. Surely this is of concern to Parliament as a whole, not just to the Secretary of State.
The Bill separates Royal Mail and Post Office Ltd, which stays within the public sector. The disposal of assets is therefore important and of concern to Parliament generally. There are no restrictions on the time within which the sale takes place. The Government want that to happen in 2012. What happens if the market conditions are not then favourable? There should be provision for the Government to relegislate if a suitable sale cannot be made within a prescribed period. These should be matters for Parliament.
Another important issue is the continuing relationship between Royal Mail and Post Office Ltd. How will the Government ensure that Royal Mail products, currently worth 37 per cent of POL income, will continue to be offered through Post Office Ltd? Apparently there has been debate about the inter-business agreement, but so far the Government have refused any amendment to the Bill that would guarantee a continued relationship between a privatised Royal Mail and a publicly owned POL. As I said, these are some issues that we will explore further in Committee.
The situation is changing. More people use e-mail. I do myself. I do not like my computer much, but I use e-mail rather than typing a letter and posting it in the way that I used to. Nevertheless, the mail service is highly regarded and it is still a requirement that we should continue with it. Many of us have doubts—I do myself—about whether privatisation is the right way forward. Is it always true that privatisation is more efficient? I sometimes doubt it, and I speak as a consumer who is elderly and disabled and who has a lot of complaints about the service I receive from some of our privatised services.
Issues relating to the Bill had been raised with me by people who know the service and understand the people who work in it. Therefore, I hope that we will have the opportunity to raise these matters in Committee, because the people who have made these points to me know what they are talking about.
Lord Whitty
My Lords, I start by declaring a past interest. When the last Bill was before us—indeed, until last December—I was chair of Consumer Focus, the statutory representative of domestic and small business consumers of postal services. Its role is threatened by another piece of legislation before this House, namely the Public Bodies Bill. However, I am now free to speak without that encumbrance.
I fear that, as the debate has shown, the Bill raises more questions than it fully answers. I constructed my speech in the form of questions. I realise that, as I am the last speaker, this is a little unfair on the Minister. Nevertheless, I will proceed and assume that she will reply in writing to things that she cannot pick up immediately.
First, I will make it clear where I stand on the main points. I welcome the strong determination to defend the USO through the process, although I am slightly concerned about its long-term future. I welcome the change of regulator, but again I have some questions about that. I accept the inevitability of sorting out the pensions issue in the way that is proposed, and I broadly welcome the unravelling of the Post Office network from that of Royal Mail—although that, too, raises a number of questions.
On the issue of privatisation, I will be honest with the House, as ever. My former organisation retains a neutral stance. I was always intellectually sceptical and emotionally opposed. However, it is probably going to happen. I have some questions about ownership. What will be the impact and what kind of privatisation are we engaging in? What kind of owner do we envisage for the Royal Mail in a few years’ time?
I will start with the Post Office network, which is dear to many of our communities, rural and suburban. It is vital that the Post Office continues to exist. Individuals see it as part of the universal service provision and we need to continue to guarantee a postal service on the Royal Mail side that is the same in the further reaches of County Fermanagh or the remotest bay of the Western Isles as it is in the centre of London or Birmingham. However, the Post Office network also needs to fulfil a role for all sorts of communities.
Disentangling the Post Office and the Royal Mail may give greater clarity to their roles, but we need some indication from the Government of what they intend to do with the network. There are 11,500 branches at present. As the noble Lord, Lord Cope, has just said, the intention to reduce some of those branches to Post Office Local, together with the severe restrictions, makes the commitment to maintaining the network at roughly its present size not quite what it seems. In any case, that commitment is for the short term, and we need to know what the Government intend for the Post Office network in the longer term.
A number of questions arise in addition to that. Is the Crown network to be treated differently from the sub-post office network? What happens after the £1.4 million subsidy over the next few years disappears from the network? Do the Government envisage a continuation of any subsidy for the Post Office network or are they going to leave it entirely to the market? What moves are afoot—others have made this point—to redirect or encourage other government departments to provide their services via the Post Office network? Many of them, from the DWP to the Inland Revenue and the DVLA, have been withdrawn over the past few decades. If the commitment of the Minister’s colleague, Ed Davey, to make the Post Office network the front office of government is to be fulfilled, then all government departments, as well as local government, need to be encouraged to put more of their business through that front office.
I ask the Minister, as others have done, why the Government have apparently abandoned the proposals, which were some way down the line under the previous Government, to develop some sort of post office-based banking system. As the noble Baroness, Lady Kramer, underlined, it would do much to help the problem of financial exclusion in this country—a cause of very real deprivation for a large number of people. I think that such a banking system could be made commercially viable, as the noble Lord, Lord Cotter, implied.
In terms of representation of consumers, will Consumer Focus, or its successor in the citizens advice bureaux, and the Consumer Council for Northern Ireland remain spokespeople for the network as well as for consumer interests in Royal Mail?
I am not against mutualisation of the Post Office network, although it is very complicated. For employees and the franchisees—the sub-postmasters—it may hold an attraction but the Government are also talking about wider interests being represented in a mutual set-up. I think that it will be some time down the line before we can translate the whole of the Post Office network into a viable mutual organisation. Nevertheless, I think that we should provide for it and I agree that those provisions should be in the Bill.
The key questions regarding the network are: what is its relationship with Royal Mail as we go down the line and what is the future of the interbusiness agreement? More than a third of the Post Office network’s business is tied up with Royal Mail. If that were to be withdrawn or substantially modified, the economic pressures would mean that the network at its present size, and probably at significantly less than its present size, would no longer be viable. Therefore, we need greater clarification on the future of the interbusiness agreement and on the Government’s claim that they can sustain the principles of that agreement only for a short period because of the legal situation. I have never seen that legal situation completely spelled out; nor have I seen an explanation of why the interbank agreement or some modification of it cannot be committed to for some considerable time. If that were guaranteed and if the Post Office network were able to provide more government services and develop new services itself, then a Post Office network with a thriving business in every corner of the land would be a possibility.
I move on to the regulatory framework. I support the transfer to Ofcom, partly because the old system was daft, as my noble friend Lord Mandelson effectively said. A single technology regulator was always a bit of an oddity. The minutiae of the regulatory approach by Postcomm made it the wrong approach, and it is certainly the wrong approach in the world into which we are now moving. Ofcom has a number of advantages. It has experience as a regulator in multiple industries and, in particular, it has experience of the communications industry, which is a far bigger competitor to the Post Office than are the other postal services.
The Bill leaves a lot for Ofcom to sort out. In some ways I have faith in Ofcom doing that in a sensible way, but I think that more needs to be on the face of the Bill in the form of benchmarks.
One of my concerns is that much of the present regulation of Royal Mail is, in effect, delivered via the conditions of the licensing system. If the licensing system is removed, as it will be, more traditional forms of regulation will have to cover this. The Bill says only that Ofcom may do many of these things, whereas, under the licensing condition, the Royal Mail had to do these things. There are arguments about whether it should be only the Royal Mail or whether there are some issues that we could take out of regulation entirely. Some of those are currently specified, and Ofcom’s new rules will have to cover them as a requirement rather than as an option. They include issues of consumer protection and complaints-handling services, which are still pretty bad in the Royal Mail. More than 13 per cent of small businesses have a complaint about the Royal Mail, and at the end of the complaints process three-quarters of them are still unsatisfied. It is not a great record. We need to lean more heavily on them, and as a result we probably need to provide, in a stipulating statute or regulation, for access to the ADR system via the ombudsman.
We also need to recognise the role of Consumer Focus—or, eventually, of citizens advice and the Consumer Council for Northern Ireland—as the voice of consumers. That role will require some financing. Standards of mail integrity and reliability are also important. Many of the complaints and problems relate to lost or tampered-with parcels. By and large, Royal Mail has a good, positive reputation in this area. However, that needs to be retained, and we need to require the Royal Mail to provide information to the regulator and consumer interests.
Other aspects of regulation need to be considered, including the claim by the Royal Mail and the union that subsidies to their competitors effectively amount to £160 million a year. Do the Government intend that those requirements should disappear? As for the USO in total, perhaps the Minister can explain why the designation of the Royal Mail as the USO provider appears to last for only a very short time, particularly given that the Government presumably intend that, within that time, the ownership should change. The uncertainty about the future requirements of the USO will undoubtedly have an effect on the enthusiasm of any potential buyer to pick it up. The USO is clearly important. I am not saying that the terms of the USO are absolutely set in stone and should never change, but I agree with my noble friend Lady Drake that if there is to be a significant change in the terms of the USO, either in the products covered or the level of service required, then that should come back in some form to Parliament before it is agreed, simply as a regulatory matter. Those are the kinds of questions that I would like the Minister to answer, if not tonight then at a future date.
I have a couple of things to say on the ownership issue. The modernisation programme needs both money and more effective management than we have seen. We are in a more benign era in the sense that the business transformation agreement has been reached between the union and the management and the modernisation programme seems to be more under way now than it appeared to be a couple of years ago. On the money side, however, it is not entirely clear why we are looking for substantial sums from the private sector; or, more accurately, it is not clear whether we are looking for substantial sums or for an improvement in the management side. It was clearer in the previous Bill, and clear in the Hooper report, that the main aim of bringing private capital into the Royal Mail was to improve the management and to bring in people with logistical expertise. That is why it went for a strategic partnership as the preferred option.
It is not so clear here. When we move from 80-odd per cent to 100 per cent, we change the nature of the ownership in any case. It is not clear whether the Government envisage a sovereign fund, a hedge fund or an international competitor, as has been suggested, taking over the lot; whether we will have a range of people investing in Royal Mail; or whether we are primarily concerned with a strategic partnership with someone who knows something about the business and its competitor businesses, which the logic of the previous Government's approach demanded.
Royal Mail will have some more money available, but it still needs substantially more money from the market. I accept that. Is the motivation for privatisation to maximise the money, or is it to maximise the expertise and management improvement? I am not clear on that, and I do not think that the British public are clear. Their attitude to the privatisation process will vary if, in a few years’ time, Royal Mail is owned by the Sheikh of Abu Dhabi, some hedge fund—or has gone to a share option on the Stock Exchange, in the light of previous privatisations, such as that of British Gas, which was quite popular—or whether it will be run by TNT or DHL. There will be a difference of attitude among the workers, the consumers and competitor businesses to Royal Mail once we know the answer to that.
Those may be my prejudices on privatisation, but I counsel the Government that they need a clear answer to that. When the Bill gets through the House and they engage in the process of seeking buyers, they need to be clear what they are doing; and they need to communicate it to the British people.
Lord Young of Norwood Green
My Lords, first, I thank the Minister for her contribution in introducing the Bill. As my noble friend Lord Whitty said, it may raise more questions than it answers; it certainly raises several questions, which I shall endeavour to go through.
Before I commence on that, I congratulate the noble Lords, Lord Dobbs and Lord Empey, on their maiden speeches. I shall make some comments on the content later. I declare a lifelong interest as someone who was initially employed in 1958 by the GPO, as it was known in those days, and went on eventually to become the joint general-secretary of what is now the Communication Workers Union, with an esteemed colleague of mine in the other place—to whit, one Alan Johnson—and my noble friend Lady Drake, who spent many a happy hour with me negotiating with British Telecom and the Government of the day on privatisation.
We probably experienced every aspect of privatisation in all its phases, in all its successes and failures. It did not always go as well as the noble Lord, Lord Jenkin, tells us. I cannot resist saying that BT was a company that went from being totally self-financing to, in less than 10 years, attracting a debt of £30 billion. That is quite an achievement. Perhaps if the company had listened to the union in 1989, it might have invested its money more wisely. Why do I say that? Because we recommended that it fibre-up every household in the country in a programme which we called Network of the Future. It told us that that was overly ambitious and that it would cost £15 billion. If we tot up how much it has spent on the network since then, I think that it would have been a good investment. Instead of talking about superfast broadband everywhere, we would have had it.
I want to focus on what is fundamentally important in the Bill. Several noble Lords have referred to the huge history of Royal Mail, so I do not need to go into that. Everybody in this House recognises that Royal Mail and the Post Office face a huge challenge in today’s technological environment. That challenge will not go away, so we need to look at ways of ensuring that we can preserve the essential nature of these organisations. Clearly, that lies in, first, the universal service obligation, which everybody seems to value, and the post office network. Along with challenge, there are some growth areas, such as fulfilment mail and internet shopping deliveries. We recognise that Royal Mail as a business needs fundamental modernisation if we are to keep the universal service obligation and the six-days-a-week delivery service that lies at the foundation of our postal system.
There are some areas with which we can agree. The Minister attempted to say that the Bill is much the same as the one proposed by the previous Government, but in one specific area it clearly is not because it contrasts with Labour’s Bill in 2009, which would have kept a majority stake in public ownership. Clause 3 of our Bill explicitly stated that:
“Each Royal Mail company must at all times be publicly owned”.
Labour envisaged that any private partner would be looking at ownership of something like a third, and on no account would more than 49 per cent go into private ownership. I refute the idea that this is just a small change in legislation. A lot of the concerns and questions that have arisen during this fascinating debate are because we are talking about a privatised environment which starts to throw up uncertainties about the continuation of the universal service obligation as we know it and the relationship between the Post Office business and Royal Mail.
I could not help smiling when I listened to the noble Lord, Lord Razzall, because an opinion poll from YouGov showed that 56 per cent of Lib Dems were opposed to privatisation, 50 per cent think the service will deteriorate and 74 per cent think that prices will go up. That does not seem an overwhelming mandate. That was reflected at the last Lib Dem conference, where there was a lot of questioning about privatisation. Dr Pugh, the Lib Dem MP for Southport, said that there was a distinct danger that what they were presenting could look a bit like privatising the profits and nationalising the losses, which would be even more acute if the end result failed to be a Royal Mail system that the country was comfortable with for the next 20 to 30 years. There does not seem to be an overwhelming endorsement by the public at large, and the figures for Conservative voters show that they do not show any great enthusiasm for privatisation per se.
There are definitely some areas that we have in common and that we support in the Bill, such as the Government taking on the historic pension deficit. Similarly, it is right to move regulation from Postcomm, which does not have a sparkling record in its regulatory decisions, to Ofcom and to regulate mail services in the wider context of communication technologies. However, regulation is about more than the heading on the notepaper or the address of the building. It is also right to put it at the heart of the regulatory system for the maintenance of the universal service obligation. This Bill, like Labour’s Bill, has a reserve power for a levy to support the universal service. Interestingly, in his report Richard Hooper was sceptical about the need for this, seeing it, perhaps, as an excuse for modernisation not to proceed. We felt it was right to take such a power to ensure the maintenance of the universal service in the future. The concern goes much wider than us. The National Federation of Sub-Postmasters believes that if Royal Mail is to be privatised, as a strategic UK company it should, interestingly, remain in British ownership. It has a lot more concern about ensuring that its businesses stay viable in the future.
There are areas of agreement, and I will comment on the employee share ownership scheme. We proposed something similar, so it would be surprising if we suddenly performed a volte face on this. It contains a provision, which we welcome, to hold at least 10 per cent of equity in Royal Mail in the future. That is, we have to acknowledge, one of the largest holdings, but we will probe a lot more how the shares will be distributed, what employees will be able to do with them, and what real benefits share ownership in the scheme will bring. There have been plenty of other comments on share ownership throughout this debate.
I will focus a bit on the threat to the link between Royal Mail and Post Office Ltd, which has exercised so many noble Lords throughout this debate. Currently, Royal Mail and Post Office Ltd are linked to part of the same state-owned business, and as a result of the internal business agreement Royal Mail is required to take all its post office services from Post Office Ltd. The Government imply that a privatised Royal Mail would still use Post Office Ltd to provide its counter services, and it has been suggested that the post offices might be protected by the terms of the internal business agreement until 2014-15. However, as it is not a commercially binding agreement, this is not necessarily the case, and in selling off Royal Mail the Minister’s priority understandably will be the sale price.
Potential purchasers will want to reduce the number of outlets that they are required to use so that they can reduce costs. They will be looking for terms that might require as few post offices as possible. Once the internal business agreement ceases to apply to Royal Mail, Royal Mail will be free to use any partner to supply post offices. A third of Post Office Limited revenue comes from Royal Mail. Without this revenue, Post Office Limited will be unable to keep many post offices open.
Again, not only opposition Front-Benchers are expressing this concern. This concern has been echoed in all parties in this House, and I hope that the Minister will address it. I think it was the noble Baroness, Lady Wheatcroft, who interestingly said that despite the Minister’s assurances the chairman of Royal Mail was absolutely determined that this inter-business agreement should remain. I heard exactly the same kind of comments from Moya Greene. That might well be, but chairmen come and go, and so do CEOs, so that is by no means a sufficient guarantee. The House certainly needs more than that if it is going to feel satisfied in that respect. The Government need to answer questions about how they can make a privatised Royal Mail honour that current business agreement, how they will respond to potential purchasers who do not want to be tied to this agreement, and how they can influence what happens to the agreement after 2014.
An obligation to provide fewer access points for counter services would make Royal Mail more attractive for prospective purchasers. Some might say that more post office closures might make a better sale price for Royal Mail. A number of noble Lords have commented on mutualisation and on the need to have more detail and clarity about whether mutualisation would be a successful formula. I congratulate my noble friend Lord Tunnicliffe on raising a number of key issues—for instance, what happens to the proceeds of the sale or the Ofcom review of the universal service obligation after only 18 months. I do not need to repeat those.
I pay tribute to the contribution of the noble Lord, Lord Empey. He made the point about the public not distinguishing between Royal Mail and the Post Office, saying that he saw this as important as broadband. That was an important and interesting assessment. He also referred to the 18 month review of the universal service obligation and— I hope I am not paraphrasing—the undercurrent of uncertainty and cherry-picking by competition.
I also pay tribute to the noble Lord, Lord Low, who always gives us something to think about in his contributions. He talked about the current impact of competition on Royal Mail; the subsidy of 2.5 pence per item and the £160 million loss. He, again, referred to the review of the universal service obligation. I hope that the Minister is going to address his comments on the use of the post offices by the disabled community and the 9 million items for the Articles for the Blind Scheme. If she cannot pick up all these questions in her contribution, I hope that she will certainly return to them.
I am limited by time so I will not be able to pick up all the comments that were made by noble Lords. I have a slight disagreement with my noble friend Lord Mandelson, my previous boss when he was Secretary of State. I think this is a fundamentally different Bill to the one that we introduced, for the arguments that I have previously put forward.
I know that my union has not always been the most co-operative. My attitude towards the union—which has got me into a significant amount of trouble over the years—is not necessarily to agree with everything that it says, but to try to give it honest, candid advice about what I feel is in the best interests of the industry and, eventually, the long-term interests of the members. Since we came through that long and difficult strike and the transformation agreement was reached with Royal Mail, there has been a change. The modernisation programme is now going ahead. I remind people, including the noble Lord, Lord Hunt of Wirral, who talked about the union in certain terms, that the Hooper report was just as critical of management as it was of the unions. Sometimes the assessment is not balanced. I am trying to be impartial; I am not saying that it was all management’s fault, but it has not had the greatest track record. The current management seems to be getting off to a much better start.
The union’s co-operation with modernisation is something we should acknowledge. It has enabled that programme to go forward. And, in relation to my noble friend Lord Sawyer, the best example I have seen of Royal Mail management is its World Class Mail which you can see if you go to Gatwick. It is an interesting example of management and the work force working together very well.
I am conscious of time, so I am going to bring my contribution to a close. I must compliment my noble friend Lady Drake, who gave in her usual manner a very penetrating and forensic analysis of the impact of regulation and some of the questions that need answering—instead of just expecting that Ofcom will necessarily do the right thing—and pointing out the impact of not getting regulation right.
Privatisation of itself will not necessarily be the magic cure-all or answer to this. The organisation is complex and needs to carry out a huge amount of further modernisation. I think that it was my noble friend Lord Sawyer who pointed out the importance of cultural change and ensuring trust between management and the workforce. When things go wrong in privatisation, usually the people at the top seem to escape quite well financially provided for; it is the workers—to use the phrase that emanated from the First World War, the poor bloody infantry—who suffer. I hope that we can look forward to continuing a probing and penetrating analysis in Committee of what we see as the shortcomings of the Bill, and I look forward to the response from the Minister.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, we have had an excellent and informative debate and I thank all noble Lords for their contributions. It is my pleasure and privilege from the Front Bench to congratulate the two maiden speakers on their speeches; I will refer to some of the questions that they asked later. The debate has been worthy of this House’s reputation as the revising House and I look forward to the rigorous scrutiny that the Bill will receive over the coming weeks.
When I made my opening remarks I reminded your Lordships of the context for action. It is sometimes easy to let that slip our minds as we focus on the detail of specific policies or clauses, but I stress that the Royal Mail is facing an enormous challenge. The letters market is in structural decline, with volumes falling ever faster. Royal Mail urgently needs to modernise and increase efficiency. The company is weighed down by a huge and unsustainable pension deficit, and the regulatory framework is no longer fit for purpose. Action is urgently needed to address those issues. First, Royal Mail needs access to private sector capital and commercial disciplines. Secondly, it needs to be relieved of its historic pension deficit. Thirdly, the regulatory framework needs fundamental reform. That threefold package of measures is urgently required if we are to secure the future of the universal postal service. As Richard Hooper said in his update report:
“If all these policies are implemented without further delay, and Royal Mail modernises to best in class with management, workforce and unions working together, then despite the very real market difficulties the company has a healthy future”.
Let me begin with the Post Office, which has played a key part in today’s debate. I am sure that your Lordships need no reminding that Royal Mail and the Post Office are very different businesses facing different challenges. However, as many noble Lords have emphasised, they are both cornerstones of our society, and the Bill will benefit them both. We have heard concerns over the future of the post office network. Noble Lords are worried that post offices will lose business from Royal Mail or from the Government. I would like to provide reassurance on that point. The Government are absolutely committed to the post office network. It provides an enormously good service, as I have said many times before. The post office network is a unique national asset.
The noble Lord, Lord Dobbs, raised the important issue of rural post offices and the outreach services that have replaced them in a few areas. Outreach services were introduced following the last Government’s closure programme, to mitigate the impact of large closures. They offer more than simply access to mail—access to cash, pensions, benefits and many other services. Many communities highly value their outreach services and in some cases their introduction has brought in services that were not available at the post office that they replaced.
Both the noble Baroness, Lady Kennedy of The Shaws, and the noble Lord, Lord Kennedy of Southwark, spoke of the importance of getting new business into the post office. I agree wholeheartedly. As the Government set out in our policy statement on the post office published last November, we want it to be the front office for government. That would make it the natural place for citizens to access face-to-face government services, with an important role in supporting the delivery of online services—for example, through identity verification and check-and-send services.
The noble Baronesses, Lady Wheatcroft, Lady Kennedy and Lady Kramer, raised the issue of the Post Office bank. I can inform the House that we have looked at the case for a Post Office bank, but, in this financial climate, it is just not a viable option. The Post Office has an important role to play in making financial services accessible. It already provides a wide range of financial services, including savings, credit cards and mortgages. On top of this, thanks to the Royal Bank of Scotland’s recent commitment, almost 80 per cent of current accounts are now accessible at post offices.
The noble Viscount, Lord Tenby, asked about the extent of the rollout of the Post Office Local model. As we set out in our policy statement published last November, we envisage that, over the next four years, around 2,000 small sub-post offices out of a total of nearly 12,000 will transfer to the local model, with the major implementation starting in 2014.
The noble Lord, Lord Cope, and the noble Viscount, Lord Tenby, raised the issue of losses in the Crown post office network. The Crown network is losing £55 million a year. This is not acceptable. Post Office Ltd is committed to eradicating these losses over the next four years. This will be facilitated by the Government’s investment of £1.34 billion in the post office network announced last year.
The noble Lord, Lord Whitty, raised a number of questions about the future long-term viability of the post office network. A number of the clarifications that he sought can be found in the Government’s November 2010 policy paper, Securing the Post Office Network in the Digital Age. He asked in particular about subsidy beyond 2015. I confirm that, while we believe that these measures will help to reduce the subsidy substantially over time, there will almost certainly remain a need for a residual level of subsidy to maintain those branches which could never be profitable, such as those in remote rural areas, but which serve a valuable social purpose.
I am trying to answer as many questions asked by noble Lords as I can. It will make my speech slightly disjointed, but it will hopefully mean that I bring everybody on board.
The noble Lord, Lord Young, asked about the relationship between the Royal Mail and the Post Office and the inter-business agreement. I can make it clear that the inter-business agreement between Royal Mail and the Post Office is a legally binding contract. The Royal Mail and the Post Office will of course continue to work closely together. The post office network of more than 11,500 branches dwarfs any other retail network in the country and offers unrivalled access to communities the length and breadth of the UK. I echo my noble friend Lord Razzall in saying that it is inconceivable that Royal Mail would not want to take advantage of the post office network. The chairman of Royal Mail has given a commitment to Parliament that, before any sale involving Royal Mail, the companies will put in place between them a new commercial contract that will run for as long as legally possible. That is a strong commitment, but the Government have gone further. We said in another place, and I repeat it today, that we shall ensure that the companies are held to the commitment that has been made by the chairman of the Royal Mail.
The noble Baroness, Lady Howe, and the noble Lord, Lord Sawyer, raised interesting points regarding the potential for a mutually owned Post Office. I reassure noble Lords that a mutualised Post Office is not a step towards a privatised Post Office. The Bill is quite clear that Post Office Ltd may be owned only by the Government or by a mutual organisation that acts for the public benefit. The design of a Post Office mutual must put the views of sub-postmasters, employees, business partners and customers first. That is why we have asked Co-operative UK to look at this proposal in detail and propose options for how a mutualised Post Office might work. It is due to report to Ministers in the spring of this year. I reassure noble Lords that, before any changes to the network are made, there would be a full public consultation.
We heard from several noble Lords the case for the privatisation of the Royal Mail. Here, the noble Lord, Lord Mandelson, spoke from his own experience and of Royal Mail’s need for a settled existence. I wholeheartedly agree with that.
The noble Lord, Lord Selsdon, asked what has become of the Postmaster-General. I am very sorry to inform him that the position was abolished some years ago under the Post Office Act 1969. The last post-holder was John Stonehouse. The responsibilities of the Postmaster-General have been divided between the Secretary of State for Culture, Media and Sport, who is responsible for telecoms, and the Secretary of State for Business, Innovation and Skills, who is responsible for postal affairs.
Why private capital? Royal Mail urgently needs access to fast, flexible capital, and this must come from the private sector. The reasons for this are threefold. First, government is simply not a fast and flexible provider of capital; there are so many competing priorities for public funds and any government funding must, of course, be subject to European Union state aid approval from Brussels, which can be lengthy. Secondly, private sector capital will bring with it commercial disciplines that will benefit the company. Finally, the spectre of government interference in commercial decisions must be removed.
On privatisation, the noble Lord, Lord Tunnicliffe, said that the case has not been made for full privatisation, as did the noble Lord, Lord Brooke. The noble Lord, Lord Christopher, was concerned about how and when we would sell Royal Mail. I hope that the noble Lord will be reassured by Clause 2, which requires the Secretary of State to report to Parliament when he has decided to undertake a sale. This report must include details of the type of transaction and the timescale for undertaking it.
As we have heard, the extent of private sector investment is one of the key areas of difference between this Bill and the Bill put forward to this House by the previous Government. The Opposition prefer partial privatisation, which was the approach that they took in their Bill, but a partial privatisation model did not and will not solve the problems that Royal Mail faces. It places too many restrictions on the deal and takes away the flexibility to get the best outcome for the company and the taxpayer. We see no reason why the Government should retain a stake in Royal Mail in the long term, but we will retain the flexibility to ensure that we can negotiate the best deal for Royal Mail and for the taxpayer. Public ownership has not helped Royal Mail to move with the times and to make the changes that it needed to succeed. That is why we need a different approach if we are to safeguard the six-day, one-price-goes-anywhere, universal postal service.
The noble Lord, Lord Tunnicliffe, asked about privatisation and raised concerns that Royal Mail should remain in public ownership on the basis that this is the only way to guarantee the provision of the universal postal service. I fear that some noble Lords may be confusing effective regulation with government intervention. The universal postal service is protected by Parliament through legislation; it is not protected through the Government’s ownership of Royal Mail. The Government are committed to protecting the universal postal services.
As I have mentioned, employee shares are a new innovation. I am delighted to say that they are supported by my noble friend Lord Hunt, who knows all about Post Office Bills, and by my noble friend Lord Cotter. A commitment to employee shares was not a feature of the previous Postal Services Bill but it is an important addition to this legislation. I am pleased that it has support from all sides of the House. The noble Lord, Lord Sawyer, joined the noble Lord, Lord Brooke, in ideas that he will no doubt develop in Committee. The noble Lord, Lord Brooke, used to chair the employee share trust for NATS. He has valuable experience to bring and I look forward to hearing him in Committee.
It is not only the commitment to an employee share scheme that will benefit members of the Royal Mail workforce. Members of the Royal Mail pension plan are rightly concerned about whether their pensions are safe. The pension deficit is a huge and unsustainable burden on the company and is dragging Royal Mail down. I repeat: the proposals in Part 2 of the Bill represent a positive outcome for members of the plan, who can take comfort that their hard-earned benefits will be protected and that Royal Mail, going forward, will be better able to deliver the USO once relieved of this burden.
The noble Baroness, Lady Turner, said the pensions deficit has already been solved. Unfortunately, it remains very real—the scheme deficit stands at more than £8 billion today. As Hooper made clear, the deficit must be addressed in order to facilitate an injection of private capital. The noble Lord, Lord Rowe-Beddoe, asked what would happen to the assets of the pension scheme. The cash transferred to Government will be transferred to the Consolidated Fund, gilts to the Debt Management Office and the remaining assets—stocks, property, et cetera—will be transferred to a newly created government fund. They will then be sold in a measured fashion, with cash proceeds from disposals going to the Consolidated Fund. Alongside these assets, the Government will also of course be taking on the corresponding debt and much, much larger liabilities. We will be entirely transparent about the effect of these transfers throughout the government accounts.
Finally, let me turn to regulation and the universal postal services. This is a key part of the Bill; I want to address the universal postal service because noble Lords have expressed concern that it is at risk or will be downgraded. I am afraid that Richard Hooper has made it clear that we cannot do nothing—the universal service is already under threat and that is why we must take urgent action. The purpose of the Bill is to secure the future of the universal service. The Government are committed to the existing service—six days a week collection and delivery of letters, at uniform and affordable prices, for all the United Kingdom’s 28 million addresses. This is at the heart of our legislation. We have no intention of downgrading the minimum requirements of the universal service. This Bill puts in place new protections to safeguard the level of the universal service—protections not in the current regime or in the previous Government’s Bill. Crucially, this Bill gives both Houses of Parliament a say in whether the universal service can be amended in the future.
The noble Lords, Lord Tunnicliffe and Lord Low, were worried that this Bill will allow the universal service to be reviewed and downgraded in 18 months’ time. I am happy to reassure them that this is completely untrue. There is no small print allowing this. What I believe they were referring to is the requirement that within 18 months of Part 3 of the Bill coming into force, Ofcom must have conducted a market review to ensure that the services offered as part of the universal service reflect user needs. These are set out in statute and the review cannot recommend a downgrade of the minimum requirements after 18 months.
Some noble Lords questioned whether the Royal Mail will be left facing too much regulation under the Bill. As Government, it is our role to strike the right balance between protecting the universal postal service and promoting competition in the sector. Our position is clear: competition is beneficial but not where it undermines the universal postal service. Ofcom, the new regulator, will have the regulatory tools it needs to ensure that this balance is protected. The noble Lord, Lord Jenkin, was concerned on the other hand that the Government were easing competition on the Royal Mail in order to increase its value. I assure my noble friend that this is not the case. We have two objectives: first, to secure the future of the universal service; and secondly, to secure the future of Royal Mail as the only company capable of providing that service.
The noble Lord, Lord Low, raised concerns that the needs of disabled and blind or partially sighted people would be neglected under the Bill. I will try to reassure the noble Lord. Clause 30 includes services to blind or partially sighted people as a minimum requirement, ensuring that they will be part of the universal service. This was not the case in the 2009 Bill. Furthermore, the Communications Act 2003 gives Ofcom a general duty under Section 3 ensuring that it must take account of the needs of persons with disabilities when carrying out their functions. The noble Lord, Lord Empey, and the noble Baroness, Lady Drake, were concerned that competitors would cherry-pick profitable areas of the market. I hope that I can reassure them that the Bill gives Ofcom the ability to put conditions on other operators to ensure that there is fair and effective competition in the market.
The noble Lord, Lord Whitty, argued that the Bill should not leave it to Ofcom’s discretion to impose certain conditions and should mandate that it does so. The Government believe that we should impose regulation only when it is necessary, and that it must be flexible enough to respond to the changing needs of the market. We believe that the Bill strikes the right balance between ensuring that proper protections and safeguards are in place while freeing the sector from unnecessary and burdensome regulation. The Bill allows Ofcom the discretion to utilise regulation in the way that it considers most appropriate to meet its statutory duties, which include having regard to the needs of consumers. Placing on Ofcom statutory requirements to use its regulatory tools in any and every circumstance is inappropriate and at odds with the thrust of the new regulatory framework that we seek to establish.
In conclusion, I thank noble Lords again for today’s debate. It is clear that these issues need urgent action. The fact was emphasised by my colleague Edward Davey, the Minister for Postal Affairs, when he sent this Bill to us from the other place, and it has been emphasised by Richard Hooper, the independent expert commissioned by both the previous Government and the present one to review the sector. We have covered many issues today and I have no doubt that we will cover many more over the coming weeks. I am heartened that there is much on which we can agree, and I am looking forward to scrutinising, and no doubt improving, this Bill with your Lordships’ help. I am confident that we will work together to ensure that this Bill is the best that it possibly can be for Royal Mail, its employees and for all users of the universal postal service. I commend it to the House.
Parliamentary Voting System and Constituencies Bill
(14 years ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
23:00 - Division on Amendment A1 to Motion A. - Ayes: 153 / Noes: 221 - Amendment A1 to Motion A disagreed.
Lord Strathclyde
That this House do not further insist on its Amendments 1 and 8, in respect of which the Commons have insisted on their disagreement, and do agree with the Commons in their Amendment 8C in lieu:
(b) include that information in any report they submit under section 6(1)(b) of the 2000 Act to do with the referendum.
(4) In sub-paragraph (3) “turnout” means the percentage of those entitled to vote in the referendum who did so.A ballot paper recorded under head (b), (c) or (d) of rule 42(4) of the referendum rules is to be treated as a vote for this purpose.”
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, this body—and my body—is not built for marathons, yet here we find ourselves still debating and scrutinising this Bill. Those veterans of the Bill will know that, like a great relay race, this is the hour of the night when the baton is passed to me. It has been a remarkable journey. From November when we set out until now, four months on, we have certainly put in an immense amount of time on this legislation: a marathon 17 days with over 110 hours of Committee and, overall, nearly 100 hours more than the other place to consider this Bill. It is obvious how passionately many noble Lords genuinely feel about the matters before us—issues which go to the very heart of our constitution.
However, I believe it is time to take a step back and to look carefully at the situation before us. This is a constitutional question in more than one way. The final amendment at issue between the two Houses of Parliament is about the voting system used to elect Members of the other place, which is fundamental to our democracy. It has also been about how constituencies have been drawn, but we have now concluded that debate. However, there is another constitutional dimension to our debates: about the role of this House and the other place, our respective responsibilities and the different roles that we play within our constitutional settlement.
There are important arguments of principle both for and against thresholds. We heard them powerfully articulated earlier today, on both sides, and articulated with sincerity. Yet at its simplest, the Government’s contention is this: we have consistently and clearly said that the people of this country should have their say, knowing that their vote in the referendum will count—no ifs, no buts and no artificial hurdles. At best, a turnout threshold rewards apathy; at worst, it encourages it.
This is about the people casting their vote, fair and square and with no conditions attached. This is not about Parliament setting a condition for the validity of the people’s vote. There were no thresholds in the 1997 referendums on devolution to Scotland and Wales, despite the fact that they also would have had the effect of introducing new voting systems without that even being explicit in the question. At that time, neither the Government nor indeed this House considered that a threshold was necessary, as we do not consider one to be necessary now.
However, as I said in beginning my remarks, there is another constitutional issue before the House tonight. I have been clear, at every stage of this debate on the Bill, that I fully accept and understand the points made earlier by noble Lords, that this House should have its say on the issues before us. Not only do I understand it, I passionately believe it. This House exists to scrutinise and amend legislation, and to ask the other place to think again. However, a time must come when this House should respect the will of the elected Chamber.
I also heed the points made so powerfully in this afternoon’s debate by the noble and learned Lord, Lord Lloyd of Berwick.
Lord Strathclyde
My Lords, I am glad noble Lords opposite listened so carefully to what the noble and learned Lord said. This is about how representatives are elected to the House of Commons. The elected House has spoken three times on this issue: once on the question of a threshold and twice on whether to incorporate the specific amendment moved by the noble Lord, Lord Rooker. In each case the other place has spoken clearly. It has heard the arguments made in this House and it has given its response. I respectfully submit that we have asked the other place to think again not just once but twice, and we have heard its emphatic answer. After due consideration, further debate and an increased majority in another place, we have done our duty and we should let the Bill pass. I urge the House to agree to the Commons amendment. I beg to move.
Amendment A1 to Motion A
Lord Rooker
As an amendment to Motion A, at end insert “but do propose Amendment 1D as an amendment to Commons Amendment 1C in lieu”:
“Line 11, at end insert—
“(5) The estimate of the turnout in England, Wales, Scotland and Northern Ireland published under sub-paragraph (3)(a) shall be made available before any order is made under section 8 implementing the result of the referendum; and if the total turnout in the four parts of the United Kingdom is less than 40% of the total electorate of the United Kingdom, the result of the referendum shall not be binding.”
Lord Rooker
My Lords, in short I am proposing to add to the government amendment a sub-paragraph (5). When I saw the Government’s amendment a few hours ago I thought, because I am weak, that I saw some movement. Sadly, that is not the case. I said earlier today that the issue of substance is not the figure, although I have used the same one. The issue of substance is that this will be a binding referendum for the first time in the UK. The Government are still refusing to address that issue; it is being glossed over. In the talk about previous referendums, not once has anybody addressed the issue of this being the first binding referendum. That is still the case, which is why I do not apologise for continuing to raise the issue.
I had thought of adding to the government amendment—because I thought I saw a bit of movement—some words to the effect that the Electoral Commission report should be done properly, which I do not think it will be. By properly I mean that it should meet the issues that government Ministers have spoken about at the Box—that is, take off the electoral register the dead, the foreigners, the students, the hundreds of thousands with two addresses and all those with two homes. That would mean the commission had to go to every electoral register—not every constituency but every register—and double-check to get an accurate measure. That is what I would expect the Electoral Commission to do as a result of the Government’s amendment but I fear that it will not be the case. However, I would like that report to be put to Parliament and properly debated before a Clause 8 order, assuming that there is a yes vote.
I have seen no evidence. I sat in the Commons Gallery during the debate earlier this evening. The real issue was not addressed in the Commons, and the government Minister hardly spoke to the amendment that he was moving. He did not explain it. I thought, “He hasn’t got that much to say about it. It can’t be worth a great deal”. When Sir Gerald Kaufman and others indicated that from their experience, before the coalition, it was possible to get agreement on various aspects of Bills going through the House, they were shouted down.
In the years that I was a Minister in your Lordships’ House, I was in four departments and responsible for many Bills, including Bills that started here. I cannot recall a single Bill that I was ever in charge of as a Minister on which I did not offer change following debates in your Lordships’ House. Indeed, twice I made the policy at the Box and went back to the department to say to the policy Minister, “This is what you have to accept. This is the will of the Lords. If not, your Bill will be in shreds”. That is what I did because I took heed of the voices in this place who had tried to make the legislation better. However, I have not seen any attempt to do that on this Bill. On two occasions the Leader offered a “package of concessions” a week apart. I have to assume that he did that with authority. All I can say is that—I choose my words carefully—I will know what to think the next time I hear the phrase “package of concessions”.
The Government have refused to listen from day one of this Bill. They have rammed it through both Houses under a guillotine—that happened again tonight—and people who wanted to speak did not have the opportunity to do so. Reputations have been damaged all round save for that of the noble and learned Lord, Lord Wallace of Tankerness. I do not wish to embarrass him. I am just giving my view; I do not speak for anybody else. I therefore offer the House and the Government a last chance, if you like, according to what the Leader said, to break the precedent that they are creating. They can waffle all they like about previous referendums and thresholds but this threshold does not damage the introduction of AV, as I have said repeatedly. They refuse to accept that this is the first time that the people of this country have been given a referendum where the result—whatever the turnout and the majority—will be the order of the day. That has never happened before. It is no good praying in aid the euro referendum or the Scottish referendum as they were not binding referendums. Legislation followed but they were not binding, so it is no good praying those in aid. There is no precedent for what the Government are about to do. Sadly, no Minister has addressed that central issue of substance.
In some ways, I do not look forward to the morning after the count as I do not want to be proved right. I hope that there will be a successful referendum with a huge turnout and a clear vote one way or the other. That is my desire and that is what I will encourage. I do not have a problem with that. However, if that is not the case, we will be bound by the result. It will be impossible to get out of the mess and the people will find out what Parliament was doing. They will ask, “Why did you not think about this and give yourself a lifeboat? Why did you not think about what might happen? You have done it in the past with all the other referendums, so why did you not do it with this one?”. As I say, I do not look forward to the morning after the count for that reason; but many others will, because they might be proved right. I beg to move.
The Lord Speaker (Baroness Hayman)
The original Question was that Motion A be agreed to, since when Motion A1 has been moved as an amendment thereto. The Question now is that Motion A1 be agreed to.
Lord Beecham
My Lords, I have been a Member of this House for only seven months and I have therefore listened with very great attention to the debates that have taken place around the relationship of your Lordships’ House to the other place, particularly as regards the conflict which, unfortunately, we seem to have been locked into for some time. I listened very carefully to the very persuasive speech this morning of the noble and learned Lord, Lord Lloyd, to which the Leader of the House has referred. I agreed with every word that he said save what he said about a previous debate in 2005 on the Constitutional Reform Bill, as it then was. He said that on that occasion the House ultimately acceded to the views of the other place by some 203 votes to 191. However, it occurred to me immediately that 191 Members of your Lordships' House at that time clearly did not accede to the wishes of the other place; they voted for an amendment. I thought that I ought to look to see whether the noble and learned Lord had voted for that amendment. Indeed, he did. Not only that, he moved the amendment.
Lord Beecham
Not only that, my Lords, but he was a teller. The noble and learned Lord this morning quoted my noble and learned friend Lord Falconer and I should like to repay the compliment by quoting what the noble and learned Lord, Lord Lloyd, said on that occasion. He said:
“I hope we will vote once more against the Commons amendments. I hope more fervently that we may not have to do so again”.—[Official Report, 21/3/05; col. 23.]
Clearly, he would have been quite willing to do so again, had your Lordships’ House on that occasion not ultimately acceded to the views of the other place. The Leader of the House perhaps ought to rely on rather stronger support than that inadvertently offered by the noble and learned Lord.
I am utterly persuaded by the views of my noble friend Lord Rooker. There are many in this House on all sides who have been persuaded by the force of his logic. I certainly hope that your Lordships will, if necessary—and it seems to be necessary—again approve my noble friend’s amendment and again invite the other place to think seriously about the direction in which it is taking this country and its constitution.
Lord Hodgson of Astley Abbotts
My Lords, I shall make a brief intervention. I did not participate in the debate this morning, although I did so at Report, 10 days ago, in a way that I am afraid my noble friend found slightly disobliging. I also voted in a disobliging way then and again earlier today.
I found the amendment of the noble Lord, Lord Rooker, persuasive on four grounds. First, as he has said when he moved it, we should avoid setting or reinforcing the precedent that referenda should not have thresholds. I do not like referenda. We elect Members to go to the other place to take difficult decisions and I think that referenda that decide important issues of public policy with small turnouts are doubly undesirable. The second reason for supporting the noble Lord’s amendment is that it sets the binding, mandatory threshold at a level that would command public confidence. It is the stickability and credibility argument. A 40 per cent turnout, at which 21 per cent, or one in five, will have had to vote in favour, seems to strike the right balance. Thirdly, the amendment means that if there were to be, as I fear there will be, substantially differential turnouts in different parts of the country because of the different types of elections taking place—parliamentary elections, Assembly elections and, in London, no elections at all—those for whom the referendum goes in the wrong direction need to be assured that there has been a reasonable overall turnout. I think that 40 per cent is that right level. Finally, the amendment is not a fatal amendment because the referendum would become advisory if the turnout was below 40 per cent. Indeed, the amendment in the name of the noble Lord, Lord Elystan-Morgan, would not have had my support because it sought to tie the hands of the Government, as opposed to enabling them to have the opportunity to consider the advisability of proceeding, when we knew what the final turnout was.
The amendment is being put forward once again by the noble Lord, Lord Rooker, in his normal robust and combative way—and it is none the worse for that. The noble and learned Lord, Lord Falconer of Thoroton, in his more silky and persuasive form, sought to raise the debate to a higher level and has made remarks such as that the amendment is in line with our parliamentary democracy and high principles. I hope that he will forgive me if I say that, when I see how his party has changed its voting position in the other place, there may be high principle, but there must be at least a whiff of political opportunism around the other Chamber.
We have now asked the other place to think about this issue twice and we have had a clear answer twice—by 70 votes last night and by 79 this evening, if my mathematics are right. We have heard a powerful speech from the noble and learned Lord, Lord Lloyd of Berwick. Whatever the rights and wrongs of the amendment, he was right to tell us that we are discussing an issue that focuses narrowly on a matter that affects the other place alone. Therefore, while I continue to have considerable and very grave doubts about the course on which my Government are embarking, I am afraid that I have now concluded, after two disobliging votes, that the time has come for the Members of the elected Chamber to make a final decision, because they alone will have to live with the consequences of their deliberations.
Lord Falconer of Thoroton
My Lords, it is for your Lordships to imagine what happened to the noble Lord, Lord Hodgson of Astley Abbots, between approximately 1 pm this afternoon and that rather unimpressive speech.
Lord Hodgson of Astley Abbotts
I described the noble Lord as “silky”. I withdraw that immediately.
Lord Falconer of Thoroton
And I withdraw the word “unimpressive” and apologise to the noble Lord, Lord Hodgson.
There are two issues for your Lordships to consider. First, are your Lordships satisfied that the issue is important enough to be referred back? Secondly, has it been considered properly by the other place? On the first matter, we have had many debates on the issue, which has been described as the most important constitutional change since 1832. The Leader of the House talked about fair values for fair votes and other things like that. He did not deal—just as Mr Harper in the other place did not deal—with the issue of a derisory turnout leading to a fundamental change in our voting system. That is the importance of a threshold; that is why it matters; and that is why it is at the heart of what is left between your Lordships and the other place. It is for your Lordships to determine whether the issue is important. I certainly regard it as important, and it is not without significance that it is the last issue that stands between this House and the other place.
The second issue, which is the one most relied on by the Leader of the House and the noble Lord, Lord Hodgson of Astley Abbots, is: “Well, we’ve asked twice; now is the time to subside”. The amendment was first passed in your Lordships' House last Wednesday. It went to the Commons this afternoon. It was debated for another hour. I have not been able to access Hansard to read the debate. I have had a report from my noble friend Lord Rooker, which the House has also had, on what was said in the other place in the debate. This is an important constitutional Bill. It seems wrong that we should make our decision on this important issue on the basis of a debate that we cannot even read in Hansard, eight days after it was raised for the first time last Wednesday.
Noble Lords opposite shake their heads and say, “Let’s just ram this through now at this 11th hour”. It is for your Lordships to decide whether this is the right course for the House, whose role is not to overrule the other place but to make it think again, to say that debating it twice in one day, eight days after the amendment was tabled, is consideration enough of whether 13 per cent of the electorate voting for a fundamental change in our voting system that all noble Lords in this Chamber know would not be—
Lord Falconer of Thoroton
I am not taking interventions. Thirteen per cent of the electorate could pass a change in our voting system that would not be passed in the other place. Is that an appropriate basis on which to make a fundamental change? Is there a country in Europe or a developed democracy that would allow its constitution to be changed on that basis? Therefore, this is an important matter.
We do not know what the Commons said, although I am sure that we have a very accurate report from my noble friend Lord Rooker. Should the Commons think again or should we rely on that eight-day period as being sufficient? In my respectful submission to this House, if we are serious guardians of the constitution, then eight days is not enough. A debate that we cannot read is not enough, and the issue is sufficiently important for us to ask the Commons respectfully to think again. Therefore, I shall support my noble friend Lord Rooker, whose judgment throughout this whole debate has proved impeccable.
Lord Strathclyde
My Lords, the noble Lord, Lord Rooker, in what I thought was an uncharacteristically spiky speech, admonished me and, through me, the Government for not offering any change or making any concessions. As he was speaking, I thought that I would write down a few. There was the substantial concession on the Isle of Wight—
Lord Strathclyde
There was the substantial concession on the Isle of Wight at the request of noble Lords opposite, the substantial concession on public hearings at the request of noble Lords opposite, and—most cheekily and unusually from the noble Lord, Lord Rooker—his amendment on delaying the referendum and providing an opportunity for it to take place at any stage between 5 May and 31 October this year was accepted. Indeed, we helped the noble Lord to rewrite his amendment so that it would work. Let us hear no more talk about this Government not making concessions.
We have had nine referendums in the past 40 years. Only the 1979 referendums had thresholds, and those were imposed by Back-Benchers in another place in order to thwart the possibility of devolution being implemented. They were successful in their intention and, as I have noted before, that has been a source of much resentment. There were no thresholds in the 1997 referendums on devolution, as I said earlier; nor have there been any other thresholds in any of the other referendums that have taken place in the past 13 years.
Lord Forsyth of Drumlean
Will my noble friend please address the point made by the noble Lord, Lord Rooker, that this referendum is quite different from any other because it is binding? The effect of his amendment will simply be to give the referendum the same status as every previous referendum in so far as the Commons is able to consider it and reach a conclusion. Will he address that argument, because it has not been addressed in either House so far?
Lord Strathclyde
My Lords, the referendum taking place in Wales on 3 March, on which there is no threshold and for which no threshold was requested, is for a poll which is binding on this Parliament. I know that noble Lords will say, as my noble friend and others have, that this is a binding referendum, so let me be entirely clear about my answer. Referendums are a constitutional device; they are rarely used but they are used occasionally to ask the people their view on a specific issue. I believe that it would not be right to offer the people a referendum where Parliament has explicitly laid out what the effects of that referendum would be and yet say that we might not give them what they vote for. A threshold, even in the more nuanced form proposed by the noble Lord, Lord Rooker, is unnecessary and, we believe, wrong.
Lord Rooker
My Lords, I shall not detain the House. I shall certainly not comment on that excuse about the concessions. That was not in the context of the two offers from that Dispatch Box about the defeats that the Government have suffered. It was not said in that context. It was about wholly different subjects, none of which has materialised. I think we have heard enough and people have been delayed long enough on this last day before the Recess. I beg to test the opinion of the House.
The Lord Speaker
My Lords, before I put the Question on Motion A, I have to inform the House of a minor drafting error on the Marshalled List. The Motion should refer to Commons Amendment 1C, not 8C, in lieu.
Motion A agreed.