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Mr Philip Hollobone (Kettering) (Con)
1. What recent discussions he has had with ministerial colleagues and Ministers in the Scottish Executive on funding for higher education institutions in Scotland.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
I have regular discussions with ministerial colleagues on matters related to higher education in Scotland. Funding for higher education in Scotland is largely a devolved matter, and my hon. Friend may be aware that the Scottish Government concluded the consultation on its Green Paper on the future of higher education funding on 1 March.
Mr Hollobone
In our United Kingdom, is it right that students from England studying in Scotland can be discriminated against in favour of students from Scotland or from other countries in the European Union?
David Mundell
My hon. Friend will know, as I have stated, that higher education is devolved, and it is for the Scottish Government to decide how to determine the funding of students from both Scotland and England. The fact that £75 million is being spent funding students from the European Union in Scotland will be the subject of considerable discussion at the forthcoming Scottish Parliament elections.
Angus Robertson (Moray) (SNP)
Not long ago, the Secretary of State unwittingly told The Daily Telegraph that
“tuition fees are the biggest, ugliest, most horrific thing”,
and that breaking his word on the issue is
“the worst crime a politician can commit”.
Does the Minister agree with him?
David Mundell
I agree with Sir Andrew Cubie, who commented on the Scottish Government’s proposals on higher education, and said that their response was “too late” and that they had had the opportunity to lead the way on higher education in the United Kingdom, but chose to follow.
Angus Robertson
The Minister chose not to answer the question. Returning to the comments of the Secretary of State, at the same time, he said that accepting tuition fees of £9,000 was a “car crash” and “a train wreck”. Will the Minister confirm that, because the issue is devolved, Scotland does not have to follow the hare-brained policy of the Liberal Democrats and Conservatives in government in England by introducing a car crash of a policy in Scotland?
David Mundell
My concern for students in Scotland stems from the failure of the Scottish National party Government to address the issue of higher education funding in Scotland. As the hon. Gentleman will know, a funding gap of up to £260 million in higher education in Scotland has been identified as a result of the SNP’s governance. By my definition, that is a car crash.
Iain Stewart (Milton Keynes South) (Con)
The aspect of the reform of higher education funding in England that I most applaud is the fact that, for the first time, part-time students will receive the same treatment as full-time students. Will my right hon. Friend do all he can to persuade the Scottish Government to do all they can to support part-time students in Scotland?
David Mundell
My hon. Friend identifies a positive and progressive aspect of the Government’s higher education policy as it applies to England, and it is a policy that deserves to be introduced in Scotland.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
2. What recent discussions he has had with the Chancellor of the Exchequer on the implementation of a fuel duty derogation for rural areas.
The Secretary of State for Scotland (Michael Moore)
I have regular discussions with the Chancellor of the Exchequer on a wide range of issues. The Government have already announced that they intend to introduce a pilot scheme that will deliver a discount on petrol and diesel in rural areas, including the inner and outer Hebrides, the Northern Isles, the islands in the Clyde, and the Isles of Scilly.
Mr MacNeil
Through the rural fuel derogation we must ensure that there is transparency in fuel distribution in the highlands and islands. Nine months ago, there was 8p difference between Stornoway and Inverness; now there is 18p difference in the price of a litre of fuel. Will the Secretary of State make sure that the Office of Fair Trading looks at issues surrounding fuel distribution, so that any savings from a rural fuel derogation are passed on to families, businesses and the community in the islands?
Michael Moore
I welcome the hon. Gentleman’s implicit recognition of the importance of the derogation, which we are seeking and on which my right hon. Friends in the Treasury will make formal submissions in the near future. As for distribution issues, the hon. Gentleman is right to highlight the complexities of the price of fuel across the country. He knows that better than most people, and I am happy to meet him to discuss the issue further.
Mr Alan Reid (Argyll and Bute) (LD)
I greatly welcome the introduction of the fuel duty discount pilot scheme on the islands, and I also welcome its extension to the Isle of Bute. While we wait for permission from the EU, however, urgent action is needed to stop the price of fuel going up even further. Will the Secretary of State speak to the Chancellor and tell him that he must cancel the 4p fuel tax rise that Labour planned for this year’s Budget?
Michael Moore
My hon. Friend will be the first to acknowledge that the fuel duty increases over the past year reflect the previous Government’s plans to increase duty by 1p per litre over the retail prices index this year and for years to come, and, as we have already discussed, the derogation is now being sought. The Chancellor and the Chief Secretary to the Treasury will have heard my hon. Friend’s strong representations on behalf of his communities, and I recognise how serious an issue petrol and diesel prices are throughout the country.
John Robertson (Glasgow North West) (Lab)
3. How many small businesses in Scotland (a) applied for and (b) received research and development tax credits in the latest period for which figures are available?
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
In the financial year 2008-09, figures for the United Kingdom show that there were 350 claims for research and development tax credits from small and medium-sized businesses, and that the total amount of relief awarded was £15 million. Figures for Scotland are not currently held centrally.
John Robertson
Well, there we are: once again, a question not answered. The right hon. Gentleman probably does not even know that there is no R and D specialist unit in Scotland to help small businesses get tax credits—but there is one in Wales and six in England. Does he think that that is fair?
David Mundell
What I am aware of is that Her Majesty’s Revenue and Customs R and D tax and credits unit held a workshop in Glasgow on 9 February, and it was well attended by businesses from the Glasgow area.
Fiona Bruce (Congleton) (Con)
Do the Government intend to abolish the intellectual property restrictions on R and D tax credits, which would make it much easier for companies in Scotland in the biotechnology and micro-electronics industries to benefit?
David Mundell
The Government do indeed intend to abolish that restriction, and I believe that it will have the benefits that my hon. Friend outlines.
Ian Murray (Edinburgh South) (Lab)
4. What assessment he has made of recent trends in levels of employment in Scotland.
Jim McGovern (Dundee West) (Lab)
8. What assessment he has made of recent trends in levels of employment in Scotland.
The Secretary of State for Scotland (Michael Moore)
Although the final quarter of 2010 saw falling unemployment and rising employment in Scotland, helping people into work remains a key priority for this Government.
Ian Murray
Gross domestic product in the economy has contracted by 0.6%, confidence is being shattered by the increase in VAT, unemployment is rising, with the full effect of public sector job losses to come, and employers all over my constituency are really concerned that the banks are getting away scot-free while they are being hit the hardest. Does the Secretary of State have any plans at all for growth in order to get jobs back into the Scottish economy?
Michael Moore
In a compendium of issues, the hon. Gentleman forgets to mention the role that his own Government played in the management of the economy up until last May. Our overriding priority is to get a path to sustainable growth, and that means stabilising the economy, which is what the deficit reduction plan is about, and ensuring that we support businesses by reducing tax, maintaining interest rates lower than they would otherwise have been and helping businesses to access finance. We have a real programme of action, unlike the previous Government.
Jim McGovern
Rising unemployment is a great concern in my constituency of Dundee West. In fairness to the Secretary of State, he did visit Dundee to see for himself the importance of the computer games industry to the city, but does he continue to support the Government’s stance of not implementing a tax break, which both the Lib Dems and the Tories claimed to support prior to the general election? If so, what plans does he have for job creation in my city of Dundee?
Michael Moore
As I have said previously to the hon. Gentleman, our visit together to Abertay university was very worth while, and he makes a strong case for the computer games industry. Taxation is clearly a matter for the Chancellor, and the Budget is coming along soon, but, as I said in answer to his hon. Friend the Member for Edinburgh South (Ian Murray) a moment ago, the overriding thing, which will help the computer games industry and everybody else, is to get us back on a sustainable path to growth. That is our overwhelming priority.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
My right hon. Friend will know that marine renewable energy offers tremendous employment prospects in Scotland. Is he aware of the proposal by Department for Energy and Climate Change Ministers to create renewable energy parks; and will he use all his powers to ensure that the first such park is in Caithness, where all the ingredients already exist?
Michael Moore
Caithness could not hope for a finer advocate of its cause, and my hon. Friend has spoken with me on many occasions. The importance of renewables to the far north of Scotland—indeed, the whole of Scotland—is second to none, particularly in the context of the rundown of Dounreay, something that I know is close to his heart and on which he works very carefully.
Ann McKechin (Glasgow North) (Lab)
In December I highlighted to the House that in Campbelltown 13 claimants were chasing every available job. Unfortunately the situation today is far worse: the Scottish Trades Union Congress reports that currently 27 jobseeker’s allowance claimants are chasing every advertised vacancy in north Ayrshire. The Secretary of State says that he is concerned about high unemployment in Scotland, so can he tell the House when he last visited north Ayrshire and spoke directly to those people who are struggling to find work?
Michael Moore
I have carried out a range of visits around Scotland and will continue to do so; I am very happy to take up the hon. Lady’s suggestion. However, may I gently remind her that unemployment was rising under her Government when she was in the Scotland Office? She should not look so pleased about the situation as it is now.
Ann McKechin
Yet again, the Secretary of State fails to tell us what his alternative is. Thousands of our young people have been worst hit. This Government claim that their Work programme will be much better, but officials are saying that there will be 250,000 fewer places next year than the number who entered Government schemes this year. Can he therefore confirm what percentage of 18 to 24-year-olds currently unemployed in Scotland will be allowed to participate in the new Work programme, and whether it will be less than in the current year?
Michael Moore
The hon. Lady is right to highlight the issue of youth unemployment, which is a key priority for the Government. Again, it is something that rose significantly throughout her time in office, and it needs to be tackled very seriously. We have already introduced elements of the Get Britain Working programme, the work clubs and the Working Together programme, and the Work programme will come along in the summer. We look forward to debating that further with her.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
5. When he expects next to discuss with ministerial colleagues trends in the level of youth unemployment in Scotland.
The Secretary of State for Scotland (Michael Moore)
The Government are determined to deal with the long-term legacy of youth unemployment, and this is a key priority in my discussions with ministerial colleagues. Our Get Britain Working measures and the new Work programme will provide the best possible support for young people struggling to find employment.
Mr Donohoe
I thank the Secretary of State for that answer. He will be aware, however, that levels of unemployment among the 18-to-24 age group have soared over the past few months. As a result, in north Ayrshire in particular, we have the highest levels of youth unemployment. What is he going to do about that?
Michael Moore
First, I commend the hon. Gentleman for his consistent campaigning on this issue, which is a very significant one in his part of the world. However, I think that he would also acknowledge the point that I made to the hon. Member for Glasgow North (Ann McKechin) a moment ago—that youth unemployment has been a serious problem for a long period. I discussed the issue with the Work and Pensions Secretary only last night. As I have said to the hon. Gentleman previously, I look forward to convening a meeting in his constituency where we will discuss all these issues with the relevant individuals and organisations from across Scotland. I look forward to his being part of that event.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I think the whole House shares the concern that the Secretary of State seems to indicate that he has, but can he share with the House the number of young unemployed people to whom he has spoken this year?
Michael Moore
I have spoken to many young unemployed people across Scotland, not just this year but over the whole course of my time as a Member of Parliament, and not just in my own constituency but elsewhere too. They all want to see a sustainable route out of the difficulties that the country is in. This is not only about the Work programme measures that I have already mentioned but about getting the country back on its feet and tackling the deficit, making sure that we have a sustainable way to growth by focusing on bank lending, keeping interest rates low, and providing support by cutting taxes, be they corporation tax or national insurance. All those measures will help.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
6. What assessment he has made of the likely effect on families in Scotland of the changes to benefits proposed by the Secretary of State for Work and Pensions.
Mrs Anne McGuire (Stirling) (Lab)
7. What discussions he had with the Secretary of State for Work and Pensions prior to the publication of the Welfare Reform Bill on the likely effect on Scotland of the measures in that Bill.
Fiona O’Donnell (East Lothian) (Lab)
10. When he last met anti-poverty campaigners in Scotland to discuss the potential effect in Scotland of the measures in the Welfare Reform Bill.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
The Secretary of State for Scotland and I are in regular contact with ministerial colleagues in the Department for Work and Pensions. We also meet regularly organisations in Scotland with an interest in welfare and combating poverty.
Michael Connarty
That was not an answer to the question that I asked. I cite two cases to the Under-Secretary: a family with a son born with fragile X syndrome and autism and another family with an absolutely outstanding young teacher who suffered a massive stroke. Both of them now require 24-hour residential care. Their lives will be damaged irreparably if the Government go ahead with the withdrawal of benefits for people in residential care—benefits that give them a quality of life that makes residential care not a prison sentence. Will the Secretary of State and the Scotland Office campaign with the people of Scotland against this proposal by the Government to withdraw benefits from people in residential care?
David Mundell
The hon. Gentleman will be aware that there was a debate this morning in Westminster Hall on that specific issue. The Government have indicated that they are listening to the concerns. The fundamental issue with disability living allowance is that it is not fit for purpose and needs change. The Government are taking those changes forward.
Mrs McGuire
I have been contacted by Mr Ron Skinner, MBE, who is a non-executive director of Order of Malta Dial-a-Journey Ltd, which operates in my constituency. He expressed grave concern about the impact of the removal of mobility allowance from those in residential care. What specific discussions has the Minister had with his opposite numbers in the Department for Work and Pensions on this issue, which is causing great concern for those in residential care?
David Mundell
Yesterday, I met the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) and Lord Freud, the Minister in the House of Lords who is responsible for welfare reform, to discuss the implications of welfare reform for Scotland. The right hon. Lady raises one such issue. As was said in Westminster Hall this morning, DLA as it currently exists is not fit for purpose. It is applied randomly across care homes, not just in Scotland but across the United Kingdom, and it needs to be reformed.
Mr Speaker
Order. There are far too many private conversations taking place in the Chamber. Let us have a bit of order for Fiona O’Donnell.
Fiona O'Donnell
Like you, Mr Speaker, I am feeling in a generous mood, so I will give the Under-Secretary of State a third chance to redeem himself. The Prime Minister’s excuse for removing the mobility component was that it addressed an anomaly between those in hospital and those in residential care. Will the Under-Secretary of State at least acknowledge that residential care homes are based on a social model, and not a medical model?
David Mundell
I certainly acknowledge that residential care homes are social rather than medical institutions primarily. However, as the hon. Lady will know, having been present at this morning’s debate in Westminster Hall, many care homes operate the mobility aspect of disability living allowance differently. The basis on which it is applied to a person in a home in Scotland and what it is applied for is dependent on which home they are in. I am sure she will agree that that is not acceptable.
Mrs Eleanor Laing (Epping Forest) (Con)
Does the Minister agree that many families in Scotland are suffering economically and socially because of the disastrous policies not only of 13 years of Labour Government, but of four years of Scottish National party Government in Scotland? Will he undertake to work with the Secretary of State for Work and Pensions to ensure that people in Scotland who are in real need, especially those with disabilities, benefit under his Government’s policies?
David Mundell
I agree with my Friend’s analysis. Like many people in Scotland, I recognise that the Welfare Reform Bill provides a once-in-a-generation opportunity to radically overhaul the benefits and welfare system.
Mike Freer (Finchley and Golders Green) (Con)
Can the Minister indicate to the House how many low-paid Scots will be lifted out of income tax, and how many families in Scotland will benefit from the reform to tax credits that has been announced?
David Mundell
I will seek out that information for my hon. Friend and write to him.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
The changes announced last week to social fund crisis loans will cut the level and availability of loans for essential items such as beds and cookers. Does the Minister agree that that will push vulnerable people on lower incomes towards high-cost lending and into the arms of loan sharks, exacerbating problems that Scotland already has?
David Mundell
I do not agree with the hon. Lady’s analysis. I am surprised to hear again from the Scottish National party that it does not welcome the devolution of elements of the social fund to the Scottish Parliament.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
9. What recent discussions he has had with the Secretary of State for Business, Innovation and Skills on the operation of the green investment bank in Scotland.
The Secretary of State for Scotland (Michael Moore)
I have regular discussions with the Secretary of State for Business, Innovation and Skills on a wide range of issues, including the operation of the green investment bank. The green investment bank will support economic growth in all parts of the country and help us to meet our environmental objectives.
Chi Onwurah
Like the north-east, Scotland has great wind resources, and we are looking forward to getting a return on all that wind. Does the Secretary of State agree that the delays to and downgrading of the green investment bank are preventing us from making the best of that asset?
Michael Moore
First, as somebody whose constituency is not that far from Newcastle, I agree with the hon. Lady that we should appreciate all its wonderful characteristics, including its weather patterns. I agree that around the whole coast of the UK, we have much that we can exploit for renewable energy. On the specifics of the announcement on the green investment bank, we are taking the matter forward aggressively and she will hear further information announced very soon.
Mike Crockart (Edinburgh West) (LD)
Does the Secretary of State agree that the green investment bank could open up tremendous potential for rebalancing the economy and creating a great many new jobs? For that to happen, it needs financial experience, research and development experience in the academic institutions and renewable energy experience, all of which are available in abundance in Scotland, and particularly in Edinburgh. It would therefore be a perfect location for the institution.
Michael Moore
I commend my hon. Friend for his efforts to locate the green investment bank in Edinburgh. I welcomed the opportunity to meet him and the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) recently to discuss that very issue. I and other Ministers look forward to hearing further details on the proposal in the near future.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
When I asked the Secretary of State about the green investment bank in October, he said that he would make the best possible case for its location in Scotland, yet his Department has been forced to concede under freedom of information that he has had no correspondence with Department of Energy and Climate Change Ministers on the issue and that there are no notes of meetings with them about it. How is he actually pressing the case rather than just dealing in rhetoric?
Michael Moore
I am aware of the hon. Gentleman’s commitment to freedom of information, and I am delighted to say that, as he knows from his time in the Scotland Office, those are not the only ways in which Ministers meet. I have had many conversations with the Secretaries of State for Energy and Climate Change and for Business, Innovation and Skills, the Deputy Prime Minister and others on the issue. Like the hon. Gentleman, I hope that my colleagues will support the case for the bank coming to Scotland.
Mr Speaker
Order. There is still far too much noise in the Chamber. It is very unfair on people asking questions and Ministers answering them.
Margaret Curran (Glasgow East) (Lab)
11. What discussions he has had with the Chancellor of the Exchequer on the effect on the economy in Scotland of the increase in the standard rate of value added tax.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
The Secretary of State and I have regular discussions with the Chancellor of the Exchequer on a range of issues. The VAT rise is a tough but necessary step towards Britain’s economic recovery.
Margaret Curran
Is the Minister aware of the sense of outrage throughout Scotland that on this Government’s watch, the increase in VAT means that low and middle-income families now pay a higher rate of tax on purchases and earnings than the banks are to pay on their profits? How can that possibly be fair, and why do the Government continue to insist that those with the least should pay the most?
David Mundell
I am aware of the sense of outrage, not just in Scotland but throughout the UK, at the state of the economy that the last Labour Government left us with, which has required such measures to be taken.
Katy Clark (North Ayrshire and Arran) (Lab)
Does the Minister not accept that the recent increase in VAT, particularly on fuel such as petrol and diesel, is having a more dramatic effect on the economy in rural areas? Does he not think that his Government should address that?
David Mundell
The hon. Lady would be much more credible on that point if she had spoken out against her Government’s rises in duty. The issue of fuel prices in rural areas is serious, and it is already clear that my right hon. Friend the Chancellor has heard the concerns.
Harriett Baldwin (West Worcestershire) (Con)
12. What discussions he has had with the Deputy Prime Minister on the establishment of a commission to examine the West Lothian Question.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
The Secretary of State and I have regular discussions with the Deputy Prime Minister on various issues, including those concerning the constitution. The Government remain committed to establishing a commission this year to consider the West Lothian question.
Harriett Baldwin
The Deputy Prime Minister told us that the commission would be established by the end of 2010, then the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), told us that it would be established in the new year. Does the Minister know on what date in 2011 the commission will be established?
David Mundell
I am not able to give my hon. Friend an exact date, but as she will know, it is a commitment of the coalition Government to proceed with the commission, and I am sure announcements will be made shortly.
John Stevenson (Carlisle) (Con)
13. What recent discussions he has had with the First Minister on support for private sector employment in Scotland.
The Secretary of State for Scotland (Michael Moore)
In my recent discussions with the First Minister, we spoke about a range of issues, including economic policies. Returning the United Kingdom to sustainable economic growth is the Government’s overriding priority. We are doing everything we can to create the conditions that enable UK businesses to be successful and create more jobs.
John Stevenson
If the Scottish economy is to be rebalanced, the future clearly lies with employment in the private sector. Can the Minister therefore give some indication of how much Scottish businesses will save from the Government’s changes to the employers’ national insurance threshold and rate, and of how many businesses will benefit from the payment holiday for new businesses?
Michael Moore
My hon. Friend is right to point to the importance of reducing the tax burden, and we are determined to do that. We estimate that the national insurance reductions will bring a benefit of £280 million to businesses in Scotland, or the equivalent of helping 59,000 jobs.
Ian Mearns (Gateshead) (Lab)
Q1. If he will list his official engagements for Wednesday 9 March.
The Prime Minister (Mr David Cameron)
I am sure the whole House will wish to join me in paying tribute to Lance Corporal Liam Tasker from the Royal Army Veterinary Corps, who died on Tuesday 1 March. The whole country has been touched by the story of this true hero, who selflessly worked with his search dog, Theo, to locate improvised explosive devices, weapons and bomb-making equipment to save many, many lives. He will not be forgotten, and our deepest condolences should be with his family, his friends and his colleagues.
This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.
Ian Mearns
I am sure the whole House will join me in passing on their condolences to the family and friends of our fallen service personnel.
The Prime Minister will be aware that today is no-smoking day. Will he join me in congratulating the organisers of the “Making Smoking History” lantern parade which takes place this evening in Wrekenton, a part of my constituency that is particularly blighted by that addiction? Will he also comment on British Lung Foundation research that shows that more than half of children surveyed across the UK have been exposed to cigarette smoke in cars, and that 86% of children want adults—
The Prime Minister
The hon. Gentleman makes a good point with great passion. I certainly support no-smoking day, and unlike in some previous years, I hope to meet its requirements in full this year. His point about smoking in front of children and babies and smoking in cars is a good one. Whatever people have done in the past, the facts show that they really should change their behaviour. I am not sure whether it is possible to legislate in that area—we need a change in attitudes, which he is helping to lead with the British Lung Foundation and others.
Mary Macleod (Brentford and Isleworth) (Con)
Yesterday was international women’s day, and today great trade figures and export growth were announced. Does the Prime Minister agree that we would have even better figures if we managed to get more women on the boards of companies across the UK?
The Prime Minister
My hon. Friend is right to draw attention to today’s trade figures, which show a big increase in exports, which is exactly the sort of rebalancing that our economy needs. It is absolutely right that we need to get more women involved in the work force and at board level. In addition, in terms of entrepreneurialism, if we had the same rate of women setting up small businesses as America, we would have tens of thousands of extra businesses creating wealth and jobs.
Edward Miliband (Doncaster North) (Lab)
I start by paying tribute to Lance Corporal Liam Tasker from the Royal Army Veterinary Corps. He was doing a job that put him in such danger, and he showed extraordinary bravery and courage. We remember him, and we pass on deep condolences to his family and friends.
Can the Prime Minister tell us who authorised the mission in Benghazi last weekend?
The Prime Minister
The Foreign Secretary set out the position absolutely in full in the House on Monday, but let me say clearly that I take full responsibility for everything that my Government do.
Edward Miliband
I am grateful to the Prime Minister for saying that, and I want to support him on Libya wherever I can, but there is increasing concern about the Government’s competence on the issue. We have had the flights fiasco, talk of Colonel Gaddafi heading to Venezuela when he was not, overblown briefing about potential military action, and the setback last weekend. Does the Prime Minister think that it is just a problem with the Foreign Secretary, or is it a wider problem in his Government?
The Prime Minister
I am not sure that I particularly want to take a lecture from Labour about dealing with Gaddafi and Libya. The first thing that we should have from the Labour party when it comes to Libya, Gaddafi and the release of Megrahi is an apology, which we still have not had. When it comes to this Government’s conduct, we have led the way in getting a tough UN resolution on Libya, getting Libya thrown out of the Human Rights Council and making sure that the world is preparing for every eventuality, including a no-fly zone.
Edward Miliband
Everybody will have heard the deafening silence about the performance of the Foreign Secretary. There is an issue of competence at the heart of this Government, and I want to turn to another example of incompetence. Does the Prime Minister think that people will notice the loss of 12,000 front-line police officers?
The Prime Minister
First, the right hon. Gentleman raises the issue of the Foreign Secretary. Let me tell him: I think we have an excellent Foreign Secretary. When it comes to it, there is only one person around here I can remember knifing a Foreign Secretary, and I think I am looking at him. [Interruption.] Right, I think we have dealt with that.
We want to see police on the streets fighting crime, not stuck behind their desks fighting paper. That is what we want to achieve. Let me say to the right hon. Gentleman that whoever was standing here right now would have to be reducing the Home Office budget and the policing budget. Labour was committed to a £1.3 billion cut. The question is not “Are you reducing the budget?”; the question is “What are you doing to cut the paperwork, freeze the pay, deal with the allowances and make sure the police are on the streets?”
Edward Miliband
The more that the right hon. Gentleman brings my relatives into this argument, the more that we know he is losing the argument. I have a second cousin in Belgium he will be going after next, I am sure.
On the question of crime, the Prime Minister says that he wants to improve front-line policing, but the West Midlands is losing 1,000 officers, Bedfordshire has scaled back gun licence checks, and now we hear that companies that have been burgled are to be sent fingerprint kits in the post. I know that he believes in the big society, but solving your own crimes is a bit ridiculous, even by his standards. You have to ask, Mr Speaker: does the Prime Minister actually have a clue what is going on out there?
The Prime Minister
I think the leader of the Labour party is getting a little bit touchy about this issue.
The point that I would make is that if we listen to what chief constables are saying about what they want to do—[Interruption.] Here is the chief constable of Thames Valley:
“what I haven’t done at all is reduce the number of officers who do the patrol functions, so the officers you see out in vehicles, on foot, in uniform, on bicycles. We haven’t cut those numbers at all.”
Listen to the chief superintendent in Surrey, who says:
“We are determined to increase our frontline capability by recruiting…extra”
police constables. The fact is that all the leadership of the police is engaged in the exercise of keeping costs under control to make sure that we get more officers on the beat. Whether we have to divert them to protect the right hon. Gentleman’s relatives, I do not know, but they are going to be on the beat.
Edward Miliband
Ten months, and so out of touch with people up and down this country. The Prime Minister talks about police officers; in case he had not noticed, it is the Association of Chief Police Officers that says that 12,000 front-line police officers are going to be lost. Why are they being lost? It is because he chose to go beyond the recommendation by Her Majesty’s inspectorate of constabulary of 12% cuts. If he had made 12% cuts, the savings could have been found from the back office, but he went too far and too fast, and insisted on 20% cuts in policing.
The Prime Minister
The right hon. Gentleman is wrong. The Association of Chief Police Officers is not talking about front-line officers, so he is simply wrong about that. Let me remind him what his home affairs spokesman said at the time of the election, when asked
“Can you guarantee if you form…the next government that police numbers won’t fall?
Alan Johnson: No”.
That was the position, and this is what he said after the election:
“if Labour had won the general election, the Home Office budget would have been cut and the police would have had to make savings”.
What we see today, once again, is jumping on a bandwagon and total opportunism. The right hon. Gentleman has no plans to reform welfare, no plans to reform the NHS and nothing useful to say about policing.
Edward Miliband
We know that the Government are out of touch, and now we know that they are incompetent as well: incompetent on Libya and incompetent on policing. The Prime Minister may act like he was born to rule, but the truth is that he is not very good at it.
The Prime Minister
The usual pre-scripted questions that he dreamt up earlier. The question is: has he got a reform plan for the NHS? [Hon. Members: “No!”] Has he got a police reform plan? [Hon. Members: “No!”] Has he got a plan to cut the deficit? [Hon. Members: “No!”] It is no wonder that the former Foreign Secretary has just said that
“the…Left is losing elections on an unprecedented scale because it has lost control of the political agenda…it is also losing key arguments”—
and it has a
“deficit in ideas”.
That is what he said, and he is absolutely right.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Will my right hon. Friend join me in congratulating the people of Suffolk, who, in less than a year, have raised more than £3 million to build a new children’s hospice through the Treehouse appeal? This is an example of the community coming together to support a local project that will really make a difference. It is also supported by BBC Suffolk, the Evening Star and the East Anglian Daily Times.
The Prime Minister
My hon. Friend is absolutely right. I know that Members right across the House back the hospice movement, with its hospices for adults and for children. The Government have put extra money into hospices, but that is a great example of the big society, where people come together and make sure that there is real provision to look after those who need it most.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Q2. The coastguard stations, our maritime insurance policy, have been treated badly by the Maritime and Coastguard Agency, which has started threatening to close stations without carrying out any risk assessment whatever. The proposed savings were not even highlighted in the comprehensive spending review, and they will be very small compared with the huge risks involved. Will the Prime Minister ensure that our coasts, islands and mariners are protected by saving our stations? As the campaign says: SOS!
The Prime Minister
I will look at this issue carefully, because it is being raised by Members across the House. What I would say, however, is that this is not about the UK’s front-line rescue capability. The key changes are about how the coastguard service co-ordinates services and rescue missions, so the aim of the consultation is to get the resources on the front line, to those people who are actually carrying out the rescues and to those in the voluntary sector who are helping. That is what the consultation is about, and I would urge the hon. Gentleman to engage in the process.
Neil Carmichael (Stroud) (Con)
Q3. The alternative vote system is unfair, expensive and discredited. Even members of the support team for the yes side do not really want it. What is the Prime Minister going to do to ensure that we defeat this system, because it can produce distorted outcomes?
The Prime Minister
I thank my hon. Friend for his question. I will be campaigning hard for a no vote in the referendum. I think that it is a relatively simple argument to make. We have a system that is simple, clear and easy to explain. The alternative vote is used in only three countries. They are Australia, Fiji and Papua New Guinea—and Fiji is beginning to change its mind. There are clear arguments, and it is a referendum, so people in the coalition will be able to make those different arguments.
Paul Goggins (Wythenshawe and Sale East) (Lab)
At Prime Minister’s questions on 27 October, the Prime Minister agreed that Ministers would work with me and with our leading children’s charities on an affordable alternative to the child trust fund for looked-after children. I can confirm that, since then, the Financial Secretary to the Treasury and the Children’s Minister have both worked constructively with us on that issue. However, the time has come to turn good intentions into action. Today, Barnardo’s and Action for Children have published a report that sets out a compelling case for a new system of savings accounts for children in care. I know that the Prime Minister wants to do more for such children. Will he read the report, then write to me to confirm that provision for such a system will be made in the Budget?
The Prime Minister
I will certainly read the pamphlet, if the right hon. Gentleman will leave me a copy. We are looking at whether we could replace funds, particularly for children in care, with some form of child ISA, and I hope that my right hon. Friend the Chancellor will have something more to say about that in the Budget.
Tom Brake (Carshalton and Wallington) (LD)
Q4. The coalition Government’s principal objective is to cut the eye-watering deficit that we inherited from the previous Government, yet we want to support people on low and middle incomes. [Interruption.] Can the Prime Minister confirm how many people will see their incomes—[Interruption.]
Mr Speaker
Order. I apologise for having to interrupt. Members must be heard when asking their questions, and the Prime Minister heard in answering them. It is a very simple principle. I think that the hon. Gentleman has completed his question, and we are grateful to him.
The Prime Minister
The truth is that Labour Members do not like being reminded of the massive deficit and the huge mess that they left this Government to clear up. My hon. Friend makes a good point—that in spite of difficult decisions, we will lift the tax threshold for income tax payers in April this year, and 880,000 people will be removed from income tax altogether. That is a major step forward, a big help with the cost of living, and will be welcome to families up and down the country.
Gloria De Piero (Ashfield) (Lab)
Many parents in my constituency are worried sick because a number of school bus services are being withdrawn, with no guarantee of an equivalent replacement—meaning that timetables, routes and fares will be at the discretion of commercial operators. What is the Prime Minister doing to ensure that families are not subject to big fare hikes just to get their children to school?
The Prime Minister
What we are doing—it was one of the difficult decisions we took in the spending round—is to make sure that the per pupil funding in place is not going down; it is being maintained. That meant taking difficult decisions elsewhere in the Budget, but we took that decision for the good of the country’s schoolchildren.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Q5. Do the Prime Minister and the Chancellor recognise the severe impact of exceptionally high petrol and diesel prices on rural communities in England such as Northumberland, where prices tend to be 5p to 10p a litre higher than in the cities, where people have long distances to travel to work and where public transport is very limited? May we hope for some relief in the Budget?
The Prime Minister
My right hon. Friend makes an important point. The argument has been made about high fuel costs, and we are listening to it very carefully. He will have to wait for the Budget. I know that prices for heating oil are also a big issue in rural areas like the ones that he and, indeed, I represent. We have asked the Office of Fair Trading to look at it, but I make the additional point that we have maintained the cold weather payments at £25, which has meant that something like £430 million has been spent this winter on helping people with their heating bills.
Mr David Winnick (Walsall North) (Lab)
However serious the situation in Libya—no doubt Gaddafi is now using arms sold to him by British companies—will the Prime Minister give an assurance to the House today that no military action will be taken regarding Libya without direct authorisation from the United Nations Security Council?
The Prime Minister
What I discussed last night with President Obama is making sure that we plan for every eventuality, including planning for a no-fly zone. If that becomes necessary, everyone would want it to have the widest possible backing, which is why we are currently drafting a UN Security Council resolution. I think that is absolutely the right thing to do.
Nigel Adams (Selby and Ainsty) (Con)
Q7. It is no secret that council tax doubled under the last Government. In my constituency, both local councils—Selby district and Harrogate borough council—are freezing council tax this year. Will the Prime Minister tell me and the House how many other councils have chosen similarly to help hard-pressed council tax payers?
The Prime Minister
I am delighted to say that a huge number of councils have done that. I think it was right to announce a freeze in council tax, which will bring real help to households across the country, saving the average family up to £72 a year at a time when they face difficulties with the cost of living. That compares, as my hon. Friend said, with a doubling of council tax under the last Government. As to whether they have learned any lessons from that, I have to say that Labour’s shadow Local Government Minister, the hon. Member for Derby North (Chris Williamson) attacked this freeze as
“nothing more than a gimmick”.—[Official Report, 17 January 2011; Vol. 521, c. 531.]
Yet it is bringing relief to hard-pressed families up and down our country and it is absolutely the right policy.
Mark Durkan (Foyle) (SDLP)
Is the Prime Minister aware of a commitment in the programme for government of the coalition Government who are taking office in Dublin today to move to an opt-out system for organ donation? As well as whatever consideration his Government might give to that proposal, will the Prime Minister undertake to work with all other Administrations in these islands through the British-Irish Council to increase the number of organ donors and to improve networks for sourcing and sharing donor organs and transplant services for people who need that life-saving and life-changing treatment?
The Prime Minister
I will certainly agree to do that. It is important that we try to increase the amount of organs available for donation. In the last Parliament, there was a debate about whether we should move formally to an opt-out system, and there are difficulties with that, but there is a huge gap between where we are now and a formal opt-out system, in encouraging patients and talking to them about what can be done. I am sure that we can make steps forward, and my right hon. Friend the Health Secretary will do that.
Mr Peter Bone (Wellingborough) (Con)
Q8. Mr Speaker, 373,000 Daily Express readers want it, 80% of Conservative Members support it, the Deputy Prime Minister would love it, and my wife demands it. The British people, Conservative supporters, the leader of the Liberal party and especially Mrs Bone cannot all be wrong. Prime Minister: may we have a referendum on whether the United Kingdom should remain in the European Union?
The Prime Minister
I wish that my wife were as easy to please. I was worried about where that question was going.
I am afraid that I must disappoint my hon. Friend and Mrs Bone. I think that we are better off inside the EU but making changes to it, in the way that we are setting out.
Jim Dobbin (Heywood and Middleton) (Lab/ Co-op)
Q9. There are 1.5 million individuals throughout the United Kingdom who suffer from involuntary tranquilliser addiction, which is not a misuse of drugs by the individual but prescription addiction. It has horrendous side-effects. Can the Prime Minister ensure that special withdrawal programmes are set up across the country to give those people their lives back? I understand that the Government are reviewing the situation, but the reviews keep being put back. These people are victims of the system, and they are suffering all the time.
The Prime Minister
The hon. Gentleman has raised this matter with me before. He speaks very powerfully on behalf of people who have that addiction, which is an extreme problem in our country.
We published a drugs strategy which set out an ambition to reduce drug use, including the use of prescription and over-the-counter medicines. That should include programmes to help people to withdraw from and come off those drugs. However, as I have said to the hon. Gentleman before, I think that we must deal with the problem at source. That is part of the purpose of our health reforms, which is to ensure that the national health service is genuinely concerned with the health of the whole person rather than being a national drugs service in which there can sometimes be too much prescribing of drugs.
Mr Steve Brine (Winchester) (Con)
The German company Storck UK, which owns and makes Bendicks chocolates in my constituency, has announced that it is consulting on plans that could involve production being moved to Germany. In the area that I represent, 115 jobs depend on that factory. Will the Prime Minister ask one of his Ministers in the relevant Department to meet me and representatives from the company as soon as possible to establish whether we can help?
The Prime Minister
I will certainly do that. My hon. Friend is right to speak up for his constituency and for that business. Through the growth review—we will confirm this in the Budget—we are taking steps to ensure that this country is the best place in Europe in which to do business. We have set out plans for the lowest rate of corporation tax anywhere in the G7, but we will also take further steps to ensure that we encourage companies to stay here, come here and invest here.
Karl Turner (Kingston upon Hull East) (Lab)
Q10. The Prime Minister is beefing up his office to help sell the Government’s unpopular and wasteful £2 billion reorganisation of the NHS. Does it concern him that Baroness Williams of Crosby feels that she is“under no obligation to support policies outside the agreement”?The Prime Minister’s Back Benchers do not want this; no one wants it. Is it not possible for the Prime Minister to halt—
The Prime Minister
The questions drafted by Labour Members have got a bit longer. I think that those in the Labour Whips Office need to go to remedial writing school.
If the hon. Gentleman was asking a question about the NHS—as I think he was—and asking who supports the NHS reforms, let me say this. I think that one of the greatest proponents of the NHS reforms is Labour’s shadow Health Secretary, the right hon. Member for Wentworth and Dearne (John Healey), who has said:
“The general aims of reform are sound—greater role for clinicians in commissioning care, more involvement of patients, less bureaucracy and greater priority on improving health outcomes—and are common ground between patients, health professions and political parties.”
If life gets too tough for the right hon. Gentleman on the Opposition Front Bench, there is always plenty of room over here.
Jeremy Lefroy (Stafford) (Con)
Q11. This month, soldiers from 3 Mercian (Staffords), including many from my constituency, are being deployed to Afghanistan, and our thoughts and prayers are with them. Will the Prime Minister ensure that if our brave soldiers are injured while serving our country, they will receive compensation that recognises their sacrifice?
The Prime Minister
My hon. Friend makes a very important point. The bravery of our servicemen and women, who are often deploying to Afghanistan for the third or fourth time now, should be uppermost in our thoughts. I think the whole House can unite on that, and on the results of the review of the armed forces compensation scheme carried out by Admiral Boyce. That will lead to significant increases in the value of awards—on average in excess of 25% to all lump sum payments, except for the top award which was recently doubled to £570,000. We are also trebling the maximum award for mental illness to £140,000. We can never compensate people for their injuries in battle, either physical or mental, but we can, as a generous, tolerant, warm and welcoming nation to our armed forces, do so much more, and I am glad that we are doing this.
Jessica Morden (Newport East) (Lab)
Q12. Does the Prime Minister appreciate that the 1,500 women in Newport who are now going to have to work for up to two years longer because the Government have accelerated the introduction of the increase in the state pension age feel very angry that they are not being given long enough to plan properly for a delayed retirement?
The Prime Minister
I know this is a difficult reform, but as well as dealing with the short-term problems of our deficit and making spending reductions across Government programmes—which, frankly, any Government would have to do right now—it is also right to try to make some long-term changes to reduce the long-term costs of our pension system, and as life expectancy is increasing, I think it is right to ask people to retire later. This is a difficult and long-term decision, but I think the arguments for it are absolutely right.
Ms Louise Bagshawe (Corby) (Con)
Will my right hon. Friend join me in welcoming the good news on jobs announced this morning by KPMG: that February saw the fastest rate of permanent positions being filled for 10 months and that those jobs came from the private sector?
The Prime Minister
My hon. Friend is right to draw attention to that as well as the trade figures. We are engaged in a very difficult operation to rebalance the economy, which for too long was dependent on government, housing, finance and, frankly, on immigration as well. We need an economy that is based more on manufacturing, technology, exports, enterprise and small business. It is going to be difficult, but there are good signs that the private sector economy is growing, and growing well.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Q13. Last year, Newcastle citizens advice bureau dealt with more than 26,000 cases, supported by 75 volunteers, yet its budget has been slashed and there is no clarity from Lib Dem Newcastle city council on funding from the end of this month. How can this shambolic situation possibly contribute towards the big society?
The Prime Minister
The Government have made sure that the national funding for the CAB debt service has been maintained, and that is a vital part of it. I urge all local councils, whoever controls them—I have had this conversation with my own council—to make sure we do as much as we can to support CABs, which do such a vital job in our communities.
Jake Berry (Rossendale and Darwen) (Con)
I am sure all Members agree that one of the most important jobs we perform every year is to represent people who have lost their lives in war on Remembrance Sunday. It is certainly something I do with great pride in my constituency. With that in mind, does the Prime Minister think a £50 fine is an appropriate punishment for those who burn poppies and chant during the silence?
The Prime Minister
My hon. Friend will have spoken for many people in their reaction to that court case. It is difficult unless we are sitting in the court and making that decision ourselves, but many of us look at such cases and feel that as a country we should be making a stronger statement that that sort of behaviour is completely out of order and has no place in a tolerant society.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Q14. May I take the Prime Minister back to the question on AV, and ask him to look at early-day motion 1550 tabled yesterday, which challenges the funding from the Electoral Reform Society? As, like me, he is a firm supporter of first past the post, will he look at that and write to me afterwards to tell me that there will be an investigation?
The Prime Minister
I have to admit that I have not got round to early-day motion 1550, but it sounds as if I should. We have been looking for all these years for something for the hon. Gentleman and I to agree about, and it is a delight to have this issue. I think some people will be surprised to find that what they thought was an organisation running elections is funding a campaign, but in the interests of coalition unity, I will leave it at that.
James Morris (Halesowen and Rowley Regis) (Con)
I recently met a number of manufacturing businesses in Cradley Heath in my constituency. Does the Prime Minister agree that the Government must do all they can to support manufacturing, particularly in areas such as the black country, to drive private sector jobs growth?
The Prime Minister
My hon. Friend is absolutely right. As I have said, we need a rebalancing of the economy whereby we see more technology, more aerospace, more manufacturing and a greater emphasis on such things. We are seeing recent figures showing good strong growth—up to 5% a year—in manufacturing output and even stronger figures for manufacturing export. What the Government can do to encourage that is ensure that we are delivering what manufacturing businesses want: less regulation, lower taxes and a real boost in apprenticeships, which this Government are providing—an extra 75,000 apprenticeships over and above what Labour planned.
Jack Dromey (Birmingham, Erdington) (Lab)
Q15. Does the Prime Minister agree that the bankers do a bad job in lending to small businesses and the real economy and that the police do a good job in helping to cut crime? Can he explain, therefore, why he is cutting police pay while letting the bankers walk away with millions?
The Prime Minister
What we are doing is introducing a £2.5 billion levy on the banks each and every year, which will raise more in every year than Labour’s bonus tax raised in one year. We are getting money out of the banks into the Treasury. We are seeing the bonus pools come down and bank lending go up. None of those things happened under the last Government.
Mr John Baron (Basildon and Billericay) (Con)
The law courts have agreed with Basildon council that the illegal Dale Farm Travellers’ site should be cleared, but because the previous Government stopped the council taking action, the site has mushroomed in size. Would the Prime Minister meet me to discuss the case to ensure that justice is done?
The Prime Minister
My hon. Friend has persistently raised this case and this issue in the Commons. I know he speaks for many people about the sense of unfairness that one law applies to everybody else and, on too many occasions, another law applies to Travellers. What I will do is arrange a meeting between him and the Secretary of State for Communities and Local Government so that they can look at what more can be done to ensure that we have real, genuine fairness for all communities in our country.
Education Maintenance Allowance
(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Keith Vaz (Leicester East) (Lab)
A few weeks ago, my hon. Friends the Members for Leicester South (Sir Peter Soulsby) and for Leicester West (Liz Kendall) and I launched—
Mr Speaker
Order. I apologise for interrupting the right hon. Gentleman, but may I appeal to Members who are leaving the Chamber to do so quickly and quietly, so that we can hear him present his petition?
Keith Vaz
Thank you very much, Mr Speaker, for your protection, which I appreciate greatly.
As I was saying, a few weeks ago, my hon. Friends the Members for Leicester South and for Leicester West and I launched a city-wide petition against the Government’s proposals to abolish the education maintenance allowance. Over the next few evenings, we will each be presenting petitions from various educational institutions. This petition has been collected by those who study at Gateway college, in Hamilton, in my constituency, where the principal is Suzanne Overton-Edwards.
The petition states:
The Petition of residents of Leicester and the surrounding areas,
Declares that the Petitioners oppose the abolition of the Education Maintenance Allowance; notes that a substantial number of young people are in receipt of the Education Maintenance Allowance in Leicester; and further notes that education can provide a better future for young people.
The Petitioners therefore request that the House of Commons urges the Government not to abolish the Education Maintenance Allowance.
And the Petitioners remain, etc.
[P000897]
Teaching Assistants
(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Tony Cunningham (Workington) (Lab)
I would like to present this petition on behalf of Marie Steele and more than 120 classroom assistants from west Cumbria who are both angry and upset at Cumbria county council’s single status proposals.
The petition states:
The Petition of residents of Cumbria, and others,
Declares that the Petitioners are concerned about the plight of Teaching Assistants in Cumbria, who feel they are being unfairly treated and whose professionalism is severely under threat. The Teaching Assistants/support staff across the county are currently fighting a change to their terms and conditions that affects their hours and a considerable loss of pay. Support staff are a vital resource for the running of a school. Senior Teaching Assistants also cover classes when teachers are absent or on planning time.
The Petitioners therefore request that the House of Commons urges the Secretary of State for Education to look into the plight of Teaching Assistants.
And your Petitioners, as in duty bound, will ever pray.
[P000898]
Points of Order
(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
On a point of order, Mr Speaker. On yesterday’s Order Paper, a debate was scheduled on coastguards, one of two debates that I had planned to speak in—
Mr Speaker
Order. Before the hon. Gentleman completes his point of order, may I appeal to hon. and right hon. Members who are leaving the Chamber to do so quickly and quietly so that we can proceed with subsequent business, including the point of order.
Mr MacNeil
On yesterday’s Order Paper a debate was scheduled on coastguards, one of two debates that I planned to speak in tomorrow. Today, it is not on the Order Paper. I found out about the change yesterday in a series of Chinese whispers and I was livid, Mr Speaker. I have not heard of a debate being changed at 48 hours’ notice. Coastguards are dismayed that the bread-and butter-issue of jobs is being overlooked in this House. Coastguards have been badly treated by the Committee, which is an alleged Back-Bench Committee, made up of Conservative, Liberal and Labour Members who have utterly dismayed me in their treatment of the coastguards. The name “Back-bench Committee” is utterly wrong. It has made this change on a whim, Mr Speaker—
Mr Speaker
Order. I have got the point. First, on a point of fact, people can raise points of order and with those points of order I will deal, but we are not referring to the work of an alleged Back-Bench Committee. The Backbench Business Committee is established, it is functioning in an orderly way and it is chaired extremely assiduously and conscientiously. I will not have aspersions cast on the work of the Committee. I will not have that in this Chamber.
On the point of order, let me simply say to the hon. Gentleman that I am grateful to him for giving me notice and I understand his extremely strong feeling on this matter on behalf of his constituents and on behalf of others as well. I understand that the coastguards debate is now scheduled for a three-hour debate on Thursday 24 March—
Mr Speaker
Order. The leader of the Scottish National party must not chunter at the Chair from a sedentary position in that way. It is very uncharacteristic of him and quite unnecessary. That three-hour debate will take place in Westminster Hall. As the House knows—the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who is an experienced Member, can certainly not claim to be unaware of this—the order of business is not determined by the Chair. The hon. Gentleman is free to raise the matter with the Backbench Business Committee if he wishes. The Chair of the Committee is in her place, and although I will not have a whole series of exchanges on this—that would not be right—if the hon. Member for North East Derbyshire (Natascha Engel), who chairs the Committee, wishes to respond to the point of order and to offer explanation or clarification to the House, she is perfectly welcome to do so.
Natascha Engel (North East Derbyshire) (Lab)
Further to that point of order, Mr Speaker. I thank the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) for giving me notice of his intention to raise his point of order. I do not want to go into the difficulties of scheduling business, but I want to say that the Committee absolutely emphatically recognises the importance of the coastguards debate. Far from cancelling it, we rescheduled it in order to protect the full three hours of debate that it so clearly deserves. However, the notice given was very short, and I apologise for that, and I deeply regret any inconvenience that this rescheduling has caused to any Member of the House. Parliamentary business changes at a moment’s notice, but I do regret any inconvenience caused to the hon. Gentleman.
Mr Speaker
Order. I see other members of the Backbench Business Committee bidding to catch my eye. I just said that I am not going to have a protracted exchange on this; that would not be right or a proper use of the time of the House. I think I can say, and will command general assent for this proposition, that we have had a very clear and gracious response from the Chair of the Backbench Business Committee. Other Members may agree with it or they may disagree with it; such is the stuff of democracy. But a point of order was very properly raised by the hon. Gentleman; I have responded to it; the hon. Lady has said her piece. It is not a continuing debate. The position is clear, and that is the end of the matter.
Mr Speaker
Order. I have made the position very clear. It is no good the hon. Gentleman shaking his head. He asked his question, in order, he raised the point of order and I have responded to it. There has been a further come-back on the point of order. I think most Members of the House would accept that the matter has been properly aired in the Chamber this afternoon.
On an unrelated point of order, Mr Jim Shannon.
Jim Shannon
On a point of order, Mr Speaker. First, I thank the hon. Member for North East Derbyshire (Natascha Engel) for her response; I understand that. On the procedure, given that the coastguards issue was to be debated, and that it was on the annunciator at 10 am this morning, is it in order for the business listed in Tuesday’s Order Paper—
Mr Speaker
Order. I am sorry; I do not wish to be unkind. The hon. Gentleman is an extremely assiduous new Member. I very clearly said, “On an unrelated point of order.” We are not continuing this exchange. So, nice try, but I am afraid it is not in order. I shall take any unrelated points of order.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
On a point of order, Mr Speaker. On Channel 4 news yesterday evening, the Secretary of State for Energy and Climate Change described 50 kW as “an enormous amount of power. That’s the equivalent of 1,500 domestic roofs.” That is just plain wrong, and either this is startling incompetence by the Government or they have based their review of solar feed-in tariffs on a completely false premise. The review is already causing uncertainty; these comments make it worse. I wonder, Mr Speaker, whether you can use your good offices to ensure that the Secretary of State clarifies the Government’s position to this House and to the public as quickly as possible.
Mr Speaker
As the hon. Lady knows—and as far as I am concerned, this is very fortunate—the content of ministerial statements or answers is not a matter for the Chair. If a Minister has made an incorrect statement, there is a procedure for setting the record straight, and that will be well known to all Members on the Treasury Bench. Meanwhile, the hon. Lady has put her concerns and her interpretation of the facts very clearly on the record, and that statement and interpretation will have been heard by Ministers.
Paul Flynn (Newport West) (Lab)
On a point of order, Mr Speaker. There is a matter that is causing great concern within the country, but on which the Government are silent in this House: the alleged conduct of certain official representatives of this country who are cultivating friendships with some of the emergent tyrannies in the world, including Azerbaijan. Should we not also be debating in this House whether we choose our trade representatives on the principle of inheritance?
Mr Speaker
There is every opportunity for the hon. Gentleman to raise this matter at business questions tomorrow, and he may well choose to do so. I have got a feeling that he will be hot-footing it to the salon, as the Leader of the House describes it, of the hon. Member for North East Derbyshire, who chairs the Backbench Business Committee, because I think the hon. Gentleman will probably be pursuing a debate on this matter in that Committee’s time.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op)
On a point of order, Mr Speaker. Yesterday, I apologised to the House and I wish to make a further apology. Yesterday, I apologised for suggesting that the reason why the Liberals had come sixth was because the nationalists and the—
Mr Speaker
Order. The hon. Gentleman must resume his seat. I listened very carefully to what he said yesterday. He is very dexterous in his use of parliamentary language and he has a great sense of humour, but what he must not do—I say this in all seriousness—is abuse the point of order procedure to make apologies that transpire to be nothing of the kind and are really carefully crafted partisan points which suit his book. I cannot believe that he would ordinarily want to do that, but I think he was planning to do it today and I cannot allow him to continue with it.
Naomi Long (Belfast East) (Alliance)
On a point of order, Mr Speaker. On two occasions during Prime Minister’s Question Time—both this week and in previous weeks—the Prime Minister has asserted that money that is going to be released by reform of the coastguard service will be redirected into front-line rescue missions. However, this is actually done by charitable organisations such as the Royal National Lifeboat Institution, and it is unclear as to how the transfer will take place. Would it be in order to request that the Minister responsible provide either a written or an oral statement to the House to clarify the link between the two?
Mr Speaker
The decision on whether to make a statement is a matter for the Government, as is the form that the statement takes. Otherwise, my earlier remarks about the procedure for correcting ministerial inaccuracies apply to the hon. Lady’s point of order.
If there are no further points of order, we will move on to the ten-minute rule motion, for which the hon. Member for Cheltenham (Martin Horwood) has been patiently waiting.
Tied Public Houses (Code of Practice)
(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Martin Horwood (Cheltenham) (LD)
I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to introduce a statutory code of practice to require certain pub owning companies to provide their tied lessees with a guest beer option and the option to become free of tie accompanied by an open market rent review; and for connected purposes.
I should straight away express my appreciation for the support that this Bill has received from hon. Members on the Liberal Democrat, Labour and Conservative Benches; the hon. Member for Na h-Eileanan an Iar (Mr MacNeil); the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd); the hon. Member for Brighton, Pavilion (Caroline Lucas); the Campaign for Real Ale; the Federation of Small Businesses; and the all-party Save the Pub group. I am grateful for all their support.
In bringing the subject of beer and pubs before this House, I stand in a fine Cheltenham tradition: my Liberal Democrat predecessor, Nigel Jones, now Lord Jones of Cheltenham, was chair of the all-party group on beer; his Conservative predecessor, Sir Charles Irving, was himself a licensee; and the longest-serving Member for Cheltenham, another Conservative, the right hon. Sir James Agg-Gardner, was a local brewer. In 1848, the very first MP for Cheltenham, a great Liberal, the hon. Craven Berkeley, risked the wrath of the religious lobby in the town by trying to delete the fixed opening hours for pubs on Sundays from the Sale of Beer Bill. All of them shared an appreciation of the very special and much-loved role that pubs play in our national life. As Lord Jones has said,
“a pub does not just sell beer. It is a social centre, providing meals and snacks, raising money for local charities and diversifying offerings all the time.”—[Official Report, House of Lords, 11 December 2008; Vol. 706, c. 559.]
He might have added that pubs are places where national sports are watched in good company and local sports teams are formed—indeed, hugely popular skittles leagues operate almost nowhere else.
The pub is the hub scheme, another one of those inspired initiatives for which His Royal Highness the Prince of Wales gets insufficient credit, has shown that, imaginatively used, pubs can provide a location for community shops, post offices and even youth centres. Of course, perhaps most importantly of all, they provide a social drinking environment, open to families and pensioners, and to new drinkers and old regulars. Pubs are personal enough to exert peer group pressure on those who might be tempted to drink irresponsibly and people who really have had too much are refused another in them, as they should be everywhere.
The British pub is a unique institution—it is a product of history that would be very difficult to recreate if we ever lost it. But we are losing our pubs, at the rate of as many as 40 a week; we are losing thousands a year. The list of lost pubs in Cheltenham includes the Greyhound, the Cat and Fiddle, the Bass House, the Duke of York and four others since just 2007. Whole communities, such as Whaddon in my constituency, are now without any local pub. Even where the pub does not close, many publicans are finding it harder and harder to make ends meet, and many go bust only to be replaced by a rapid succession of new tenants or lessees.
The reasons given for the decline are many, and I acknowledge that they are not restricted to the tied public houses which are the subject of this Bill. Such reasons include everything from happy hours to economic downturn, supermarkets and lifestyle changes.
In 2004, the Federation of Small Businesses was so concerned about a particular issue that it asked the then Select Committee on Trade and Industry to investigate. That issue was the profoundly unequal relationship between tenant and lessee landlords and the big new pub companies, or pubcos. At the heart of this relationship is the tie—a strange addition to the normal landlord and tenant business relationship that applies to short-term tenants and long-term lessees. In what should be a relationship of mutual benefit, tenants and lessees have to pay a premium of 40% or more on the open-market rate for beer. I have seen invoices side by side for the same quantity of the same beer to support this contention. Those tenants and lessees also have to pay rent based not on the normal calculations of square footage but on the rather obscure and highly subjective judgment of the pub company of estimated earnings of a reasonably efficient operator. In other words, the pub company calculates the maximum amount it can extract from the business and charges it. In return, publicans get apparently valuable business and marketing support from the pubco.
That first Select Committee inquiry rang alarm bells about the state of the industry but was pretty gentle on the tie itself, weighing up the benefits and costs for publicans. Self-regulation appeared to be the name of the game and the Committee shied away from recommending a legally binding code of practice, although it did say that
“Government should not hesitate to impose a statutory code”
if matters did not improve. The follow-up report in 2008 by the Select Committee on Business and Enterprise was much more damning and included its own commissioned research into the state of lessees’ businesses. The research found that 78% of lessees were dissatisfied with the tie, that 67% were earning less than £15,000 a year and that 50% were earning less than that even when their pubs were turning over more than £500,000 a year. The majority believed that the tie with the pubco did not add value to their business. The Committee concluded:
“The imbalance of bargaining power persists”
between pubco and publican. It went on:
“The arrangements for assessing rents remain opaque…Rental assessment should be the basis for negotiation, but incumbent lessees often risk loss of their home as well as their business if they cannot reach agreement.”
This time, the Committee concluded that it had
“no confidence that the advantages of the tie outweigh its drawbacks.”
Another follow-up report by Select Committee on Business, Innovation and Skills in the following year reviewed the new British Beer and Pub Association framework code of practice and concluded that it represented only “modest progress” and that the issues surrounding the tie had not been resolved. The Committee suggested a deadline of June 2011 for self-regulation to give way to statutory regulation. Its message to the pubco industry was clear:
“If it fails to deliver on its promises by June 2011, it should be in no doubt what the reaction will be.”
Well, June 2011 is not far away and I can tell the House that new FSB research still paints a gloomy picture. According to its preliminary findings, 91% of its tied pub members do not think the tie allows them to make a fair profit. More than 85% believe it prevents them from competing effectively in the marketplace and the same number would like to be free of the tie. One FSB member told researchers:
“Enterprise Inns are happy for any tenant to fail. They would sell a pub and land for top market value and only then reinvest in other property to suit. They are, after all, property and land developers”.
That might be harsh but there is a serious breakdown in the relationship between the pubcos and their tenants and lessees, whose businesses continue to fail at an alarming rate while we continue to lose pubs at the heart of many communities.
A quick glance at the latest BBPA framework code of practice and the codes of practice used by the two leading pubcos, Enterprise Inns and Punch Taverns, highlight the inequality of the situation. Potential tenants and lessees are given a terrifying list of responsibilities. They are urged to engage solicitors, get structural surveys, talk to the police, environmental health and other appropriate authorities, check if a Highways Act licence is in place, engage their own qualified accountants and stocktakers, apply for their own gaming licences, obtain an asbestos survey, a full electrical report and a gas safety certificate, and so on—all at their own expense. The pubco helpfully offers training in food safety, health and hygiene, drug awareness, first aid and door management, along with repairs, maintenance and insurance—but also at the publicans’ expense. Indeed, publicans are not allowed to get insurance from anywhere else.
The real support that the pubco provides, outside the rather opaque area of the rent, is in marketing and advice on the product mix, legal compliance and cash-flow and financial management. That is helpfully explained in one of the codes of practice: it is given face to face, typically for one and half hours, once every 12 weeks. That adds up to less than one working day of face-to-face business support a year, in exchange for which the pubco could extract between £15,000 and £20,000 of value from lessees’ businesses.
It is difficult to escape the conclusion that unless Parliament steps in, we will see those pubcos manage even more traditional British pubs into oblivion. The Bill does not ban or abolish the tie, but it does aim to replace the codes of practice with a statutory one, as recommended by the Select Committee, and almost in time for its deadline, along with a guest beer option and the option for lessees to relinquish the tie in a process that is fair and transparent to both parties. My illustrious and sociable predecessors would be proud of us if we saved the pub that they all enjoyed, and future generations will thank us if we help to save the traditional British pub for them to enjoy as well. I hope the Bill will help us to do just that, and I commend it to the House.
Question put and agreed to.
Ordered,
That Martin Horwood, Greg Mulholland, Tony Cunningham, Neil Carmichael, Mr Angus Brendan MacNeil, Mr Elfyn Llwyd, Caroline Lucas, Stephen Metcalfe, Lisa Nandy, Lorely Burt, Stephen Williams and Jackie Doyle-Price present the Bill.
Martin Horwood accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 10 June, and to be printed (Bill 160).
Welfare Reform Bill
(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:59 - The House divided: - Ayes: 244 / Noes: 317 - Question accordingly negatived.
19:15 - The House divided: - Ayes: 308 / Noes: 20 - Question accordingly agreed to.
Mr Speaker
I have selected the amendment in the name of the Leader of the Opposition.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I beg to move, That the Bill be now read a Second time.
The Bill before us today covers a number of areas, but I hope that it sets a new course for the welfare state. I believe it will enable us to reach out to some of the groups of people who have become detached from the rest of society—trapped, too often, in a permanent state of worklessness and dependency. For the sake of the House, I will go through the relevant clauses of the Bill. I am sure that colleagues on both sides of the House will want to intervene. I hope they will recognise that we shall get to most of the clauses that they want to discuss, but I will take interventions as and when they come.
The problem is that although from 1992 to 2008 this country saw some 63 consecutive quarters of growth, and 4 million more people were in employment by the end of that period, before the recession had even started we still had some 4 million-plus people on out-of-work benefits. The question is: where did all those jobs go? Under the previous Government, over half of the jobs created went to foreign nationals. This is not an immigration point; it is a point about supply and demand. There were a group of people in this country completely unable, it appears, to take advantage of that long period of growth and job creation. In essence, the key point about the Welfare Reform Bill is that it is intended to help that group.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I am grateful to the right hon. Gentleman for giving way so early. I wondered whether, at the outset, he would like to comment on the reports in today’s Telegraph that the cancer charities are warning that his proposals for employment and support allowance will penalise those who do not recover soon enough. How could anyone think that that is a fair approach, in a Bill like this?
Mr Duncan Smith
I think the report was in The Guardian. I do not know whether it is in The Daily Telegraph.
Mr Duncan Smith
I read The Guardian; he reads the Telegraph. What can I say? Times really are changing.
I have read the report, and I think that a number of elements in it are simply not altogether correct. I say that rather carefully because the point about the cancer aspect is that, as the hon. Gentleman knows, we inherited from the previous Government a process of reform and change to the employment and support allowance, which included the work capability assessment. We supported that, with the previous Government, because it was the right thing to do—to look at the 1.5 million people on incapacity benefit and check them over. We did not inherit any real allowance for cancer sufferers. It is important to make this clear. The Employment Minister, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), immediately accepted the internal reviews, but went further. He asked Professor Harrington to conduct a review of what we did regarding cancer patients and others, and the hon. Gentleman, being a generous individual, will know that we then incorporated a big change, so that a person in cancer treatment—chemotherapy—who is between treatments will go straight on to the support element. Thus the contributory aspect will not affect them, because while they are on the support element they will continue to be supported when they are out of work.
Mr Duncan Smith
One second. Would the hon. Lady forgive me? I have been asked to answer a question and I shall try to answer it. We have already made some very substantial change to support people in cancer treatment. The concerns of Macmillan and others relate to oral chemotherapy. I understand that. We have already asked Professor Harrington, in his second review, to undertake to give some advice on that. We have a slight problem with that from the start, because it is a fairly new form of treatment and a limited number of people are on it. So far, much of the medical evidence suggests that it does not affect people in the way that intravenous chemotherapy does; it is not as debilitating. We remain open to that evidence.
Although there is no provision for oral chemotherapy right now, my right hon. Friend the Employment Minister has made it clear that Professor Harrington will review the subject and take evidence, and we have asked the cancer groups to offer up their thoughts and advice, in addition to the medical fraternity. We will take account of what Professor Harrington says. As the hon. Member for Birmingham, Selly Oak (Steve McCabe) knows, last time we adopted all the recommendations in the professor’s report in their totality. So we are not in the business of trying to harm or affect cancer patients; quite the contrary. We made some very serious changes to what we inherited from the previous Government—I would like to think that they would have done the same—and we will continue to do so. I hope that answers the hon. Gentleman’s question. If he will let me get on with the rest of the Bill, I will.
Naomi Long (Belfast East) (Alliance)
Will the right hon. Gentleman give way on that point?
Mr Duncan Smith
I would like to make a bit of progress, if the hon. Lady does not mind. I think I have been pretty generous on that aspect. I will return to it.
The key is that I hope the Bill in general—we shall get to the more specific elements later—represents a whole new concept: a contract with people who are in need of support. For those who are able to work, work should pay, and for the most vulnerable in society we will continue to provide the support that that they need. I think it is our duty to do so. We can debate the levels of that support, but it is our duty none the less.
The Bill says to the taxpayer, “Your hard-earned money must be spent responsibly.” We sometimes forget, in our debates on welfare, that the taxpayer is also a player in this, because taxpayers—many of them on low and marginal incomes—are constantly being asked to pay in taxes towards support for others. That is fair, but we have a responsibility to ensure that taxpayers too are properly supported. I shall now outline some of the principles of the Bill, and then I will try to get through the various clauses.
Mr Andy Slaughter (Hammersmith) (Lab)
Will the right hon. Gentleman give way?
Mr Duncan Smith
Forgive me; I want to make progress before I take more interventions, but I certainly will not shy away from interventions.
I note the comments by my opposite number, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), that his party agrees with more than
“three quarters of the principled and burden-sharing”
changes that the Government are making. Obviously, in his interventions he will make clear what he does not agree with. I have read his amendment and there will be some questions about some of that; I am sure we will get to that in a minute.
I intend to take the House through the Bill stage by stage. Let me start with universal credit. I shall begin with an overview, and then consider some of its detailed aspects. The universal credit obviously sits at the heart of this welfare reform. I do not think I would want to embark on this process if that were not the case. I believe it is a commitment to the public that work will always and must always be made to pay, particularly critically for that group of people who are probably the most affected—the bottom two deciles of society—who have too often found it really difficult to establish that work does pay.
I am pleased to say that those principles seem to have received support from a number of stakeholders, including Citizens Advice and the Institute for Fiscal Studies. The IFS said that by and large the measure was a progressive change. We anticipate that the universal credit will make some 2.7 million households better off. Over 1 million households will be better off by more than £25 a week—clearly, those will be down in the bottom deciles—and 85% of that increase will go to households in the bottom 40% of the income distribution.
We have agreed a package of transitional protection which will ensure that there are no cash losers as a direct result of the migration to universal credit, where circumstances remain the same. The universal credit should also start making inroads into the couple penalty. Members on both sides of the House agree that that is necessary. I know that the right hon. Member for Birkenhead (Mr Field), who is in his place, has made great play of that over the years, and many of us have agreed with him.
Mr David Evennett (Bexleyheath and Crayford) (Con)
I am listening with great interest to my right hon. Friend’s speech. Can he give me some further detail on how the benefit cap will be introduced?
Mr Duncan Smith
I was coming to that, but I shall touch on it now; I may make some further comments later. The principle is that people who are unemployed and on benefits should not be receiving more than average earnings. It is a matter of fairness, so that those who are working hard and paying their taxes do not feel that someone else will benefit more by not playing a full part in society. We recognise that there must be transitional arrangements. We will work intensively with the families affected once the cap comes in. We will help them move into work, to change their circumstances so that they are not affected. We will make sure that families who need transitional support will receive it. We will make more detailed statements about that later.
The idea is that we should encourage people back into work, and most of all that people who are in work and paying their taxes should feel that it is fair that while they earn and they work hard, others realise that the best way to increase their income is through work, not through benefits. That is a great principle.
Mr Slaughter
According to the right hon. Gentleman’s Department, 70% of those affected by the benefit cap live in social housing. The Housing Minister is building only unaffordable housing, because of the rent levels set. Is not the cap just a crude piece of social engineering, forcing people not to live in expensive areas, such as the constituency that I represent? Is it not directed at vulnerable people and the poorest in society, making it possible for them to live only where the Secretary of State chooses for them to live?
Mr Duncan Smith
With respect to the hon. Gentleman, it is not about where I choose for them to live. As with everybody else, it is about where their income and their ability to earn allow them to live. There are many people in London, for example, who work hard and who commute well over an hour to get to jobs because they cannot afford to live in parts of central London. We may argue that the cost of living in London is too high. One of the arguments that I would make is that the way that the previous Government’s local housing allowance was set drove up rents in both the private and the social housing sector. The hon. Gentleman should consider that what we are doing is reasonable. What we are trying to do is not to damage people, but to get them in locations where they can afford both to live and to work. I will return to that.
Mr Duncan Smith
I shall make a little more progress.
May I confirm that we shall move from the universal credit making inroads into the couple penalty to a subject on which I am sure many right hon. and hon. Members will want to speak—child care costs in universal credit? I can confirm that support for child care costs will be provided by an additional element paid as part of the universal credit award. We will invest at least the same amount of money in child care as in the current system, and we will aim to provide some support for those making their first moves into work, so that the support available is not restricted to those working more than 16 hours.
This is an important point. Although there is a debate about it, we must remember that working tax credit gives that child care support to those in the relevant band. Universal credit will allow claimants to adjust their hours of work to suit their child care responsibilities. It will allow people to set their hours of work more in line with their caring responsibilities. It will cover all the hours that people are planning to work. We will be much more flexible, and we intend to work closely with relevant groups to take further advice about the rates that we will set. By the time the Bill reaches its Committee stage, we will be able to be more specific.
Kate Green (Stretford and Urmston) (Lab)
Can the right hon. Gentleman confirm that as a result of that further consideration, there will be no circumstances in which, as a result of child care costs, a parent could be faced with a marginal deduction rate of more than 100%, as some models prepared for us by Family Action have suggested?
Mr Duncan Smith
That is not our intention, and it is why we were are proceeding carefully and consulting about our proposals. The purpose is to maintain incentives to go to work. Universal credit is designed to encourage lone parents to go to work, but it recognises their need to meet their child care responsibilities. We can debate the various elements, but the principle is that the measure should be more than helpful to them. We will move on to the finer detail as we get to Committee stage.
As we increase support to make work pay, it is right to ensure that claimants do everything they reasonably can to find or prepare for work. As the House knows, we will tailor conditionality to individual circumstances, and require all claimants to accept what I call a claimant commitment. From the outset they will be asked to sign up to the idea that we will provide them with the necessary support and access to universal credit, but we will also expect them to recognise that the sanctions regime is applicable. It is easy to understand. If they do not comply with that as they go further through the process, they are likely to encounter that sanctions regime at key moments.
The toughest sanctions will apply to those who are expected to be seeking work but fail to meet important conditions. They should understand that if they keep on crossing a series of lines, they will invoke the sanctions regime. The problem at present is that the regime is often confusing. I have visited jobcentres a number of times—and I see on the Opposition Benches one of the Members who used to be a Minister in the Department. As he knows, if one talks to jobcentre staff, they will say that the problem is that when claimants reach the point where they are about to hit sanctions, it comes as a big surprise to many of them that sanctions will be imposed and that the situation is real and serious.
By letting claimants know much earlier and by introducing a regime that is easy to understand, with a simple tripwire process, they will know from the word go. That should disincentivise people from taking the wrong turns. Benefits will be taken away for three months after a first failure, six months after a second, and three years after a third. That will apply to those at the top level—in other words, those who are fully able to search actively for work and to take it. There are, however, other categories. The same conditions would not apply to lone parents, for example.
Hywel Williams (Arfon) (PC)
The rate of worklessness and the availability of jobs vary from area to area. What account will the sanctions regime take of that variation?
Mr Duncan Smith
The sanctions regime is about work being available. If work is not available, people cannot be expected to take jobs, so I give the hon. Gentleman the assurance that no one will be told that they are on sanctions if there is no work available. The sanctions apply only if a job is available, the claimant has been offered it and for one reason or another has not taken it, or if they are not complying with the details of what they are meant to be doing to seek work. That is only fair. People who pay their taxes want to know that everybody out there is seeking work. If they are seeking work sanctions should hardly ever apply, and in most cases they will not apply.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The right hon. Gentleman is making a thoughtful speech, and I know him to be a thoughtful and caring politician. I will give careful consideration to much of the Bill and I will not vote against Second Reading. Is it not spoilt, however, by what is happening to the mobility component of disability living allowance? I visited a residential home in Huddersfield, in Edgerton, only last week. The Bill will destroy the lives of most of those people, 60% of whom are in wheelchairs.
Mr Duncan Smith
I thank the right hon. Gentleman—although I am not sure: is he a right hon. Gentleman? [Interruption.] An hon. Gentleman—okay. That is something that his party should do—it is not for me—given his record of service.
Yes, I accept that there were issues. In fact, when we looked at the decisions taken at the time of the spending review, I reviewed the matter, after discussing it with the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller), who is the Minister responsible for these matters. We visited lots of care homes—my hon. Friend went out to see people and talk to them—and we realised that there was a lot of chaos out there about what should be given to people in care homes, what care homes themselves provide, and what local authorities believe it is their statutory responsibility to provide. Some of them say that they do not have any such responsibility to provide mobility services, but others say that they do, and provide access to such services.
We have therefore changed the provisions in the Bill, as the hon. Member for Huddersfield (Mr Sheerman) has probably noticed. That will be incorporated in the review of disability living allowance. Our objective is to get rid of the overlaps, genuinely to find out what can be provided at local level, and to figure out what the amount should be to support someone in a care home, bearing in mind that mobility needs in a care home are likely to be variable, and different from the needs of someone living in the community completely independently. Adjustments will be necessary, but my hon. Friend and I give the hon. Gentleman and the House an undertaking that we are going to try to figure out what the right answer is. We will work out a set of figures, and how they can be applied. That is the purpose of the review; I guarantee that.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Reflecting on what the Secretary of State has just said, does he recall that on several occasions, the Prime Minister has been given the opportunity to say that he has listened to the evidence and accepts that there is virtually no support for withdrawing the mobility component of disability living allowance for people living in residential accommodation? To what extent does the Secretary of State’s position differ from the position taken again and again by the Prime Minister?
Mr Duncan Smith
We are as one. I say that immediately, before I explain the position.
The reality, for the Prime Minister and for me, is that when we understand that certain facts are slightly different from what we thought they might have been, we always modify what we are doing to make sure that the effect of what we are trying to do is reasonable and produces the best results. All I can say to the right hon. Gentleman is that the Bill is not the same as the one that he would have seen some weeks ago. We are not knocking out the mobility component from care homes, and we have included it in the review of what mobility provisions are necessary and required for people in care homes. That is the real principle behind the measure. My previous comments were about finding the overlaps, and how we made sure that they did not cost people money in one area, but found those costs in other areas. That is the main point of the review, and I have asked my hon. Friend the Under-Secretary to make sure that that is the case. The Bill covers that, and I hope that most people will see that it is quite reasonable to try to recognise what that figure is.
Mr Duncan Smith
I shall try to make progress, if hon. Members do not mind, because I have given way quite a lot on that subject.
Before the introduction of the universal credit we will introduce many of the changes to conditionality and sanctions that I discussed. Claimants, I hope, on that principle will accept the claimant commitment, as they will be subject to tougher regimes that are fair and reasonable. Turning to other benefit changes, we are making changes to the income support regime for lone parents before the introduction of universal credit. Lone parents who can work will be expected to claim jobseeker’s allowance when their youngest child reaches the age of five. We want as many people as possible to get help to engage with the labour market, and we know that about 80% of all lone parents are working or would like to work.
There will continue to be safeguards to allow parents to fit their job-search requirements with their caring responsibilities and child care availability. There are other relevant changes, too, and I accept that there have been concerns about them. I would be interested to learn the Opposition’s position on that. We are making changes to contributory employment and support allowance, time-limiting receipt to one year for those in the work-related activity group. There will be no change for those in the support group, as we have made clear, and people claiming income-related employment and support allowance will be unaffected.
I note the comments that have been made by the right hon. Member for Birmingham, Hodge Hill, who accepted, in his speech to the Institute for Public Policy Research, that time-limiting ESA is the right thing to do, but disagreed about the period—in this case, a year, whereas he was talking about two years. However, that is not clear in the amendment to the motion, so I wonder whether he could clarify the position. The amendment opposes the limit altogether, rather than the number of years. I would happy to accept an intervention from the right hon. Gentleman if he wished to clarify the position. [Interruption.] He will cover it in his speech—very good. I hope that we will understand that, as principles and practicalities need to come together.
I would point out to the right hon. Gentleman and to everyone else that the one-year limit is twice as long as that currently in place for jobseeker’s allowance. There has been discussion of people undergoing cancer treatment and others. That is best dealt with under the ESA regime and reviews, so that we can decide which groups are relevant, and which not, as we have done with some cancer patients undergoing chemotherapy. They have been taken out of that provision because they are in the support group. Professor Harrington’s review is the best way of doing that. We have established the principle of receipt for a year, and the rest is about the details of the conditions that best apply, and that can be dealt with in the Harrington review.
That best reflects the different nature of ESA and the different needs of those who claim it. However, we simply cannot pay those benefits indefinitely. I wonder whether that would have been the previous Government’s position if they had undertaken further reviews. For limited contributions under ESA, it would have been feasible for someone to receive ESA for their rest of their life. That was one of the big issues that we had to tackle.
Mr Duncan Smith
I will give way to the hon. Lady, because she has been persistent.
Sheila Gilmore
I thank the Secretary of State for giving way. ESA is not given indefinitely, because there are constant assessments and reassessments. I have constituents who have been reassessed twice in the past two years and who are due for another assessment. It is not true that someone who receives contributory ESA will receive it for ever without assessment. The assessment process should cover that, without an arbitrary cut-off date.
Mr Duncan Smith
I remind the hon. Lady that in the support group, the contributory element does not apply. It applies to people with finances that take them above the line. The income-based measure continues—that is not the issue. The issue is whether we think that people who have contributed for a certain time have the right to contribution-based benefit, regardless of their income, for a period of time. That is the debate. The income-based measure is exactly the same—it is not going to change, so that meets the hon. Lady’s concerns.
Mr Duncan Smith
I think that I have dealt with that.
There are other changes, including the consumer prices index uprating, in the Bill. We must get to grips with the housing benefit system, which ran out of control under the previous Government. I have a deep suspicion that they knew that before they called the election, and I sense that there were big differences about whether they would do something about this. Over the past 10 years, overall spending on housing benefit has almost doubled from £11 billion to £21 billion, which is a huge increase. I accept some of the arguments about the reasons for that—the fact, for example, that house building fell to a record low, and more and more people had to be moved into the social rented sector—but the reality under the local housing allowance regime was that we lost control of spending. We have therefore introduced a number of changes to the local housing allowance, including a move to annual uprating in line with CPI. Restricting uprating should enable us to keep downward pressure on rents. Only if an increase in local market rents exceeds the annual rate of CPI will the restriction apply. That will also be an important step towards the integration of housing support with the universal credit.
We accept that those changes will not be easy for some people, which is why we want to provide a great deal of transitional protection. Essentially, we have put up a total of about £190 million to smooth the transition to those measures for those who are most likely to be deeply affected. That includes £130 million in discretionary housing payments, £50 million to assist people with housing advice and removal costs and £10 million for homelessness prevention, particularly in London. That, coupled with the other changes that we have already made through regulations, where we are looking at making direct payments to those who are able to lower their rents and at delaying the point at which the measure comes in by some nine months, was a product of listening to people’s main concerns and trying to ensure that what we bring in is doable and manageable by councils.
Alison Seabeck (Plymouth, Moor View) (Lab)
On the right hon. Gentleman’s point about housing benefits, what discussions has his Department had with housing associations and their lenders about the disaggregation of housing benefit under the universal credit and the direct payment to housing associations? They are deeply worried that, without that direct payment capacity across the piece, arrears will rise and lenders will become more nervous.
Mr Duncan Smith
We have had, and continue to have, those discussions, and I understand the concern. There is a debate, on both sides of the argument, about whether we basically continue with the principle that we should pay people and deal with certain elements of what they receive because they are not capable of doing so themselves, or whether we try to get people to the point where they are capable of managing their own money more and more. I recognise from the hon. Lady’s intervention that, on this matter, there is no absolute, but there is at least a debate on both sides, and that is simply where we are at the moment—trying to discuss the issue with those who feel that they would be most affected.
Mr Stewart Jackson (Peterborough) (Con)
Was it not a moral catastrophe and economic madness when, under the previous Labour Government, registered social landlords had no incentive to tackle welfare dependency, because their main funding stream was housing benefit? Under this Bill, registered providers will have an opportunity to tackle welfare dependency among their tenants.
Mr Duncan Smith
What we want from the Bill is to encourage people to get involved in the process—to help people to use it as part of the incentive of trying to make the right decisions about taking work and providing for their families.
Geraint Davies (Swansea West) (Lab/Co-op)
Will the right hon. Gentleman consider the example of a married couple who are at work and have five children from previous marriages, but then lose their jobs because, for instance, they work for the local council? Because they have five children, they would get almost £500 of personal allowance and £200 of housing benefit, taking them over the £500 cap. Rationally, they might choose, because of the £500 cap, to split up their family so that there are three children and two children in two houses, each with £250 of personal allowance and £200 of housing benefit, making a global total of £900, when it would have been £700. Surely his policies of breaking up families and making demands for more and more social housing, alongside making people unemployed, do not add up to fairness or competence.
Mr Duncan Smith
I understand the hon. Gentleman’s point and can, I hope, assure him that as the Bill progresses, and as he will see as we reach Committee, our objective is to recognise that unemployment, for those who fall unemployed, is probably a temporary condition. He will understand that point more as we get into the detail, but trying to find some way of protecting such people through that process is critical to us, as the vast majority will be back in work within a set period: 90% of people will be back in work within a year. Most people will get through that process, and it is for us to ensure that the transition is met and dealt with, but I think that he will be very happy in due course to hear what we propose.
Mr Duncan Smith
I am going to make a little progress, because I am conscious that we have a limit. Mr Speaker is looking at me benignly, but he might not look so benignly shortly.
It is time for fundamental reform of the social fund, which is poorly targeted and open to abuse. Some 17,000 people have received 10 or more crisis loans in the past 12 months, and we have already taken steps to limit the number of crisis loans for living expenses to three in a 12-month period. Those are important steps, because the fund has been somewhat out of control and is complex. The Bill will then pave the way for local authorities in England to deliver a system of assistance that should replace the community care grants and some crisis loan provision. This is a complex area, and many will know more about it than I do, but the key point is that we are trying—
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
Will the right hon. Gentleman give way?
Mr Duncan Smith
In a second. I think that the hon. Member for Bolton South East (Yasmin Qureshi) was slightly before the hon. Lady.
The key thing that we are trying to do is to give local authorities an element of control over some of the process, including in particular what I call the crisis loans short-term element—the hiatus moment in the payments,—and some of the community care grants. The point is that, when the fund became only distantly linked to the Department, the telephone concept behind it allowed people to push up the number of claims, because they were not seen or understood, so their cases were not properly known and it was very difficult to decide whether they were true or false. Local areas will be far better able to recognise who such people are, what conditions they are in and what circumstances apply to them. Therefore, localising the process will be very important. Of course, huge swathes of it will remain centralised, but we feel that those two elements in particular will most respond to localisation.
Yasmin Qureshi (Bolton South East) (Lab)
I understand the Minister’s explanation of the social fund, but a linked point is that thousands of young children currently receive a free school meal, the only hot meal that most of them get, and that some people also receive free prescriptions. Can the Secretary of State assure us that those who receive free prescriptions and free school meals will continue to do so?
Mr Duncan Smith
That is exactly what we plan to do, but, because of the universal credit, we will have to be a little more specific, and we will be so in Committee. We are still looking at the best approach to take, but that is exactly what we plan to do. We do not want—the purpose is not—to disadvantage anybody who receives such support, but, because of the way the universal credit works, we will have to think through carefully how we achieve that. The principle behind the measure will remain that we want to support those who are in difficulty and receive support as it stands.
Mr Duncan Smith
I think that the hon. Member for Banff and Buchan (Dr Whiteford) was before the hon. Gentleman, and he has had a shot.
Dr Whiteford
Returning to crisis loans, my greatest concern is that people who go for them will not be able to buy essential items such as cookers and beds. That will push them straight into the arms of loan sharks and other high-cost lenders, and that issue has been overlooked. I also question the view that the increase in the uptake of such loans has not been down to the recession and the hardship that people have faced.
Mr Duncan Smith
The answer to the hon. Lady’s question is that budgeting loans will still be available for those cases. On the second question that she raises about crisis loans being down to the recession, the trend of upward claiming was on track and had started long before the recession.
The Minister of State, Department for Work and Pensions (Steve Webb)
With the telephones.
Mr Duncan Smith
My hon. Friend has made that point to me again and again. The key problem resulted from the changes that were made to dislocate much of the process from people—face to face—who knew what was going on in their communities. I think—I hope—this Bill will change that, because local communities will now be able to determine how best to deliver that critical service, and they will be closer, I hope, to people who need it. That is the principle behind it, and I hope the House recognises that.
The remaining discretionary elements of the social fund, as I indicated earlier, will stay in the wider benefit system, and we will introduce payments on account to replace alignment payments and the interim payments of benefit when crisis loans are abolished, a point that my hon. Friend the Minister has also made on several occasions. We will extend the provision of budgeting loans so that they are available to help people, as I said to the hon. Lady just now.
On disability living allowance, the personal independence payment and the changes to and reforms of them, I believe—and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke, in her consultations, has by and large obtained widespread agreement—that we need to start reforming disability living allowance. I think most people accept that the system we inherited does not deliver for some of those in genuine need, particularly given its confusing nature. Disabled people often tell us that the claims process is incredibly complicated and decisions are not consistent. We need to sort that out.
Many people—a significant number—still wrongly believe that DLA is an out-of-work benefit, so, as people said on several occasions during the consultation, “Being in receipt of DLA is a reason why you wouldn’t want to be getting involved with work; you might lose your DLA.” Such confusion is absurd, because that is not the case, so we need to sort the issue out, and I hope people recognise that it is important.
About 50% of those currently receiving DLA did not have to provide any additional evidence to support their original claim, and more than two thirds of current recipients have an indefinite award. That means basically that no one is ever going to see them again, yet their condition may change; it may worsen or it may get better. That is why we propose to replace DLA with a new system—the personal independence payment, or PIP. This benefit will be awarded on the basis of a more objective assessment of individual need; that assessment is vital. The money will continue to be paid to people in and out of work, and it will not be means-tested. I want to be clear that we do not intend to take away the mobility of people in residential care. As I explained earlier, this is about overlapping payments. The review will cover all that. The key thing is reform.
Annette Brooke (Mid Dorset and North Poole) (LD)
There is a great deal of uncertainty about how children might be affected by the reforms to DLA. Is the Secretary of State proposing further consultation? Is there any information that he can give about future processes regarding children?
Mr Duncan Smith
We are consulting on that. However, this is going to be done later on, so we will have plenty of time to hear many more representations concerning children before we make any decisions. My hon. Friend the Under-Secretary is already talking to various groups about this particular issue.
Jim Shannon (Strangford) (DUP)
In relation to the indefinite awards, there is already a system in Northern Ireland whereby people have periodic checks, and I am sure that Northern Ireland is no different from the rest of the United Kingdom. If there is already a system of regular checks in place, why change that?
Mr Duncan Smith
Because it does not apply to everybody; it is very patchy. The honest truth is that no award we make should say to people, as has happened too often in the past: “You are in receipt of a particular benefit and we don’t want ever to see you again.” If the hon. Gentleman is arguing, as I think he is, that it is right to see people, surely we should be arguing that it is right to see them all to ensure that when their condition changes, that is met. That is surely fair both to them and to the taxpayer.
Mr Tom Clarke
Despite the right hon. Gentleman’s assurances, I ask him to look again clause 83(2), which says:
“The condition is that the person is an in-patient of a hospital or similar institution, or a resident of a care home, in circumstances in which any of the costs of any qualifying services provided for the person are borne out of public or local funds by virtue of a specified enactment.”
That is absolutely clear, but, with great respect, it is not what he is telling us.
Mr Duncan Smith
I am afraid that I do not agree with the right hon. Gentleman, because that is exactly what I was saying. The provisions gives us the opportunity to do just that; it does not specify what we do, but it tells us that this is what we are going to be doing. We are looking at all this because, in our view, we need to come forward with an amount that is relevant to the mobility that is necessary for people in care homes.
Mrs Anne McGuire (Stirling) (Lab)
The Secretary of State is playing with words. The hon. Member for Strangford (Jim Shannon) is right. Although reference is made to an indefinite award, these awards have always been liable to review. If someone has an irrecoverable disability such as permanent blindness, what is the value in regular reviews to assess whether they are still entitled to DLA or the PIP?
Mr Duncan Smith
As I said to the hon. Member for Strangford (Jim Shannon), it is assumed straight away that this is a terribly intrusive process, but in reality what goes on is patchy. For many people, their condition may well have worsened. Do we simply want to say that we should not speak to them or see them, and that it is therefore left up to the vagaries of the system? It is not built into the system that they will be seen.
Mr Duncan Smith
Wait a minute. The right hon. Lady has made a point and I am trying to respond to it. As this is not built into the present system, it is left to decision making, which can be very ad hoc, about who someone sees and when they see them. All I am saying is that if we believe it is right to see people, we may then be seeing somebody whose condition has worsened, and surely that is an advantage.
Mr Duncan Smith
I am going to press on, because I think that I have dealt with the right hon. Lady’s point. She may not agree with me, but I think that this is the right position for us to take.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
This is an extremely important point. Is the Secretary of State saying that someone who is deaf-blind will be recalled for regular checks under the regime that he is aspiring to put in place—yes or no?
Mr Duncan Smith
The detail of how that works will be looked at during the passage of the Bill. My point is that built into this should be the requirement that it is necessary to see people. There is the question of who and what conditions we can look at specifically, but it should be right that it is bound into the system that we are going to look at people. In some cases, it may be entirely self-evident that the individual’s condition has not changed and there is not much to be done; in other cases, an assessment may be required because their condition has changed quite fundamentally. I do not understand why the need to see somebody who may be in receipt of a benefit should be such an issue for people. It should not be worrying; it is part of a process. [Interruption.] Before right hon. and hon. Members object to that change, they need to ask themselves what they would say to those people whose conditions have changed for the worse and who are confused and never make it back to make a proper claim. This is a debate that we can and will have.
Mr Duncan Smith
I think, with respect to the right hon. Gentleman, that I have dealt with this point, and I am going to make some progress. [Interruption.] Oh, go on then.
Mr Byrne
I am genuinely trying to be helpful to the Secretary of State. He says that his Bill is incomplete and that he has not been able to furnish the House with full details on how the powers that he seeks from us will be put into practice. Will he consider exempting people with certain kinds of conditions from the need to go back to go through check after check?
Mr Duncan Smith
I say to the right hon. Gentleman, despite his best intentions, that the mess that the previous Government got into over incapacity benefit—[Interruption.] It is all very well for Labour Members to sit in opposition and pretend that nothing went wrong under the previous Government. We are picking up an incapacity benefit system in which they left people parked, never seen by anybody for years and years. All we are putting into the Bill is the requirement that people be seen to check on their condition. That has to be in their interests, and it is not in any way a problem that it should happen. Of course, if the right hon. Gentleman wants to try to make amendments as the Bill goes through Committee, we will always be happy to debate those and listen to him. My point is simply this: it is right to see people, and wrong to leave them parked for ever on set benefits. Seeing them is more humane than inhumane, and that balance is the way that we should go.
As we introduce our new welfare system, we will have to take steps to clamp down on benefit fraud, as Opposition Members know. The system that we have is inefficient and too often ineffective. Despite significant overlaps between benefit and tax credit frauds, fraudsters are subject to different treatment in their cases as they are handled by different groups—DWP, Her Majesty’s Revenue and Customs or even a local authority. The mess and overlap is enormous. The Bill introduces powers enabling a new single fraud investigation service to investigate and prosecute all cases of benefit and tax credit fraud. I hope that the House supports that process. We will ensure that anyone found committing lower-level fraud will face a tough minimum fine as an alternative to prosecution. For all other fraudsters, we will seek prosecution whenever we can. We need to ensure that fraudsters get the message that repeated criminal behaviour will not be tolerated, so those found to have committed fraud may face losing their benefit for certain periods; I have already dealt with the detail of the timings.
I simply say to the House, because this was raised in the Select Committee, that I am absolutely clear that not every problem with overpayment or difficulties with those payments was down to fraud. I fully accept that with the complexity of the system, officials made mistakes and that we were often too ready to badge people as fraudsters when in fact they were not necessarily fraudsters but caught up in a system that left them confused and perhaps not making the right or necessary level of statements to the authorities. This process is about separating those people out. A recent trial of a changed reconsideration process at Jobcentre Plus led to a fall of some 15% in the number of appeals being heard. The general view is that process will be sustainable and will work.
We are also changing child maintenance. Much of the current system is designed to drive people into acrimonious disputes during family breakdown. We should all agree that we want to take the heat out of such situations, as far as we can. That is why we are reforming the system and introducing a gateway to the statutory scheme so that parents consider making their own arrangements. We will offer parents a calculation-only service to make it easier for them to make their own arrangements. Of course, if they choose to take matters further, they can.
We are introducing measures to allow non-resident parents to pay through Maintenance Direct when the case is within a statutory scheme. That will provide further flexibility for parents. We need to keep the burden of the cost of collection under control. In 2009-10, the cost of collecting every pound was more than 40p. However, should the non-resident parent fail to pay in full or on time, we will move the case swiftly into the collection service and take enforcement action where necessary.
Sheila Gilmore
Why was it necessary to introduce provisions in the Bill before the consultation process has concluded? The consultation process on this matter is due to conclude on 3 April. Because the conditions have been published in the Bill, rather than being legislated on later, many people feel that the Government’s mind is set in stone.
Mr Duncan Smith
The measures in the Bill set the framework for the details. We will obviously work through the details in time for the Committee stage. It is reasonable to do that. The Bill does not set out the detailed prescriptions, as is right. I do not agree that the process is wrong.
In conclusion, the Bill is not just about balancing budgets, although that is part of the process. It is also about transforming lives and moving people—hopefully—from the entrapment and tyranny of doubt and dependency, to some kind of opportunity, enterprise and change to their lives that they can make themselves, through assistance and support. Surely it is our duty together to ensure that no one is written off, discarded or left behind. I believe that that is what the Bill will achieve. Notwithstanding criticisms and individual issues, I hope that the House will recognise that the purpose of the Bill is positive, and that it will transform the lives that we seek to transform.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House, whilst affirming its belief in the principle of simplifying the benefits system and good work incentives, declines to give a Second Reading to the Welfare Reform Bill because the proposal of the Universal Credit as it stands creates uncertainty for thousands of people in the United Kingdom; because the Bill fails to clarify what level of childcare support will be available for parents following the abolition of the tax credit system; because the Bill penalises savers who will be barred from the Universal Credit; because the Bill disadvantages people suffering from cancer or mental illness due to the withdrawal of contributory Employment Support Allowance; because the Bill contains no safeguards to mothers in receipt of childcare support; because it proposes to withdraw the mobility component of Disability Living Allowance from people in residential care and fails to provide sufficient safeguards for future and necessary reform; because it provides no safeguards for those losing Housing Benefit or appropriate checks on the Secretary of State’s powers; because it fails to clarify how Council Tax Benefit will be incorporated in the Universal Credit system; because it fails to determine how recipients of free school meals and beneficiaries of Social Fund loans will be treated; and because the proposals act as a disincentive for the self-employed who wish to start up a business; and is strongly of the opinion that the publication of such a Bill should have been preceded by both fuller consultation and pre-legislative scrutiny of a draft Bill.”
I start with a word of thanks to the Secretary of State for meeting me and my right hon. Friend the Member for East Ham (Stephen Timms) a week or so ago to discuss the Bill. As I said to him then, we genuinely want to approach the vital question of welfare reform in a spirit of national consensus. We believe that if we can forge such a consensus it will be good for our country, it will reduce the deficit and, crucially, as he said before he sat down, it will be good for the fight against poverty in this country. We have been forced to table the amendment to oppose the Bill because it fails such fundamental tests that we believe the Government should go away and bring back a better Bill that will deliver genuine and lasting welfare reform.
We could begin to forge that national consensus by drawing the right lessons from the past 13 years. The Secretary of State presented his view, but elided one or two prominent features of the past 13 years, such as the fact that the number of people on out-of-work benefits before the depression came down by 1 million and the fact that the claimant count halved. We did not once, let alone twice, see unemployment go through the 3 million mark. We can draw important lessons for this debate from that period, the first of which is that if the Secretary of State wants welfare to work to work, we need more jobs. Labour consistently put that approach in place.
The Secretary of State said to his spring conference at the weekend—
Mr Byrne
I not only listened carefully, but checked the transcript because I could not believe what the Secretary of State said:
“It’s not the absence of jobs that’s the problem.”
Given that five people are chasing every vacancy in this country and that 120 Members of this House have more than 10 people chasing every vacancy in their constituencies, the absence of jobs is very much a problem at the heart of his welfare reform programme.
Mr Duncan Smith
Does the right hon. Gentleman recall that I also said that notwithstanding the period of growth and the number of jobs created, more than half the jobs created by the Government did not go to British nationals sitting on unemployment benefit?
Mr Byrne
The employment rate under the Labour Government reached a record high and there were 64 quarters of consistent economic growth. The idea that welfare to work can work when the number of jobs is not growing is frankly laughable. There is an important lesson that we must draw from the past to get welfare reform right.
Mr Byrne
I want to move on to a second lesson before I give way.
When we brought laws to this House to set new obligations for people to work, we ensured that set alongside them were new opportunities to work. We also brought determination and care to the business of legislation. In the Bill, there is determined carelessness.
Mr Heald
Is the right hon. Gentleman seriously saying that at a time when it is more difficult on the jobs front we should not make the effort to help people off welfare and into work? If people are capable of working, they should get help. That is what this Bill does. Should we sit on our hands and say that all is hopeless?
Mr Byrne
That was an extraordinary contribution. Of course we believe that extra help—for example, the future jobs fund, which the hon. Gentleman’s party closed down—should be given to get people back to work.
In looking at this Bill over the past few weeks, I could not but remember Lord Birkenhead’s description of Baldwin’s method of Government:
“He takes a leap in the dark, looks around, and takes another.”
That is the approach that this ramshackle Bill proposes for millions of people in our country—a leap in the dark. I hope that we can begin to sort out, as is appropriate on Second Reading, where the Government have got their principles right—some of their principles are right—and where they have got them wrong. The Secretary of State says he wants to set a new course. The problem is that we are not quite sure where it will lead.
Mr Slaughter
Did my right hon. Friend notice that almost every time the Secretary of State was asked a question on free school meals, housing benefit or disability living allowance, his answer was, “I’ll get back to you.” There are no answers to those points. I have here a few of the letters from my worried constituents, just on disability living allowance. Thousands or millions of people are worried that they will not be able to make ends meet, and the Secretary of State has no answers.
Charlie Elphicke
I take issue with the right hon. Gentleman’s statement that the Bill is a leap in the dark. We know that 5 million people of working age could work but do not. We know from December’s labour market report by the Office for National Statistics that 1.2 million of the people who took the jobs that were created came from overseas. We need to get our 5 million countrymen who are out of work back into work. Surely that is the priority.
Charlie Elphicke
Of course there are quite a few people chasing each vacancy. As the right hon. Gentleman knows, the issue is not with this Government but with the mess left by the previous Government. This Government are trying to grow the economy and make Britain great again.
Mr Byrne
I am grateful for that observation. I say gently that, with five people chasing every job in the economy, if we are serious about getting people back into work—I think that the Government do want to do the right thing—we have to do more to create more jobs. We can pass laws and put in place extra help for unemployed people, but there must also be an economic policy that creates more jobs to absorb the very deep public sector job cuts that we know are coming down the line.
Geraint Davies
Does my right hon. Friend accept that the deficit was the price paid to avoid a depression caused by the bankers, and that the best way to get rid of it is to focus on economic growth, make bankers pay their fair share and make sensible savings over time, not to make the poorest pay the most while the richest are lavished with massive bonuses, which is what the Bill is about?
Mr Byrne
I will avoid getting into an extended debate about macro-economic policy, although I would happily discuss it all afternoon, but my hon. Friend is right. Under our approach, despite the fact that we faced the worst global crash since the 1930s, unemployment did not go beyond 3 million, as it did not once but twice under the Conservative Administration.
Mr Evennett
We are listening to the right hon. Gentleman with great interest, but is he not ashamed that although his party was in power for 13 years it failed to make work pay and that the UK now has one of the EU’s highest rates of children living in workless households? Is that not a disgrace?
Mr Byrne
I would do no more than encourage the hon. Gentleman to look at the analysis of his noble Friend Lord Freud, who examined our work to get people back to work and remarked on how fast the number of people on out-of-work benefits had fallen. He examined the number of children lifted out of poverty and said that our record was truly remarkable.
Mr Stewart Jackson
I fear that the right hon. Gentleman is going through the motions. He was a gifted and talented Chief Secretary to the Treasury, and I do not think he truly believes what he is saying. Will he at least concede that people who are no friends of the Conservative party, such as the Scottish TUC, have said that worklessness was exacerbated by the decision to import millions of low-skilled, low-wage workers from eastern Europe, which drove down wages and conditions and made it much more difficult for indigenous British workers to secure jobs and get off welfare dependency?
Mr Byrne
I do not think I should veer into a debate about immigration this afternoon, because you, Mr Deputy Speaker, would quickly call me to order. I would, however, make the point that, after consistent economic growth, employment went up, the number of people on out-of-work benefits came down and the number of people lifted out of poverty, including pensioners and children, was at a record high. The Government can learn something from that record.
Of course, that has to be put alongside the right legislation to encourage people back to work, which is where I fear the Bill will fall short, for a very simple reason. It fails the basic tests of whether it fosters ambition and whether it reinforces and consolidates our obligations to each other. Fostering ambition and nurturing compassion are the basic tests of welfare reform, and I am afraid the Bill fails both.
John McDonnell (Hayes and Harlington) (Lab)
I oppose the Bill, and given any opportunity I will vote against it.
As my hon. Friend the Member for Hammersmith (Mr Slaughter) said, the Government’s response to every representation that has been made by external organisations or today in the House has been, “These matters will be dealt with in regulations”. Attached to the Bill is a quantity of regulations that we have not seen before with a Bill of such stature. May I suggest that my right hon. Friend link up with the Secretary of State to discuss the procedure to be followed after Committee and before Report, so that the bulk of the regulations are published in time for us and others to consider them before our final debates on the Bill?
Mr Byrne
That is an extremely sensible proposal, and perhaps the Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling), will reflect on it in his winding-up speech. It is important for the other place to be involved in discussions, too, to ensure that the Bill leaves this House in better shape.
Mr David Lammy (Tottenham) (Lab)
May I align myself with what my hon. Friend the Member for Hayes and Harlington (John McDonnell) just said?
Will my right hon. Friend put on record the fact that words that we used to use in the Chamber—equality and non-discrimination—must exist for people in the work force with disabilities and from ethnic minorities at a time when there are few vacancies? I think in particular of Haringey Phoenix Group, which represents blind people, whose representatives came to see me in my constituency.
Mr Byrne
That is a challenge that I know well, representing the constituency that I do. I will say a little more later about the challenges and the reforms that are needed on disability living allowance.
There are some principles in the Bill that we support. The principle of universal credit builds on the changes that we made to ensure that work pays, and we welcome some of the proposed reforms to the claimant commitment. We certainly welcome tougher and tougher measures on fraud, but the basic truth, which many hon. Members have rehearsed this afternoon, is that the Bill is not a pamphlet. It is not about theory; it is about practice. It is therefore important that we consider whether it will foster ambition and strengthen compassion in a number of important areas. I start with child care, with which the Secretary of State started.
For millions of families in this country, and especially for women, the truth is that extra help with child care is needed if they are to get back to work. Many families in our country receiving a combination of housing benefit, council tax benefit and child tax credit have up to 97% of their child care costs supported. The Secretary of State said today that he wants that budget to be frozen, which at least shows some progress, but he also confirmed that the number of people who will have a claim on that budget will grow. That of course means that some people will get less help with their child care than before. What we have not learned this afternoon is what that will really mean for people.
My hon. Friend the Member for Stockton North (Alex Cunningham) asked the Secretary of State a very straight question on 9 February: had he decided which child care option he would propose? “Not exactly, no,” said the Secretary of State.
“Can you give us a clue?”,
my hon. Friend persisted, gamely.
“I will give you a clue when we are a bit closer to the finalised detail”,
said the Secretary of State. Now, the right hon. Gentleman is asking for powers to end child tax credit. I am not sure how much more finality one could want, but there are still no answers other than the comment that the Government are still consulting. We hear rumours that for some people the cover for their child care costs will be reduced to 70%—a gigantic new bill for many families that could prevent people from getting back to work. Helen Dent, chief executive of Family Action, has said:
“The possible reduction in help with childcare costs could mean that many parents might end up being worse off under universal credit”.
I say today, on behalf of the 486,000 families who get child care help from the Government, that they need to know more.
Glenda Jackson (Hampstead and Kilburn) (Lab)
I absolutely agree with my right hon. Friend, but is there not a further black hole in the Government’s proposals, which is the failure to acknowledge regional variations? The cost of child care in London, for example, is massively higher than it might be in another metropolitan area of the country. The Bill reflects that lack of definition and flexibility and a complete ignoring of regional variations.
Mr Byrne
My hon. Friend is right, and I am afraid it gets worse. The Secretary of State has made much of his effort to reduce the disincentive to work, which we genuinely welcome, but, like me, he will have noticed that earnings are now growing at about half the rate of prices. He will also doubtless have noticed that once people begin to earn £43,400, they will lose their child benefit, which is worth several thousand pounds a year. That all puts pressure on second earners to go out to work, so the question must therefore be what marginal deduction rates will confront those second earners. The answer is not easy to find, but it is buried away in paragraph 69 of the impact assessment. Having read it, I am not surprised that the Government did not put it up in spotlights, because it states that twice as many earners will see their marginal deduction rates go up than will see them go down. Who is most likely to be hit? It will be couples with children, whose median deduction rates will go up.
That is what we do know, but what is worse is what we do not know. We do not know what will happen to those entitled to free school meals; what will happen to free prescriptions; which working families will be exempt from the benefits cap; or how unearned income such as widow’s benefit or child maintenance will be treated. We do not know about sick pay or maternity pay, and we have no idea how on earth council tax benefit will work. As the House knows, the council tax benefit system is going local, but the rules on universal credit are to remain national. The Secretary of State for Communities and Local Government, who likes to be straightforward with the House, boldly asserted on 17 February that he was in charge of drawing up the new rules on council tax benefit, but surely the final word must come from the Work and Pensions Secretary. Once again, there is total confusion. The questions for families are stacking up, and there are no answers to any of them. That is the story for families.
Grahame M. Morris (Easington) (Lab)
Would my right hon. Friend care to comment on reports in today’s papers that representatives of 30 cancer charities have written to the Secretary of State expressing concern about people who are recovering from cancer? Specifically, they are likely to lose their employment and support allowance after a year, but 75% of them or not in a position to return to work after a year.
George Hollingbery (Meon Valley) (Con)
The right hon. Gentleman makes a persuasive case on the detail—clearly a lot of it remains to be found, but this is a confusing and complex matter. Will he admit that the current system is unsustainably complicated? There are 8,600 pages of guidance on benefits administration at the DWP and 2,000 pages for local government, and there are 30 different benefits to administer. Change is required. If we have a framework and consult widely, we will have a better system.
Mr Byrne
The Opposition want welfare reform that sticks. When so many details are unclear, the danger is that the Bill will unravel progressively as it comes into effect.
We have discussed whether the Bill passes the test of fostering ambition for families and have shown that a great number of questions remain unanswered. Let us now consider savers. All hon. Members want to nurture the ambition to save. The amount that people must save for a deposit for a house is heaven knows how much, but now that tuition fees have been trebled, more families have to save harder to get their young people into college. One might have thought, therefore, that the Government would provide more incentives to foster the ambition to save, but the noble Lord Freud told the House of Lords that
“the £16,000 savings threshold would extend to all households eligible for universal credit.”—[Official Report, House of Lords, 15 December 2010; Vol. 723, c. WA204.]
There we have it. The Government are so keen to foster the ambition to save that once someone has £16,000 in the bank—the price of two and a half years at university—their tax and in-work benefits are taken away.
Mr Byrne
I will give way in a moment, but first I want to tell the House what James Browne of the Institute for Fiscal Studies said:
“This is a much harsher treatment of capital than we have in the tax credit system.”
Will the Secretary of State tell us how that measure rewards savers?
Mr Duncan Smith
May I remind the right hon. Gentleman that his system became completely absurd, because it allowed people with huge savings and income to claim benefits? The previous Government’s system supported not the bottom two or three deciles but people further up the income scale. That is one reason so few people from the bottom income deciles got back into work, and why poverty was so high.
Mr Duncan Smith
The right hon. Gentleman’s figures are incorrect. When universal credit comes in, the figure is more than likely to be no higher than about 100,000—[Interruption.] Wait a minute. I know where the right hon. Gentleman gets his figures from. Those 100,000, of course, will be transitionally protected, so they will not lose.
Mr Duncan Smith
Will the right hon. Gentleman give way, because he needs to answer my question?
Mr Byrne
The Secretary of State needs to answer my question. The Minister of State told my right hon. Friend the Member for East Ham that getting rid of the savings cap would cost only £70 million. Will the Secretary of State therefore look again? He must recognise, as I do, that he is currently not fostering the ambition to save for hundreds of thousands of people.
Mr Duncan Smith
I completely disagree with the right hon. Gentleman on that, but I want to challenge him to give an answer to taxpayers, who ask whether the welfare system is about supporting people who are most in need, or whether it is about casting money wider and wider to people who can support themselves in particular periods. How much more money does he really want to spend?
Mr Byrne
I am afraid that the Secretary of State has still not provided an answer to my question—he still cannot tell us how he will encourage people to save. Tuition fees have trebled, and people in my constituency are asking, “How on earth do we encourage our young people to go to college, and how on earth can we afford to get our young people into university?”—[Interruption.] I know the Secretary of State does not have those challenges to face, but thousands of people in our constituencies need to save to get their kids to university. The regime that he is proposing will strip in-work benefits from them, kicking the ladder away from aspiration in our country.
Angie Bray (Ealing Central and Acton) (Con)
Surely the right hon. Gentleman must recognise that tuition fees are not payable until such time as people come out of university and earn a salary of £21,000 or more. His argument is a red herring.
Mr Byrne
I do not know what the hon. Lady’s constituents are saying to her, but many in my constituency live in fear of debt—they want not to burden their children with debt, but for them to get a first-class education, so that they can contribute to the future of our country.
The wider point that is emerging is that we do not know enough about how the Bill affects families and savers, but there is also a question over how it will affect the self-employed. Over the last few weeks, we have heard a great deal of pitch-rolling from the Chancellor and the Prime Minister, who are now worried about the damage that their last Budget did to our economy. All of us hope that the Chancellor can upgrade his growth forecast at the forthcoming Budget after doing so well over the last year, and the Prime Minister is now promising that his next Budget will be the most pro-growth Budget in the universe. He told his spring conference:
“At its beating heart this is still a party of start-ups, go-getters, risk-takers…We’re the party of practical men and women, people with a passion and a mission to build a business and see it grow...We are the party of enterprise.”
No doubt, then, the Bill is part of that plan—no doubt the Bill will make it simpler, easier and more encouraging for people in this country to start a business and to make that entrepreneurial leap. Well, my hon. Friend the Member for Stretford and Urmston (Kate Green) asked the Secretary of State about the self-employed on 9 February. To be fair to him, I think he recognises the problem. Surveying the position of the self-employed, he told her that
“we are conscious that that area is the slight blip in the system.”
This is what the blips in the system at the Federation of Small Businesses told me yesterday. Mike Cherry, the FSB national policy chairman, said:
“We are concerned that the Government has assumed that entrepreneurs with a new business will be paying themselves…and will therefore lose all benefits under the Universal Credit system…A measure such as this simply creates yet another barrier towards self-employment which is particularly unhelpful at a time when we are relying on the small business sector to grow the economy”.
So much for the party of enterprise.
Rehman Chishti
Considering that the right hon. Gentleman agrees that it is absolutely right and proper to support families, does he concede that the Labour party got that wrong because couples were paid to live apart?
Mr Byrne
I do not know whether the hon. Gentleman was in the Chamber when my hon. Friend the Member for Swansea West (Geraint Davies) spoke of the disincentives for families to stay together under the new regime, but if he wants to pretend that the Bill ends the couple penalty in the welfare system once and for all, perfectly and immaculately, I look forward to him setting out his argument.
Mr Duncan Smith
The right hon. Gentleman raises the issue of the self-employed. I made this point to him privately and I will now make it publicly: they will fall within the universal credit. The point that I was referring to was how complicated and counter-intuitive the current systems have become, as he knows very well. We are seeking the best way to ensure that the right reporting structures are in place for those people, who will be inside the universal credit.
Mr Byrne
Perhaps the Secretary of State can tell the House this afternoon when those proposals will be ready for us to look at. [Interruption.] “In time for Committee,” he says from a sedentary position. We all look forward to seeing that.
It is now clear that for the self-employed, savers and families, this Bill at the very best poses more questions than it answers. The other question that the House has to ask the Secretary of State this afternoon is not about how we foster ambition, but about how we nurture compassion. How do we strengthen and reinforce our obligations to each other? That is something that we will hear a lot more about, when we talk about the reform of disability living allowance. What we know about the detailed reforms is not good. I welcome what the Secretary of State has said about the mobility component of DLA. I think that he has confirmed that he is withdrawing the proposal to cut £135 million from the mobility component of DLA. If that is true, it is welcome, because we are talking about a measure that the chief executive of Scope pronounced as “callous” and an
“assault on the most vulnerable”.
The rationale presented by the Minister of State has this morning been taken apart by 39 charities. I am afraid that I have to agree with the words of those campaigners who have said that
“many of these people”
—those in residential care—
“will be prevented from enjoying the freedom of movement that is taken for granted by people who are not disabled.”
Those are, of course, the words of the motion at the Liberal Democrats’ spring conference this weekend. I hope that together we may be able to prevail and get this measure dead and buried.
Mr Tom Clarke
On the crucial issue of the mobility component for people in residential accommodation, when my right hon. Friend put his question to the Secretary of State, I understood the Minister of State to be indicating dissent. Will my right hon. Friend give the Minister another opportunity to clarify this important issue?
Mr Duncan Smith
The right hon. Gentleman knows very well, because we had this conversation privately. As I assured him, and as I assure him now, what we have done is roll the proposal into the personal independence plan. We are reviewing what is necessary. I said to him then, as I have said to the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke), that what we are looking for is the amount necessary for people who are in residential care. That is the commitment that I have given. That is the exact fact, that is how it remains, and all other things will fit around that.
Mr Byrne
The argument that the Secretary of State has rehearsed this afternoon is that the Bill will give him the flexibility either to withdraw or to reform the proposal, but what he has not set out for the House is whether he will reduce the savings target of £135 million that has been scored by the Chancellor against the measure.
Mr Byrne
I therefore look forward to the Government reflecting on this debate and perhaps giving slightly more clarity when the Minister winds up.
More alarming for many people is the lack of any safeguards on what the Government have in mind for the future of DLA, especially as we know that the Chancellor is determined to take £1 billion off the bill and then ask what kind of reform will be necessary to deliver his sums. Not for him the subtleties of asking what kind of reform might make sense. This is what the Multiple Sclerosis Society had to say about the measure: “We share serious concerns”—[Interruption.] It is incredible that when such organisations present their arguments, those on the Government Front Bench would rather talk among themselves than listen to what they have to say. This is what the Multiple Sclerosis Society said:
“We share serious concerns with a large number of other disability organisations that the Bill in its current form could lead to those most in need losing out on the support they rely on”.
The Secretary of State’s own equality assessment says that 13% of disabled households could be entitled to less help under the new system. He has simply not provided assurances on that point. When my hon. Friend the Member for Stretford and Urmston asked him about that, he said:
“I am sorry to be cagey about this. It is simply because this will become very clear when we publish the Bill.”
Well, here is the Bill, but where are the answers to the question?
Mr Duncan Smith
I am interested in what the right hon. Gentleman is saying. He is going on about the review and the issues around disability living allowance, but I notice that the Opposition make no mention of that in their amendment. I notice also that both he and his leader have said that they support the reforms to disability living allowance, so perhaps he would like to make it clear: is he in support of them or not?
Mr Byrne
Everybody is in support of reforming disability living allowance, but we have not said that £1 billion should come off the bill and that we should then work out what kind of reform would deliver those numbers. The Secretary of State must realise that this is why millions of people up and down the country are so alarmed about the reform proposals being put in place. Now he—or, indeed, his Minister—has a chance to say that he will listen to campaign groups that are worried about the proposals, that he will listen to amendments and that he will try to put in place safeguards to ensure that DLA reform is done in the right way. Yes, we should reform DLA, but we should not abolish it.
Charlie Elphicke
Would not one key reform be to ensure that those claiming the allowance are seen, to check that they are still in need of it? Some 140,000 people have not been seen by the Department for Work and Pensions in the last 20 years, going back to 1992. Surely that is unacceptable.
Mr Byrne
There is a strong case for reform of DLA. The lobby groups agree with that, as do we, but we do not agree with the way the Government have approached the issue. First, we had an announcement by the Chancellor of the Exchequer that DLA would be cut £1 billion, then we got a consultation, which has only just finished, and while all that was happening a Bill was published with no detail or safeguards dealing with how that reform would be conducted. The Secretary of State must realise that that is a serious concern for millions of people up and down this country.
That alarm is simply magnified by the proposals to set a one-year limit for those who can receive contributory employment and support allowance. I, too, think that there is a case for time limits—there is a good case for considering two years, for example—but this morning 30 cancer charities have written to the Secretary of State urging him to think again on that measure. His own Department’s statistics, they say, show that 75% of cancer patients still need ESA after a year. Their message is blunt:
“this proposal, rather than creating an incentive to work, will lead to many cancer patients losing their ESA simply because they have not recovered quickly enough.”
If this indifference is not addressed in Committee, the Secretary of State will have single-handedly dismantled any notion that compassionate conservatism is truly a reality. This simply cannot be right, and it needs to be looked at again.
Mark Durkan (Foyle) (SDLP)
I support the crucial points that my right hon. Friend is making, but has he noted that the impact assessment on the proposed changes to DLA makes no mention of the impact on carers? There clearly will be a consequential impact on carers, depending on what benefits the people for whom they care receive and which rates of the daily living component or the mobility component will entitle carers to claim carers allowances. There is no mention of that whatever. Is my right hon. Friend aware of whether the Government have even made an estimate of the number of carers affected, and if so, why it has not been published?
Mr Byrne
I will give way in a moment.
My final point is about the small question of whether the Bill will actually save any money in and of itself. The Bill would save money if it got people back to work, but it will not create a single job. By the time we get to Royal Assent, there will still be five people chasing every job in this country, and for 120 of us, there will still be 10 people chasing every job in our constituencies. The only way that this Government are going to save money through welfare reform is by cutting the benefits of working families. Indeed, once we take out the shift to a lower form of uprating, we see that half the benefit cuts hit working families, starting with 10 raids on the family budget, taking out £1.5 billion from this April. Two thirds of that bill would not be necessary if unemployment were not as high—in fact, if it where down it would have been under Labour. Nowhere is that muddle about whether the Bill saves money more confusing than when it comes to the housing measures.
Mr Byrne
I will give way in a moment, but I want to make this point first.
Clause 68 puts into the Secretary of State’s hands unprecedented powers to do whatever he wants with people’s rents. Normally, we would object to that kind of sweeping power because we would not know what a Minister was going to do with it. This time, however, we object because we know exactly what the Secretary of State is going to do. He has proposed a housing benefit cap, which he says will save money, but the Mayor of London has now said that the measure will cost more money because homelessness costs will rocket.
The Secretary of State says that his measures will bring rents down, but the Secretary of State for Communities and Local Government is putting rents up in the social housing sector to 80% of market value. The House of Commons Library says that that could cost up to £200 million. One half of the Conservative party does not know what the other half is doing, and taxpayers are picking up the tab. In fact, it was left to the Pensions Minister to tell the House on 3 February that, on his estimate, the housing bill would go up by £1 billion over the course of this Parliament. So how is this Bill going to save money on housing benefit?
Alison Seabeck
Before I ask my question, I need to draw the House’s attention to the entry in the Register of Members’ Financial Interests for my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), with whom I have an indirect interest: he is my partner. Now I can get on with my question.
My right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) has mentioned the increase in costs resulting from the impact of rents going up to 80% of market value. The Localism Bill contains measures designed to put homeless people straight into the private rented sector. That will put further pressure on that sector, which is already being squeezed, and push rents up. There is no evidence that rents will come down. Does he agree that the Government’s left hand does not know what the right hand is doing?
Sajid Javid (Bromsgrove) (Con)
At the last election, the Labour party manifesto contained a pledge to reform housing benefit to ensure that the people claiming it would not live in the kind of homes that ordinary working families could not afford. We believe in that policy. Is the right hon. Gentleman now renouncing it?
Mr Byrne
Not at all. The point that we are making is about the way in which this reform has been adopted and steamrollered through, and about the lack of consultation between the Department for Communities and Local Government and the Department for Work and Pensions. This has been so mismanaged that many people—the Mayor of London, Shelter, the Secretary of State for Communities and Local Government—are now saying that the cost of housing benefit could go up. Surely that is not the DWP’s intention. We need a bit more detail about a policy that might actually deliver the necessary savings on housing benefit.
Angie Bray
I was recently talking to some constituents in Acton, and I discovered that these proposals for changes to housing benefit are among the most popular proposals that the Government have introduced. My constituents like the idea that it pays to work, and that those on benefit will not be able to afford better houses than those in low-paid work can afford. They also wonder why it has taken so long for any Government to introduce a measure that is simply fair, regardless of the money it might save. They wonder why the Labour Government never did anything about this when they had the chance to do so.
Mr Byrne
I will take a couple more interventions in a moment.
I want to put on record my thanks to the scores of charities and campaign groups that have helped to brief us and offered to work with us to draw up amendments to improve the Bill in Committee. I am even more grateful to them for their commitment to mobilise their millions of members to help the Government understand why the Bill needs urgent reform. If the Government persist with the illusion that the Bill is immaculate, perfect and beyond improvement, and if they decline to hear the voices of those millions of members of charities and campaign groups that have worked with us, we will have no alternative but to vote against it on Third Reading.
In today’s debate, we will hear a lot of statistics; we will also hear about this record and that proposal. I just hope that the House will remember that behind every statistic is a person—one of our constituents. They are people like my constituent, Colin Hulme, who wrote to me at the end of last week. Mr Hulme suffers from Chiari malformation, a condition that affects about one in 1,000 people. It hit him in 2007, and he had to give up his job as an IT consultant and move home. He is a very brave man. He told me that his disability living allowance means that
“at least I can pay my household bills, my kids will have food on the table and clothes for school. More importantly, it means my wife can provide the care that I need.”
His view is that the Bill is about
“cutting costs and shifting responsibilities rather than improving the lives of sick and disabled people.”
It is a worry for him, and I think that the whole House will acknowledge that that worry is shared by millions of people up and down the country today.
My real point to the Secretary of State in this debate about principles is this: in the debate ahead, let us together put aside the politics of fear and division, and let us have the politics of hope—people’s hope for a job, the hope that they can get the help that they need, and the hope that they can get on and move up in work. That is what welfare reform should be about. That is the instinct expressed in our amendment, and I hope that the House will back it this afternoon.
Mr Deputy Speaker (Mr Nigel Evans)
Order. A lot of Members wish to participate in the debate, and we have introduced a six-minute time limit on Back-Bench speeches, with the usual amount of injury time for up to two interventions. Clearly, however, Members do not have to take interventions, and if they do not, that will allow more people to speak.
Mr Oliver Heald (North East Hertfordshire) (Con)
I welcome this opportunity to support the Bill, which will bring about probably the biggest change in the welfare state for 60 years. I disagree with the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) on certain points. The Bill is about helping people into work and establishing big principles for the future, and it really is not good enough to make a speech saying, “We want to help people into work,” but then to deny the means to do that. He is saying that the Bill should not go ahead. He is saying that the details—which should be debated, I agree with him on that—are sufficient to allow him to deny this major Bill a Second Reading. Well, he is wrong about that. He has issues that he rightly wants to discuss in Committee, and he has the support of numerous groups throughout the country that want those points of detail to be considered. Yes, he is right about that, but, my goodness, he is wrong to say that the Bill, which does such important things, should not go ahead.
Let us consider the idea of the universal credit. We will finally be able to say that a person will always be better off in work. That is a big principle; that is important. I venture to suggest that the right hon. Gentleman agrees with that in his heart of hearts, yet he is saying that we should not introduce those measures. I notice that he is not prepared to listen to this—
Mr Heald
At the moment, it takes 45 minutes in a jobcentre to work out whether someone will be better off in work or not. The Bill will change that at a stroke. People will know that they will always be better off in work. That is an important principle.
My second point involves helping people to get into work, giving them support through the “black box” approach. This is something that Labour agrees with; the right hon. Gentleman actually trialled it when he was in government, and it worked. It is recognised internationally—
Mr Heald
Yes, it is in the Bill. The sanctions are about making the Work programme work. It will not work without sanctions and without the measures in the Bill. To deny the Work programme to people all over the country who should have help into work would be a big mistake. The right hon. Gentleman should support the principle behind the Bill.
My third point is that it is essential to make proper training available so that people can avail themselves of those training opportunities and then get the jobs that are available in this country. There are 500,000 jobs advertised in the jobcentres every month, but many of them are jobs for which people do not have the necessary skills. To introduce a system, through the “black box”, that will enable people to acquire those skills and get into those jobs is something good, and it is something that the right hon. Gentleman should support.
As for whether jobs are available, when the right hon. Gentleman’s party were in government many jobs were created, as he said, but the problem is that many of them went to people who were not from this country and had not been languishing on benefits for years. Members of the Select Committee visited Burnley earlier this week and we met people who were being helped to move from benefits into work. We found that many of them did not like the work capability assessments, so I hope that it will be possible for the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) to make the Harrington changes before that scheme is rolled out nationally. I see him nodding. Some people there had not worked for 10 years, and said that they were pleased to have the opportunity to be trained and to look for a job.
Burnley is not an area where there are as many jobs as there are in Hertfordshire, which I represent, but even in areas where there are not many jobs, it is wrong to say to someone who could work, “No, we’re not going to do anything about it; we’re not going to train you; we’re not going to give you those chances; we’re not going to provide the Work programme.” By denying this Bill a Second Reading, the right hon. Member for Birmingham, Hodge Hill would be depriving people of all those things.
Let us take some of the other issues that the right hon. Gentleman raised, such as child care. The Secretary of State has said from the Dispatch Box that there will be child care; the black box works only if child care is available. Support for single parents to get into work is necessary, but it is to be provided. If the right hon. Gentleman wants to talk about the details in Committee, we would all fully understand that. I believe that it is a mistake for him to try to deny this Bill a Second Reading.
Time is whizzing by, but I would like to make two further points. Child support is an important issue in the Bill, and it has been troubling for a long time. If single parents are to get into work, it is important for them to be able to rely on child support payments coming in. America has a system whereby, once the figure is set, it is automatically deducted from the salary of the parent who has to pay it. In this country we have always denied that possibility, and said that we should not do that. However, if we are to say to many lone parents, “Look, we really want you to go to work”—and we shall be saying that to a lot more lone parents—we must find ways of ensuring that the essential payments from the other parent come through.
The Minister of State, Department for Work and Pensions (Chris Grayling)
This will provide my hon. Friend with an extra minute to conclude his remarks. We very much welcome the work of the Select Committee, and I assure him that the points that he and the Select Committee raise will help us to shape some of the outstanding issues and the Committee debates that lie ahead.
Mr Heald
I thank my right hon. Friend for that. One encouraging development is that many of the proposals in the recent Select Committee report on housing benefit change—proposals for improvements such as monitoring the changes as they are implemented—were accepted when the Government responded to it. It is particularly welcome that the original proposal for people to lose 10% of their benefits after 12 months has been abandoned. I see that the Chairman of the Select Committee is in her place, and she may catch the Deputy Speaker’s eye in a moment; we are all pleased that the Committee has been able to make a difference in that way.
Finally, let me say a few words about how the contracts for the Work programme are dealt with. It is important to have proper implementation.
Charlie Elphicke
With housing benefit rising 45% in recent years, does my hon. Friend agree that it is a matter for serious concern?
Mr Heald
Yes, absolutely right. It is important to bear down on that through the sort of changes now proposed.
To return to the Work programme contracts, it is important to monitor carefully the performance of the contractors and sub-contractors to ensure that there is an equal level across the country. The Select Committee looked at the issue in a previous report on a pilot scheme in Glasgow. We felt that there were differences between the performance of the different contractors. Clearly, if there are weaknesses, it is important to address them, for the sake of all the people who want to find work. I am grateful for the opportunity to support this great Bill.
Dame Anne Begg (Aberdeen South) (Lab)
This is a huge Bill with a huge amount in it, so it is impossible to cover it all in a six-minute speech. I always call my Select Committee colleagues my hon. Friends, and I shall point out that our report on housing benefit, which my hon. Friend the Member for North East Hertfordshire (Mr Heald) mentioned, will be debated in Westminster Hall tomorrow afternoon. I hope that many Members will come along so that we can go into greater detail than we can today. Other elements of the Bill include the abolition of the social fund, and the moving of responsibility for council tax benefit to local authorities and how that cuts across the universal benefit principle and the sanctions regime; I shall not have time to go into that, but perhaps others will.
The biggest fundamental change to the welfare system in the Bill is, of course, the proposal for the introduction of a universal credit. As has already been said, and as confirmed in almost all the briefing papers I have received, the idea of a universal credit has been accepted in principle. I have always said, however, that the devil is in the detail. That is where the problem lies for Labour Members, who are well aware that we do not yet have much of the detail.
Despite what the Secretary of State said today, we still do not have any detail on how child care will be incorporated into the universal credit. We know that housing costs will be included, but we do not know how they will be dealt with. We are not sure about the disability premium or about the issues that my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) raised about passported benefits, free school meals and all the other aspects of the present benefit system that put significant amounts of money into the hands of those who have the least. That often includes people in work, but low-paid work. As I say, we do not yet know from the Bill how all those matters will be dealt with; we will not know until the regulations come out.
We know that carer’s allowance will be outside the universal credit, but we do not know how kinship carers will be treated. Changes are proposed to the disability living allowance, which is the key benefit that allows carers to access their benefits, and a lot of questions remain to be answered.
Furthermore, we still do not know what the marginal deduction rates will be. We know that 65p in the pound is proposed, but when we look in detail at someone in low-paid work paying income tax, we find that the marginal deduction rate will go up—and in connection with child care costs, it could go up by more than 100%. Child care costs will, in any case, go up, simply because more people will need child care if the Government proceed with their proposals to start imposing obligations on lone parents to start looking for work when their youngest child reaches five. Extra expenses are therefore associated with the Bill, but we do not know how they are to be dealt with.
We do not yet know how some of the claims will be fulfilled—whether, for example, the Bill will succeed in making work pay. The previous Government did make work pay in almost every case—apart from where there were high housing costs and many children. What we did not do was make work pay enough.
Harriett Baldwin (West Worcestershire) (Con)
I thank the hon. Lady, who is such a marvellous Chair of the Select Committee, for giving way. Does she agree that it is disappointing that the Labour party is not supporting Second Reading of this Bill, because the points that she rightly raises are the sort of detailed issues that could addressed in Committee?
Dame Anne Begg
I hope that they will be addressed in Committee, but the problem is that there are still too many unknowns about the Bill. That makes it impossible at this stage to give that kind of support to it. That is the danger.
There are reasons for suspicion, particularly among disabled people, about the Bill’s intentions. The Bill was published two days before the consultation on what amounts to the abolition of disability living allowance was announced. Again, we do not know the details. I do not understand why the Government need to change the name of the disability living allowance. Yes, there might be a case for reform, but this is a wholesale replacement. That is what worries people, particularly when the evidence suggests that it is going to be based heavily on the test.
Discussion this afternoon has been about the test for disability living allowance—but our experience is of the work capability assessment. We know that that is discredited and not fit for purpose, and disabled people fear that that is what is going to be imposed. As soon as the Government announce a proposal to change or reform a measure in order to make a 20% budget saving, suspicions enter people’s minds. Given the Government’s proposal to remove the mobility element of disability living allowance from those in residential homes, it is no wonder that some people are now frightened.
I realise that most of the time allotted to me has gone, but I want to say something about the proposal to withdraw contributory employment and support allowance after only one year. I believe that the Government should reconsider. I have always said that it is easy to reduce welfare bills: all that is necessary is to stop giving people any money—and that is what the proposed withdrawal of the allowance would do.
Glenda Jackson
My hon. Friend, and other members of the Work and Pensions Committee, will be aware that one of the most shocking pieces of evidence presented to the Committee was that under the present system, in which people are tested by Atos, it is not unusual for an Atos centre to be completely inaccessible to the disabled. Furthermore, we have been hearing for some time that when people appeal against the denial of benefits, whatever those benefits may be, a staggering number of appeals are upheld. What is particularly frightening is the fact that there may be a long gap between refusal of an application and the upholding of an appeal—a problem that will inevitably increase in the absence of the detailed provisions that the Bill so markedly lacks.
Dame Anne Begg
Indeed. We heard on Monday, in Burnley, that the appeal process can take anything from a year to 18 months. There are real doubts about the ability of the tribunal system to cope.
Chris Grayling
At present, the appeal process takes 17 weeks on average. A year or more is absolutely not the norm. I would be happy to discuss the matter in the Select Committee, but I should grateful if the hon. Lady would note what I have said for the record.
Dame Anne Begg
Interestingly enough, a constituent of mine is having to wait for six months. I thought that that was ridiculous enough, but two or three weeks ago, when the Committee was taking evidence, we were told that someone was having to wait for between nine months and a year. Perhaps the Minister should talk to his officials, because it seems that in some areas, at least, the wait is much longer than 17 months.
I mentioned the withdrawal of contributory ESA after a year. Many of the people who will lose that benefit will not qualify for a means-tested benefit, particularly in my constituency, where there will probably be a partner or someone else in the household who has an income. Such people will lose all the money that they have.
We have heard today what has been said by cancer charities, but it is not just cancer sufferers who will be affected. Many other people may not have been given a diagnosis, or may have had a mental breakdown from which they have not recovered. It may take at least a year for those people to get anywhere near the Work programme, although they will be in the work activity group because their disabilities will not be severe enough for them to qualify for membership of the support group. They will be told to come back after another three months, because they will still not be fit for work. They may find that they have used up the whole year’s worth of contributory benefit before they are anywhere near even looking for a job. Many with other illnesses and disabilities will fall into the same category.
I was going to read out a letter from Heather Bennett that would have summed up the position far better than I have. Unfortunately I have no time to do so, but I ask the Government please to reconsider.
Jenny Willott (Cardiff Central) (LD)
I welcome the Bill, especially the introduction of the universal credit system. It is a huge improvement on the current over-complicated and burdensome benefit system, which has spiralled out of control under a number of previous Governments. I think that several elements of the Bill require further work, and I look forward to their being discussed today and during the Bill’s later stages, but I do not consider that a good enough reason not to give it a Second Reading.
I am glad that a couple of earlier proposals have already been reconsidered. Both have been mentioned by other Members. I am delighted that the Government listened to Liberal Democrats, the Select Committee and others throughout the United Kingdom who called for the proposal for a 10% cut in housing benefit for those who have received jobseeker’s allowance for a year to be dropped, because it was unfair. It is very good news that the proposal has indeed been dropped, and I am sure that Members on both sides of the House welcome that.
I am also glad that the Government are listening to those who are concerned about the removal of the mobility component of disability living allowance from those in residential care. A number of Members have mentioned that today, and I expect that it will be mentioned again before the end of the debate. I am pleased that the proposals have gone back to the drawing board, and I hope that the Government will take account of the serious concern that many Members have expressed and will, I am sure, express again during the Bill’s subsequent stages.
I welcome wholeheartedly some measures that are in the Bill, as well as the absence of some measures that are not. As I said earlier, those that I welcome include the introduction of universal credit, which will finally end the absurd circumstances in which people can be better off on benefits than in work. I am sure that many Members have met people who are frustrated and desperate because they know that although their lives would be better if they were in work, financially they would not be better off in work. I think that everyone should welcome the fact that universal credit will put right that wrong.
A number of Members have expressed concern about the changes in employment and support allowance. As the hon. Member for Aberdeen South (Dame Anne Begg) pointed out, and as the Secretary of State acknowledged earlier, there is particular concern about the decision to time-limit contributory ESA. I hope that during the Bill’s passage the Government will consider, for instance, whether the period before the cut-off should be longer than a year, whether it is appropriate to include the 13-week assessment period in the calculation, and whether those with certain conditions could either be entirely exempt from the cut-off or be allowed extensions at the discretion of Jobcentre Plus staff. A good many people will be affected by the limit, especially if, as is currently planned, it is applied retrospectively.
I mentioned the controversy surrounding disability living allowance. As I have said, I am delighted that the proposals affecting those in residential care are being reconsidered. However, concern remains about the increase from three months to six months of the period before people are eligible to apply for the allowance. I understand the logic of trying to ensure that it is given only to people with long-term conditions, but in the case of sudden-onset conditions such as cancer, strokes or accidents, the greatest financial need is at the start. I hope that thought will be given to whether people in those circumstances can be helped to deal with the serious financial implications of such conditions.
I agree with the hon. Member for Aberdeen South that a huge number of issues could be raised in relation to the Bill, but today I can focus on only a few of them. The last issue that I want to raise is the total cap on benefits. Again, I understand the rationale. Many working people with low incomes find it very difficult to see others receiving more money from the state than they themselves can earn, and I understand their frustration and resentment. However, we have yet not been given enough detail to establish the precise impact of the Government’s proposal.
Some people also resent the fact that families, particularly large families, are living on benefits, but the choices made by parents are not the fault of their children. By the time the Bill has completed its passage, we must ensure that any cap has been set at an appropriate level, that there is no prospect of children being pushed into poverty, and that families—especially in London, where housing costs are so high—will not be disproportionately hit. Given that the housing benefit cap is £400, a total benefits cap of £500 could leave a large family with just £100 a week to cover all their other living costs. I hope that the Government will consider excluding housing benefit from the calculation, or, preferably, excluding child benefit. Given that child benefit reflects the size of families, that could have an impact on child poverty. I am very concerned about the implications of that policy, and we will need to know the impact on children, in particular, before I can agree to support it.
Most of the Bill is well thought out with a strong sense of principle, and I wholeheartedly support the overwhelming majority of its measures. I welcome the moves to simplify the benefits system and to create a more individually tailored welfare system, but I also have concerns, and I hope the Government—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Time is up. I call Mr Tom Clarke.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
I should begin by declaring an interest: I am co-chair, with Lord Rix, of the all-party group on learning disability.
Members will not be surprised to learn that I intend to oppose the Bill and support the reasoned amendment. In the short time available to me, I shall speak in direct opposition to this Welfare Reform Bill, because if it is implemented it will devastate the lives of people who are sick, people with disabilities and many vulnerable people throughout Britain, not least in my constituency.
Since before I was elected to this House, I have firmly held to the principle that people with disabilities should have the same opportunities as everyone else, no less and no more, and I have to say that the election of this new coalition Government does not in the least diminish the need for a principled stand to be taken on behalf of people who require support. That is because of the highly punitive measures that are being proposed, and which have not been denied today, and I hope to have the time to address some of them later.
On Tuesday 30 November I secured a Westminster Hall Adjournment debate on Government plans to remove the mobility component of the disability living allowance for disabled people who live in a residential establishment. At the beginning of that debate, I said:
“To put that into context, it is important to establish which members of our society qualify for that benefit. The first, and by far the most common group, is where the claimant is unable—or virtually unable—to walk. The second group consists of people who are both blind and deaf. The third category comprises people with a severe mental impairment, and/or severe behavioural problems. In truth, we could not be discussing people who are more vulnerable or deserving in our communities.”—[Official Report, 30 November 2010; Vol. 519, c. 197WH.]
I also pointed out that of all the proposals on welfare reform, this is the most brutal and cruel. I have had no assurances on this issue during the course of the debate
Chris Grayling
It might be helpful to put on the record that we have been very clear that we intend mobility provision to continue for people in care homes. There is an overlap between a number of provisions however, and we have formed the view that it is better not to include a stand-alone clause in this Bill, but to include the issue as a whole as part of our review establishing exactly what needs to be done and through which channels.
Mr Clarke
So in place of the clear threats we had from no lesser a person than the Prime Minister and in the face of a lack of clarification today from the Secretary of State, we are expected to wait for a review. I am sorry to have to tell the Minister that, as my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) said in opening for the Opposition, organisations representing disabled people throughout the country are simply not prepared to accept what appear to be assurances at the 13th hour, given what is written in the Bill and given the opposition to my colleagues’ amendment.
I urge the Government to consider the opinions of voluntary organisations and of the independent Social Security Advisory Committee, which obviously took the same view as I did:
“We consider that the proposal to remove the mobility component from people in residential care should not go ahead.”
That remains our determination today. I trust that the Government will take on board the view expressed by such an influential and informed body.
Dame Anne Begg
It is, perhaps, worth putting the record straight on DLA. This afternoon, the impression has been given that there are no checks on people on DLA and that they are just left to languish, but everyone on DLA gets a letter every year saying they must report any changes to their condition.
Mr Clarke
I am grateful to my hon. Friend, who has considerable knowledge of these important matters.
Even today, we have heard much about the deficit, but the sick, the poor and the vulnerable in our society simply do not deserve to be punished for the financial greed and recklessness of the banking sector. That is what this Bill is proposing, and if anyone doubts that then let them address the planned 20% reduction in DLA. We are cutting a lifeline on the basis not of a necessity, but of a statistic plucked out of thin air.
I work closely with disability organisations that are at the forefront of supporting disabled people and their families at every stage of their lives. Today, I speak up on behalf of the many constituents who have been in touch with me on this subject. Indeed, I have had more representations on this Bill from both constituents and disability organisations than on any other Bill in my entire time in Parliament, and it is a bit too late for the Minister to make the intervention he has just made. Organisations working in this field have long been striving to achieve a balance between providing practical help and listening to those who need support, and that informs me in this debate. Incidentally, almost all the caring organisations, from Mencap to Scope to Enable in Scotland, are united in condemnation of what is on offer.
We are told the Government plan to simplify the benefit system for claimants and to remove financial disincentives to moving into work. I have no problem with those two objectives if that is what is really meant. As my hon. Friend the Member for Aberdeen South (Dame Anne Begg) said however, the devil remains in the detail. Where is the commitment to promoting social justice for disabled people? We have rising unemployment on the one hand and spending cuts on the other, with reduced access to social care services as a consequence of reductions in local government funding. The latter is hitting disabled people disproportionately hard all over the United Kingdom, further compounding the poverty and disadvantage they already face. There appears to be a lack of recognition that we are talking here not about people who are fraudulent or feckless or who fear work, but about people who are incapacitated and cannot work and therefore must be supported. While disabled people who live at home are to keep the mobility component of their benefits—which is as it should be—it cannot be right, it cannot be fair and it certainly cannot be equitable for disabled people living in residential homes to be hammered with a 69% cut in overall benefits.
For that reason and many others, I ask the House to consider very carefully the words printed in the Bill, because it is the Bill that we are considering today. We are being asked to give it a Second Reading, and on the basis of its contents and what has been said by Ministers, I cannot support the Government.
Mr David Evennett (Bexleyheath and Crayford) (Con)
I welcome the opportunity to contribute to this debate on a Bill that will radically reform our welfare system, and I congratulate my right hon. Friend the Secretary of State on proposing these much-needed and long overdue reforms to our benefits system. He is well known and respected for his work on social justice, and the Bill marks a genuine step forward. I also commend him on the thoughtful, moderate and constructive speech he gave this afternoon.
This measure is to be supported as it places individual responsibility at the heart of the benefits system. That approach will, in general, be welcomed across the country and certainly by the vast majority in my constituency.
The welfare system under the previous Labour Government became a welfare culture in which people claimed everything they could. People not only acted irresponsibly but were encouraged to do so; as a result, some people were better off claiming state handouts than their neighbours who were working. To have 5 million people living on out-of-work benefits and 2 million children growing up in households where no one works is a disgrace, and the Opposition ought to be ashamed of that record after 13 years in power.
There are many problems with the welfare system that the Government inherited. It is complex, bureaucratic and contains perverse incentives to keep claiming rather than work. We have heard the interventions—a 45% increase in housing benefit since 1999 is an incredible figure and such problems cost the taxpayer a fortune. The Labour party had 13 years to simplify the benefits system and to increase the incentive to work and it did nothing but make the problems worse. The Opposition amendment is merely a prescription for doing nothing.
Those who can work should work; that is the responsible thing to do and the best route out of poverty. Our aim should be to encourage people to take jobs, and I believe that most people want to work and to find a job. The Government’s role should be to help match people to the vacancies on offer, to ensure that they have the skills they need to take on jobs, and to provide individual support in the meantime to help people to get there. The Bill offers opportunities for change to enable people to do that.
It is right to place a 12-month limit on contributions-based employment and support allowance claims. That ensures that those who need support when they lose their job receive payment, and underlines the principle that they cannot claim for as long as they want. I hope that the introduction of a claimant contract will increase individual responsibility by ensuring that people turn up for their appointments and interviews. The inclusion of a personal pledge to take up reasonable offers of work, with financial penalties for those who do not keep their obligations, is also a necessary reform.
Placing a fixed limit on the maximum amount that any one household can claim in benefits, together with the new housing benefit cap, will mean that the financial barriers to employment will be removed, and that will be fairer for the taxpayer, who will no longer subsidise high rents for others. A regular complaint from my constituents is that, as workers and taxpayers, they pay for some people to have a better life than they do when they are in full-time work. I therefore welcome the introduction of the universal credit, which will mean that once the Government’s reforms have taken effect, people will be able to see for the first time that they are better off for each hour they spend working rather than being on benefits. The reforms will ensure that work pays.
Benefit fraud has also been a problem, costing the taxpayer about £1.5 billion every year. That is simply not acceptable. I hope that the measures in the Bill will send a clear signal that fraud and the abuse of the benefit system will not be tolerated.
Issues have been raised this afternoon that we will need to consider carefully, including the point about the disabled. I recognise—and I know that the Government recognise—the important role that cash benefits play in supporting the disabled in overcoming the daily problems that they face. Life is often more difficult and more expensive for those with a disability. I hope that the personal independence payment system that the Government plan to introduce will be fairer and simpler, allowing vulnerable people to lead active and independent lives. Changes must be made to ensure that those who do not need personal independence payments do not receive them. It is important that the assessment system is right and fair and takes into account genuine needs. Change over time should be noted to prevent abuse, as well as to help to ensure that those with growing and additional needs caused by disability get what they need and genuinely deserve. I am pleased that the payments will not be means-tested and will provide people with support when they are both in and out of work.
The disabled issue is emotive and I have received a considerable amount of correspondence from constituents about it. Some of the information that they have been given has unfortunately not been accurate, which is to be regretted.
Fiona O'Donnell (East Lothian) (Lab)
On the subject of inaccurate information, a duty press officer from the Department for Work and Pensions told the BBC last night that the Government were not going to reduce the qualifying period from three to six months. Can we have clarity on that issue?
Mr Evennett
I understand the hon. Lady’s point and we have had some clarity from the Secretary of State already this afternoon. It is important that we urge those on the Front Bench to take into account the needs of the disabled, and I believe that they will do that in the policies that they seek to implement.
I strongly commend the work done in the Bill and the further consultation that will be undertaken by Ministers to ensure that all the needs of the disabled are considered when we bring in the new annual assessment. I welcome the fact that there will be an annual assessment for those who are disabled so that their real needs can be reassessed if necessary to ensure that they get what they need and what they deserve.
I am running out of time and, as other hon. Members have said, it is very difficult to cover all the aspects of such a complex Bill in such a short time, but I want to commend the work being done in further education by my hon. Friend the Minister for Further Education, Skills and Lifelong Learning to ensure that people get the necessary training to take up the jobs on offer.
I believe that the Bill will deliver real progress from a coalition Government who are determined to reform a system that is unwieldy, unfair and unacceptable. The Bill should be commended and supported this evening.
Julie Elliott (Sunderland Central) (Lab)
There have already been some excellent speeches in this debate on one of the most important issues that we have discussed so far in this Parliament. Before I talk about the issues, I want to align myself with the comments made by my hon. Friend the Member for Aberdeen South (Dame Anne Begg) about the problems with the Bill.
I support any attempt to reform the welfare system for the better, to make it easier to access and understand and to make people claim and receive the benefits to which they are entitled, and some measures in the Bill attempt to do that. For example, if universal credit can be made to work, that will be a good thing, but, as yet, I am not convinced that that will be the case. I await with interest the details of how the proposals will work. The jury is out for me on that point.
In the run-up to Second Reading, I have been contacted by many people who are extremely worried about the proposed changes and who are worried and frightened about the impact that those changes will have on their lives. The lack of detail about some of the proposals is one of the problems. The people contacting me have been, in the main, among the most vulnerable in our society. That was why I felt that I had to speak in this debate; I believe that, as an MP, I should speak up for the most vulnerable people I represent.
There are many reasons why I cannot support the Bill as it stands, many of which are set out in the reasoned amendment. The uncertainty about how the universal credit will work is creating fear for those people for whom benefits form all or part of their income. The Bill seems to contain disincentives to work, and that surely cannot be the intention.
I come from an area with long-standing high unemployment and I firmly believe that we need to incentivise work and to give people the opportunity to be aspirational about their lives and the chance to make things better for themselves. Although there is high unemployment in Sunderland and the north-east, there is also a strong work ethic. I was brought up in a family and community that believed that people should work hard and do their best, and I do not believe that that has changed over the years in the majority of families. Sometimes, people need help to do that. Such help includes the tax credit system, but there has been no clarification on what level of support parents will get for child care. The disincentives for people who save, who will be barred from the universal credit, seem unbelievable.
As the Bill disadvantages people suffering from cancer or mental illness through the withdrawal of the contributory employment support allowance, it is hitting hardest those whose needs are probably the highest.
Julie Elliott
No, not at the moment, although I might in a minute.
As I said earlier, I want to focus my remarks on the most vulnerable. Many of the extremely vulnerable people who have contacted me are suffering from mental health issues and autistic spectrum disorders. Autism is a spectrum condition, which means that, despite some common characteristics, it affects sufferers in different ways and to differing extents. ASDs, as they are commonly known, are largely “hidden” disorders that affect a sufferer’s ability to communicate with others, which means that the annual review will be a real problem. ASD sufferers span the whole disability spectrum. Some are able to live relatively independent lives; others need a lifetime of care or receipt of specialist support.
Approximately one in 100 children and 350,000 adults of working age suffer from ASDs. Of the latter group, only 15% are in full-time employment in the UK. The disability living allowance has been a key benefit, providing for these people the help and support that the additional costs of their disability require. The £1 billion cut over the next three years, when the DLA is replaced by the personal independence payment—
Jim Shannon
At the beginning of her remarks the hon. Lady said that reform is necessary, which we all accept. However, does she share my concern that a target to reduce by 20% the number of people in receipt of DLA is the wrong approach, and that the issue should be dealt with through reform alone?
Julie Elliott
I totally agree with the hon. Gentleman. Reform is about making the benefit fit the individual need. If the benefit needs to be paid and if it fits the need, it would not be wrong if it went up by 20%.
It is vital that the Bill does not disproportionately hit those with autism and other disabilities, who are all too often overlooked despite being among the most vulnerable in our society. The goal surely must be to support people with autism who cannot work, so that they can live a full and happy life. However, for those who are able to work, DLA has been crucial in helping them into the workplace. Without the DLA, people with autism would be socially isolated and more likely to suffer from poor mental health. The reform of DLA may lead to people with mental health problems missing out, which could have huge knock-on cost impacts on health and social care services. Surely this cannot be this Bill’s motivation—to give less support to people with autism and to increase the knock-on costs to other Government Departments. As it stands, that is what the Bill is in danger of doing. Its implications for people with autism could lead to confusion and frustration, which in turn could lead to more serious health problems. The Government must ensure that the needs of those with ASDs are taken into account.
The proposals for face-to-face assessments are in themselves creating great anxiety among people with autism and with mental health issues. ASDs are a very specialist area of medicine, and the doctors who deal with such disorders are the people who understand them and their implications. Many of the doctors undertaking the assessments will not have a full understanding of ASDs and the specific needs of the people who suffer from them. When a detailed assessment by a specialist has already been undertaken, what is the need for a further assessment, for benefit purposes, to be carried out by someone without that expertise?
As I said at the beginning of my speech, for a welfare reform Bill to work, it must be, as it says, a “reform” Bill that makes benefits easier to access and to understand.
Tracey Crouch (Chatham and Aylesford) (Con)
May I begin by congratulating the Government on introducing the Bill? I firmly believe that its proposals have the potential radically to reform our welfare system for the better, and we are in dire need of such reform. Those trapped within the system, and the millions of taxpayers who pay for it, will note that Labour intends to vote against such reform later today.
It is vital that we assess the broken welfare system that this Government inherited, to put the need for reform into perspective. Under Labour, we saw ballooning welfare expenditure, an increase in workless households and the absurdity of some housing benefit awards dwarfing the average family income. The Government simply must urgently address that appalling legacy by establishing fairness and an ethos of individual responsibility as cornerstones of our welfare system.
I welcome the notion of a universal credit and the merging of a number of working-age benefits. By replacing housing benefit, the child tax credit, the working tax credit, income support and the employment and support allowance with one single benefit, we replace a tired, confusing welfare system with a simpler, more transparent one. This simplification will help to combat the serious issue of benefit fraud, which is estimated to cost the taxpayer £1.5 billion per year—another reason why the Bill ought to be welcomed on both sides of the House.
Undoubtedly the most progressive aspect of the universal credit is its potential to incentivise those who are unemployed back into work, with no one left worse off by entering employment. The previous Government created a welfare system that discouraged people from working. As a result, there is a troubling number of cases of people languishing on benefits who have become accustomed to that way of life. I see that in my own constituency.
I am proud that this Government recognise that more must be done to help get these people back into employment, either through personalised support for those who are seeking work or through tough sanctions for those who are not. Although the universal credit will act first and foremost as a safety net for those out of work, it has motivation and conditionality at its heart, which, coupled with the Government’s Work programme, which focuses on the long-term unemployed, ought to be welcomed.
I visited Canada a few years ago to study its rehabilitation programmes for those who had suffered some kind of personal injury, and I was struck by the completely different mentality. The programmes, which were often as much about psychological as physical rehabilitation, were entirely designed to get people back into work. Canada’s insurance system simply does not encourage a sit-at-home attitude; our current welfare system does precisely the opposite.
Although I am in no doubt about the positive impact the universal credit will have on our welfare system, there are areas that I believe we must be particularly careful in addressing. By creating an overarching single benefit, we have to take this opportunity to make sure that the flaws in the system are remedied. Although I congratulate the Government on addressing the way in which people with mental health conditions were treated under the previous Government, I would like a reassurance that, where necessary, carers will be able to accompany those with particular conditions to their work capability assessment. Assessments of the needs and suitability for work of those with mental health conditions must be more comprehensive, compassionate and consistent. I welcome the Government’s broad acceptance of Professor Harrington’s review of these issues.
The Bill presents the opportunity to restore faith in a broken system. Undoubtedly, we must provide the means for those who are out of work to re-enter employment, while supporting those in genuine need. A system based on conditionality, with strict requirements for out-of-work benefits, will also be fairer for the taxpayer. Most importantly, we must shift the emphasis from what claimants cannot do to what they can do.
These bold welfare reforms must be carefully implemented, and people will be understandably anxious about how they will affect their lives, but I share the Government’s belief that they are necessary and for the better, and I am confident that, in time, this will be proven.
Mark Tami (Alyn and Deeside) (Lab)
I recognise that a lot of Members want to take part in the debate, and I want to make just a few points about the possible effects of changing the disability living allowance and the impact on young people with cancer and their families.
Receiving a diagnosis of cancer for your child is devastating. Each day, 10 families get that terrible news. For my family, that news came on 31 July 2007, when what we thought was a viral issue with our son was in fact leukaemia. Your life and that of your family changes at that moment: you are scared, frightened, terrified—you do not know what is going to happen next—and when the treatment starts, it is quite an aggressive process. It is a long, helter-skelter journey; there is no quick fix. For girls the protocol is two years, and for boys it is three. Children will respond very differently to chemotherapy. Some will respond relatively well, whereas others will get quite ill, but few get through it without any side effects. There will be times when things will be fairly stable, with periods at home and out of hospital, but there will be other times when you are back in and out of the hospital with an infection or some other problem, which affects the family as a whole.
The financial impact of this illness on your family is probably the last thing you think about when you are told the devastating news, but it must be taken into account because, like the treatment period, it goes on for years, rather than days, weeks or months. We were fortunate because I have a well-paid job and an understanding employer. In my case, two parents can share the care, we have the use of a car, and we have a supportive family and friends. Many people I have met and know were not in that position, which is why disability living allowance is a very important, if limited, support, on which many people rely.
I ask the House to consider what it is like being in a hospital almost full time, day and night, perhaps with another child at home who cannot really grasp what is going on. Some people in this position are single parents. Some cannot drive or do not own a car, so the very task of getting to and from hospital becomes a nightmare. Some do not have any family network or friends on whom they can rely. Perhaps their employer, who at first was very understanding, later requires them to come back to work, but as they are not sure what the next day will bring they are not sure whether they can commit to doing that. They start to use up their paid leave, then start to take unpaid leave, and then perhaps they give up their job altogether.
A 2007 survey found that 83% of families incur significant extra costs associated with their child’s cancer and 68% get into actual financial difficulties. I think that the survey is wrong, because I believe that about 100% of people in this position find themselves incurring extra costs—I do not see how they can fail to do so. The current qualifying period for DLA already creates problems, as it takes no account of the sudden onset of many cancers—that point was made earlier. Families need help at the earliest possible time, and doubling the qualifying period will only make matters far worse. I ask the Government to look at that again, and I hope they do so.
I also ask the Government to recognise that cancer treatment is not a nice, smooth process; there are ups and downs, and a failure of the treatment or a relapse will result in a different protocol being used, which again can cause a number of problems. My son went down the transplant route, and a lot of issues arise there. Families may need just as much support a year or two years down the line as they did when they received the first news. There is no one-size-fits-all solution and any assessment criteria must take account of that. The Government need to rethink and to listen to charities such as CLIC Sargent, which deal with the families day in, day out and provide a very high level of care. They are the experts. Please listen to the experts and take their views on board.
Chris Skidmore (Kingswood) (Con)
I welcome the Bill, which marks a point at which we can send out this message: we cannot continue to spend on welfare as we have previously. Instead, we need to understand that there is no such thing as Government money, free to be given out; there is only hard-earned taxpayers’ money, which in these difficult times needs to be spent with caution and care.
Over the past 13 years, we saw no evidence of that caution, as the total annual expenditure on benefits mushroomed to £152 billion. Every year, £5.2 billion was lost in overpayments, of which £1.5 billion was lost to fraud. Some £3.5 billion was spent annually on administration costs and paperwork alone. As we have heard from the Minister, other benefits rose, with the cost of housing benefit having increased from £11 billion to £20 billion since 1997. That is simply unsustainable and we must act.
I wish to refer to the words of one commentator, who once said that
“we have reached the limits of the public’s willingness simply to fund an unreformed welfare system through ever higher taxes and spending”.—[Official Report, 14 May 1997; Vol. 294, c. 65.]
Those words could have been spoken today by the Minister, but they were spoken by Tony Blair in 1997. In opposition, Blair understood the problem. He understood, even 14 long years ago, that our welfare system prevents people from living independent and fulfilling lives. He understood that it creates a segregated society, which he stated was a “moral and economic evil.” In 1997, Labour’s manifesto promised:
“we will face up to the…issues that confront us. We will be the party of welfare reform.”
I see very little evidence of that, and, tied down by Members on the left, the party did nothing.
In this debate, we are having to deal with the tragedy that that inaction has left us. Millions of people of working age are locked in dependency on state benefits, with little incentive to get off them. They can exploit a system that provides hand-downs, rather than a hand up—a system that has become the engine of social failure and has driven a culture of “work does not pay”. That, in turn, has driven the importation of cheap labour, exacerbating the immigration problem.
I hope that this Bill can mark the turn of the tide and that it will usher in a new era—one that we were promised in 1997 but that was never delivered. I hope this will be an era of reform that will transform this nation. The stakes might be high, but we cannot afford to waver on welfare reform. We must deliver for the health of the nation, and I urge every Member to give the Bill their full support.
Malcolm Wicks (Croydon North) (Lab)
It is a pleasure to follow my Blairite colleague on the Government Benches. May I say, by way of introduction, that I judge, as many of us would, that wise social security policy seeks to relate the issues of benefits to the issue of employment? I would argue that we should start the discussion with work. I wish to analyse the Bill and some of its proposals in that important context, because surely for those able to work the best social security policy is a job—things start from there.
I often quote William Beveridge at this stage, partly because it reminds us that there was once an era of great Liberal reform. In his famous 1942 report, he talked about the giants of want, disease, ignorance, squalor and idleness standing in the way of social reconstruction once peace had come. He said that the giant of idleness, by which he meant unemployment, was the largest and fiercest of the giants and that if we did not overcome it all the other social goals of peacetime reconstruction would be out of reach. If one thinks about the implications for health and education, one sees exactly and empirically what he meant, so that is my starting point.
Skipping forward 65 years from the great Attlee reforms that implemented the Beveridge recommendations and many others to the present day, it seems to me that there are three issues or obstacles that we must address or overcome if we are to get right the balance and relationship between what I still prefer to call social security—I find the term “welfare” pejorative—and work.
The first issue is employment policy. Where is the Government’s full employment policy? Is it their ambition to move back towards full employment? In my Croydon constituency, literally hundreds of job losses have just been announced at the Home Office’s Border and Immigration Agency. In addition, the council will contribute hundreds of job losses and there will be job losses in the health service with the reform of primary care trusts. That is just the start in an area that is very dependent on public sector work. What we are seeing is not ambition for full employment but a move towards further unemployment, which concerns me greatly.
One of the great tragedies is that many of our fine young people leaving school and getting vocational qualifications and degrees are finding that no jobs are available. We must all think long and hard in the short, medium and longer term about whether we can somehow move towards a job guarantee for our young people, many of whom do so well in education and skills. We will betray a generation if we cannot soon offer them work that suits their skills, creativity and qualifications.
On the contentious issue of immigration, it is clear to me, from a London perspective, that eastern European immigration has made it more difficult for people on the margins of the labour market to get jobs. It is a simple matter: if an employer is presented with a British person of whatever ethnic group who is not job-ready, as opposed to someone from Lithuania or Poland who is clearly eager to work and will probably turn up on time, who will they employ? How, in those circumstances, can we enable British people to get the work that our country owes them?
Stephen Lloyd
That is an important point. Does the right hon. Gentleman agree that a key area in the Bill—within the black box that was discussed earlier—is the fact that the Department will pay providers upwards of £14,000 to help into work people who have been away from work for a while and to sustain them in work over a couple of years? Does he agree that that is a positive step?
Malcolm Wicks
Of course, which is why the Labour Government, under the former Secretary of State for Work and Pensions, my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), established such policies with Jobcentre Plus. Of course that is the right thing to do.
The second of the three issues I mentioned is wage levels. I recall from my history that the Speenhamland system was created in the late 18th century. As far as historians can judge, that was the first direct wage subsidy in Britain. Since then, we have had a number of policies, starting with family income supplement, tax credits and so on that could be said to subsidise low wages. I am proud that a Labour Government introduced the minimum wage, but Conservative Members will not be so proud that their party vehemently opposed it. As we move back towards economic growth and greater affluence, should we be talking about not just a minimum wage but a living, or adequate, wage, not least for people who are employed by multinationals that make large profits? Otherwise, the social security system will continue to subsidise low and sometimes exploitative wages.
The third issue is the work ethic, on which my hon. Friend the Member for Sunderland Central (Julie Elliott) touched. I believe the work ethic is alive and well in many parts of Britain. I also recognise that because of the de-industrialisation during the Thatcher years the work ethic among some individuals in some communities had the stuffing knocked out of it, and there are now communities where three generations of people have been nowhere near a job for a very long time. We need to think through the implications of that.
Where people can work and where jobs are available, working-class people on our estates are angered by spongers and shirkers. Those people do exist and we should not ignore that fact, but in a culture in which bankers can stick two fingers up to democracy, to Parliament and to the Government and in which multinationals brag about avoiding paying tax, we have become an amoral, if not sometimes an immoral, economy. If we are to preach honesty and responsibility to the poor, as I think we must, although it can be difficult at times, then responsibility is also good enough for the rich and powerful.
Paul Uppal (Wolverhampton South West) (Con)
It is an honour to follow the right hon. Member for Croydon North (Malcolm Wicks). I very much shared some of the sentiments that he expressed. His speech contained a good deal of common sense. I would not expect anything else from a fellow Wolverhampton Wanderers fan; that is the least I would expect from him. I do not think I am the third Blairite in a row to speak, but I will endeavour to add some thoughts, particularly from a personal perspective. Six minutes is not long enough to do justice to my full thoughts on the Bill, but I shall be brief. Hon. Members may be happy to hear that I do not intend to use all of my allowance.
This piece of legislation is a seminal Bill. It is one of the reasons that I hold the politics that I do. I am a Wolverhampton Member and Wolverhampton South West is a no-nonsense constituency, full of decent, hard-working folk who say it as it is and always wear their heart on their sleeve. The sentiment that has been repeatedly expressed to me is that the Bill has been a long time coming. Its central ethos is that work always pays. I shall sum it up by recalling my personal experience of my father.
My father came to this country with less than £5 in his pocket and no idea where he would sleep that night. He took that risk not only because he wanted to live in a country that had choice, freedom and opportunity, but because he wanted to work. Within 48 hours of his arrival, someone tapped him on the shoulder and said, “Do you know you can actually claim benefits?” That was anathema to him; it was not even in his mind. He came with the ethos of working, and working is what he has always done. That story has been replicated by those of scores of my relatives, who came over to work and had the ethos of working hard at their core.
I have actually been poor. I was brought up in poverty. I say this to Opposition Members—to all Members, actually: there is no nobility in poverty. It is something one strives to escape from. I went to a state school. My friends divided into two camps: those who had the ambition to move on, and those who, even then, in the late ’70s and early ’80s, would tell me to my face that they envisaged that the rest of their life would be on benefits, and that they were quite happy to live that way. The Bill, through its ethos of making work pay, tackles that problem head-on.
The right hon. Member for Croydon North said that a lot of people had the stuffing knocked out of them in the 1980s. I will use a personal example. Many of the uncles that I referred to earlier lost their jobs because they worked in industries in the midlands in that period, but almost all went on to establish their own businesses. They were driven by ambition and the ethos of trying to better their lives.
I have spoken a lot from an historical perspective, but I want to bring my remarks up to date with a personal story that I heard from one of my closest friends just after Christmas. He had run a motor salvage firm, which, through a bit of bad luck and for other reasons, had gone downhill and eventually folded. People said to him, “How about claiming? You’ve contributed enough in your life,” but he said, “No. I’ve worked for myself and that’s what I’m going to do.” He set up a new business—a cleaning business. He has worked hard, but whenever he tries to employ staff—this frequently comes up—people approach him and say, “I’m happy to work for you if you give me a bit of cash on the side.” What they are saying is that work does not pay in those circumstances.
I am glad, and absolutely proud, to be part of the Government who are introducing the Bill. To make a non-partisan point, this has been a long time coming. It should have been done, not just in the past 13 years, but very many years ago. I shall sum up briefly by paraphrasing a saying that was used by my hon. Friend the Member for North West Leicestershire (Andrew Bridgen): there is never a wrong time to do the right thing. As the Chinese always say, the first step of any journey is a long journey, and the most difficult step. I am happy to put my shoulder to the wheel and support the Bill, and push it through its very important journey.
Teresa Pearce (Erith and Thamesmead) (Lab)
All Members agree that the welfare system needs reform, and I welcome attempts to simplify the benefits system and make work pay. We need a welfare system that helps those who can work to do so, by supporting people into good, well-paid, meaningful work, and properly supports those who cannot work. However, I have serious doubts about the Bill’s effectiveness, and I am worried about the impact that some of its provisions will have on vulnerable people in my constituency.
I shall first raise some concerns that I have about how the Bill has been drafted and presented. Almost all the charities and organisations that I have been in touch with have raised legitimate concerns about the speed of the legislation and particularly the lack of detail. There is a heavy reliance on regulations and secondary legislation that makes it difficult for Members and others to scrutinise how the welfare reform agenda will work in practice. Clause 11 on housing costs, for example, is only 30 lines long. There is little detail or analysis of how child care costs, free school meals and council tax benefit will be covered under universal credit.
One of the most concerning aspects of the Bill is that some of its provisions are still under consultation. For example, clauses 69 to 72 propose the abolition of the social fund, yet the Department for Work and Pensions consultation on its proposed replacement is still open and does not close until 15 April. Abolishing the central fund and handing the emergency money to local authorities without ring-fencing is likely to create a postcode lottery. It is not right that this provision is included when we do not know its full impact and people have not had a chance to submit their views. I strongly urge the Secretary of State to withdraw any clauses on which consultation is still open.
One of the reforms in the Bill that will affect my constituency most is the changes to housing benefit. Capping local housing allowance rates and setting them at the 30th percentile of local rents rather than the median from April will create affordability problems. Many people will see a shortfall between their benefit and their rent. Plans to introduce regulations to uprate LHA rates based on the consumer prices index will make the problem worse. The DWP’s own impact assessment states that CPI is expected to rise by 2% each year, but rental costs will rise by 4%. This will break the link between housing benefits and actual rent costs, and means that many families will struggle.
The change will push many LHA claimants in London further out to areas like my constituency, Erith and Thamesmead, which has some of the cheapest housing in Greater London. This will place a great strain on our already overstretched housing and local services. The other possibility is that people will simply be unable to find any affordable accommodation, and will be at risk of debt and homelessness. Everyone should be entitled to a secure home. I urge the Secretary of State to think again.
Another of my concerns about is the proposal in clause 111 to apply a £50 civil penalty for claimant error. The proposal will affect the most vulnerable claimants—those who have difficulty filling out forms, those whose first language is not English and whose literacy skills are poor—and people who inadvertently miss out information. More importantly, it appears to link error with fraud, something that Ministers have done far too often recently and this afternoon, the most obvious case being the Chancellor’s announcement in the comprehensive spending review statement that over £5 billion was lost to benefit fraud. As we heard today from the hon. Member for Kingswood (Chris Skidmore), the figure is £1.5 billion. The DWP’s latest central estimates of total fraud and error across the Department shows that roughly the same amount of money was lost in claimant error as through official error by the Department, but we do not talk about departmental fraud. I urge the Secretary of State to reconsider the proposal to introduce a £50 civil penalty for claimant error, as well as the heavy sanctions in other clauses.
I was pleased that the Secretary of State decided not to proceed with plans to impose a 10% housing benefit cut on anyone who had been out of work for a year. That sanction did not make sense, and similar provisions in the Bill need to be reconsidered. A sanction-led approach does not make sense when we are facing huge public sector redundancies, a knock-on effect in the private sector and a weak growth rate which means that jobs simply are not available. There are 2.5 million people unemployed and fewer than 500,000 vacancies in the economy. I am already receiving a significant number of letters from constituents, many of whom were recently made redundant late in their careers, who are desperate to work but cannot find employment.
I have visited local colleges, where highly motivated young people are gaining qualifications in the hope of getting an apprenticeship or a job, but they are fearful because they know that the ratio of claimants to Jobcentre Plus vacancies is 12 claimants to every three vacancies. People need help overcoming barriers to work. They need personalised support, and a Government with a growth strategy to create jobs. A sanction-based approach will only cause severe hardship for the people who need the most support and further stigmatise people on benefits, setting neighbour against neighbour. I also fear that it will mean a significant increase in child poverty rates in this country.
Finally, I dispute the assertion by the Secretary of State that the welfare state is only for the most vulnerable. It is not: it is for each and every one of us. It is in effect a national insurance system into which people pay when they do not need it so that it is there when they do. It is a system in which contributions have just gone up by 1% for everyone in employment, but all they can expect is a cut in pensions and benefits. Overall, I support the principle of universal credit, and I am in favour of simplifying the benefits system and creating work incentives, but in the context of £18 billion of welfare cuts—
George Hollingbery (Meon Valley) (Con)
I pay tribute to my hon. Friend the Member for Wolverhampton South West (Paul Uppal), who made a compelling speech. My contribution is likely to be more technocratic, but I pay tribute to his eloquence.
I pay tribute, too, to the Opposition, who have a real passion for this subject and, Government Members will all acknowledge, are more likely to represent constituents who are subject to the vagaries and whims of the benefits system. We must encourage them, however, to accept that our ministerial team cares equally deeply about this complex, difficult and challenging issue. It has introduced a broad skeleton of proposals on which to hang the detail. In my conversations with Ministers, it has been quite clear that they know that that detail is missing at this stage. Indeed, the Secretary of State has made it plain that there is more work to be done on particular areas, but change is certainly required.
There are more than 30 different benefits out there that can be claimed. There are 14 manuals in the Department for Work and Pensions, with 8,690 pages of instructions for officials. There is a separate set of four volumes for local government, with 1,200 pages covering housing and council tax benefits alone. That is an astonishingly byzantine system. One of my constituents, Nigel Oakland, wrote to me:
“Nobody at the Jobcentre Plus can explain if it is beneficial if I continue to sign on. The last advice I was given is that I should Google the question.”
In such a situation, where even the experts at Jobcentre Plus cannot answer the questions that arise, we are clearly in difficulty.
It is confusing for clients. There is a 30-page form for housing and council tax benefit, including three pages of declarations. Employment and support allowance requires a 52-page form; jobseeker’s allowance, 12 online sections, each of five to 10 pages long; and disability living allowance, a 60-page form. Is it any wonder that people become confused and fill in the forms incorrectly and make mistakes? The system is extraordinarily expensive to administer. The DWP spent £2 billion last year administering working-age benefits, and local authorities a further £l billion administering housing benefit and council tax benefit. Even the tiny citizens advice bureau in Bishop’s Waltham, a town of 5,000 people in a rural and relatively affluent part of Hampshire, processed 2,176 queries about benefits in 2009-10, advising people how to claim them.
As we have heard from my hon. Friend the Member for Kingswood (Chris Skidmore), overpayments are rife, and I do not intend to rehearse the clear disincentives to finding work imposed by the benefits system, as that has been covered in some detail by the Secretary of State and my hon. Friend the Member for Bexleyheath and Crayford (Mr Evennett). There is absolutely no doubt that with some work having a marginal rate of tax of 95%, there are powerful disincentives that prevent people from going out to work. The taper in the universal credit of 65% at least allows some certainty, so that every time someone goes out to work they can be sure that they will earn a reasonable amount and get a reasonable amount in their pocket.
The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) discussed the difficulties for self-employed people in the new system. Only yesterday, I asked my right hon. Friend the Minister of State how that would be administered outside the PAYE system. He had a clear answer, and said that there would be mechanisms in place. In the present situation, my constituent Zehra Peermohamed wrote:
“For every £50 extra per week my new business may generate”—
a business that she started up herself—
“I would only gain an extra £4.81 of it to add to my overall income…It seems that there is little incentive for people in my situation who want to better themselves and not to rely on the benefit system.”
Whatever objections the shadow Secretary of State might have now, the existing situation is certainly no better.
Gemma Sword, a single mother with a child who has turned seven, says:
“In March…I started working part time 4 hours weekly over 3 days earning £96 monthly of which I was allowed to retain £80.”
From 15 November, she earned up to £150. Ms Sword continues:
“I was then transferred to Job Seekers allowance as my son turned 7 and was told that I can now only keep £20 of my monthly earnings”,
which did not even make it worth travelling to work. She was then told that she had to look for full-time employment but, to do so, had to leave her part-time employment. Those rules make no sense to anybody who looks at them carefully, and there is no doubt in my mind that there are powerful disincentives in the system to stop people going out and bettering themselves by finding work.
I do not want to spend a large amount of time examining the issue now, but we need sticks as well as carrots. There needs to be an understanding in the system that if someone does not perform as the system requires them to do in looking for work, they will pay a penalty in terms of the benefits to which they are entitled. Without that part of the mix, the new universal credit will not work.
I would love to examine in more detail the Work programme and its localisation, because the Communities and Local Government Committee has heard evidence that localisation will be peripheral. I would like to hear about the migration from disability living allowance to the personal independence payment, and in particular about the mobility component. I have talked to the Under-Secretary about that at some length and received considerable reassurances, for which I thank her. I would like more on the work capability assessment, the Harrington review of it and the ongoing review continually to refine that system and make it fairer and more equitable; and I also want to hear a little more at some stage and, particularly, in Committee about the appeals process and the proposed changes to it.
On the whole, however, this is a thorny, knotty problem, which the Government are grasping with some alacrity, and I for one will certainly vote for the Bill’s Second Reading.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
These debates about our welfare system or, as I should say, heeding the comments of my right hon. Friend the Member for Croydon North (Malcolm Wicks), our social security system—whether in the House, the media or the pubs and living rooms of our constituencies—often become a magnet for two opposing arguments. The first is that everyone on welfare is somehow undeserving and all the money is spent incorrectly; the second is that every penny spent is 100% effective and should be beyond question. We have heard those views today, but both are extreme and neither is true.
I will always support our welfare state, and I want to live in a country where we accept collective responsibility for the people who are most in need. We would all be much poorer if we did not enable the most vulnerable members of our society to live with dignity, and it would be a far more daunting society without the support that we currently offer to people who are searching for work. I admit, however, that our system is not without its shortcomings, and it could benefit from some reforms. Unfortunately, those are not the reforms suggested in this Bill.
Our welfare system can be daunting and is too complex, and universal credit could be a positive step forward if it simplifies the system, but simplicity and transparency, welcome objectives that they are, are not enough on their own; the welfare system must also be fair and effective and, above all, enable the transition from welfare to work. The proposals in the Bill fall short of those measures, and as a result, despite being a supporter in principle of welfare reform, I cannot support them today.
The Government need to realise that we can support the welfare system and make it stronger only if we are also willing to support the labour market. Helping the transition from welfare to work will be successful only if there is work to take up, yet the scale and pace of the cuts that we currently see threaten to send unemployment soaring, just as happened under the previous Conservative Government, when it topped 3 million on two separate occasions.
Government Members tell us that the welfare bill is expensive, but so is mass unemployment. I believe enormously in the power of work. Employment brings dignity, respect and decency to life, and getting more people into work should always be one of the prime objectives of the Government. In my constituency there are 16 people chasing every advertised job, and, with some of our major employers, such as the council and the police force, axing hundreds of jobs, that will only become worse. Residents are concerned about their jobs, and with youth unemployment at record levels they are worried that there will be no work for their children.
The Labour Government took deliberate and positive steps to reduce youth unemployment by introducing measures such as the future jobs fund. By September, almost 700 young people in my borough had completed placements funded by the scheme. The scheme was an opportunity for participants to learn new skills, to develop confidence, and to learn about the things that might be holding them back in the jobs market. Many of the people who completed it went on to further education or training. Where was the sense in axing such a scheme, which was already proving successful in stemming the increase in youth unemployment?
It seems to me that schemes such as the future jobs fund were cancelled not for economic reasons but for political ones. The Government appear intent on spinning the myth—
Jonathan Reynolds
I will, because I believe that I could not give way to the hon. Gentleman on Second Reading of the Health and Social Care Bill, and I do not want to be discourteous a second time.
Stephen Lloyd
I thank the hon. Gentleman. On the future jobs fund, does he agree that the percentage of people who went into paid work afterwards was incredibly low? One of the reasons why the Government have decided to focus more on apprenticeships, where they have invested much more money, is that with apprenticeships the jobs that people get tend to stick.
Jonathan Reynolds
When I looked into this, anticipating such an intervention, I found that it is difficult to get precise figures on a constituency basis, but the information that my local authority could give me shows that two thirds of the people who were employed through the future jobs fund in my borough went on to paid employment or training. I appreciate that that is not quite the answer to the hon. Gentleman’s question, but it is the best one I can give him.
The Government seem to want to create a year zero and pretend that no reform went on over the past 13 years, in order to create a benchmark by which they can measure their own progress. However, it is a false benchmark because it fails to recognise the progress that was made. Returning people to employment was an integral part of the last Labour Government’s policy, and many advances were made. The Benefits Agency-Jobcentre Plus merger, which is always identified as best practice, allowed people to look for work at the same time as claiming as benefits. We launched the new deal, under which, for the first time, people were told that they could not refuse help to find work, and it was the Labour Government who toughened sanctions against those who could work but refused to do so. Some of the measures now being proposed dilute the sanctions imposed by the last Labour Government.
Mel Stride (Central Devon) (Con)
Will the hon. Gentleman explain what progress was made under the last Government, given that the numbers claiming incapacity benefits increased from 700,000 to over 2.5 million?
Jonathan Reynolds
The benefits changed, so I am afraid that the hon. Gentleman is not comparing like with like. If he goes to the Library, he will see that the overwhelming rise in sickness benefits occurred in the 1980s, when take-up doubled. That is because when we went through the process of deindustrialisation the Conservative Government threw people on to the scrapheap, encouraged them to take that benefit until they retired, and did not care one bit about them. That is where he should look if he wants to find a reason behind these figures.
Ian Paisley (North Antrim) (DUP)
Does the hon. Gentleman acknowledge that in Northern Ireland there is over £700 million in unclaimed benefit that people should be claiming and have not claimed? If that is the case in Northern Ireland, the same must be true across the rest of the United Kingdom.
Jonathan Reynolds
I thank the hon. Gentleman for his point; I am pleased that he has been able to put it on the record.
I am proud of the Labour Government’s record on welfare reform, which stands in stark contrast to what occurred in the 1980s and 1990s, when there was no such reform at all until the end of the Conservative Government. Only now are the Conservatives coming back to it, but against the backdrop of public sector cuts and deficit reduction. The question that people will ask is whether the Bill is really aimed at getting people back into work or, once again, merely pursues the Government’s ideological goal of reducing the size of the state.
In principle, I welcome the move towards a single, simplified universal credit; few would not do so. That has the potential to ensure that people are clear about the income they will have if their circumstances change, and in principle I wish that we had done it. However, only through scrutiny of the detail of the Bill will we determine whether the reality of these reforms matches the promise, or whether they are really a cruel camouflage to hide savage cuts targeted at the most needy members of our communities. The measures in the Bill will penalise savers. Estimates suggest that nearly half a million families could lose all eligibility for financial support. Some reforms, such as the removal of the mobility element of DLA, are simply cruel and unfair. The Bill leaves many questions unanswered, such as how some benefits—crisis loans and council tax benefit, for example—will maintain any consistency if eligibility is decided locally.
Furthermore, we still know far too little about the Government’s plans for the most important area of all—child care. For all the good that any reform might do, unless the Government continue to provide support for childcare, we will not make anything like the progress that could be made.
I believe that the principles behind the Bill are right, but there is too much in the proposals that is ill thought through, and will be detrimental to many vulnerable people. The Bill is not ready in its present form, and the Government should recognise that. Welfare reform has a great many supporters in all parts of this House. The Government should have built on that consensus in creating the Bill, but they did not. That is why I will not support the Bill today, but will vote for the reasoned amendment moved by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne).
Sajid Javid (Bromsgrove) (Con)
I welcome the Bill, and the excellent and thoughtful contributions that we have heard from all parts of the House. This Bill is important for many reasons, and it goes to the heart of the kind of society that we want to be. Do we want to be an opportunity society that rewards people for hard work, believes in equality of opportunity rather than equality of outcome, and believes that we should have a welfare state that stands behind people to cushion them if they fall, not one that stands in front of people and stops them progressing and reaching their ambitions and aspirations? That is the essence of the Bill. If one believes in an opportunity society, one believes in this Bill.
Some 1.4 million people have claimed out-of-work benefits for nine of the last 10 years. In that time, 600,000 people have gone straight on to the welfare register on leaving school and have never worked since. In short, many people have come to see welfare as a career option. I have seen that as an MP when meeting my constituents. In particular, I met a local farmer some months ago who employs 52 people on the national minimum wage for unskilled work. Of those 52 people, 40 are foreign workers from eastern Europe. When I asked him why that was the case, he said that our young people lacked a work ethic. In many cases, he had interviewed people but when they had considered the job and checked the numbers, they realised that they would be worse off if they took the job as opposed to staying on welfare.
Our welfare budgets have rocketed in such a way that today, 2 million children are growing up in households where no one works. Incredibly, the proportion of working-age adults living in poverty is the highest since records began. Worklessness and benefit dependency is costing our country a fortune. This entrenched poverty and worklessness throughout Britain is bad for benefit recipients and bad for society, and often leads to higher levels of debt, family breakdown, and alcohol and drug abuse.
At the heart of the problem is the lack of work incentives. We have a proliferation of benefits that makes the system so complex that people do not know whether they would be better off in work than out of work. I went to my local jobcentre a few months ago and asked the staff how long it would take them to tell somebody if they would be better off in work if they came in and said that they could get a part-time job tomorrow for 10 hours a week on the minimum wage. The answer was that it would take 90 minutes on average. They added that even when they give an answer and it happens to be yes—in many cases it is no—because it takes so long, many people have so little faith in the answer that they decide not to work in any case. That has to change.
We cannot address only the symptoms of poverty and worklessness; we have to address the causes, such as welfare dependency, educational failure, addiction, debt and family breakdown.
I will highlight three areas of the Bill that I believe represent the right way forward. The universal credit is the most important part of the Bill, because it will ensure that everyone is better off in work than out of work. The taper relief, at 65%, strikes a good balance between budgetary pressures and giving the right incentive to work. However, I hope that in the longer term, Ministers will look again at that rate with a view to reducing it. I caution that in implementing the universal credit, Ministers should look carefully at the IT systems, because they will have to work with other agencies, including Her Majesty’s Revenue and Customs. Many previous Governments have bungled new IT systems in terms of time or cost. This therefore has to be considered carefully. So does the passporting of benefits, to ensure that the nature of the taper relief is maintained and there are no cliff edges.
I also wish to highlight the changes to housing benefit, which are welcome because for the first time, they will ensure that people on housing benefit cannot live in properties that ordinary working people would have no prospect of being able to afford. That was a commitment in the Labour party’s manifesto, and I hope that all Members wholeheartedly endorse it.
The change to the consumer prices index for the uprating of housing benefit is also welcome, partly because it will save £300 million a year and we have to find savings given the budgetary pressures. Also, as such a huge proportion of people in social housing receive housing benefit, it may lead to a change in the rents demanded. Finally, I wish to highlight the welfare cap, which will be £500 a week for couples, meaning that no family can earn more than £26,000 a year in benefits net, or £35,000 gross, which happens to be equal to the national average household wage.
In summary, the Bill is a huge step forward in creating an opportunity society. It restores the dignity of labour and ensures that the Government will be standing behind people in case they fall, to help cushion that fall, but will not be in front of them to prevent them from progressing and meeting their ambitions and aspirations.
Yvonne Fovargue (Makerfield) (Lab)
Like many other Members, I welcome the concept of simplicity in the welfare system—of which I have experience, having worked in it. I also welcome the aim of ensuring that work is a route out of poverty. However, I do not believe that the Bill demonstrates fully how that will be achieved. Among two groups in particular, it could actually increase the number of people falling into poverty and debt. Like others, I am seriously concerned that people who are ill or have an accident, and have to take prolonged time off work, will suddenly be negatively affected by the plans to replace disability living allowance with the personal independence payment and by the changes to employment and support allowance, and will get less help from the universal credit, particularly during the first six months of their illness or disability.
People in that situation are coping with significant stress and coming to terms with a fundamental change in circumstances, as well as a sudden and dramatic drop in income. I had worked out some examples, but I shall not have time to give them. Suffice it to say that in months three to six, a single person who has worked all their life but has had a stroke and can no longer work is likely to be more than £130 a week worse off unless the qualifying period for the personal independence payment is brought forward to three months.
The importance of the severe disability premium cannot be overstated. It is a source of extra help for people who do not have a carer and have higher costs because of that. If it is not included in the Bill, the drop in income for hard-working people who suffer a life-changing illness or disability will be catastrophic. If they have a mortgage, the position will be even worse. Almost 20% of the people who attended an advice desk run by the citizens advice bureau at the county court said that an illness was the major factor in their falling into mortgage arrears, putting them at risk of losing their home. No fewer than three measures in the Bill will substantially reduce the amount of financial support available to people in that situation.
I now turn to families, particularly those paying for formal child care. If, as has been suggested, only 70% of child care costs are covered, many second earners on a low income will not have a realistic option of returning to work until their children are older and need less care. In some cases it could cost people money to return to work, which was not the intention behind the Bill at all. In fact, somebody’s problems might start not when their baby is born, as is usual, but when statutory maternity pay or maternity allowance is paid, because it is unclear in the Bill whether that will be treated as “income other than earnings” and lost pound for pound.
Clarification is also needed on other issues, such as whether benefit will be paid to the household rather than to the main carer. That is a big issue for many families.
Ian Paisley
Does the hon. Lady accept that there is a huge policy contradiction? The Government claim that they want to eliminate child poverty, yet at the same time they want to cut the social security payments that go right to the heart of benefiting children from low-income households.
Yvonne Fovargue
I totally agree with the hon. Gentleman, and I have evidence that some lone parents will not be able to work their way out of poverty.
To return to the question of to whom benefits are paid, I have seen mothers whose only source of stable, reliable income is child benefit, and many more mothers who do not know what their partners earn and who are given an allowance every week. That problem will be exacerbated if benefit is paid to main wage earner, which is usually the man.
Finally, if there is a query about one element of a claim there is often a delay, particularly when housing benefit and private landlords are involved. I can only hope that the other elements of the universal credit will be paid while such matters are investigated, and that the benefit is not so universal as to be “all or nothing” in such cases.
On sanctions, it is quite right that people refusing reasonable work should be penalised, as indeed they are under the current system. However, I urge the Government to ensure that great care is taken when sanctioning vulnerable claimants. For example, I dealt with a client who was sanctioned for not turning up for an interview to discuss his claim. Hon. Members might think that that is perfectly reasonable, but that client was in a secure institution—a secure mental health unit—and the letter requiring him to turn up for interview was sent there.
The £50 civil penalty for claimant error should be withdrawn. I am sure that, like me, many hon. Members deal almost daily with constituents who have been the victims of official error. The focus on claimant error is out of proportion. People who claim those benefits include the most vulnerable people in our society. They are the most likely to make errors, particularly with official forms, and the least likely to be able to afford the penalties. We should not simplify the benefit alone; the claiming process should also be simplified.
I hope that the amendment will be supported, because the Bill lacks clarity and detail. In fact, it will have the opposite effect of what is intended in terms of the Government’s stated broader goals and obligations, such as making work pay, reducing child poverty and protecting vulnerable groups.
Harriett Baldwin (West Worcestershire) (Con)
This is a profoundly important Bill. It is born out of the Secretary of State’s deep passion for helping people to get out of poverty—he has spent the last decade looking at that. There are few ways in which people who are born and grow up in poverty can find a way out. I can think of some, but winning the lottery does not happen very often and it is unlikely that someone will get a surprise inheritance from a relative whom they did not know existed. Marrying a top footballer is rare, and it would probably be quite hard work. The hon. Member for Makerfield (Yvonne Fovargue) spoke of work as “a” route out of poverty, but it is “the” route out. If Opposition Members have alternatives to work as a route out of poverty, I would be interested to hear of them.
The Bill removes the barriers that the welfare system puts in the way of people working their way out of poverty, which is important. We must recognise—this is why I am so disappointed that Opposition Members will not support Second Reading—that there are many barriers in the system’s construction that prevent people from getting the important message that they need to go out to find a job and to work, and that that is how they will improve their economic circumstances.
Ian Paisley
I appreciate what the hon. Lady says about people who are able-bodied and who can work working their way out of poverty, but how do people find their way out of poverty if their impoverishment is a result of disability?
Harriett Baldwin
As the hon. Gentleman knows, there are many provisions in our welfare system for exactly that sort of situation. I do not think that anyone is suggesting that people with no capacity for work should get out and work. We should have a generous safety net, as we do for people in those situations.
However, the system as currently constructed has many barriers that send the message that taking on full-time work is not worth while. With single parents facing a withdrawal rate of 96%, what kind of message does that send to people about the sense in going to work? We have all met people who work 16 hours a week. As we know, the way that working tax credits work gives people an incentive to find a job working 16 hours a week. At the moment, those working 15 or 17 hours a week find themselves financially worse off. That is why it is so important that the Bill tackles those cliff edges, ensuring a much smoother process and a linear relationship between the time that people work and the amount that they take home. At the end of the day, we all respond to the financial incentives that are inherent in the system.
As we heard earlier, the current benefits system also pays couples more to live apart than to stay together. I believe that I am right in saying that 2 million people in this country would identify themselves as being in a relationship but living apart. No one can deny that, in large part, that is down to the messages and the financial incentives sent through the welfare system, which will be reformed by this Bill.
I am sure that Opposition Members will welcome the fact that the distributional analysis of the universal credit shows that the vast proportion of additional money in the system will go to those in the lowest income deciles, with 85% going to those in the four lowest-paid deciles.
I should point out, however, to the Secretary of State that it was still a shock to realise that even under the changes that we are discussing today, the benefit withdrawal rates for those going into work will still be 65p in the pound. That is still a shockingly high marginal deduction rate, when our higher-rate taxpayers are on 51% or 52%. The Child Poverty Action Group, the Centre for Social Justice and Family Action have all argued for a withdrawal rate of 55%, with Save the Children arguing for a 50% withdrawal rate. I hope that everyone in the House will welcome the fact that the Bill gives the Chancellor in future the ability to stand at the Dispatch Box and say that he is making a change in the marginal withdrawal rate, because we would all like it to be reduced over time.
Naomi Long
I acknowledge what the hon. Lady says about the Bill giving the Chancellor the freedom to do that, but it does not require him to do it. Would it not provide people with more certainty if the Government indicated that that were the intention?
Harriett Baldwin
I think that we have heard the Secretary of State put that on the record on a number of occasions.
There are a few debating points that have arisen in this debate, particularly from the Opposition, that I would like to address in my few remaining minutes. On savers, we can have a debate about whether someone with £16,000 in savings ought to be in the benefits system, but we should all recognise that the welfare system should focus on those on the lowest incomes and with the lowest savings. That is one of the difficult decisions that it is worth tackling, and the Bill does that.
Stephen Timms (East Ham) (Lab)
That feature of the proposals will mean that, as a fine simply for having £16,000 in the bank, people will lose all their tax credits, which could amount to £5,000 a year. Surely that is not right.
Harriett Baldwin
The right hon. Gentleman probably also supports the proposition that I should continue to receive child benefit. We need to make these decisions, and they need to focus on certain levels of savings.
Passported benefits, on the other hand, are something that we will need to discuss in great detail. I hope that the Committee will do that, because things such as free school meals, which at the moment are passported in with other benefits, are also a trigger for early years payments for schools and the pupil premium. It will therefore be particularly important to have clarity about how free school meals are going to work in the future. Personally, I would favour putting that in with the universal credit, where it would be affected by the same withdrawal rates.
Another good point that has been raised in the debate was about entrepreneurs. We must ensure that people do not hear from the benefits system a message against entrepreneurial behaviour. The Committee needs to look closely at how the imputed income of new business start-ups will be treated for benefit purposes.
We have heard allegations that the Bill has been rushed. I disagree. We are talking today about changes that will not even come into effect until 2013. However, I agree with my hon. Friend the Member for Wolverhampton South West (Paul Uppal) that they cannot come soon enough, although I know that a major computer system needs to be changed. I welcome the measures in the Bill and I look forward to supporting its Second Reading.
Mrs Anne McGuire (Stirling) (Lab)
I am delighted to follow the hon. Member for West Worcestershire (Harriett Baldwin). In June last year, I made a contribution to a debate in the House on welfare reform, in which I congratulated the Secretary of State, then new to his post, on the sentiments that he had expressed on reforming the welfare system in this country. At that time, I said that he had used a broad brush, and that we had not yet seen any details. Frankly, we still find ourselves in that situation today.
Like other Labour Members, I welcome some aspects of the Bill. The introduction of the universal credit and the moves towards simplification are certainly proposals that we can endorse. Most of us, and most of the organisations that we communicate with, welcome those developments, but there is still serious concern about significant aspects of the Bill. In the time available to me, I want to concentrate on just a couple of those aspects.
First, the Bill is skeletal in the extreme. The clauses have definitely been drafted with a broad brush, declaring an intent rather than giving details of what will happen. For example, what exactly does
“benefit rates for people not in work will generally be the same as under the current system”
mean? How will “generally” impact on the specific? How will individuals know, when deciding whether to support the Bill, what is actually going to happen if work is not a realistic option for them? I have rarely seen a Bill in which so much depends on regulations that “may” happen—[Interruption.] I do not know which hon. Gentleman is chuntering over there, but I can give the House an example from clause 4 on entitlement. Subsection (2) contains the words “Regulations may provide”, and subsection (3) states that “regulations may specify”. Subsection (7) states that “regulations may specify circumstances”. And so it goes on.
We are not being asked to deal with a major piece of welfare reform here; we are being asked to buy a pig in a poke. We do not know the details. The Secretary of State made great play of the fact that this will form a contract. Well, in all contracts, the devil is in the detail. I welcome the comment of my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) today that he is not prepared to sign up to the Second Reading of the Bill until we have seen the details. We have so many unanswered questions. What will happen when council tax benefit is abolished? Is it going to be replaced by a grant? How will that be assessed? How is it going to be managed?
I must point out to Conservative Members that it is not only in Labour constituencies that the Bill will have an impact. It will do so in the constituencies of Members across the Floor of the House, and individuals in those constituencies are now worrying about whether they will be able to maintain themselves in their own homes. What will happen to those who fall off the edge when their employment and support allowance runs out? Surely it is the right of any disabled individual in a civilised society to be supported if they are unable to work. Frankly, the Secretary of State’s comment about reviewing people whose impairment will not change throughout their lifetime was absolutely astonishing, and I think it did him no great credit. I would not like to explain to the parent of a deaf-blind child that they needed to bring their child for a review every so often—just to make sure that the child was still deaf and still blind.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Like my right hon. Friend, I have received representations from many constituents who have a similar concern. Does she agree that, regrettably, those parents who have heard the Secretary of State today are likely to be even more worried than they were at the start of the debate by his very refusal to rule out the type of continued reassessment about which we are so concerned?
Mrs McGuire
I agree wholeheartedly with my hon. Friend. I believe that this is one of the issues causing the greatest concern among individuals and families.
Mrs McGuire
If the Minister is going to clarify what the Secretary of State said earlier, I would be delighted to give way to her.
Maria Miller
I just wanted to clarify that these measures do not affect children.
Mrs McGuire
In that case, we can take the age forward and talk about a deaf-blind adult. Our case about people whose impairments or disabilities will not change and who can be assessed as such is not at all diminished, as they will still have to go through this review.
The type of review is also an important issue. For a long time, disabled people in this country have fought hard to be recognised as part of a social model of disability. What we are seeing now is the introduction of an assessment by a medical professional. Is it any wonder that disabled people out there are beginning to think that all those things for which they fought so long and so hard—the achievements they have made over the last 15 years, with cross-party support—are going to be thrown on the scrapheap? That, I think, is the danger posed by this Bill, and I have highlighted the questions that disabled people are asking.
The Minister might well be thinking that all this is a matter of hyperbole. I do not think it is, and I know that many of my hon. Friends would agree, because we are hearing daily quite tragic stories about people who are terrified about what is going to happen. They are worried not necessarily because the Government have bad intent, but because the Government are not explaining exactly what is in the Bill. I do not think that the Minister has bad intent and I certainly do not think that the Secretary of State has, but given that they are embarking on something that will radically affect individual people and families, we must have a better Bill than the one before us.
The Secretary of State is often cited as saying that this Bill amounts to the greatest change in the welfare system since Beveridge. The reason why Beveridge worked and was sustained for so long was that it was about engagement with the whole of society. It was about a contract that people recognised, knowing that if they put something into society, they could occasionally get something back—not just a cushion, but something that gave them a participatory role in that social contract. What we have now is a deconstruction of those Beveridge proposals. What we have is a system that effectively tells people that they cannot have welfare unless they meet all the criteria, which are not even known, in a Bill that is far more skeletal than many of—indeed, any of—the welfare Bills brought before this House.
We should not give the Bill its Second Reading today. If the Minister can tell us in her summing up that all those issues will be dealt with in Committee, we might be able to give the Government the benefit of the doubt later in the process. I welcome, however, the view of my right hon. Friend the Member for Birmingham, Hodge Hill, the shadow Secretary of State, that if the Bill is not radically changed and if its contents are not confirmed, we should not support it even on Third Reading.
Mr John Leech (Manchester, Withington) (LD)
I am delighted to have the opportunity to contribute to this important debate on the future of the benefits system.
I think that the whole House would agree that the way in which a Government treat the most vulnerable will always be a good measure of whether they can claim to have been fair. When the last Labour Government failed to restore the link between pensions and earnings during their 13 years in power and introduced the infamously derisory 75p pension increase, people rightly saw that as unfair. Similarly, their cut in benefits for single parents—described by one former Labour Member of Parliament for Halifax as “punitive and cruel”—was vindictive and unfair.
If the coalition Government are to be able to make that claim of fairness, we must ensure that we protect the most vulnerable. We have made a good start by restoring the link between pensions and earnings with the triple lock and committing ourselves to raising the personal allowance to take hundreds of thousands of the most poorly paid out of tax altogether. However, changes in the benefits system present a real challenge. If the Bill is not amended during its passage, it will certainly not receive my support.
I want to concentrate on housing benefit and possible changes in disability living allowance. Let me begin with the positives. Ministers in the Department for Work and Pensions have certainly been listening. I have had the opportunity to meet all of them to discuss the proposed changes and am pleased that the plans to restrict housing benefit to 90% of the full award after 12 months for claimants on jobseeker’s allowance have been abandoned. That terrible idea would have resulted in numerous people who were actively seeking work being worse off through no fault of their own. Many people and organisations inside and outside the House have worked hard to ensure that that does not happen, and I am glad that Ministers have recognised that it would have caused real hardship for many vulnerable people.
A great deal of attention has been paid to the proposal to remove the mobility component of disability living allowance from people in residential care. Last month, in an interview in The Guardian, the Minister sought to reassure disabled people in care homes and their families that the Government would not remove their ability to get out and about. I have no doubt that that is the Government’s intention and welcome their commitment to reconsider the proposal. Unfortunately, I do not share the Minister’s optimism that the mobility needs of those in care homes will be met if disability living allowance or its replacement is taken away, and I urge her to abandon any such plans.
The proposal has caused concern to organisations such as the Muscular Dystrophy Campaign, whose petition I submitted to Parliament only last night. The petition stated that the mobility component
“helps to meet the higher costs of accessible public transport”.
It also stated that
“without DLA mobility component, thousands of adults of all ages with severe disabilities who are supported by the state to live in residential care will be unable to retain voluntary employment or simply to visit family and friends”.
I urge the Minister to ensure that that does not happen.
Ian Paisley
I agree with much of what the hon. Gentleman has said. Does he believe that linking benefits to the lower consumer prices index rather than the retail prices index is “punitive” and “unfair” to those who have to claim benefit?
Mr Leech
I was just coming to that. Yes, I do think it is unfair.
The Bill proposes that from April 2013 the local housing allowance should be uprated in line with the consumer prices index rather than real rent increases. I shall avoid the temptation to reopen the debate about whether RPI or CPI is a better measure to use. I merely point out that the Government do themselves no favours by picking and choosing which measure to use. If CPI is a better measure of inflation, we should not allow train operating companies to increase train fares in line with RPI, but that is a debate for another time. I recognise that the current arrangements do little to keep rents low, but there is a real danger that rents will increase at a much faster rate than CPI. The Government must be prepared to keep a watching brief on increases in rent and to take further action if the changes fail to keep housing benefit in line with rent increases.
I do not think that any Member has raised the issue of under-occupation so far. The decision to restrict housing benefit in social rented homes when tenants are under-occupying properties is ill thought out, and will cause significant hardship to many families who are existing tenants. I recognise that this is designed to bring housing benefit for social-rented property into line with the private-rented sector, but it does not take into consideration local circumstances. In Manchester, for example, under existing rules a family with one child is entitled to queue for a two or three-bedroom property. That is intended to allow for the possible growth of young families and reduce the need for future moves caused by overcrowding. Similarly, in low or no-demand areas where there are a lot of two-bedroom flats, property has been provided to single people or childless couples either to allow children who live elsewhere to visit, or simply to fill the vacancies in hard-to-let properties. As a result, a significant number of families on housing benefit could face a reduction in benefit through no fault of their own. We need to look at this again and recognise that a one-size-fits-all approach will not work. I suggest at the very least applying a gross under-occupation test whereby restrictions to housing benefit could be applied if more than two rooms were unoccupied.
Mark Lazarowicz
Another possible circumstance could arise where people who have been in work all their lives and have never had to claim any benefit suddenly find that after 20 or 30 years they have to apply for housing benefit and face the prospect of having to leave the house that they have lived in for decades. Would that not be extremely inhumane as well?
Mr Leech
Yes, that is true, and it might lead to people being forced to go into private rented accommodation and not having a protected tenancy.
I want to comment on the proposals to cap benefit at £500 a week for families and £350 for a single person with no children. I recognise that a cap on benefit is justifiable to make work pay, but the cap should exclude housing benefit costs, which can vary dramatically in different parts of the country. Given that the cap on housing benefit for four-bedroom houses will be £400 a week, large families might be expected to survive on as little as £100 per week if total benefit is capped at £500 a week. Under other proposed changes, homeless families will receive only one reasonable offer, which might be of a private rented property that could swallow up the vast majority of their total benefit entitlement. The answer to this problem is to calculate a maximum benefit excluding housing benefit to ensure that families in receipt of benefit have enough to live on, regardless of the cost of housing locally. That is the only way to guarantee that they will have enough to live on.
Finally, although this point is not directly related to the Bill’s contents, I suggest to Ministers that the best way to tackle escalating housing benefit would be to invest properly in affordable social housing and bring more empty homes back into use. That would not only massively boost the construction industry but help reduce rents in the private sector, which is holding tenants to ransom. There would be a short-term cost, but it would give a major boost to the economy and there would be a long-term reduction in housing benefit costs.
Geraint Davies (Swansea West) (Lab/Co-op)
This is a mean-minded, ill-thought-out Bill that is not designed to promote fairness or help people into work. Rather, its purpose is to punish the poor, the disabled, those with children, those trying to save and those starting a small business for the cost of the greed and recklessness of City bankers, who created our deficit. That is laid at the door of the poor, while those responsible indulge in sharing £8 billion of banker bonuses under a system propped up by the taxpayer, whereby if risks go wrong the public pay and if they go right the bankers profit.
Steve Baker (Wycombe) (Con)
I share the hon. Gentleman’s sense that the banking system is responsible for the greatest injustices in our society, which I fight often, but, as has been pointed out, these reforms long predate the banking crisis.
Geraint Davies
I shall come on to the reforms.
The deficit was the price paid to avoid a depression, and the Government had a clear choice: they could halve the deficit in four years by focusing on economic growth and making the bankers pay their fair share while also making savings over time that are fair and do not harm economic growth. The alternative, which the Government have chosen, was to cut the deficit at twice that pace, clearing it in half the time—in four years. That is a “formidable” challenge, according to the Institute for Fiscal Studies, which says that the Government need a plan B.
There is an over-reliance on savage cuts, particularly to public sector jobs and the welfare benefits we are considering today. That will throw whole communities into poverty, with a third of a million public sector redundancies triggering a further 1 million private sector job losses, which will cost an extra £7 billion a year in benefit costs and lost tax. The benefits of those thrown on to the dole will be cut, forcing them, in the worst instances, into community projects like criminals when they cannot find work. Why is this happening? It is happening because the Government have thrown a bucket of water over the embers of economic growth that Labour had kindled.
Geraint Davies
The Bill will cost around £4 billion to implement, and save some £18 billion by taking from the poorest families. The Government’s plans are incompetent, unfair and counter-productive. The fact is that the cuts are choking growth and VAT is stoking inflation, and both are pushing the deficit up, not down. In Germany the focus is on growth, not cuts, and growth continues apace. In Britain, of course, growth is negative—and it is not just the snow. Alongside the £4 billion cost of the Bill is the £4 billion cost of dismantling the health service and the £7 billion lost through the unemployment created by the job cuts, and so it goes on.
What is the impact on people in Swansea? Some 40% of its workers are employed in the public sector. We face the second highest level of job cuts and very large benefit cuts. Some 65% of people employed in the public sector are women, and the combination of cuts in jobs and welfare payments will impact on families in particular as they pay their share of the £18 billion in savings that will be made.
The Bill will hurt children, the disabled and enterprise. Let us consider a Swansea woman with children who works for the council and is made redundant. She has savings of £18,000 and, being an enterprising person, wants to start her own business. She will get no benefits, of course, because she has saved more than £16,000 in good faith. She will have no wage, but she will be assumed to be getting the minimum wage as she is starting a business. Her business will face various start-up costs, such as a computer, setting up a website and promotional literature. She will be penalised for being a worker, penalised for being a saver and penalised for being an entrepreneur.
Let us assume for a moment that the woman is successful, despite those barriers. She will be threatened with the loss of her council house if she earns too much—hardly an incentive for people on council estates to start their own businesses. Let us say that she is in her second marriage and she and her husband have five children. Her husband was also employed by the council—they met working there—and both were made redundant. They have five children, so they have nearly £500 of personal benefits in addition to £200 in housing benefit, which means they get £700 in total. The £500 cap is imposed on them, so they are forced to split up. They now live in separate council houses, each drawing £200 in housing benefit, with one parent looking after three children and the other looking after the other two. This is a recipe not just for destroying jobs and crushing entrepreneurial activity, but for splitting up homes and increasing the cost to the Exchequer to £900 when it was £700.
The Government’s approach in Swansea and elsewhere in Britain will make people jobless, make them poorer, break up families, crush enterprise, punish saving and harm children and the disabled. This is a Bill born not out of fair-mindedness and enlightenment, but an unnecessary and unwise economic strategy of cutting too far too fast and punishing the poor for the reckless greed of the bankers. It should be opposed so that we can go back to the drawing board and think again.
Julian Sturdy (York Outer) (Con)
It is a privilege to speak in this debate, and I strongly suspect that our exchanges in the House are being replicated across our country, such is the importance of this matter. People rightly care passionately about Britain’s welfare system, as has been evident from hon. Members’ contributions, but I cannot quite agree with the most recent comments made by the hon. Member for Swansea West (Geraint Davies).
A society’s willingness and ability to help its most vulnerable individuals is a measure of its compassion and its economic and social well-being. Ensuring that Britain has an efficient, fair and caring welfare system is key. We do not necessarily have that at the moment, which is why radical and bold change is badly required. I am delighted to support the Bill, as it is radical and bold.
To accept the need for such reform, we must wake up to the facts. Over the past 10 years the welfare budget has grown disproportionately, by more than £56 billion. Despite that huge increase, almost 1.5 million people have been on out-of-work benefits for nine of those 10 years. Despite years of economic growth, job creation and increases in the welfare budget, a whole group of people have never worked at all. It is therefore time to review this broken system. After all, the simple truth is that Britain’s welfare arteries are clogged up. Too little support is reaching those truly in need and too much is being lost in bureaucratic incompetence—even more worryingly, it is being lost on people who should not be in receipt of such support at all.
In essence, the whole culture of our welfare system is wrong; the cost of maintaining it is out of control and the decision-making processes within it are woefully inefficient. The Bill is therefore right to focus on incentivising pathways back to work by ensuring that employment always pays more than benefits. That is fundamental to the Bill and, as a simple Yorkshire man, I feel that it is basic common sense.
Chris Williamson (Derby North) (Lab)
Would the hon. Gentleman care to comment on the fact that his Government are cutting 1 million jobs in our economy—500,000 in the public sector, with a further 500,000 to go in the private sector as a consequence? If he genuinely believes that work is a pathway out of poverty, why does he support measures that will cause greater unemployment rather than enable people to get back into work? He has expressed concern about people who have been out of work for a long time, but they would be more likely to get an opportunity of employment in the public sector if his Government were not forcing through so many cuts.
Julian Sturdy
I agree that this Bill offers an important pathway back to work. We have to get more jobs in the private sector and restore the balance between public and private sector jobs, which was skewed by the previous Government—certainly in my region and in the north especially. The measures that this Government are introducing—I hope we will see more of them in the Budget—will incentivise private sector growth and job creation which, alongside the Bill, will get more people back into work.
It is a sad but well-known fact that the current system discourages those in low-paid jobs from increasing their hours, as rates of tax and benefit reductions often leave them worse off. This ridiculous situation helps only to dampen aspiration while increasing dependency in the benefits system as a whole. In addition, hard-working, taxpaying families, who are feeling the squeeze in these difficult economic times, should not subsidise the small but still significant number of people in our society who see the welfare system as a career choice. That must stop. By annually capping benefits, withdrawing support from those who refuse to work and increasing the financial incentives for those who do work, the Bill includes specific measures that will make work pay.
Naomi Long
I agree with the hon. Gentleman on the need to change the system to ensure that people do not aspire to live on benefits, but is that not more about changing people’s aspirations and their pathways to opportunity, rather than simply setting caps and putting difficulties in the way of those claiming benefit when they are in difficulty?
Julian Sturdy
It is about changing aspiration, which is what the Bill does. As my hon. Friend the Member for Meon Valley (George Hollingbery) said, it is about taking a carrot-and-stick approach. It is important to have certain caps on benefits, but we must also encourage aspiration to get people back into work. The current system did not do that. Instead, it dampened aspiration, which is why it is fundamentally important that we change the system. As many hon. Members have said, it is a case of now or never—we must grasp the nettle. The DWP estimates that the reforms could reduce the number of workless households by as many as 300,000 and that about 700,000 low-earning workers will be better off as they keep more of their earnings.
Administrative reform to our welfare system is long overdue; it is simply wrong that taxpayers’ money should be squandered recklessly as often happened under the previous Government. The creation of the universal credit, which will bring together various and often overlapping elements, such as jobseeker’s allowance, income support and housing benefit, and pay them in a single lump sum will cut administrative costs and reduce the risk of fraud. It is predicted that, as a result of the universal credit, just over 2.5 million households will receive higher entitlements, with more than 350,000 children and 500,000 working-age adults being lifted out of poverty altogether, as the shadow Secretary of State acknowledged earlier. That was the only thing he said that I agreed with, but it is important to mention that acknowledgement.
Lastly, and returning to my initial comments, the overriding objective of the Bill must be better to protect, equip and support the most vulnerable in our society. Too many of this country’s welfare resources have been diluted and too little has been directed at those in most need. To maintain the status quo would be to champion the cycle of dependency and despair that Britain’s welfare culture, as constructed by the Labour party, currently promotes. I know that many welfare claimants are apprehensive about the Government’s changes, but let the message go out loud and clear that those who are truly in need will receive more support, better targeted assistance and higher standards of care. I truly believe that is the motivation underlying the reforms and I strongly urge all Members to support this important Bill.
John McDonnell (Hayes and Harlington) (Lab)
I have sat through the debate and listened to the contributions and I will try to address some of the points raised. First, let me say that no one in the House doubts the integrity of the Secretary of State. I commend him for the work he did in opposition in setting up various working parties, touring around and meeting various agencies. He met a particularly influential person in Scotland, Bob Holman—a comrade of ours who knows a lot about poverty and who has expressed his disquiet about the proposals. Also, a number of us have been campaigners for the citizen’s income, which I think the universal credit is a step towards, so I do not doubt the Secretary of State’s good intentions.
However, as we have debated at length over the years, if the universal credit is to work, three conditions need to be met. First, it needs to be set at a level that will lift people out of poverty; otherwise it will inflict universal misery. Secondly, there have to be jobs to go into. Thirdly, those jobs must have decent pay. The problem with the Bill is that it does not ensure that any of those conditions will be met. In that respect, it discredits the whole concept of the universal credit, which I find worrying.
On the first condition, I am worried about the amount being taken out of the social security system. In the comprehensive spending review in October, and before that in the emergency Budget, the Chancellor identified £18 billion that was being taken out of the system. When the Prime Minister was challenged about that, he said:
“We face a choice—make cuts in welfare or cuts elsewhere”.
I believe that is happening—that we are witnessing cuts in welfare. When the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), was asked specifically about the disability living allowance cuts, we were told that the figure of £1 billion of cuts—or savings, depending on how one wants to describe them—had been set before any policy description had been laid out as to how they would be achieved. I think the Prime Minister and the Government did make that choice, because at the same time as the Government were taking £18 billion out of welfare they were reducing corporation taxes by £24 billion. Businesses are now taxed at the lowest level in 40 years, at the expense of the poor.
The debate then starts to degenerate, as it has in the House today, into attacking unemployed claimants as a justification for cuts. I remember the Deputy Prime Minister’s statements about alarm clock Britain, and today we have heard references to shirkers and so on. I have come to the view, and all the Government research under past Governments has demonstrated, that people are desperate to get back to work. Sanctions do exist already, and are implemented if people fail to comply.
Reference has been made to fraud. Let us get it on the record again: £1.5 billion of fraud, £16 billion of benefits unclaimed. Who is ripping off the system? It is not the poor. As was said earlier, £120 billion of tax has not been paid as a result of tax evasion and avoidance.
On the second condition—the existence of jobs to go to—with 2.5 million unemployed, including 1 million youngsters, even if we filled all the 500,000 vacancies, there would still be one in four chasing every vacancy, and it is going to be made worse, as was also said earlier. Another 1.2 million will be put on the dole queue as a result of the cuts.
On decent pay, I have asked others what is happening in their constituencies, but the jobs offered at the moment in my constituency are increasingly casual and increasingly low-paid, and large numbers of my constituents are now working on zero hours contracts, in which they are simply paid for the hours that they are brought in to do, on an irregular basis. According to the most recent survey, published only a month ago and based on Government figures, 1.7 million people are now in involuntary part-time and temporary work, and wages are so low that half the children living in poverty are in families that are in work. Even in the boom period, wages actually fell as a percentage of GDP. Last month, RPI was at 5.1% and wages were at 2.3%, and many in my constituency and elsewhere, especially in the public sector, are facing a pay freeze over the next two years. The reasons for the low pay are fairly straightforward. We now have less than a third of workers in this country covered by collective bargaining agreements, as a result of the weakening of trade union rights.
My fear is that, under these proposals, universal credit will fail, because none of the elements are in place to make it a success—a decent level of universal credit, the existence of jobs, or decent pay in those jobs. I think we will be left with the harsh residue of all the complaints and problems that have been described today: the sanctions—the loss of benefit for up to three years if a person refuses to co-operate in seeking work; cuts in housing benefit; the linkage of the housing allowance to CPI, which will inevitably result in cuts; the housing benefit caps; and the room unoccupied scheme, which I think is scandalous. All those factors will discredit a decent proposal, and that is why the Bill is not supportable today.
I want to use my last few seconds to say how appalled I am by the brutalisation of claimants by the privatised companies that have taken over the assessments and the administration of benefits. The brutal treatment of my constituents is a harshness that denigrates the entirety of the work of the House and the Government.
Jackie Doyle-Price (Thurrock) (Con)
I am very proud of the measures before us. The Bill is one of the most important pieces of legislation that the Government have brought forward to date. It has the opportunity to have a revolutionary impact, not only on the welfare system but on society more generally. It will contribute to building a fairer society—fairer for the millions of taxpayers, many of them on modest incomes, whose taxes are inflated by having to support the current welfare system, and fairer to claimants. It is fair that we target support to those most in need and fair that we give those who are fit and able to work every encouragement to do so.
I shall focus most of my comments on the universal credit and the impact that it will have on incentives to work. There are too many people in our society for whom work does not pay. In those circumstances, who can blame them for choosing not to work? It is a rational economic choice. If they can get as much income from sitting at home as they would from doing a day’s work, where is the incentive?
We must all have seen examples of that in our surgeries—the lone parent who wants to provide for herself and her family, but finds that the cost of child care and the loss of housing benefit make it more costly to go to work than to stay at home; someone who finds a job, then discovers that the rate at which they lose their housing benefit makes work punitive; someone on incapacity benefit trying to work part time around their disability, who finds their benefits withdrawn or clawed back, so that they are better off doing nothing; someone who has had a substantial career, finds they are no longer able to do that and wants to retrain, but who has their benefits withdrawn as they are judged not to be seeking work. All that must stop, and the Work programme will give incentives to those who want to get back into work, and the support and opportunity to do so.
We must repair decades of damage. It is easy for us on the Government Benches to blame the Opposition, but the problem goes back decades. The system has grown incrementally and the damage is there for all to see. In some households, generation after generation have failed to engage in the world of work. This has encouraged ongoing low aspiration and poor lifestyle choices. Some of my hon. Friends gave examples of that. My hon. Friend the Member for Wolverhampton South West (Paul Uppal) described how, when he was at school, there were two distinct camps—those who aspired to better themselves, and those who aspired just to live on benefits. I see the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) in his place. As someone who grew up on a council estate in his constituency, I had that experience too. We need to build aspiration, and we have policies in place to achieve that. The reform to welfare is crucial to getting our society working again. The reforms will set people free from dependency and set them free to take advantage of the opportunities that we will give them.
I want to say something about an end to the complex system of tax credits. I appreciate that the introduction of tax credits was well intentioned as a way of alleviating poverty for people in work, but they have had the opposite effect. That is because the system is retrospective, so people apply for tax credits in good faith, only to be faced with a whopping tax bill the following year because of a slight change in circumstances. That problem will be eradicated by the universal credit because it will be assessed on a pay-as-you-go basis, and for that reason must be welcomed.
I firmly endorse the benefit cap. Far too many of my constituents work hard and pay taxes, only to see their near neighbours enjoy a comfortable lifestyle living on benefits. I also welcome the obligations placed on claimants. As a condition of receiving benefit, people should surely do everything they reasonably can to find work. For many people that will be empowering. For someone who has been in the same job for many years and suddenly finds themselves workless, the loss of confidence can be considerable. The support that they will get from the Work programme to gain new skills will help them and give them the confidence to go back into the world of work. That will be empowering.
That is equally true of incapacity benefit claimants. Because a claimant is no longer able to do the job that they were doing before does not mean that they cannot retrain and do a different job. The support they will get from the Work programme will enable them to do that, and it will be empowering.
The Bill is radical. It is brave, and it is necessary if we are to tackle the endemic culture of benefit dependency that exists in our country. It has become more and more entrenched over the years, at the expense of the workless and the taxpayer. I am pleased to support the Bill.
Naomi Long (Belfast East) (Alliance)
I welcome the opportunity to participate in the debate, because this issue will have profound implications for the welfare and benefit system, and will impact on all our constituents.
Time is limited, and the scope of the Bill is extensive, so I shall focus on a few key issues, the first of which is the proposed changes to disability living allowance, particularly the work capability assessment. The Government appear to place more emphasis on the independence of those who judge someone’s fitness for work, rather than on their expertise, which is of concern to many people, particularly those who suffer from hidden, complex and often poorly understood conditions with variable symptoms, including autistic spectrum disorders, mental health issues and multiple sclerosis.
A medically qualified assessor may be independent, but not necessarily an expert in a particular condition. The single point assessment is unlikely to give a comprehensive view of an individual’s fitness to work that is more reliable than that provided by an expert in the field who has treated and monitored the patient over a long period. The clinician will also follow professional ethics in making judgments about a patient, which provides a safeguard for the Government. If expert written evidence is available, it should be used and should carry more weight than the opinion of a benefits assessor, who may not have detailed expertise in dealing with those matters.
Dr Whiteford
As someone who represents a constituency that was part of the work capability assessment pilot, one of the biggest concerns was that the evidence of I know that someone’s GP or consultant was not taken seriously by the medical assessors. Will the hon. Lady comment on that?
Naomi Long
That is a fundamental concern. One of my constituents recently came to Parliament, on behalf of the mental health charities Rethink and MindWise, to give evidence to the Select Committee on Work and Pensions about the impact of the assessment proposals on people with mental health problems. Members who met her at the round-table session would agree that she presented her evidence in a professional, competent and effective manner, as one would expect of someone with a medical degree. However, her evidence carried weight not because of her degree, but because she receives disability living allowance. She is not fit for work, and is not permitted to practise as a GP as a result of serious mental health issues, which developed in her final year of study.
If a benefits assessor, even a medically qualified one, witnessed her performance in Committee, they would doubtless assume that she was fully fit to work. However, her condition is unstable, and in periods of ill health, she is unable to leave her home or interact with people at all. Even when well, she is reluctant to take on additional stressful responsibilities because of her history of instability.
Chris Grayling
It is important, as people are listening to this debate, that the actual situation is placed on the record. Will the hon. Lady confirm that the system that she is describing is the one that we inherited from the Labour Government, which we have taken steps to change through the Harrington review? In cases where we have made changes to the assessment, the work was done by the previous Government, whose recommendations we accepted. Finally, does she accept that, at the end of all this, there is a collective desire to make sure that the system works as well as possible and that there is a commitment to continue to improve it where possible?
Naomi Long
I would like to confirm, on the first issue, that I am not making these points as a member of the Labour party or of the previous Government but as a member of the Alliance party, reflecting the concerns of my constituents. Furthermore, I would hope that there is a collective will to ensure that people are dealt with fairly in the system. However, the doubts that I am expressing to the Minister have been expressed to me by my constituents.
A problem with single point assessment needs to be taken into consideration, and I urge the Minister to look carefully at the issue. The young lady in question, for example, had a dual point assessment by the British Medical Association on her fitness to practise. One doctor said that she was fit to practise, and the other said that she was not, because of the complex nature of her condition. Neither of them was wrong when they dealt with the person in front of them, but her complex mental health condition prevented them from seeing the same individual in the same way.
I do not believe that the problem arises solely with mental health issues, but with many other conditions. People can have good days and bad days, and they may need additional support. As the Bill progresses through the House, it is hugely important that we address that issue.
Much has been said about the removal of the mobility component of the disability living allowance for those in residential care, so I will not rehearse the arguments, but I have corresponded at length on it with the Under-Secretary, and from her most recent correspondence I am aware that there is a valid concern about the inconsistent way in which the needs of some of the most vulnerable people in society are being met.
There is ambiguity and considerable variation in the way in which local authorities take the DLA mobility component into account when making financial assessments, and organisations such as Disability Alliance acknowledge that point, but having identified the problem it is incumbent on the Government to ensure that the solution does not end up disadvantaging the benefit’s recipient, who did not create the difficulty in the first place. Independent mobility is crucial to well-being and to social cohesion, and it must be protected more clearly than it is in the current proposals.
Finally on DLA, I am concerned about the change to the qualifying period, and its move from six months to three months, which could have profound consequences for those who develop sudden onset conditions, such as stroke, or experience the debilitating effects of treatment for an illness, such as cancer. It could also affect those who give birth to a child with a severe disability.
At a time when people are genuinely in need, when their energy rightly needs to be focused elsewhere on coping with diagnosis, treatment and recovery, and when additional stress should be avoided, the financial pressure of dramatically increased outgoings to cover expenses, such as travel to hospital and so on, could push them into poverty if that issue is not adequately addressed. I urge the Government to look again at that unintended consequence of reform, and to take action to ensure that the personal independence payment is available to support people at a time of genuine need.
I welcome the Secretary of State’s assurance on employment and support allowance for those taking oral chemotherapy. I trust, however, that he will also consider those who receive radiotherapy, which, although not as debilitating as chemotherapy, can nevertheless be exhausting and preclude people from holding down work.
Another concern that I want to touch on briefly is the abolition of some discretionary aspects of the social fund. Often, families who are trying to make ends meet on a day-to-day basis find themselves pushed into financial stress or even crisis by significant, unexpected and unavoidable expenditure. The replacement of a heating boiler, a cooker or a fridge, or the need to purchase a school uniform, for example, will often leave low-income families in a situation where only those discretionary elements of the social fund, such as interest-free crisis loans, stand between them and being forced to engage with alternative high-interest and often unscrupulous money lenders. There is an ongoing consultation on that and I urge Ministers to await its conclusion before proceeding to legislate to remove those discretionary elements.
In conclusion, and as I said at the outset, these are far-reaching reforms with far-reaching consequences. The Bill is arguably the biggest change to the welfare state since its inception, and it warrants careful and detailed parliamentary scrutiny. Despite that imperative, much of what is intended remains poorly defined and will be ultimately defined not in this Bill or in any subordinate legislation, but in regulations that the Minister will lay, which in turn will reduce the parliamentary scrutiny of their effects. That extensive reliance on unpublished regulations will make it incredibly difficult for people to make a detailed assessment of the cumulative impact of these broad and sweeping changes. The Secretary of State was clearly frustrated, too, because he felt that at times people had misunderstood the thrust of his proposals. Were there more substance to the Bill, that would be less likely.
Furthermore, the inclusion of clauses relating to child maintenance, when that matter is still the subject of public consultation, and the as yet undefined provisions on child care costs, creates uncertainty in an area—the employability of lone parents and second earners in households—that strikes at the very heart of the Government’s objective to make work pay.
One of the most remarkable yet disappointing things that struck me on reading through the briefings that Members received in the run-up to the debate is that, almost without exception, those organisations that actively support and lobby in this area support the principle of the Bill. Disappointingly, however, we have not had the detail that would give people the confidence to commit to the Bill itself.
Andrew Bridgen (North West Leicestershire) (Con)
I welcome not only the Bill but the fact that the coalition Government have recognised the importance of dealing with the huge financial and social failures of the current welfare system. Within 10 months of being in government, we are introducing a Bill that Labour Members and the previous Government shirked for 13 years. Because of the Opposition’s lack of will, we have the lamentable situation whereby welfare spending, which was £64 billion in 1997, is projected to be £109 billion this year, and 1.5 million people have spent most of the past decade on out-of-work benefits.
I have to say that I agree with the former Prime Minister, Tony Blair, who stated in 1997:
“We have reached the limits of the public’s willingness simply to fund an unreformed welfare system through ever higher taxes”.
If that was true in 1997, with the golden economic legacy that the previous Labour Government were bequeathed but went on to squander, one can only surmise that, 13 years later, we are well over the limit of the public’s acceptance of welfare spending. We all know what, or rather who, were the roadblocks to reform: the then Chancellor of the Exchequer, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), together with his protégés, the current leader of the Labour party and the current shadow Chancellor. How do we know this? Again, Mr Blair provides the answer in his memoirs when he states, with regard to welfare reform:
“I kept saying to Gordon, quite apart from the fact that both sets of proposals are manifestly right in themselves, if we don't do them, a future Tory government will”.
So here we are, as a Conservative-led coalition Government announcing the biggest and most overdue shake-up of the welfare system since the 1940s. We are replacing the previous Prime Minister’s micro-managed, command, dirigiste benefits system, which has created a benefits culture that is expensive, inefficient and bureaucratic—and, perversely, provides a major disincentive to work—with a system that will ensure that work pays and no one is better off remaining on benefits when offered a job. The universal credit will provide a more logical, efficient, secure and fair benefits system that will demonstrate and reinforce the value of being in work. All Members, and our constituents, should be aware that because of the transitional arrangements no one on benefits will be worse off as a result of the introduction of the universal credit.
Having supported the aims of the Bill, let me move on to the some of the specifics. I have been contacted by a number of constituents regarding the replacement of the mobility aspect of the disability living allowance with the personal independence payment. I am reassured by the Secretary of State’s remarks on this part of the Bill, when he said that DLA and its mobility component will continue and will be reviewed at a future time. However, the Government need to do as much as possible to reassure those who are severely disabled and unable to work that they will be protected and not lose their entitlement. I have had constituents saying that they fear they will lose their social interaction and effectively become prisoners in their own home. Those genuinely disabled people must be informed that these changes will be to their advantage.
Mark Lazarowicz
The fact that such an obviously ultra-loyal Government Member has been getting such messages from his constituents suggests that things are not all right on the Government Benches. Does he agree that that is another reason why a bit more consultation and time to consider the proposals would be better than the rushed way in which they are being brought forward?
Andrew Bridgen
The Labour party had 13 years to do something. Thirteen years ago, the right hon. Member for Birkenhead (Mr Field) was asked to think the unthinkable; he did so, and then was promptly removed from office. That shows Labour’s commitment to welfare reform. There will be plenty of time for consultation, and I can promise that plenty of Government Members will be fighting for the rights of these vulnerable constituents.
The detection of fraudulent claimants is key to the success of this Bill. It is inexcusable that the current system is costing the taxpayer in excess of £5.2 billion a year because of welfare error and welfare fraud. There could be a role for credit rating firms in helping to identify households where there is reasonable evidence that a fraudulent claim is perhaps being made. This can be achieved with greater data sharing across Government Departments, and with the credit rating agencies, to ensure that the widest possible range of data are available. We also need to ensure that fraud is indentified at the earliest point of the process; again, the credit rating agencies can play a role. I welcome the development of the single investigation service and the three-strike rule in the Bill. We will see a reduction in fraud only if false claimants have a serious fear of being caught, and of facing a penalty if they are caught.
In conclusion, the Bill gives our country the chance to reverse a benefits culture that has become a huge black hole sucking in large numbers of people and huge amounts of taxpayers’ money. The Bill will release millions of people from the misery of welfare dependency and break the intergenerational cycle of worklessness, which costs this country so much not only financially but socially. The Secretary of State deserves great credit for his relentless work over many years on this issue. The successful passage of the Bill will make welfare a floor on which people can build, rather than a ceiling that it is impossible for them to break through.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
This has been an interesting and instructive four and a half hours. There have been some excellent contributions, including from some Government Members, although not from the hon. Member for North West Leicestershire (Andrew Bridgen), who has just spoken.
I say to the hon. Members for Bexleyheath and Crayford (Mr Evennett) and for Kingswood (Chris Skidmore) that we should not reinvent history but learn from it. Having been the Secretary of State for Education and Employment for four years and later briefly the Secretary of State for Work and Pensions, I think that there are real lessons to be learned from our efforts to change the system. Unless those lessons are learned, we will reinvent the wheel all over again and there will be disappointment for those who believe that this Bill is the bee’s knees. Unfortunately, it is not. In 1998, when we set about reducing the unemployment claimant count to under 1 million for the first time in a quarter of a century and the labour force survey figures to below 1.5 million for the first time in 30 years, we did so not just because the economy was expanding and there was growth, but because we were helping people from welfare into work.
Work is the best form of welfare; making work pay is the right thing to do; promoting independence is sensible and logical; encouraging people to be self-reliant, including through thrift and savings, really does make a difference; and honesty in the benefits system is something that we should all aim at. The only problem is that the Bill does not achieve those things. If it did, I would be wholeheartedly in favour of it. I ask Ministers to take another look at the Centre for Social Justice report and to compare it with what is on offer this afternoon in this Bill.
I will use the example of disability living allowance, purely because I know more about issues relating to sight loss than about most other aspects of disability and welfare, despite my ministerial experience. Both with the universal credit and DLA, we are in danger of moving in the opposite direction from that which the Government say is their policy. The introduction of the personal independence payment removes automatic entitlement for certain defined groups with specific challenges, including blind people. I do not speak about these issues very often in the House, but if we remove the care component we also remove the mobility component, which is about to be expanded in April, as was agreed to by Members in all parts of the House and hard fought for by those responsible over a considerable period. To do that will have a perverse effect, and the opposite effect to that which was intended. Instead of promoting a can-do approach that makes it possible for people to get out of a position of dependence, the proposal will trap people in that position.
The perversity is best demonstrated on page 16 of “Disability Living Allowance reform”, which was published in December. It gives examples of what the system will mean and talks about testing whether someone is capable of
“planning and making a journey, and understanding and communicating with others.”
However, the whole purpose of disability living allowance was that because they received it people were able to do those things, not that it trapped people by doing those things for them. Whereas the work capability assessment is about what someone can do, the new test for disability living allowance, under its new title, will be about what they cannot do. That leads to dishonesty, with people presenting what they cannot do in their worst circumstances, not in their best. With the new universal credit, people will be encouraged to save but then penalised when they do.
Every step in the Bill that will have a positive outcome is trumped by an administrative complexity that will make the situation worse. We are all in favour of simplicity, but the problem is that simplicity does not usually lead to equity. That is why we have ended up with the complex system that Members have described this afternoon. If we could have produced a simpler system quickly and easily, we would already have it. We laid out principles in September 2005 that I believe have stood the test of time, but unless the Government listen, and unless they review and understand what has happened in the past, we will go through the same problems all over again.
Sarah Newton (Truro and Falmouth) (Con)
Thank you for calling me to speak this afternoon, Madam Deputy Speaker. It is a great pleasure and honour to follow the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), who spoke so well from his own experience, as did my hon. Friends the Members for Wolverhampton South West (Paul Uppal) and for Thurrock (Jackie Doyle-Price). The debate has been enlightening.
Those of us who have worked as either paid employees or volunteers on behalf of people who come into contact with the benefit system know that reform is overdue. The overhaul enabled by the Bill, and by other actions that the coalition is taking to integrate and localise services, is most welcome for people in our society who need help. The daily battles of trying to claim benefits, appeal against decisions and fight through expensive bureaucracy are draining on the human spirit, let alone the taxpayer’s purse.
The practical improvements and efficiency savings that will come with benefit simplification are important. However, I believe that the importance of the Bill goes well beyond that vital endeavour. The contract between people in our society is expressed, in part, in our provision of welfare. That is part of our expression of the responsibility that we have for each other. I like the conditionality in the Bill, which underscores the principle of the contract that people in our society have. It is built on the clear and settled view that as British people, we are all responsible for ourselves and our families. Just as importantly, it is also our responsibility to care for our neighbours and our communities to the extent that we can. We are each responsible for doing all we can to provide for our own needs and those of our family and community.
Our social contract is also built on an understanding that not all people are able to look after themselves at all times throughout their lives. Sometimes individuals and their families need emotional and practical support to meet their needs, including financial support.
That contract has made us a progressive society. However, over the course of my lifetime, as overall standards of living have risen considerably, I have seen well-intentioned but unwelcome consequences of the development of that fundamental social contract into a welfare state. For too many people it has created a culture of dependency and robbed them of a sense of worth, well-being and good health. It has also brought into question the fundamental principle of fairness that is so characteristic of Britishness.
Dame Anne Begg
Does the hon. Lady believe that anyone who receives any welfare benefit is by definition welfare-dependent?
Sarah Newton
I am very grateful for that question, and the answer is absolutely not at all. A great number of people in our country absolutely deserve support. In fact, I shall argue later that I believe they deserve more support.
Let me explain what I mean by giving some examples. Can it be fair to encourage a couple who would otherwise want to live together and raise a family to live apart because single parents have a better chance of securing social housing, or to encourage someone who wants to work more hours to work fewer for fear of losing benefits? Can it be fair to abandon people who have lost their jobs and need help to retrain and build their self-confidence to a life of poverty without support? None of those things are fair. The intention of the Bill is re-establish the contract between all in society, and to give a clear message that if people are able to work and to play their part in society, we will help them to do so and it will be worth their while, and that if people have a problem that prevents them from looking after themselves and their family, we will be there for them.
Many people would like more rather than less help for our elderly citizens and our disabled citizens who are unable to work, and for carers who do the incredibly important job of caring for their loved ones. I hope we can provide such help by taking the tough decisions now to establish a sustainable economy with less public and private debt and a more sustainable level of public expenditure, and by growing more sustainable enterprise that will enable people to earn a living wage and to look after themselves better.
I am a Conservative MP because I want to create a fair compassionate society, in which people of all backgrounds have the opportunity and hope to reach their potential. “Jack’s as good as his master” is a great Cornish expression. It is ingrained in me to value and treat all people equally. Any civilised society should be judged by how it takes care of its weakest members. By that measure the previous Government failed, despite years of increased public expenditure and huge national debt.
I am sure that not every word in the Bill is perfect, but there will plenty of opportunity to make improvements as the Bill passes through the House and we learn the lessons of the consultations currently being undertaken. I am proud to serve in a Parliament that will deliver the fundamental reform that our country needs. The measures in the Bill will be introduced over a number of years, even stretching into the next Parliament, so I believe that we will look back on today as the start of a fundamental process that rebuilds the contract between people in our society. I am delighted to support the Bill today.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Like many hon. Members on both sides of the House, many of my constituents and many organisations have contacted me about their concerns about the Bill. Given that many other hon. Members want to speak, I shall highlight only a few of those.
The changes in housing benefit will in due course feed into the housing element of the universal credit. Without going into all the details, there is no doubt that many people in my constituency will be seriously disadvantaged by those proposals. People will be driven into poverty, and in some cases, driven out of their current housing. The fact is that for all the press stories we read—they are sometimes repeated by Government Members—about people living in luxury housing benefit accommodation, any such cases are few and far between, if the ones we read about are genuine, which is doubtful. We should not allow the debate to be distorted by a few extreme examples that, if genuine, need to be tackled.
Hon. Members will recall that in his Budget statement last year, the Chancellor of the Exchequer referred to
“families receiving £104,000 a year in housing benefit.”—[Official Report, 22 June 2010; Vol. 512, c. 174.]
I pursued that with a number of written questions. I have still not had the exact figure from the DWP, which I suspect is because only a handful of families are in that situation. If we are to have a serious debate, we should talk about the realities on the ground, not fake figures that are designed to scare people and distort the real debate that we need to have.
There are precious few areas in which forcing down housing benefit costs will affect market rent. In most cases, the market rent will become further diverged from housing benefit. As I said, as a result, people will be driven out of their housing, and perhaps forced to leave their communities or forced to go to areas where they do not get support from family and friends either in or out of work.
It may be the case, as the hon. Member for Bromsgrove (Sajid Javid) said, that the Government’s changes will affect the market in cases where housing benefit tenants form a large proportion of the rented market. However, in constituencies such as mine, there are lots of student properties, holiday lets and those whom one might describe as young professionals. They are a major element in the rented housing sector, and they are certainly not going to go away, meaning that those on housing benefit will no longer be able to afford their existing housing. That is certainly a concern that has been expressed to me by housing associations in my constituency.
Stephen Lloyd
Does the hon. Gentleman see nothing untoward about more than 5,000 families in the UK receiving more than £25,000 a year in housing benefit, which is equivalent to earning a salary of £80,000 to £90,000 a year?
Mark Lazarowicz
In each case, we have to look at the circumstances of the individuals concerned. However, the idea put forward by the Government that at the top end of the scale there are large numbers of people receiving £104,000 a year illustrates the distortions that some people want to introduce into this debate.
Another concern that housing associations in my constituency have raised with me is about the over-accommodation rules, which were mentioned by the hon. Member for Manchester, Withington (Mr Leech). Those rules will have many consequences that will be detrimental to both housing providers and individual tenants. One of the housing associations in my area has made the point that it may have a perfectly reasonable policy of providing people with an extra room, so as to allow access visits by children from a relationship, but those people would then no longer be entitled to housing benefit to reflect that extra room.
Parents and carers for adults with autism have also raised concerns with me, although other hon. Members have also discussed those concerns today, so I shall not repeat them. There have also been concerns about child maintenance charges being imposed on those still required to use the child maintenance system.
I want briefly to refer to concerns about the changes to DLA. When I intervened on my right hon. Friend the Member for Stirling (Mrs McGuire), I mentioned the concerns raised with me by a number of parents of children with disabilities in my constituency. Of course I recognise that the children concerned will not be subject to regular reassessments while they remain children. However, those parents have raised with me their concerns that in years to come their children may no longer have their support and assistance in submitting applications for DLA or its successor. Those children will find themselves in a vulnerable position if they are forced to undergo regular reassessments for conditions that will quite patently not change.
Those parents are right to be concerned—indeed, it is not surprising that they are—given that the backdrop to the Government’s policies is a 20% cut in the DLA budget. The Government may say that some of the fears that have been expressed are unfounded. However, if that is the case, they have brought it on themselves by rushing the consultation on DLA, which closed only nine days before the Bill was published, and because so many of today’s measures depend on further regulations being introduced at a later stage. Unsurprisingly, that has led to suspicions on the part of those who are likely to be affected by the changes.
Perhaps the underlying reason for those concerns is that we know that today’s changes are being driven in two ways: by a wish to reform the system—I accept the Government’s good intentions in that—but also by a wish to cut spending. The fact is that the Government’s prime concern is cutting the budget as soon as possible—that is the driver for today’s proposals—not, I am afraid, reforming the welfare system, which is something on which we should all able to agree across the House, if we had the time to discuss and debate it, and if we had the time to consider the views of outside organisations that have real concerns about it.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Just before I call the next speaker, may I point out that 14 Members are trying to catch the Chair’s eye? I want to get everyone in, so if Members can take as little time as possible, that would be helpful.
Brandon Lewis (Great Yarmouth) (Con)
I should like to thank the Secretary of State for the assurances that he gave to cancer sufferers and their friends and families. Will the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) also assure us that he will examine how we can deal with the inequality that exists between cancer sufferers who have intravenous treatment and those who have oral treatment? There is an unfair disparity between them at the moment. Science and medicine have moved forward, but our system has not kept up with that progress. It would be good if we could do something for those sufferers.
I represent an area with above-average unemployment. That is one of the legacies of the Labour Government, who forgot about the problems experienced by some of the coastal towns and about their regeneration. They took away public sector workers, and disincentivised people from working and businesses from investing and from employing people, through their heavy regulatory system. There are people in my constituency who are second and even third generation unemployed. That presents a problem that has two sides. On the one side, we have residents who work hard and who air their frustration at what they perceive to be the injustice of people who do not work and who stay at home having a lifestyle that is similar to that of the people who work all those hours. We need a system that will change that. The Bill is courageous in introducing some great changes, and it could start to change that as well, so that people who work hard would realise that they are not simply subsidising people who do not want to work.
On the flipside of that coin are the people who want to work but who cannot find a job or who are not properly trained for work. I have constituents who are crying out for the right kind of support and training to enable them to apply for the jobs that are out there. There are jobs beyond those that they might hear about in the jobcentre. The local press and organisations such as Jobcentre Plus do a great job in advertising the wide variety of jobs available, and this can enable people in areas such as Great Yarmouth to understand that they could be well trained enough to have the option to find work, not only in Great Yarmouth but in the wider community, perhaps in Norwich or even beyond, where jobs exist that they could reasonably commute to.
What I applaud most about the Bill is that it will introduce a move to a simpler system, and the evidence presented to the Select Committee shows that that is universally what people want. They want a system that they can understand. Too many people have come to my surgeries who simply do not understand the system and cannot get the support that they need because of that. Even some of the experts working in the system do not understand it.
A single mother with two children came to see me recently. She had a job which paid her £15,000 a year for working three days a week. She wanted to work five days a week, and her company wanted her to do that as well. She phoned the tax office to ask what the implications of that would be, so that she could work out whether she could afford to do it. It is crazy that we live in a society in which someone has to make a phone call to see whether they can afford to take a job that will pay £25,000 a year.
The most worrying aspect of the story, however, was the fact that the tax office could not answer her question. There are 30 different kinds of benefit, and a tax system that is set out over thousands of pages, so it is no wonder that, when someone is offered a well-paid job, they cannot work out—even with the help of experts—whether they can afford to accept it. I congratulate that person, because she decided to take the job even though the experts told her that the tax calculation would be done in arrears and it would be a year before they could tell her what sums would be involved, and whether they would need to claw any money back. She took quite a risk, and I applaud her for doing it. That is the kind of spirit that the new system will help to encourage. It will also provide support through the use of the taper.
Labour clearly does not understand the disincentive to work that exists at the moment. In some cases, there is a 96% marginal deduction, and that is simply not sustainable if we want to encourage people to work. I applaud the Bill, because it could really help to motivate and support people in my constituency, and help them to get back into work. That is what matters: people getting back to work and employers wanting to employ them. That is what this entire package can give us, and that is why I applaud the Bill.
Mark Durkan (Foyle) (SDLP)
Unfortunately, unlike the hon. Member for Great Yarmouth (Brandon Lewis), I am not in a position to applaud the Bill, simply because there are not enough provisions in it to tell us whether it will provide a working model for a benefit system that will achieve what the Government say they want to achieve—namely, a simplified benefit system with improved incentives to work. We could all agree with those principles, but our problem on Second Reading is that the Bill lacks significant content to show how many of the detailed provisions will work in practice. We are told that the details of various schemes and measures will be provided later—as the hon. Member for Belfast East (Naomi Long) said, it will be by way of regulation. That makes it unreasonable, on the basis of so little detail, to expect Members lightly to endorse such a Bill, which is so pregnant with implications for so many people in our society.
If Governments are to be encouraged to support evidence-based policy, this House should deal only with substance-based legislation. I often hear the Government saying that they agree with the principle and stated objectives of a private Member’s Bill, but because they see serious difficulties in how it might work in practice and because many of the details have not been worked out, they do not accept it and vote the Bill down. Frankly, that is exactly how I feel about this Government Bill. Although many of us endorse the objectives and recognise the problems in the existing system, we are worried about the direction in which the Government will end up travelling.
Members have already referred to the change from disability living allowance to the personal independence payment. Some of us participated in a Westminster Hall debate about that this morning. One important point is that we do not yet know from the Government what the implications of those provisions will be for carers. They have told us that they want to create a new deal for carers, but they have not given us any estimate of how many carers will be affected as a result of the changeover to personal independence payments. The Government have a lot more to tell us; only after they have told us would some of us be in a position to accept their assurances.
The universal credit is proposed to replace quite a number of existing benefits: working tax credit, child tax credit, housing benefit, council tax benefit, income-based jobseeker’s allowance and income-related employment and support allowance. We know about the existing complexities and difficulties with many of those benefits, so we cannot just take it on assumption that there will be no problems bringing them all together. We cannot take it on assumption that there will not be any serious transitional difficulties; neither, on the basis of past experience, can we take it for granted that the administration system, the infrastructure for delivery and the information technology used for the new system will not have any problems.
We know the stated intentions for tax credits, but we also know about all the problems that resulted. We know the stated intentions for employment and support allowance, but we also know about the many difficulties surrounding its delivery. It would therefore be naive if the House simply said to the Government, “Carry on regardless; we like your stated intentions; we are not going to frisk you for any further details or caution you against any possible risks to our constituents.”
Issues in the Bill might have complicated effects in the context of Northern Ireland. When it comes to universal credit, the Bill makes presumptions about child care provision, but Northern Ireland, of course, is not covered by the Childcare Act 2006 and it does not have the same infrastructure for child care as elsewhere. That poses serious challenges about how the scenario painted by the Government will work out for Northern Ireland.
Further issues stem from the fact that Northern Ireland does not have council tax, which affects rate relief. We will have to see how that will be administered from Whitehall and what degree of discretion the Whitehall Government will allow the Northern Ireland Assembly and Executive to have in respect of delivering locally for Northern Ireland the framework created by the Bill.
As I have pointed out before, many people in Northern Ireland live and work on a cross-border basis. Many people on benefit who want to get jobs might find one across the border. The issue of providing tax credits for cross-border workers is fraught with all sorts of difficulties and frustrations. We do not yet know how the replacement scheme is going to work. There is a danger that cross-border workers—those who live and work on either side of the border—could find themselves in serious difficulties.
That is why many of us are not just suspicious about some of the Government’s intentions, which we fear may result in punitive measures for many people on benefits, but sceptical about whether enough work has been done in terms of the detail of the Bill and how it will affect our constituents. That is why many of us do not feel able to support the Bill’s Second Reading, and if others are prepared to oppose it, I am prepared to join them.
Stephen Lloyd (Eastbourne) (LD)
Given the breadth of the Bill, I intend to focus on the work aspects.
The right hon. Member for Croydon North (Malcolm Wicks) is no longer in the Chamber, but I trust that he will not mind if I, too, quote Beveridge, who famously said:
“Want is one only of five giants on the road of reconstruction; the others are Disease, Ignorance, Squalor, and Idleness.”
As we all know, those words were written at a time of real poverty for many people in the United Kingdom. How do they apply today, in the 21st century? Indeed, do they apply today? My supposition is that they do. Today, 10.4 million people of working age in the United Kingdom are not working, 5.9 million are claiming out-of-work benefits, and more than 2 million children live in households in which no one is working. It was the great Nye Bevan who said:
“There is no test for progress other than its impact on the individual.”
Yet, today 3.9 million children still live below the poverty line. Some progress! Surely it is time to do something different.
I support the Bill’s Second Reading because I believe that, in the main, it approaches this intransigent issue intelligently and constructively. The nation has got stuck, and it has got stuck because of the system. I do not think that anyone in the Government is particularly at fault, because the problem has built up over the past 40 years. A key part of breaking the system, which I believe the Bill is doing, is making work pay—a concept that the Secretary of State has championed for some time—and that means changing the tax and benefit system.
I will not go into all the details, because I am sure that everyone in the Chamber is well aware of them, but, as some Members have already pointed out, more often than not there is no point in people coming off benefit and going into work because they will be worse off as a result. A constituent of mine, a single mum with three kids who is on housing benefit and the rest, has not worked for 15 years. The rational option for her is to stay on benefit, and if I were her that is what I would do. It would be insane for her to come off benefit: she would probably lose out under the system that we have had for years, and what would happen if she lost her job in a few months’ time? The system is insane, and the Bill attempts to transform it.
Naomi Long
Another potential benefit of removing the limit on the number of hours that can be worked by claimants—currently about 16—is that employers would be more likely to take on people part-time, such as lone parents, because they would have more flexibility.
Stephen Lloyd
I agree with every word that the hon. Lady said.
How are we to help people back into work when they have been receiving incapacity benefit, jobseeker’s allowance or a similar benefit? As I said when I intervened on the right hon. Member for Croydon North, the Bill will provide much more money for training providers to give them an incentive to focus on people who have been on benefit for a long time, and make it worth their while to spend extra time and resources helping those people back into work. The right hon. Gentleman said that the Bill copies measures taken by the previous Government in that regard. That is true to an extent, but it does a great deal more than that.
In the past 24 hours, I have been in touch with the National Audit Office, according to which the average payment from the DWP to training providers for pathways to work was £1,003 per job. Under the current proposals, providers will be paid a minimum of £3,800 and a maximum of £13,700. What lies behind the Bill is our recognition of the fact that people have been “parked” for years, which is outrageous. Whichever side of the Chamber we are on, we know that if the many people who have been out of work for a long time are to be helped, they will need that extra effort, extra mentoring and extra time. The only way in which we shall persuade training providers to do that is by stuffing their mouths with gold, as Bevan said in the ’50s in respect of the British Medical Association. The Bill attempts to achieve that by making training providers feel it is worth their while expending the extra effort to get people back into work, which is tremendous.
The previous Government introduced the black box concept, and I am glad that we are building on that to start using subcontractors’ imaginative ideas. That is all good and very rational, and it is a simple solution, too. Members on both sides of the House know that, where possible, work is the best route out of poverty.
There are downsides, however. The economy is challenged—that is the best word I can use. I spoke to a senior disability spokesperson the day before yesterday. I said, “Well, it’s obviously very hard for us to get all these extra people into jobs when we’re faced with such a difficult economic situation.” She replied, “Stephen, you’re absolutely right, but at least if we start doing the spadework now it is just possible that when the economy turns in a couple of years the foundations will have been laid and a lot of people who might have seen themselves as never working again could, through the mentoring, be in a position to be able to be swept along with the upswing in the economy.” I certainly hope so, because it is very difficult to achieve such radical reforms now when we face an economic crisis.
I want to give a message to the Minister, and I am sorry that all his colleagues are not present, as this applies to the entire ministerial team. The Bill is tremendous; it is a glass-half-full Bill and it recognises that we have to spend money, which is why I appreciate the Secretary of State getting the £2.5 billion from the Treasury. We have to pour money into this problem to transform the situation, but we must change the language if we are to get people who for years have been on IB or other benefits back into work.
The Bill is clearly designed to do that, which is why it approaches the issue in such a constructive way. I was in Burnley with the Work and Pensions Committee a couple of days ago. A training provider who is very successful in getting people into work said, “If there’s one message to give to the Government it is this: respect. Use the right words, and treat people who have been on IB and on benefits for a long time with respect.” I therefore say that we must use the right words.
The Bill is fit for purpose. I think it will transform the situation, and I will support it on Second Reading.
Mr William Bain (Glasgow North East) (Lab)
It is a pleasure to be called to speak in this debate.
With more than 2.5 million people unemployed, youth unemployment soaring to 20% and persistent levels of intergenerational unemployment, it is clear that the status quo is not working. The hon. Member for Eastbourne (Stephen Lloyd) cited Beveridge, but Beveridge and the Labour Government of 1945 envisaged the welfare state as a system that would redistribute not just wealth but power and opportunity. It was a welfare state built on reciprocity, but we cannot characterise the package of reforms in the Bill as being built on sufficient reciprocity. This is a Government who are introducing a Work programme that will help 250,000 fewer people than the programmes it replaces.
Chris Grayling
It is very important to deal with this point head on. That is absolutely not the case: every single person on JSA or ESA who needs and wants support through the Work programme will get it, and the total numbers will be higher than under the previous Government.
Mr Bain
If Members look at the details of what is being spent on the Work programme, they will see it does not match up to the initiatives of the previous Government.
We also foresee huge problems for the losers under these reforms. Labour supports a simplification of the universal credit system, but it must be a fair simplification. Yes, about 1 million households will benefit, but it is absurd that that is being paid for by 1.7 million households with incomes of between £16,000 and £24,000 losing out. The squeezed middle will not only be defined; they will be heard loud and clear in respect of the money they will lose as a result of this Government’s policies.
The Government have shown a bizarre lack of clarity regarding whether self-employed people hoping to start a new business will be eligible for the universal credit. The transition for individuals to the universal credit lacks detail and could create disincentives. The credit does not deal with transport costs to and from work, and the cash protection for individuals’ incomes will apply only until their circumstances change, which could be only a few weeks after taking up a job if their hours of work are altered. Changes to crisis loan alignment payments are also likely to affect many claimants. No work has been done to identify the costs of transferring delivery to local authorities, or to identify the most affected groups.
Labour Members know that one of the best means of reducing child poverty is to encourage more second earners to take on part-time work around their family or care commitments. It is extraordinary that the proposals in the Bill will reduce the work incentives for up to 330,000 second earners. This is not a strategy that will reduce child poverty in the short or medium term. Despite the Secretary of State’s statement today, there is a shocking lack of clarity about the provision of child care, the cost of which presents a huge barrier, particularly for women returning to the labour market. Council tax benefit is being devolved to local authorities in a completely unspecified way that lacks clarity and threatens to create new disincentives to work.
The Institute for Fiscal Studies has concluded that, overall, under the universal credit the incentive to work for low earners will be stronger for single people and for those in couples where one partner does not work, but that it will weaken incentives for couples to have both partners in work, owing to a higher withdrawal rate than the current tax credit system. It has also concluded that lone parents will lose out in the long term.
This week, the Social Market Foundation established that 400,000 families with children that currently receive tax credits will lose their entire eligibility for financial support under the universal credit if they have savings of more than £16,000, and that a further 200,000 families with savings of between £6,000 and £16,000 will lose some of their entitlements. As Ian Mulheim, the director of the foundation, said,
“The Universal Credit will punish working families trying to save for the future, such as those trying to get a foot on the property ladder.”
We urge the Government to reconsider the shambolic way in which they have designed the credit, and to introduce a more adequate Bill that is fit for purpose.
On housing benefit, the hon. Member for Manchester, Withington (Mr Leech) mentioned the incredibly harmful effects of the proposal to extend the shared-room rate from people aged under 25 to those up to the age of 35. Some 88,000 people across the country will lose out, with an average loss of £47 a week. In Glasgow, my home city, the impact will be to move people from the social rented sector into the private rented sector, with a resulting increase in rents.
The Secretary of State has not been able to give the House sufficient assurances on the disability living allowance. Yes, we hear of a review, but he has not taken back, nor has he had permission from the Treasury to recoup, the amount he proposed to save by withdrawing the mobility component. His own Social Security Advisory Committee has referred to the terrible impact of the loss of independence that people who lose the mobility component will experience. We therefore urge the Government not just to review these proposals but to withdraw them.
On the move to personal independence payments, we think it unacceptable to require a disabled person to wait six months—double the length of time under the present system—before coming eligible. Richard Hamer, director of external affairs at Capability Scotland, has said:
“The welfare benefits system is the UK Government’s strongest tool to promote equality for disabled people. The changes announced in the Welfare Reform Bill will instead push disabled people and those who care for them further into poverty.”
I encourage Members throughout the House to seek a better Bill than the one the Government have proposed today. I urge Members to vote for the amendment and to seek a better Bill than the shoddy and shambolic effort the Government have proposed today.
Damian Hinds (East Hampshire) (Con)
As some hon. Members are still waiting to speak, I shall strive for brevity. We are, of course, debating the principle of the Bill, which I am very proud to support, and we will vote on whether we get the chance to discuss in Committee many of the important issues that hon. Members on both sides of the House have rightly raised. We will also vote on whether to progress with the Bill’s central reform: the universal credit, which is ambitious, bold and compassionate.
I am sure that we have all had discussions with our constituents in which they say, “Why can’t we just have a benefits system that means that you are always better off in work than out of work? Why can’t we have a system where everybody who can work does work and where we provide proper support to those who can’t? Why can’t we just simplify the whole system so that people understand it and we do not spend so much money on bureaucracy?” This Government answer those questions by saying, “Actually, we can.”
This welfare package contains many elements. Hon. Members have focused on different ones, but I wish to focus briefly on the social fund. It contains many diverse elements but, as the hon. Member for Belfast East (Naomi Long) identified, it is the crisis loans that have been growing most recently. In the past year, there were 2.7 million loans to 1.1 million people. Although the number of people taking crisis loans has grown rapidly—it has doubled over four years—the number of individual loans has grown even faster. That, in itself, has driven a big increase in the administration costs of the scheme, which have risen from £70 million in 2007 to £120 million last year. Of course it is right that we provide extra support for people in times of personal crisis, but it is also right to question those rates of growth.
There are many other problems with the social fund: a lack of awareness, particularly about community care grants; the long processing times that sometimes occur; and, on occasion, perverse incentives. One such incentive results in families applying for loans for cookers and beds because they are “priority items”, even if they are not actually the things that are most needed at the time.
It is right to devolve these programmes to a local level, where the authorities know their areas more and are better able to put families in touch with other local services that can help them. Work can be done with, for example, citizens advice bureaux on referrals, and with food banks and furniture recycling programmes, such as Furniture Helpline, in Bordon, in my constituency. Credit unions can also play an enhanced role, although we must recognise the limits to that, both in terms of geographical coverage and the client groups they are geared up to serve. I wish to thank the Department for Work and Pensions for another announcement last week on support for credit unions. An extra £73 million is being provided for capitalisation and for the development of something that many hon. Members on both sides of the House have requested for a long time: a robust back-office system that will enable credit unions to work more closely with post offices. That, combined with the imminent legislative reform order, which will allow credit unions to grow more, will mean that they will be able to fulfil an even more important role in providing responsible, affordable financial services to some of the poorest people in this country.
The reforms to the social fund are just one part of a large and radical package of measures. Some issues still need extra attention, as Ministers acknowledged today. The position of cancer sufferers is one such issue, as is the mobility component of disability living allowance, but I suspect that, deep in their hearts, many Opposition Members support the principles behind this ambitious, bold and compassionate Bill, and I urge them to vote with us to move forward on those central themes.
Mr David Lammy (Tottenham) (Lab)
I approached this debate hoping that all of us in this House recognise the importance of the dignity of work for our population and recognise the dignity of living in a society where we are concerned for the welfare of people who fall on hard times. That is the basis of our social security system and we are judged on how we deal with the most vulnerable. So the remarks that have been made about people living with disabilities are particularly pertinent to the kind of society we want to live in. We have heard remarks from Members on both sides of the House that cut to the heart of that kind of society.
I am not able to vote with the Government on the Bill. I say that coming from a working-class background in which my parents, both of whom are dead now, would literally run out of the door to work because they valued work so much. We survived on income support. For us, child benefit meant being able to buy school uniforms and books, and there was a period when I experienced free school meals. Speaking in this debate, I am thinking about the many people outside the Chamber who rely on the welfare state and social security who will be very anxious about what has been said at the Dispatch Box.
The first reason why I cannot vote for the Bill concerns worklessness. One has to acknowledge the progress of moving to a universal credit system, but the reforms are being made against a backdrop of huge worklessness in communities such as mine, and we have a residual memory of the past. When Labour came to office in 1997, unemployment in Tottenham was at 28%; it is currently the highest in London. We remember a similar programme to the workfare programme called the youth training scheme. We remember the Manpower Services Commission and the 58% of people on YTS who did not finish it and who certainly did not leave it with any qualifications or job opportunities, so we scrutinise what this workfare programme will mean, and it seems lacking when we look at what is replacing the current system. We know there will be less money in the kitty than there is now and we cannot understand how the Government can move to the new system while withdrawing £6.2 billion from the current credit schemes. That is £6.2 billion that will not be available to some of the poorest families in the country. The Bill will need a lot of scrutiny in Committee in the context of worklessness, particularly the situation facing the young, and I hope to play a role in that.
The second reason why I cannot vote for the Bill is because of where it will leave women and families. Much has been said about the situation regarding the second earner when there are two earners in the home. The Bill will hurt both families and marriage, and I am surprised to see the coalition Government, who say they value marriage, doing something that will clearly hurt families by taking this punitive approach to the second income.
Also, many of us are dealing with local authorities that are withdrawing support for services in our communities, such as after-school clubs. I agree with the single mothers in my constituency who say to me, “Listen, those activities that our children take part in when school finishes at 3.30 pm are not a luxury but a necessity because we go out to work and work finishes at about 5.30 pm, and then we have to get home and pick them up.” That money is being cut against the backdrop of the proposal in the Bill massively to reduce child care allowances. How can we do that to women up and down the country whom we encourage, and want, to work? That is another reason why we should not vote for the Bill.
Another reason why I will not vote for the Bill is the visit I had from the Haringey Phoenix Group in my constituency—a wonderful voluntary organisation that supports the blind. I am particularly concerned by what the Secretary of State has said. He was vague at best about his proposals and much has been kicked into a review. Many people will be left in huge uncertainty and it is unfair that someone who is blind, who is trying to live an independent lifestyle and who perhaps has a family, will not know what kind of assessment they will receive, how regularly they will receive it and the scale of their benefits afterwards, because the Secretary of State cannot provide those answers. I welcome the simplification of the system and the desire to see people in work and gaining the dignity that comes with that, but people outside will be very concerned, and the son of anyone who has received benefits in the past could not support the Bill as it stands.
Steve Baker (Wycombe) (Con)
I rise to speak in support of the Government, very conscious that a large number of people will have legitimate and sincere concerns about the Bill. For example, I asked one local activist, who leads the Zacchaeus 2000 Trust, to critique the Prime Minister’s recent speech, and his response ran to 23 pages. I regret that due to the time I will not be able to share his concerns, but I will forward them to the Government, as a matter of interest.
I do not think there can be any doubt that the system is currently failing the very people that it is intended to help. I want to share with the House two stories from my constituents—one that shows the imperative for change and one that has slightly broader applicability.
Miss Rachel Pepin came to see me in a state of some anguish. She is a struggling single mum who wants to work more. She is in employment and the work is there for her, but she cannot take it because of the benefits system. She has two sons whose father will not support them. It seems that every time the Child Support Agency catches up with him, he drops out on to jobseeker’s allowance. Her current housing benefit receipt makes it profitable to stay on income support and actively not to seek work. She has reached the conclusion that it simply does not pay her to stay in employment. She sees her neighbours—on benefits—better off than she is.
I am glad to say that that is not how Rachel Pepin wants to live. She wants to work, and she is struggling against the treacle of the present system. It is letting her down, and that must end. Not everyone will share her admirable work ethic. Many will make the wrong choice when faced with the choice between being better off and doing the right thing. We must ensure that work is better for everyone, or we will encourage the decivilising consequences of the state encouraging bad choices.
My constituent Mr David Laws—[Interruption.] I expected that response from the House; I believe that he is not related. Mr Laws is most concerned about the recent changes that will end home loan interest payments after two years. He wishes to protest most strongly about the “unfairness of this legislation”, as he puts it. He has been out of work for some time. He says he is not workshy. He has a law degree and has experience of both public and private sectors. At the age of 51, he finds that many employers do not think him suitable for the low-paid jobs that are available. He finds himself willing to do anything but unable to find work. He therefore faces the very real possibility of losing his home if he fails to secure a job before April 2012.
That puts me in mind of two points. First, I think Mr Laws has a legitimate concern, which must be addressed. Secondly, if we cannot create an economy in which Mr Laws can find a job within a year when he is highly qualified and at the peak of his productivity, we will have failed. I urge the Government to impress on the Chancellor the need to fulfil his pledge for an enterprise-driven Budget. We simply must deliver those private sector jobs.
Given the time and the fact that other Members wish to speak, I conclude by echoing the sentiments put succinctly in the Centre for Social Justice report, “Breakdown Britain”:
“The more we struggle to end poverty through the provision of benefits, the more we entrench it. By focusing on income transfers rather than employment, the system makes people dependent on benefits. Habituation to dependency destroys individuals and communities, as well as reducing the overall competitiveness of the UK.”
I listened to my hon. Friend the Member for Truro and Falmouth (Sarah Newton), who made the case brilliantly that the moral and intellectual high ground is on the coalition side of the House, and I agree with her.
We have heard a range of Opposition speeches. I welcomed the speech by the right hon. Member for Stirling (Mrs McGuire), who accepted that the Government’s intent is good. I share her concern that the Bill, in a sense, is enabling, but unlike her I suspect that in a complex welfare system it is necessary to give the Government some flexibility.
Mrs McGuire
On flexibility, does the hon. Gentleman recognise that the 300-odd regulations defining what is meant by the Bill should be before us today?
Steve Baker
I hear the right hon. Lady, as have Ministers, but as I have so little time, I hope she will forgive me for finishing my contribution.
I was glad to listen to the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett). In an intervention, I agreed with another Member that the banking system is currently the source of great injustice, but some of the contributions from the Opposition seemed cynically opportunistic. There has previously been broad agreement across the House that there must be change. I urge Members in all parts of the House to get on board a welfare reform that is well intentioned and must be seen through.
Kate Green (Stretford and Urmston) (Lab)
Time is tight, so I shall mention a small number of issues which have not yet come up specifically in relation to the impact of the universal credit on women and children. My hon. Friend the Member for Glasgow North East (Mr Bain) alluded to the design of the universal credit as a breadwinner model benefit and the disincentive that that creates for second earners and households to work. That is important because women’s financial independence, whether in couples or on their own, is an objective that Ministers ought to be seeking, given their proclaimed wish to use the benefits system to help everyone stand on their own feet.
I am concerned, first, that the benefit will not deliver well for women. Half of women in poor households already do not have any money to spend on themselves. Money will now be paid only to one member in a couple. As the evidence of the pension credit shows us, where there is a choice as to which member of the couple is to receive the benefit—I understand that that is what Ministers intend for this benefit—77% of payments went to the man. I urge Ministers to examine closely the design of the benefit that they have created and its implications for women’s independence. That is important because women are more likely to spend money on children.
That leads me to my second concern: the impact of the benefits cap, particularly in relation to children. As other hon. Members have mentioned, the housing cap will force many families to go into arrears or to move. One of the important dimensions of forcing families to move is the disruption that that will create for children’s schooling, children’s social networks and child care arrangements. I urge Ministers to take careful note of the lessons to be learned from what happens to children who have been in temporary accommodation, and the damage that house moves can do to young children. I hope they will think again about the imposition across the board of that benefits cap.
The third thing that I ask Ministers to give attention to is payment of the universal credit on a monthly basis. I understand why they want to do that—to mimic the way in which many people receive their pay—but we know that one in four low-income families run out of money before the end of the month. Ministers must tell us what will be put in place to ensure that those families are not left struggling or destitute because of the design of a benefit payment that does not meet the needs of lower-income households.
The fourth aspect on which I would welcome clarification is an issue that has been highlighted to me. In some cases, because payment is made to one member of a couple in a household, benefit could be paid to a member of a household in relation to a cost borne not by them, but by another member of the household. That is the case particularly in relation to housing costs. One member of a couple could receive the universal credit, including the housing component; the other member of the household might be responsible for that rental obligation. I would welcome Ministers’ clarification on whether that is also to apply to mortgage interest assistance. That matters because it is likely to deter women from forming couple relationships, which Ministers are keen to promote, if women think they will be put in a position where money which is important for them to keep their home is to be paid to somebody else.
Finally, like other hon. Members, I am distressed that proposals are being introduced in the Bill so early on in the process of consultation on child support, when we are still waiting for the responses from the many experts in the field. I am concerned that we are moving to a system that will be almost entirely voluntary, with only a residual compulsory system. We all know that when voluntary arrangements are put in place—if they are put in place—it is women and therefore children who are most likely to lose out. Introducing the payment of a fee to access a voluntary child support system is highly likely to leave many women and children completely unprovided for, and I urge Ministers, on that point in particular, to think carefully and to think again.
Charlie Elphicke (Dover) (Con)
Government Members are all aware that behind the Bill stands the financial destiny and future of millions of people. There is a great human aspect to this. Only today, I spoke to my constituent, Kelly Banks, whose son Ben is 12 years old and has a serious heart condition. The allowances that he receives are going to be taken away because he can walk to school—never mind the fact that it takes him half an hour, and by the time that he gets there, he is out of breath. Those hard and difficult decisions must be taken, and we must make sure that the right balance is struck to ensure that people who need help receive it, and that those who do not, do not.
That is a particular concern, because the figures show that disability living allowance has gone up by 30% in eight years. Housing benefit has gone up by 45% in the past five years. In the past 13 years, the benefits bill for working-age people has increased from £52 billion to £74 billion. Those are the numbers in the years of plenty, but we have inherited a catastrophic economic situation and difficult decisions must be made. The Bill seeks to strike a balance between, on the one hand, the nation’s credit card having been maxed out and, on the other, the need to ensure that those who need help receive it. Most importantly, the universal credit will help people to be sure that work always pays.
We need to do more to crack down on fraud and error, which costs £5.2 billion in wasted benefits. We need to ensure that there is a proper cap on the number of people coming in to the country. We have 5 million people who could work but do not do so, yet we all know that in the past few years 1.2 million people who were born overseas came and took jobs. We should do more to ensure that those 5 million people who could work but do not do so receive help, support and encouragement to get into work. We have to do the right thing by our own countrymen and our neighbours. It is time to reform. It is time to make work pay, and it is time to bring the benefits bill under control and ensure that there is fairness for those in need and those who are paying taxes.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I shall be brief, as I know that other Members still wish to speak. We have heard useful contributions from Members on both sides of the House. There is cross-party consensus that the welfare system needs to be reformed, and there is even common ground on the reasons for the reforms, such as making work pay, and on what we need to do about the problem, such as simplifying the benefits system.
I want to put on the record the fact that there have been some unhelpful and unhealthy remarks, particularly statements that equate the reforms on making work pay with, if not a kick up the backside for people who are deemed to be workshy, then its equivalent. I found that particularly objectionable. I began to make a list of the Members concerned, but I ran out of space.
I want to dispel some of the myths perpetrated about worklessness, which includes unemployment and incapacity, whether the result of illness or of disability, and to explain why the Bill not only fails to address key issues such as the taper of the universal credit but, in conjunction with the disasters of the Government’s economic and employment policies, risks increasing both child and pensioner poverty and inequalities, as well as creating a new underclass. We also know that there will be consequences for the health outcomes of the population as a whole.
On unemployment, constituents are coming to my surgeries having either had their jobs threatened or just lost their jobs, and it is insulting that we should consider some of them to be making lifestyle choices. Unemployment is not a lifestyle choice. There is clear evidence that unemployment has profound negative effects on the physical and mental health of not only the people who are directly affected, but their families. Studies suggest that there will be an increase in all-cause mortality as a result of unemployment, so we need to be very mindful of that.
Indeed, if we compare the level of incapacity benefits with health data, we find that it is a good indicator of population health. It is reliable, legitimate and not an indicator of malingering. There is overwhelming evidence that the driver that brings down worklessness is a high level of sustained economic growth, but the current fitful recovery will not help to get people back into work. Given the Government’s cuts, nothing will help those people.
In addition to the Bill’s appalling timing, it lacks an understanding of the importance of appropriate welfare to work programmes and fails to distinguish between job-ready and long-term claimants. That will again hinder people from getting back into work.
My final general point is about the Bill’s direction of travel. When we compare different international systems, we find that those with highly decommodifying state support packages—where state support ensures that a basic standard of living is maintained—have fewer income inequalities, a host of social benefits and no negative impact on health outcomes, as measured in particular by infant mortality.
Welfare systems also have an intergenerational effect. In the US we have seen that evidence, and I see patterns associated with what we have been introducing, and that effect also occurring here. Children inherit their parents’ poverty, and we cannot allow that, so I recommend that we look again at the detail of the Bill.
On the Bill’s specific measures, I have already mentioned concerns about the taper, and I hope that the Government will commit to an annual review of the rate and introduce it at 55% rather than at 65%. In addition, the payment of the universal credit needs to be more flexible, as many of my hon. Friends have said, so that we do not exacerbate child poverty any further.
I would also welcome some clarity about the earnings disregard—the amount a household can earn before they lose their entitlement—to ensure that work pays for all. Members have already mentioned the reduction in the child care costs that the working tax credit covers, and I hope that we can look again at that. Save the Children estimates that some families could lose more than £1,500.
Free school meals are another important source of support to low-income families, and I am concerned that the Bill does not describe how they will be maintained under the universal credit.
The withdrawal of employment support allowance after a year is absolutely disgraceful, and again we should learn from other countries. We have seen what has happened in the States, and the effect on families has been absolutely appalling.
Finally, the conditions, sanctions and penalties associated with the universal credit must be reasonable, take account of specific barriers to work and ensure that work does pay.
So, I will not be supporting the Bill—
Priti Patel (Witham) (Con)
I congratulate my right hon. Friend the Secretary of State and his entire ministerial team on bringing forward this long overdue legislation, and I pay tribute to him for his passion and conviction in driving forward his policies to get people off dependency and back into work. It is imperative that the welfare and benefits system be reformed and improved, because helping people to get back into work, ending the culture of dependency on the state and restoring the British work ethic is absolutely the right thing to do. It is always easy for Labour Members to criticise from a position of opposition, but they are the ones who spent 13 years failing to get people into work and trapped yet another generation on benefits—and they opened the door to let 2.5 million people from overseas come into Britain and take British jobs.
I make no apologies for viewing the welfare system as a safety net. Welfare should be available to help those who have fallen on hard times and need support in getting through difficulties, illnesses or disabilities. However, this has not always been the case. Many Members who have spoken in the debate recognise that our constituents have gone through many bureaucratic processes, obstacles and hurdles in getting the support to which they are entitled. They face a lot of stress and anxiety in going through appeals processes and tribunals, and many go through terrible trauma, which is why they end up in our surgeries, when we have to intervene. The reforms outlined in the Bill must therefore ensure that such mistakes, bureaucracy, regulation and hurdles are reduced, and, importantly, that we restore confidence in the system to support those who are in need.
There must be three components in any programme of measures introduced by Government to get Britain working, take people away from benefits and get them back into employment. First, we need pro-business policies that promote growth, enterprise and wealth creation. Secondly, strong measures need to be in place to get people into work and to complement the measures in the Bill to reduce benefit dependency. I therefore welcome the introduction of the Work programme, which is long overdue. It is not covered by this Bill, but has to be viewed alongside it as a complementary measure. The Secretary of State should be congratulated on promoting the role of welfare-to-work providers in getting people into work, and recognising the opportunities that they will create for the unemployed. That is the best approach to take, and the sooner the Work programme is fully functional, the better. Finally, there must be a benefits system that is fair both to the taxpayer and to those who need benefits. I therefore welcome the measures in the Bill that will get people out of the benefits trap by making work pay and removing complexity with the introduction of the universal credit.
I press the Government to use the Bill to take strong action against those who are disregarding the traditional British value of fair play and have been using the benefits system as an alternative to work. We have heard a great deal about that during the debate. The House may be interested to know that more than 500 suspected benefit cheats have warrants issued for their arrest for failing to turn up in court. Despite the levels of suspected fraud, totalling over £50,000 in some cases, because of a ridiculous example of human rights law, defying common sense, the Secretary of State’s Department is unable to name these people to help to track them down and bring them to justice, because it would violate their right to privacy. I hope that the Secretary of State and Ministers will look to alter this ludicrous position, and use the Bill as an appropriate vehicle to do something about it. I would also like action to be taken to prevent Europe from ordering us to pay benefits to immigrants, including illegal immigrants, which causes bemusement to most people in this country.
This Bill is not about penalising the vulnerable but establishing a fair system that penalises those who flout rules, abuse the system and think it right that they should have a better life than those who go out to work. That is why I will support it.
Sheila Gilmore (Edinburgh East) (Lab)
Having sat here all afternoon listening to the debate, I see a substantial difference in attitude between the two sides of the House. We have heard the Secretary of State and many speakers talk about the distinction between taxpayers, on the one hand, and claimants, on the other, as though they were two completely different groups of people. They are not. At various times in our lives we may be either or both. It is unproductive to pit these people against each other. There are too many myths and exaggerations in this whole debate.
The Prime Minister launched this Bill by saying that the welfare system had put one in four people out of work. His figures were simply wrong. The figure for those of working age who are not working, and not students or carers, is only 14%, so why did he say that it was one in four? It was simply to try to build up a head of steam to justify what are in fact cuts in benefits. Before the universal credit and all the rest of it comes into force, there will have been two years of benefit cuts. That is why the Government are able to say that people will not be worse off. Most of the reductions in benefits will already have happened through housing benefit, and by taking people off incapacity benefit and putting them on much lower levels of benefit. That is why people will not be worse off, and it is quite unsatisfactory.
Stephen Timms (East Ham) (Lab)
We have had a good debate. The Bill contains one good idea and presents us with two serious problems. The good idea is the merger of out-of-work benefits with in-work benefits, such as the tax credits that we introduced, which make it much more worthwhile to be in a job. The creation of the universal credit has been widely welcomed across the Chamber in this debate, by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), as well as by the Chair of the Select Committee on Work and Pensions, and by the hon. Member for Cardiff Central (Jenny Willott), my hon. Friends the Members for Sunderland Central (Julie Elliott) and for Stalybridge and Hyde (Jonathan Reynolds) and my right hon. Friend the Member for Stirling (Mrs McGuire), among others. It is a welcome change, and it is right that we should congratulate the Secretary of State, who has focused intently on this matter since the Conservative party sacked him as its leader. He went off and set up the Centre for Social Justice, which did the spadework, and he now brings the reform to the House.
That was the good idea, but unfortunately the bouquets end there, because the Bill is a mess. It was rumoured on good authority a few weeks ago that it would be delayed another month so that key decisions could be made—and now that we have the Bill, we can see why: fundamental points are missing. How will child care be supported? That is key to the Bill’s purpose of ensuring that people are better off in work. If the Government get this decision wrong, the Bill will fail. The Secretary of State told us that he would take further advice from relevant groups. However, the relevant groups have given him plenty of advice already; the trouble is that he has not taken it. The previous Government’s success on child care meant that the proportion of lone parents in work increased from 45% to 57%.
The decision on support for child care is crucial. The Secretary of State has told us that he wants to spread the same amount of money across many more people. People will therefore have to find not 3% of the cost of child care out of their own pocket—which is common at the moment—but perhaps 30%. That is a tenfold rise. It is therefore not surprising that lone parent organisations are reporting calls from their members saying that they will not be able to afford to carry on working.
At a time when benefits are being merged into a universal credit, the Government have, bizarrely, decided to do the opposite with council tax benefit and devolve it entirely to local councils. That appears to be the messy outcome of a dispute between the Secretary of State for Work and Pensions and the Secretary of State for Communities and Local Government, which unfortunately this Secretary of State has lost. Local authorities will apparently be free to design council tax benefit as they wish, except that it will have to cost 10% less than before. Again, that could completely scupper the advantages that the universal credit is supposed to deliver. Will the Department for Work and Pensions be able to step in if that happens? We simply do not know.
The Secretary of State was not able to tell us earlier who will receive free school meals in future. That is a crucial piece of information. How can we debate the new system without knowing that?
My hon. Friend the Member for Swansea West (Geraint Davies) made some telling points about the position of self-employed people. We have no idea how the self-employed will be handled under the new system. Employers will notify the DWP of the salary of people in pay-as-you-earn every month so that their universal credit can be calculated—that is, if the Government can get the IT to work. The Secretary of State knows that I am sceptical about his timetable for that. Self-employed people are not in PAYE, so how will their universal credit be worked out? We have no idea, and the Bill does not tell us.
Who will be entitled to free prescriptions? Who will be entitled to mortgage interest support? Which working families will be exempt from the benefit cap? How will unearned income such as child maintenance and widow’s benefit be treated? Will disability living allowance continue to be available indefinitely to children? My hon. Friend the Member for Alyn and Deeside (Mark Tami) made a powerful speech about that.
Those are enormous gaps in the Bill on crucial details, not minor matters. The whole purpose of reform, and the point that has been repeated over and over again in the debate, is that everybody wants a system that ensures that people are better off in work. Achieving that goal stands or falls by whether those questions are given the right answers, and at the moment we simply do not know.
The lack of answers is a serious problem with this unfinished Bill, but unfortunately it is not the worst problem. The things that we do not know are only the half of it: the things that we do know turn out to be even worse. Why on earth are Ministers launching an attack on saving? People who receive £80 or £100 a week in tax credits to supplement their earnings will in future receive absolutely nothing at all if they have £16,000 in the bank. They could lose perhaps £5,000 a year as a punishment for having £16,000 in savings. If they get rid of their savings, they will get their credits back. What is that about?
The Secretary of State told us earlier that child care support would be included in the universal credit. That would mean that those people, for the crime of having £16,000 in the bank, would lose all their child care support as well. Why are people on modest earnings to be punished for saving for a deposit to buy a home, or for the massively increased charges for higher education? The Secretary of State told us that 100,000 families would lose everything as a result. He said that he saw no problem with that, but he should go and talk to his colleagues in the Centre for Social Justice, who have made the point that the savings limit for out-of-work benefits is
“an unfair penalty to those who have saved”.
Instead of easing that limit, as the CSJ proposed, the Bill extends it to people in work.
The Secretary of State is wrong to say that the welfare system is only for the most vulnerable. My hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) made a telling point about that. It is there for everybody when they need it; that is why we have national insurance. My right hon. Friend the Member for Croydon North (Malcolm Wicks) was right to emphasise that responsibility should be expected from the rich as well as the poor.
Contributory employment and support allowance is to be time-limited to a year. My hon. Friend the Member for Aberdeen South (Dame Anne Begg) made a telling intervention about that, and my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) also spoke about it. The data suggest that probably less than 20% of those in the work-related activity group returned to work within a year. There is no way that someone on oral chemotherapy or with a serious mental health problem can be expected to return to work in a year, so that is clearly wrong.
Robert Flello (Stoke-on-Trent South) (Lab)
Does my right hon. Friend accept that there is already a problem with contribution-based ESA, because people are not passported through to other benefits as somebody on income-related ESA might be? There are already difficulties for people in the circumstances that he describes.
Stephen Timms
There certainly are problems. The Government have made much of marginal deduction rates and the impact on work incentives, but it turns out from the small print of the Bill that the changes will increase the marginal deduction rates of many more people than will have them decreased. Again, the Secretary of State’s own think-tank has pointed out the problem with the high taper rate that the Government have chosen.
My hon. Friends the Members for Makerfield (Yvonne Fovargue) and for Stretford and Urmston (Kate Green) pointed out that in the tax credits system, benefit in respect of children can be paid to their mother. Sometimes, if all the money went to the father, the children would never see it. The Bill completely ignores that issue.
A lot has been said about disability living allowance, and my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) spelled out powerfully the dangers of what is being done. It is being scrapped and replaced with the personal independence payment—whatever that might eventually turn out to be. A lot of disabled people are frightened, and the Bill to abolish DLA was published before the consultation even finished. We should reform DLA not abolish it, and it is wrong for the Bill to proceed in that way.
As I said earlier, the Bill presents us with one good idea—the universal credit—and two very big problems. The first is all the things that the Bill does not tell us—the large gaps of great significance that have been left in it—and the second is all the things that it does tell us. It needs radical improvement before it reaches the statute book, so I commend the amendment to the House.
The Minister of State, Department for Work and Pensions (Chris Grayling)
I am sorry to follow such a highly negative speech from the Opposition spokesman on an occasion when the Government are bringing before the House an historic Bill that lies at the heart of an historic set of reforms that will reshape the relationship between the Government, the citizen and the welfare system. The Bill strikes a balance between fairness and responsibility, and crucially, it sets out the framework for creating a more effective welfare system that is fit for the 21st century. Above all, the Bill puts in place many more of the building blocks that we will need if we are to tackle the blight of deprivation that affects too many of our communities and too many of our citizens. In the past 13 years, millions of our citizens were left on the sidelines of society, trapped by a culture of dependency, facing financial barriers to a return to work, and with inadequate support to help them to make a return to the workplace, even if their financial position made it sensible for them to do so. All that must now change.
We have had a good and lively debate, and I congratulate all hon. Members who participated in it. Time does not permit me to refer to all the points raised, but I will happily answer questions or letters, and indeed, those who serve on the Public Bill Committee can raise many of the detailed issues in the days and weeks ahead.
Not least among those contributions was a particularly disappointing start by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), the shadow Secretary of State. He and the Leader of the Opposition have both openly backed the principles of the reforms, and they even put some of the Bill’s measures, such as the housing benefit reforms, in their party’s manifesto. Yet what did we hear today? They have done a U-turn. They have been captured by the left wing of their party, and are reverting to the politics of type. That is a real shame, because the shadow Secretary of State was right to say that the reforms would benefit from consensus. It is therefore unhelpful to hear Opposition Front Benchers spend so much time seeking dividing lines rather than working with the Government to deliver reforms that will transform this country. The shadow Secretary of State may not realise it, but there is a great degree of consensus about the reforms out there in the country, among people who believe that it is time that we sorted out the mess that has built up around our broken benefits system—a mess that has left millions trapped in dependency.
One of the other disappointments of the debate was that so many Opposition Members reverted to type in the language that they used. Too many couched this debate in the kind of language that I thought we had left behind 20 years ago. Let us be absolutely clear. The reforms are designed to help those in our society who are struggling. The universal credit will help to lift hundreds of thousands of adults and hundreds of thousands of children out of poverty. We are challenging for the first time in far too long the cycle of deprivation that incapacity benefit represents for too many of our fellow citizens. We are providing more individualised support to help people to move back into the workplace.
There are some tough decisions, but for what reason do hon. Members believe that we must take those decisions? It might have something to do with the fact that the Labour Government left us with the biggest deficit in our peacetime history and we must pick up the pieces. As the shadow Secretary of State so aptly reminded us, there was no money left when we took office.
I pay tribute to the right hon. Member for Croydon North (Malcolm Wicks) for saying that the best social security policy is a job. He is absolutely right, and that principle—that simple premise—lies at the heart of our reforms and the change that we are seeking to deliver.
Let me also address the point about the gaps in the Bill, which was raised many times this afternoon. I remember being up against the right hon. Member for East Ham (Stephen Timms), the shadow Minister, in Public Bill Committees when he was in government. Some of those Bills had virtually no substance at all to them. This is a bit like the poacher turning gamekeeper, but it is pretty ripe for him to turn round and say that not all the details have been included. What I would say to the House is this. As we work through the Bill in Committee, we will deliver detail to the Opposition at each stage on how we plan to put the measures into practice. We will answer questions and be as open as we possibly can, including in saying where work still needs to be done. The Committee will, I hope, be an exercise in discussion and debate, and we will inform it to the best of our abilities, because these reforms are vital. Making work pay will transform lives, especially for the poorest, through the universal credit, the single taper and getting rid of the complexity that has dogged our system. Members on both sides of the House will know about all the problems that we have had with tax credits over the years and all the constituency cases that have come to us. They should realise that this Bill sweeps all that away. A simpler system for our constituents and a simpler system for society—this is a better way of doing things.
Many of the clauses in the Bill are also vital to the conditionality changes that will underpin the delivery of the Work programme, helping to deliver much better back-to-work support for those struggling to get into work. We have always been clear that there needs to be a clear two-way contract between individuals and the state. We will provide much better back-to-work support and a system that makes work pay, but refusing that support cannot be an option for those with the potential to work. This Bill will place clear and firm responsibilities on their shoulders, and will bring clear consequences if they fail to live up to those responsibilities.
This Bill is about taking a step in the right direction towards a more common-sense welfare system that targets resources more effectively to the vulnerable, but also restores credibility in our welfare system. That is why we have tackled the insanity of a system that can pay housing benefit to people in quantities far beyond what those in work might expect to be able to afford when finding a house for themselves. That is also why we are introducing the benefit cap, so that we remove perverse disincentives to work. Last week I sat with an adviser in a Jobcentre Plus office who said to me, “The thing I find strange is this: why am I organising payouts to people who get far more money than I do, and I’m doing a job?” That is the kind of situation that we have to address.
That is also why we are getting to grips with reforming the disability living allowance, so that we can move away from an unsustainable welfare state and a system where we leave people for long periods, untouched, uncontacted and unchecked. We do not ask the question, “Is this still right for you?” That is what the changes are about, and they are necessary.
Despite the rhetoric, Opposition Members have said that they believe that it is time for reform, and this is why we are pressing ahead with it. We are also sorting out the mess that is child maintenance in this country. Finally, we are doing something that I am very proud of—something that Opposition Members called for, but which the previous Government did not do: putting an end to jobcentres having to accept adverts from sex clubs or lap-dancing clubs in a way that exploits the most vulnerable women in our society. In short, the Welfare Reform Bill is about putting responsibility, fairness and common sense back into the heart of the welfare system, while ensuring that we deliver value for money for hard-working taxpayers.
Chris Grayling
No, I am not going to give way.
Before I conclude, let me briefly touch on a couple of points raised by hon. Members. The Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg), raised the issue of contributory ESA. I want to make two points to her. The first is that all those who move off incapacity benefit who fit into the contributory bracket will be given access to the Work programme regardless of their status. That is important in ensuring that they receive back-to-work support. However, I would also remind her that the changes to ESA simply bring it into line with JSA. It is a simple principle that, if someone has financial means in their household, the state will not support them. The state will be there to provide a safety net for those who do not have the means to support themselves. That is a sensible principle. We have extended the period beyond six months, so that we can deliver support to people with health problems, but it is sensible to have an aligned system. I will be happy to talk further with the hon. Lady in Committee or in the Select Committee.
Chris Grayling
No.
This is an important set of reforms and I commend the Bill to the House.
Question put, That the amendment be made.
Business without Debate
(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Delegated Legislation
(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Petitions
(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Keith Vaz (Leicester East) (Lab)
A few weeks ago, my hon. Friends the Members for Leicester South (Sir Peter Soulsby) and for Leicester West (Liz Kendall) and I launched—
Mr Speaker
Order. I apologise for interrupting the right hon. Gentleman, but may I appeal to Members who are leaving the Chamber to do so quickly and quietly, so that we can hear him present his petition?
Keith Vaz
Thank you very much, Mr Speaker, for your protection, which I appreciate greatly.
As I was saying, a few weeks ago, my hon. Friends the Members for Leicester South and for Leicester West and I launched a city-wide petition against the Government’s proposals to abolish the education maintenance allowance. Over the next few evenings, we will each be presenting petitions from various educational institutions. This petition has been collected by those who study at Gateway college, in Hamilton, in my constituency, where the principal is Suzanne Overton-Edwards.
The petition states:
The Petition of residents of Leicester and the surrounding areas,
Declares that the Petitioners oppose the abolition of the Education Maintenance Allowance; notes that a substantial number of young people are in receipt of the Education Maintenance Allowance in Leicester; and further notes that education can provide a better future for young people.
The Petitioners therefore request that the House of Commons urges the Government not to abolish the Education Maintenance Allowance.
And the Petitioners remain, etc.
[P000897]
Tony Cunningham (Workington) (Lab)
I would like to present this petition on behalf of Marie Steele and more than 120 classroom assistants from west Cumbria who are both angry and upset at Cumbria county council’s single status proposals.
The petition states:
The Petition of residents of Cumbria, and others,
Declares that the Petitioners are concerned about the plight of Teaching Assistants in Cumbria, who feel they are being unfairly treated and whose professionalism is severely under threat. The Teaching Assistants/support staff across the county are currently fighting a change to their terms and conditions that affects their hours and a considerable loss of pay. Support staff are a vital resource for the running of a school. Senior Teaching Assistants also cover classes when teachers are absent or on planning time.
The Petitioners therefore request that the House of Commons urges the Secretary of State for Education to look into the plight of Teaching Assistants.
And your Petitioners, as in duty bound, will ever pray.
[P000898]
Portsmouth-London Railway Line
(13 years, 8 months ago)
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Penny Mordaunt (Portsmouth North) (Con)
I wonder, Mr Speaker, whether on your outreach trips up and down the country you travel by rail. If you do, I wonder whether you like to look at your speech en route and to travel with your elbows. These are pertinent questions should you intend to come to Portsmouth to give us the benefit of your wisdom, for it seems that South West Trains expects its passengers not only not to work while travelling in standard class but not to have elbows either. A report commissioned by South West Trains on the ergonomics of its class 450 carriages, which are now on half the Portsmouth-London line, found that 59% of people, when their elbows are taken into account, will not fit into the seats. My admittedly anecdotal evidence shows that most people prefer to travel with their elbows most of the time. The only sense that one can make of that bald admission by South West Trains is that it explains why there are no arm rests on those services.
Allow me to describe the conditions in the class 450 Desiro carriage. The seats are arranged in a two-plus-three formation, so there are five seats across the width of the train. Each seat is 43 cm wide, but, crucially, there is no space between them. They are hard, they have no arm rests and the seat closest to the window is compromised by the heating channel encroaching into the foot space. Earlier today, I took the liberty of measuring out, on this very Bench, 129 cm from the Gangway and invited three hon. Friends to attempt to squeeze themselves into the space they would have for a 90-minute journey on the London-Portsmouth line. I am sorry to say that if my hon. Friends had been in a class 450 carriage, my hon. Friend the Member for Gosport (Caroline Dinenage) would have been 90% in the aisle. I hardly need to remind the House that this is the usual seat of my hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell), who, as we all know, is not a man to be crowded. We are accustomed to regular games of sardines as we squeeze ourselves into a Chamber with too few seats; if we cannot do it, what hope do others have? Crucially, we are content with this arrangement; we approved of the decisions of our predecessors to create a Chamber deliberately short of seats, but Portsmouth commuters are not content to play sardines every day.
Damian Hinds (East Hampshire) (Con)
I congratulate my hon. Friend on securing this important debate. Is she aware that this issue affects not only Portsmouth commuters but many of my constituents in Liss, Liphook and Petersfield, and that the same trains are used on the Alton line? Sometimes it is an issue not just of comfort but of health and safety—people with back trouble and so on.
Penny Mordaunt
My hon. Friend is absolutely right. I know that he has done a tremendous amount of work liaising with his constituents, especially those who commute to London, on this issue. He might also be aware that in 2005, when the 550 operated from Waterloo to Basingstoke and Alton, the Rail Passengers Council—the forerunner of Passenger Focus—said that the 450’s seating arrangements were
“only reasonable for the route on which they were run”—
that is, not suitable for a mainline service. Why, then, were those unsuitable carriages introduced to the Portsmouth-London line on 65% of the services in October 2006, before being scaled back again to 49% late in 2007? South West Trains claims that it met an urgent need to address overcrowding on the route, based on the 2005-06 passenger figures—a full 12-carriage rake of 450s having 140 more seats than the 10-carriage 444 rakes. Those passengers-in-excess-of-capacity figures for peak times showed that of the 23 services operated with the 444 carriages, only five showed standing figures of almost 100 or more, the worst being 272.
Mr Mike Hancock (Portsmouth South) (LD)
I congratulate the hon. Lady on securing the debate. I am sure she would agree that South West Trains makes easyJet look luxurious. But the real problem, surely, was the way in which the figures were massaged to suit the financial interests of South West Trains rather than the interests of the paying passengers. Does she agree that we should be a little more optimistic that the Minister this time will be a bit more successful in persuading South West Trains to do something about that than was her Labour predecessor, who tried and never got anywhere?
Penny Mordaunt
I thank the hon. Gentleman for that intervention. I will come to precisely those points and lay them before the House. I make no judgments, but I think the figures will speak for themselves. I also wish to offer the Minister some solutions, because it is part of the frustration for many commuters that the answers in terms of volumes of rolling stock are there.
Overcrowding is concentrated between Waterloo and Woking—the leg of the route that just takes the first 25 minutes. It should be recognised that trains between those stations operate about every four minutes. Those commuters have options, and the journey is suitable for a 450 carriage. Also, it seems that it is acceptable to have 97 people standing, as the eight-carriage 450 service—the 6.32, I believe, from Haslemere—that showed that figure did not need to expand. Admittedly, there is not the option there simply add a single coach, but the point remains.
Further undermining the argument that overcrowding must be addressed is the fact that the 140 extra seats cannot actually be used. People either cannot fit into them or choose not to. Portsmouth city council’s March 2010 survey found that 80% of people boarding south of Haslemere are not confident of getting a seat at busy times in a 450 carriage.
Caroline Dinenage (Gosport) (Con)
The residents of Gosport hugely appreciate my hon. Friend’s securing of this Adjournment debate. I wonder whether she understands that South West Trains has an awareness that it is not just commuters from Portsmouth who board those trains; it is also commuters who then go across to the Isle of Wight, and of course those who catch a ferry over to Gosport, which is one of the largest towns in the country without its own railway station.
Penny Mordaunt
I thank my hon. Friend for her intervention. South West Trains cannot be anything other than aware of the enormous numbers of people who have been affected. As my hon. Friend the Member for Portsmouth South (Mr Hancock) said, the problems have been going on for many years, and it is a source of great frustration that no solution has yet been found.
Returning to the number of seats and the difficulty of getting a seat south of Haslemere at busy times, 25% of people cannot find a seat at all. If it were a simple matter of the number of seats, there would not be such problems. We have a situation in which similar numbers of people might end up standing, but in a much narrower gangway. Network Rail reports that food sales at its stations are up 5%. I am sure Portsmouth residents are doing their bit, stocking up before boarding in the knowledge that the at-seat trolley service will be hauled up somewhere around the lavatory, where it will be in good company with the similarly impeded train guard.
The Association of Train Operating Companies reported 1.32 billion passenger journeys in 2010, 7% up on 2009 and 37% up on 2000—indeed, a number not seen since commuters could enjoy the charms of steam power. We should not allow this top-line figure to distort the true pattern of travel on individual lines. Even as a response to increased demand, the provision of more unusable seats is hardly adequate. In any case, surely it was a disproportionate response to replace 450s on more than 50% of weekday services, when only 10 or so out of 133 weekday services showed high numbers of standing passengers.
We must wonder why, if overcrowding were the only motivation for change, services that were not overcrowded or had only, say, 10 standing passengers were replaced with the 450s. Outside peak times, the service is not at all stressed, yet during the week 53% of services are formed of 450 trains. Although I do not make any allegations—I merely offer the House the information—the carriage leasing company, Angel Trains, has confirmed that the 444 is as much as 20% more expensive to lease than the 450.
In the face of repeated lobbying from passengers of South West Trains, the company has held firm to the line that it must increase capacity. It has succeeded in increasing the number of seats. It has not succeeded in increasing the number of places to sit. A seat on which one cannot sit is a seat in name only. South West Trains dismisses criticism of the 450 carriages as mere “comfort” concerns and a simple preference for the 444. Well, quite. The 444s have two plus two seating, tables, arm rests and seats 45 cm wide, with a 4 cm space between them. What’s not to like?
What makes the situation even more frustrating for commuters is that South West Trains has 45 carriage units of 444 carriages. Passenger groups have devised service diagrams that show that a full 444 service could be operated with just over half that number. There is thus no need for passengers to endure the discomfort that at present is their lot. I accept that service programmes are a complex business and changes could have implications for other lines, although my research shows that these would not be detrimental.
The cause of passengers is not helped by the fact that there are no departmental guidelines on comfort. Comfort does not feature in any rail franchise agreements, or for that matter in the recent Reforming Rail Franchising consultation. However, the Department for Transport is alive to the dangers of inadequate provision being foisted upon passengers. The national rail franchise terms state that, excluding additional passenger services,
“the Franchisee shall maintain the composition of the Train Fleet during the Franchise Term, unless the Secretary of State otherwise agrees, such that there are no changes to the Train Fleet, including changes:
(a) to the classes or types;
(b) to the interior configurations; or
(c) which may reduce the journey time capabilities, of any rolling stock vehicles specified in the Train Fleet.”
It is true that franchises might be negotiated with a change of stock in mind, but patently the Department accepts the need to protect passengers. Furthermore, the coalition programme for government states:
“We will grant longer franchises in order to give operators the incentive to invest in the improvements passengers want.”
Such improvements include better services, better stations, longer trains and better rolling stock. The problem is that there is no incentive for train operating companies on mainline routes, as they operate in a protected market, and frequently have a monopoly. Contrary to what some TOCs said in their submissions to the consultation, inter-city lines have less competition than suburban lines. Cars and coaches are simply not viable alternatives, and certainly not if one hopes to work while travelling.
It is with hope and expectation, therefore, that I seize on the Government’s statement in their response to the franchise consultation:
“For intercity services revenue incentives may be sufficient to encourage operators to continue to strive to maintain and improve service quality. However, we may ask bidders to commit to quality improvements which are within their control, such as onboard environment; station environment; customer service and information.”
First, what is the need for better comfort, if not to improve the onboard environment? The Department for Transport should produce guidelines on passenger comfort for each type of railway line, and they should become mandatory minimum requirements in future rail franchise agreements. It should be made plain to franchise holders that failure to meet the guidelines before renewal dates will compromise their suitability to continue as operators.
Secondly, it is within the control of South West Trains to improve its service now. It has the carriages; the rail passenger groups have the service diagrams. If South West Trains contends that it could restore the 444 services to the London-Portsmouth line only by leasing more of them and putting up prices, I would ask why prices did not come down when the cheaper 450s were introduced. I hope that the Minister will prevail on South West Trains to look at how the distribution of carriages could be realigned so that no service is disadvantaged by the improvements to the Portsmouth line. South West Trains and the Department should look at what carriage capacity is available, and open dialogues with other TOCs if necessary.
Thirdly and finally, I would ask that a meeting be convened at which departmental Ministers and officials, Members of Parliament and passengers groups can discuss with South West Trains what must change and how quickly it can be done. People such as David Habershon, Bruce Oliver and John Holland, who have done so much to represent their fellow commuters, and to help me prepare for this debate, should be able to address their concerns directly to SWT executives across the table. Commuters on the London-Portsmouth line pay handsomely for their rail tickets. In return they should be able to travel to our capital for business or pleasure without being in discomfort or running the risk of doing themselves harm. South West Trains does a good job in many respects. It has the power to put right what it has got wrong, and I hope that it will do so in short order.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
I congratulate my hon. Friend the Member for Portsmouth North (Penny Mordaunt) on securing this debate. She made her case with great clarity and determination—she is a steadfast defender of her constituents’ interests. The first question that I should like to answer concerns the meeting she requested: I would be happy to meet her to discuss this further.
I fully appreciate how important rail services are for the residents of Portsmouth North—my hon. Friend’s constituents—and I am very much aware of the concerns that have been raised about the provision of class 450 rolling stock on the London-Portsmouth main line, which is an essential artery connecting communities across Hampshire, Surrey and south-west London. The provision of reliable rail services on the line is enormously important for economic activity and growth along the route. Nearly 7 million passenger journeys were made to and from Portsmouth stations in 2009-10.
To answer the questions asked by my hon. Friend, some explanation is required of the contractual history of the SWT franchise. The current Stagecoach South Western Trains franchise was competitively tendered by the previous Government in 2006, with the contract commencing in February 2007. All bidders were required to give a commitment to lease both the class 450 and the class 444 rolling stock for the life of the franchise term, because the Strategic Rail Authority—a body now disbanded but which at the time handled franchise decisions for the Government of the day—gave a statutory undertaking to the rolling stock company that owned the trains. That arrangement, known as a section 54 undertaking, was part of the funding package agreed to replace the older slam-door stock, which had operated in the south-west since the ’60s.
New-build class 444s and 450 electric multiple units were phased in between 2001 and 2007. If the previous Government had not required the operator to lease the trains, the taxpayer might have been left to foot the whole bill. Although the section 54 undertaking requires SWT to lease the trains, the operator takes the decisions on where to deploy the rolling stock across the different parts of the franchise network to address capacity problems as efficiently as possible.
As we have heard from my hon. Friend, SWT deploys a mixture of class 444s and 450s on services between Portsmouth and London. A 10-car maximum formation class 444 provides 598 seats, whereas a 12-car maximum formation class 450 provides 738 seats. My hon. Friend is rightly and understandably focused on the concerns of her constituents, but the train operator needs to balance the competing interests of different communities that use the services provided by the franchise.
Mr Mike Hancock
Is the Minister in a position to ask her Department to examine the figures that justified the decision by South West Trains to move the rolling stock away from Portsmouth to elsewhere? Is she able to argue that those figures are somewhat arbitrary to say the least and totally misleading in most cases?
Mrs Villiers
I am always happy to respond to the concerns of colleagues; I am happy to look at the numbers again and ask my officials to do that. As I shall point out later, however, there are very real capacity problems on the line that would be difficult to address without the use of class 450s.
Penny Mordaunt
The key part of my argument, which I hope the Minister will understand, is that South West Trains has not addressed overcrowding on the line. The fact that spaces for people to sit are provided does not mean that people have space to sit down. The group of people who suffer overcrowding potentially are the same group of people who suffer painful and uncomfortable seats. They are the same group of people who are asking for the new trains.
Mrs Villiers
I very much understand my hon. Friend’s concern, but in reality we—the Government and the train operator—have to balance the interests of different communities along the line. Even if it were affordable to replace all the 450s with class 444s, and even if they were used on all services, it would have a significant detrimental impact on people further up the line, many of whom would not be able to get a seat as a result. I shall come to that in a moment, however.
The most recent route utilisation strategy work makes it clear that the infrastructure is just too full to deliver additional trains. That leaves limited options for relieving overcrowding, one of which is to use longer trains with more seats, which the operator has chosen to do. The seats on the 450s provide vital capacity for passengers closer to London. If SWT were to use class 444s for all Portsmouth services, it would worsen peak crowding problems from stations such as Guildford and Woking. More passengers would have to stand between Woking and London than do today, and removing 450s from the Portsmouth to London route might have other knock-on effects, such as displacing the class 450 carriages on to the Weymouth line, where journey times are even longer than from Portsmouth to London.
We all accept that key crowding between Portsmouth to London occurs during peak hours. In response to public concern of the sort that my hon. Friend has raised, SWT has promised to use 444s in the off-peak where it can. The extent to which it can do this, though, is dependent on complex issues to do with timetabling and the availability of trains and train crew. These complexities flow from the intense use we make of our railways and the need to deploy rolling stock and staff in a way that generates maximum passenger benefits. That means that some off-peak trains have to be class 450s to ensure that they are in the right place for the peak-time slots.
My hon. Friend set out her view that three-plus-two seating is not suitable for services on journeys of the 90-or-so minutes that her constituents face in getting to London. I can understand her concerns. However, three-plus-two seating is currently deployed on a number of routes with comparable journey times—for example, journeys between London stations and Margate, and London Liverpool Street and Ipswich. Issues of health and safety are the responsibility of Her Majesty’s railway inspectorate and the Office of Rail Regulation. Neither of those bodies, I am afraid, has sought to restrict the use of class 450s on longer-distance journeys.
At the heart of my hon. Friend’s speech is the request that the Government should introduce new requirements on rolling stock seating into current and future franchises. I hope that she will understand that to intervene in the current franchise and require SWT to change its rolling stock would involve renegotiating contractual terms. This always comes at a cost to the taxpayer—a cost that I am afraid we can ill afford when we are striving to address levels of borrowing inherited from the previous Government which are the highest in our peacetime history. Looking forward to what might be included in the next franchise, she will be aware that the decisions that the Government make on the railways are constrained by a number of factors, including infrastructure capacity, affordability and value for money.
The experiences of my hon. Friend’s constituents reflect some of the very difficult trade-offs that are made on our railways every day of the year. I acknowledge, of course, that many passengers in Portsmouth would probably prefer the environment and the seating pattern of class 444 carriages rather than class 450s. However, for the practical reasons that I set out in my response about crowding levels further up the line and infrastructure limitations, I would be unwise to make promises on the pattern of rolling stock use on the Portsmouth line in the future. Changes of the sort that she would like in relation to the seating patterns on trains would have a significant impact on the affordability of the franchise process.
As well as these practical considerations, there is another reason why I am reluctant to make declarations on rolling stock deployment on the south-western franchise in years to come. We are in the process of reforming franchises, and we have recently completed a consultation on this. A significant element of the approach that we propose would involve giving railway professionals greater flexibility to make key operational decisions to enable them to react more effectively to passenger needs and to run their services in a more commercial way. We do not envisage specifying detailed operational issues such as the seating layout of rolling stock required on specific routes, as we do not believe that it makes sense to take that sort of decision in Whitehall. We want instead to put in place the right incentives to ensure that operators respond to passengers during the period of their franchises. We will therefore be looking to include demanding requirements on service quality.
Penny Mordaunt
I would very much like to hear from the Minister a commitment on this and an understanding of the implications of these types of seating, especially over long journeys. While I acknowledge that these trains are being used for longer journeys elsewhere, this is causing a tremendous amount of physical damage. People are having to employ osteopaths and chiropractors and are really suffering. It is not just a comfort but a health and safety issue. There are a wide range of options—for example, sticking the different trains together when they get to Guildford. Often, trains join up when they get to Guildford, and class 450 carriages can be put on when they get to Guildford and Woking to allow other commuters to use them. If they are in operation down in Portsmouth, people will sit on the comfier seats first. Also, there is other rolling stock that the Department is trying to do something with—I think that they are called class 460s and they used to be on the Gatwick line. There must be a solution to this out there, and I urge the Minister to pull the train operating companies together to try to find it.
Mrs Villiers
I am happy to work with my hon. Friend and the train operating company to see whether there are alternatives that have not been considered which can be brought into play without unfairly compromising the interests of passengers on a different part of the route, and without affecting the affordability of the franchise for taxpayers and fare payers. I encourage her to continue this dialogue with the train operator, and I am happy to take part in that. I think she will accept that I cannot promise to issue a directive to train operating companies on the detail of the seating plans of their rolling stock. That would not be affordable and it is not the right long-term option for the management of the railways in this country.
I appreciate the opportunity to debate this issue with my hon. Friend. As I have said, I am happy to continue to work with her to see whether a compromise can be found. I look forward to meeting her, and perhaps other colleagues who have attended this debate, to discuss the matter further.
Question put and agreed to.
Petition
Child Protection
Westminster Hall
(13 years, 8 months ago)
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Disability Living Allowance
(13 years, 8 months 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
Hywel Williams (Arfon) (PC)
I am glad to have secured this timely debate on the reform of the mobility component of disability living allowance—the debate could scarcely be timelier. I am also grateful to the hon. Members who are here, as well as to those who have expressed their interest but cannot be here. Lastly, I am grateful to the many organisations that have provided briefings to me and others for this debate.
Disability living allowance is highly valued. Currently, the lower rate is £18.95 and the higher rate is £49.85. As the response to the Government’s consultation states, DLA, and attendance allowance before it,
“had a major positive impact on recipients’ lives…DLA recipients of working age were unanimous in expressing views that DLA made a big difference to them.”
Many people depend on DLA. With some reservations, I say that the application and decision making processes are clear. I will refer to that later, but at least we know where we stand. Research also shows that DLA is unlikely to be subject to fraud: the Department for Work and Pensions estimates fraud at 0.5%, the lowest rate in the entire benefits system. The system seems to be working. As a rural MP in north Wales, I know that DLA is particularly valuable to people in rural areas, who generally face intense problems with mobility. The money can transform people’s lives.
My concerns about the Government’s proposals relate to the assessment system, the threats to automatic entitlement, the extension of the waiting period, mobility payments for people in residential care and assessments regarding the use of aids and adaptations. However, my overarching concern is about the prospect of cuts of up to 20%. If cuts are made, who will pay for them? I strongly suspect that it is people with a disability who will be hit.
To rehearse the history, the mobility element of DLA was introduced in its earliest form, mobility allowance, by the Conservative Government in 1973. At the time, the Government were responding to the consensus between parties and civil society organisations that something had to be done to address the changing circumstances in which people with disabilities were living. They were living, living longer and living in the community rather than in residential care, and they were often younger than the disabled people who would have been living in the community 10, 20 or 30 years earlier. The world was changing, and the attendance and mobility allowances were introduced in response.
I have personal experience of those allowances. A close relative of mine, a young person severely injured in a car accident, was in just such circumstances in the early 1970s and was living in the community after extended medical treatment. At the time, mobility allowance made all the difference. It transformed his life then, and it still does now, given that he lives in a remote rural area and depends on his own transport.
The Government say that DLA needs reform. I agree, but my grounds for reform might be somewhat different from theirs. I think that the application process can be a disincentive. Many people have come to me, as their MP, in dismay over the substantial form that must be filled in, and I have been glad to refer such people to the citizens advice bureau. I pay tribute to the CAB’s work in the benefits field in general, but its expertise in the particular instance of DLA is truly inspirational. The application process could be changed.
I worry about take-up. There are few current statistics about the level of take-up of DLA and the mobility element of DLA. I did a bit of research with a colleague and found a reference to research in 1998, more than 10 years ago. The family resources survey estimated take-up of the mobility element at between 50% and 70%. Will the Minister tell us, now or by letter, whether any more recent estimates of the take-up have been made? I think that many people do not claim DLA or DLA mobility, even though they would clearly benefit from it.
As I have said, the application process could be improved. The number of successful appeals suggests that the initial assessment is not what it should be. Also, the DLA mobility element is age-restricted. Mobility allowance was initially subject to age restrictions—it was confined to people between 25 and 45—which were gradually expanded over the years. However, as one elderly constituent said to me recently, that benefit, which would help older people with mobility problems, is deliberately denied them by the age limits, which seems somewhat paradoxical. Will personal independence payments for mobility awarded before retirement continue to be paid afterwards, as DLA is at present? People are worried, perhaps unnecessarily.
The Government are proposing changes, as we will see this afternoon, and introducing PIP. The proposals will be subjected to detailed debates. As I have said, I worry about the possibility of 20% cuts and share people’s concerns and perception that there is a problem.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate the hon. Gentleman on his success in securing this debate. He has returned to the issue raised in the press of the possibility of a 20% cut in the numbers applying. If we take that figure with his earlier figure of less than 1% fraud or abuse of the system, we see the inevitable consequence that, even if the Government’s reductions target all those who fraudulently abuse the system, more than 19% of those targeted will still be genuine claimants, who will suffer unnecessarily.
Hywel Williams
The hon. Gentleman makes an excellent point. The fundamental question is who will pay if cuts are made. The people squeezed out of the system will be genuine claimants who are disincentivised, or people with lower-level needs.
I am concerned by the Government’s conflation of the arguments about promoting the take-up of work and the need for reform. DLA literally helps some people get to work, but it is not a work-related benefit; it exists to assist with the additional costs of living with impairments or long-term health conditions. There is a coincidence between receiving DLA and experiencing difficulty finding work, but that means only that work for people with a disability is scarce. DLA is a marker rather than a cause, as the consultation paper seems to suggest. The work problems that I see confronting people with a disability involve ignorance among employers about the value of disabled workers. But perhaps, Mr Davies, I am straying into a subject beyond the strict bounds of the mobility element.
I am concerned about mobility and people in residential care. When I first thought of applying for this debate, that was the main issue that I wanted to address, as it is of concern to a great number of people. I certainly welcome the Government’s decision to delay the provision and to review it until 2013. That is unsurprising, given the view of the Social Security Advisory Committee, which said:
“This measure will substantially reduce the independence of disabled people who are being cared for in residential accommodation, which goes against the stated aim of the reform of DLA to support ‘disabled people to lead independent and active lives’.”
I very much welcome the postponement, but it is only a postponement and people are concerned.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Gentleman on securing this debate. A Library research paper notes:
“The DLA mobility component is however not affected if a person is in a care home. In a written answer in 2005, the then DWP Minister Malcolm Wicks said that this was because ‘care homes do not cover mobility needs’.”
It is now 2011. Does the hon. Gentleman agree that nothing has changed and that more than 90% still do not provide that?
Hywel Williams
The hon. Gentleman makes an interesting point on a subject to which I shall refer later. Another concern is that the loss of the mobility component and of the Motability scheme in particular would have an effect on families with children in residential schools and their participation in family life.
The possibility of direct payment of money to claimants to fund their self-assessed mobility needs would be relatively simple compared with the complexity of ensuring that a residential setting provided similar, individually tailored mobility provision. We hardly need to think about the comparison. Many disability organisations have pointed out that current contracts do not provide an element of mobility. If the move is towards tackling duplication, as the Government see it, will we merely require the renegotiation of contracts as opposed to any other cost-saving change? Will such a renegotiation be at a further cost to the public purse?
I do not want to dwell on this issue—time is short—but I draw the Minister’s attention to the fact that health and social services in Wales are devolved. Changing the benefit system run from London does not necessarily mean that local authorities in Wales and the Welsh Government will follow what happens in England. I should perhaps point out the complications of a general welfare system that is run by two Governments—one concerned with care, the other with benefits—with possibly different priorities. I will not go down that route today, but it is a further complication that the Government need to consider between now and 2013.
Jim Shannon (Strangford) (DUP)
Some Members present will be aware that the level of those with a disability in Northern Ireland is greater than it has ever been compared with other parts of the United Kingdom. Does the hon. Gentleman share my concern, as an elected representative, that, under the proposal to reduce 20% of DLA claimants, which will save £2.1 billion, it will be those people who need DLA who will lose out?
Hywel Williams
I suppose that that is the overarching concern behind all this. Eventually, some money might disappear, and the question is who will pay it. That is unclear at the moment. Many years ago, I used to repeat endlessly to some of my more starry-eyed social work students that, “It is not as simple as that,” which is a general rule for politics.
I was a young social worker in the late ’70s. I have promised the Minister that I would not use a lot of Welsh, but, inevitably, I would like to make one little point. I used to take some of my clients out on social occasions to try to improve the quality of their lives, and the only practical way to do that at that time was by minibus. It was a big, yellow minibus, which said on the side, “Cymdeithas Plant Araf eu Meddwl,” which translates as the society for mentally handicapped children. Needless to say, the people with whom I worked were neither children nor mentally handicapped, which was a loaded term even then but, for the non-Welsh-speakers present, “araf eu meddwl” is even more loaded—it literally means “slow of mind,” so I was taking people out in a big, yellow bus that said that they were slow of mind. I would say, therefore, that social security and social and health provision have developed over the past 30 to 40 years towards a more normalised provision, based on autonomy and choice.
If we depend on institutions to solve people’s problems of mobility, we will soon get institutional answers, which is something we should avoid.
George Hollingbery (Meon Valley) (Con)
I congratulate the hon. Gentleman on securing the debate. Does he not think that there is room for some standardisation or effort by central Government to ensure that those who are in residential settings and need mobility have at least some consistency of provision across the board? Surely, without that, there would be as much confusion as there would be otherwise.
Hywel Williams
I agree entirely with the hon. Gentleman. The provision in the public and private sectors of residential care needs to be looked at, but should that be done by reforming DLA in the way proposed? Would that be a blunt instrument? Are there other ways that that can be done?
Guy Opperman (Hexham) (Con)
As someone who lost to the hon. Gentleman in the 2005 general election—I represented, in a poor standard, the Welsh Conservatives in the former constituency of Caernarfon—I am particularly enjoying his passionate reverie of the 1970s. It is beyond question that he represents his constituency very well indeed. We all accept that there is likely to be a degree of cuts ahead. Does he accept the need for this issue to be reformed?
Hywel Williams
We can take a look at DLA, but that is the budget that I would cut almost last, because of its targeted nature and its efficiency and because of the needs of those who receive it and a host of other reasons. I accept the hon. Gentleman’s general thrust—everything should be open to review and reform—but I would start elsewhere before addressing the provision under discussion.
Jim Shannon
Surely, the real concern for many people is that 20% will become a target that must be achieved. If so, the target, rather than the people affected, will become the be-all and end-all of the achievement. Surely, the Government must say, “Let’s make improvements, but not set a target.”
Hywel Williams
The problem with targets, of course, is that they must be fulfilled, perhaps at the cost of the needs of individual claimants. I would start by looking through the other end of the telescope to see what the system of assessment and so on generates, rather than—I do not think that this is what the Government are actually doing—by imposing a rough, across-the-board 20% cut.
I must press on, because other hon. Members are anxious to contribute to the debate. My further concerns centre on the proposed assessment system. The current system assesses via a variety of sources of information—the claimant, a carer, a support worker, a GP, a specialist, a physiotherapist and so on—and I worry that, by slimming down that evidence to one assessment based on specified activities, the impact of disability on the individual may be missed. We have experience of using medical assessments in employment and support allowance applications. Like many other hon. Members, a large amount of casework in my constituency has been generated by the operation of that system.
As I said, I have received a number of briefings. An interesting and striking one came from the National Autistic Society, which suggested that those carrying out assessments will possibly fail to recognise the needs of people with conditions such as autism. I am concerned that reassessments should be fair and accurate, especially in relation to the suitability of people who have fluctuating conditions or mental health conditions. We must accept that mental health conditions are particularly difficult to assess.
Another concern relates to the proposal on delay, because increasing the waiting time to six months may cause hardship, although people with terminal illnesses will continue to have no waiting period.
Automatic payment is also a concern. I shall not go into that now, other than to say that the current system allows automatic payment in certain self-evident and extreme conditions—for example, double amputations. I am worried that automatic reassessment of those cases might lead to a waste of public money. If we remove those automatic entitlements, it may increase the cost of assessment and lead to the same outcome as we had under the original system—such people might still receive the higher rate.
On aids and appliances, it has been pointed out to me that if too much notice is taken of their use—particularly in unfamiliar situations—and that leads to a loss of money, it might be a disincentive to people using them. Will that be a disincentive?
As I said earlier, I am very happy that attention should be paid to the needs of disabled people. I am happy to consider the benefits system for disabled people at any time, but I worry that the proposals will not be much help. I am glad that the provision in respect of people in residential care has been delayed until 2013, and I look forward to contributing to the debate between now and then.
In summary, I fear that the changes might limit lives and increase disability poverty and demand for mental health services. Consequently, they might increase the demand for primary care services and lead to a loss of employment. Those fears might all be laid to rest by the Minister’s response and as the debate progresses over the next months and days—I accept that entirely—but it is important to put such concerns on the record.
Tony Baldry (Banbury) (Con)
As co-chair, with Baroness Pitkeathley, of the all-party group on carers, I am grateful to be given the opportunity to speak in this debate. The reforms will affect carers as much as they will affect those who are being cared for. The hon. Member for Arfon (Hywel Williams), who introduced the debate, said that his main concern is about the mobility component of DLA for those in care homes. That is the matter that I wish to discuss.
In a letter to all parliamentary colleagues, the Minister states:
“We want support for care home residents which takes account of their individual needs and safeguards some of the most vulnerable members of our society, whilst also ensuring that the taxpayer is not paying twice for this provision. It is vital that we get this reform right, and that is why we are taking the time to do so.”
It is helpful that Ministers have decided to postpone any decision until 2013. I know that the Minister has taken enormous personal care to ensure that the Government get this right. I was grateful that, following our last debate on the issue, the Minister kindly came to Banbury and visited Agnes Court, which is a home run by Leonard Cheshire in my constituency.
I am trying to sort out in my mind how we approach the matter, and I have a number of questions that I wish to ask. As I understand it, Ministers are saying that local authorities, in the contract that they have with care homes, should provide sufficient funding for residents to have the opportunity for independent living. It would be helpful for hon. Members if the Department for Work and Pensions explained that route. Where in primary legislation is the responsibility on local authorities to provide for that element when residents go into residential care? That is an important point because if one does not have an understanding of the statutory basis upon which local authorities have that responsibility, apart from anything else, it is difficult to know when one could bring judicial review on the basis that they were not providing that which Ministers say that they should provide. Part of the reason for these reforms is that Ministers say there is an overlap and duplication of funding. We need to understand exactly where it is said that such duplication is occurring.
I also have a slight concern that if one puts a greater responsibility on local authorities to provide an increase in the contract fee that they pay to residential care homes, a number of local authorities will say that rather than sending those who may need care in a residential setting into residential care, they will try to provide them with care at home. The Minister met one or possibly two residents of Agnes Court in relation to whom the local authority funding their place is considering withdrawing funding because it is finding it too expensive and it wants the person to be supported at home or elsewhere.
We need to have an understanding of what Ministers believe should be the model contract between local authorities and care homes, and what the obligations on the residential care homes are in relation to this. Let me make it absolutely clear that everyone is doing their best in what are often very difficult circumstances. What was clear from talking to people at Agnes Court is that they have very little contact with the local authority. The local authority obviously rightly believes that Leonard Cheshire Disability runs a fantastic home and provides a fantastic service and that there is no need for a local authority to find out what is going on there. What is the model contract? What is it that Ministers believe, first, that local authorities should be funding and, secondly, that they should be requiring of care homes?
The Minister will have met people in Agnes Court who have used the mobility component of DLA to purchase a wheelchair of superior quality to that which they could have obtained through the NHS—one person in particular has certainly done so. I am talking about a very bright man who has been a long-term resident of Agnes Court. He is almost blind, but his intellect is razor sharp, as I know from the letters and e-mails he has sent to me over many years. Indeed, at one general election, he organised a hustings for parliamentary candidates, so that we could discuss disability issues. He has used his mobility competent to buy a wheelchair, which seems a sensible thing to do given his circumstances. Would that be possible if the funding were coming through a local authority contract to the residential care home?
Nicky Morgan (Loughborough) (Con)
I entirely agree with my hon. Friend about how helpful the Minister has been in responding to constituents’ concerns on the matter—her letters have been very much appreciated. Does he agree that some of the points that are unclear relate not only to the overlap between what the local authority should fund and what is covered by DLA, but to the activities that local authorities will pay for? Constituents have told me that local authorities fund travel only to a doctor’s appointment or to day care, and not to enable disabled people to participate in everyday activities. Such activities are important to them, but might not be important to the care home or the local authority.
Tony Baldry
My hon. Friend makes an incredibly good point. I—and I suspect many hon. Members—would like and welcome a route map from the DWP. I sometimes feel that policy relating to that Department is a bit of a secret garden. I am always a bit reticent about entering into the garden, because I usually use the wrong words—the mobility component of disability living allowance for those in residential care, is in itself quite a mouthful.
What is it—I entirely agree with my hon. Friend the Member for Loughborough (Nicky Morgan)—that we, or those in residential care settings, can expect to be provided? After all, let us remember that what we have here are a very wide range of human beings who are individuals and constituents. Stephen Argyll, the person to whom I just referred, is intellectually very bright, but almost blind and has difficulty getting around. Some are in Agnes Court because they have learning difficulties, and some are there because they are suffering distressingly from degenerative illnesses, such as Parkinson’s disease. There is not just one group of people, but a large number of individual human beings who have different histories. For example, many are married and still wish to maintain their relationship with their husbands or wives, go shopping, and so on. I also understand, however, that Ministers are concerned that this can be an expensive provision, if what is being provided are individual, tailored mobility vehicles that are not being used much each week by individual people. If there is an overlap with other funding that is supposed to go to care homes from the local authority, that is also a concern.
Tony Baldry
I am conscious that lots of other hon. Members, including, I am sure, many from Northern Ireland, wish to take part in the debate.
I suspect that all of us want to engage constructively with constituents who have concerns about this matter, but we want to do so positively and be conscious of the legitimate concerns of Ministers that the system is not working. The Minister has stated:
“We will not remove the mobility of disabled people but we will remove the overlaps and gaps inherent in the current system.”
I want to understand where the Minister sees the overlaps. Where does she see the gaps? Please can we have a lay person’s guide that we, as colleagues, can take when we talk to constituents in this situation, so that they understand the issues and that we understand the examination question that we have been set. I know that there is an exam, but I am not confident yet that I fully understand the examination question.
I appreciate that the decision has been delayed until 2013, but Ministers will at some point have to be clear, and send a clear signal about post-2013, for the following reason. The Minister will have met, when she was at Agnes Court, large numbers of people who have entered into leases and other contractual arrangements for mobility vehicles. There need to be transitional arrangements so that if there is a change in the regime and the rules in 2013, people do not suddenly find themselves with a period of time to pay a contract without the wherewithal to do so. If Ministers are coming to the view that at some point they will change the rules, it would probably be helpful to give a clear signal of their intentions so that people have a clear understanding of that and make dispositions accordingly.
Mr Wayne David (Caerphilly) (Lab)
I should like to refer to one case in particular: that of Mr and Mrs Owen and their deaf and blind son Jordan. They attended my surgery some months ago and explained the situation in which they find themselves now and what they fear might happen in the future. Their son Jordan is a big lad—17 years of age. He currently attends the Trinity Fields special school in Ystrad Mynach and is in receipt of disability living allowance and the mobility component as well. The family put that to good use and provide mobility for him and the family. In the near future, when he becomes an adult, he will leave the special school and go to a residential home. However, it is likely that that residential home will not be anywhere near where he lives in Tir-y-Berth, Hengoed. It is likely to be in Monmouth, or possibly in England. There is a real concern among the family that, because of the changes that may come about, he will no longer be in receipt of the mobility component of DLA.
Jordan is a member of an ordinary working-class family. He has tremendous support from his parents, and from the charity Sense, which has done excellent work with the family. Naturally, however, when he does go to a residential home, the family will want to visit him and take him out from the home and give him the best experience of life possible for that young man. The family is concerned that, if the mobility component is taken away, they will not be able to visit him as frequently as they would like or to take him out from the residential home. In fact, they might have to leave to one side the opportunity of going to a residential home, even though that would probably be best for him, but ensure that he stays at home, so that they can give him proper love, care and support. That would obviously not be the best for him, and probably not the best for the family as a whole.
I should like to make it clear that I am not against welfare reform. In fact, I am strongly in favour of welfare reform. What I find difficult to understand, however, is the rationale of making someone like Jordan so fearful for his future. There could well be a cut. Of course, I can understand the financial saving to the state, but that is not what welfare reform should be about. That is why I am particularly concerned about clause 83 of the Welfare Reform Bill. It is important when we talk about welfare reform that such things are made fair and streamlined, but particular care must be taken to ensure that people such as Jordan do not lose out. For example, I was concerned that, when the Prime Minister was asked about changes to the mobility component at Prime Minister’s Question Time, he said:
“our intention is very clear: there should be a similar approach for people who are in hospital and for people who are in residential care homes.”—[Official Report, 12 January 2011; Vol. 521, c. 282.]
I simply point out that the needs of people in hospital are not the same as those of people in care homes. That is a fundamental point. We need to move away from the mechanistic, bureaucratic approach and to recognise that people in residential care homes have particular needs, and the Prime Minister, to start with, should recognise that.
I hope that we have a respite. The Government have said that they will delay implementation for at least 12 months. I hope, however, that in the interim the Government will look at cases, such as that of Mr and Mrs Owen and their son Jordan, and recognise that welfare reform must be tailored to the needs of individuals, so that young men like Jordan do not lose out.
Richard Fuller (Bedford) (Con)
It is a great pleasure to speak in this debate, and I congratulate the hon. Member for Arfon (Hywel Williams) on securing it. I wish to declare an interest—I am chairman of two domiciliary care service companies. They are not in receipt of disability living allowance, but they deal with adjacent issues. I welcome the debate. In particular, I welcome the Minister to her place.
The fundamental question that went through my mind when the announcement was made was what it said about our attitude towards the decency with which we allow people to lead their lives. What does it say about how we are prepared to protect the most vulnerable in our community at this difficult time, with the significant financial challenges inherited by the Government? That was made real for me by the visits of constituents; families who care for their sons, daughters, mothers, fathers, cousins and uncles, and who have to create that sense of independence every day for their loved ones in care homes.
In particular, it is my pleasure to recognise the campaigning work of Mr and Mrs Ogaza from my constituency—Mrs Ogaza is here today—on behalf of not only their son Paul, but other families. I thank the Minister for taking the time to meet me not once but twice—the second time to listen to Mrs Ogaza—and for her visit to a care home in Shefford, near my constituency. That is emblematic of how much she is trying to reach out and listen, and to understand this complex area. Indeed, that complexity is at the root of the Government’s attempts to deal with the question of decency. There is nothing decent about the system that is in place if it provides a patchwork of services for recipients in different parts of the country. There is nothing decent about a system that does not ask our care home providers tough questions to ensure that they are actually providing the services that we would like.
Guy Opperman
Is not the biggest test for the future to have a road map where things are clearly signposted and understood? Whatever the reason for the system being in the state that it is in, comprehension and utilisation would then be much clearer.
Richard Fuller
My hon. Friend is absolutely correct. He echoes a point that was made by my hon. Friends the Members for Banbury (Tony Baldry) and for Loughborough (Nicky Morgan). This is an opportunity to provide a clear map of the requirements and also to identify, not in a naming and shaming way but in a positive way, what local authorities and care homes should provide and where evidence shows that they are falling short.
I believe that this is the second debate on disability living allowance that the hon. Member for Arfon has secured. Is that correct?
Richard Fuller
I am sorry. It is the second debate that I have attended on the subject. It shows how important it is to hon. Members that we get the correct answers. This debate is a bit more heartening in that it is not focused so much on cuts. The Minister needs to lay this to rest: the changes are not being made to reduce funding but to ensure that the funding that is available is directed in a way that gives clarity to families and the recipients of care in various care homes. It is extremely important that that message is made clear. [Interruption.] If hon. Members disagree, we need to continue to bring that to the Minister’s attention. I fundamentally do not believe that that is the intent of the policy, and I look forward to listening to those who think differently.
I should like to thank the 27 charities—the number is growing—that have provided information to other hon. Members and to me in their reports, “Don’t Limit Mobility”, and, more recently, “DLA mobility: sorting the facts from the fiction”. A number of them are in an expert position because they also operate care homes. I would be interested to hear from the Minister how many of them have come forward with examples from their own experience of the uniformity of provision across their network of homes. Has she received such representations or evidence from them about whether they experience differences in the various local authority areas in which they operate? That would be a useful body of evidence, and it behoves the charities to provide such information to the Minister, so that we can have a clearer picture.
In their reports, the charities provide some information about the rationales for the changes. I admit that several have been presented over the months, but I should like to pick up on two that are particularly pertinent and germane. I thought that the first one they listed was very interesting:
“The responsibility for mobility/transport costs should be met by the care home provider”.
What struck me in the evidence that the charities provided was that they saw a lack of clarity in what has been provided. They stated:
“Related legislation and guidance make no specific reference to mobility… While guidance places a responsibility…it contains nothing about how this is paid for… This guidance is not contract terms… the guidance does not provide a legal requirement.”
That points to the comments that were made earlier by my hon. Friend the Member for Banbury and others about the need for clarity and a road map.
Mr Steve Brine (Winchester) (Con)
I would echo my hon. Friend’s comments about the Minister. She has gone far out of her way to reach out to colleagues across the House, and I pay credit to her for that.
My hon. Friend the Member for Banbury spoke about contracts and specifics being written down. The Winchester and District Mencap Society has made the point to me many times that the mobility component is not necessarily used just for appointments at doctors or care homes, or for visits to friends or the hairdresser. Sometimes, for their own physical and mental health, people use it to get away from those with whom they live. Is not the key point that if we reform the system and move to personal independence payments, we will put power in the hands of disabled people who are individuals in their own right? They do not want the Government or the House to prescribe how they do everything, or how and where they spend their money.
Richard Fuller
My hon. Friend makes a good point. However, there are also requirements on the part of the Government to provide some guidance and clarity. If we can get clear evidence of the original intent—the changes are required because of differences in provision—people could move forward more confidently, empowered to exercise their rights. We are going through a process that we have not yet completed.
The second rationale that I wish to discuss—I will not take too much of hon. Members’ time—is No. 7 on the charities’ list:
“Local authorities’ contracts with care homes should cover personal mobility needs”.
The charities’ response focuses very much on ability to pay. Local authorities do not have the money; care home providers are not in a position to pay. That comes again to my earlier point: this issue should not be driven by the need to make cost reductions, but by the need to ensure that there is clarity about what we expect to provide on both a local authority and care home basis. If insufficient money is being provided, that should be the answer. If too much money is being provided and there is a better way of getting value for money, that should be the answer. That is what we are driving for in achieving an answer.
My final point is that this is not just about mobility. The issue is independence. A personal expenditure allowance of £22 a week is not sufficient for the broad range of an individual’s requirements. That measure was not set by this Government—they inherited it. It is a little insulting to tell someone, particularly someone who is vulnerable or people who have spent much of their own lives looking after a child or a mother who is in need and thereby saving the Government so much money, that we will leave them with just £22 a week to cover the wide range of their personal expenditure.
I ask the Minister, as she looks at the mobility component, to bear in mind the broader picture of providing decency overall for people in care. She has done an excellent job in reaching out and listening to people, and I hope that she will listen to the contributions to the debate.
Mark Durkan (Foyle) (SDLP)
Like the hon. Member for Bedford (Richard Fuller), I was present for the previous debate, which was specifically about the mobility component for those in residential care homes. There is a danger in this wider debate today that we will focus too much on that issue. My concerns about that issue are no less than they were before, but I do not want to concentrate on it today, as other hon. Members have adequately done so.
The Government paper that heralded these changes, “Welfare reform: Disability Living Allowance for the 21st century”, discusses focusing on those with the greatest need. We also know that the target is to achieve a 20% cut. I was struck by the comments of the hon. Member for Banbury (Tony Baldry) about the different people he knows at Agnes Court and the range of conditions that they have. Would any MP be able to say who of such a group of constituents is in greatest need, or where we could make a 20% cut? If we are not prepared to do that or to envisage others doing that, we should not support the Government in this measure and proposal.
Several issues arise. The first is assessment and, of course, reassessment in the future, which will come with it. The fact that particular conditions will not be screened out from assessment and reassessment—everyone will have to go through the process—raises fundamental concerns for those who are currently on benefits and their carers. We need to remember carers as well. They all think that they are facing a grand national, where everyone needs to try to get over and on to the benefit. As we have heard, that will cause great problems for citizens advice bureaux and the many others to whom people are turning for advice on what is likely to happen and the implications for them.
If the Government will not allow any specific conditions to be screened automatically from having to go through the assessment test now, or in the future, we need more clarity about what forms of evidence will be considered particularly telling in the context of the assessment test. What evidence from experts in neuromuscular conditions and so on will tell in that setting, or will the interview setting count more? On the cost of administering the assessment and reassessment process, many of us know that some people will pass every time, because of their circumstances. Should they have to go through the ordeal of assessment and reassessment every time, and should the Government carry the cost of that?
On moving to a six-month qualifying period, the hon. Member for Arfon (Hywel Williams) referred to cancer patients. We must question whether it is enough to tell people that if their illness is terminal, they will automatically qualify. Many cancer patients do not want to think of themselves or present themselves as terminal cases, and we might send out a dangerous message. If the Government are determined to remove the mobility component as was and to introduce a six-month qualifying period for the personal independence payment, perhaps there should be a distinct allowance for those who have been diagnosed with cancer and have been referred for chemotherapy or radiotherapy. Perhaps there should be a cancer care and support allowance that takes care of such circumstances, instead of cancer patients finding themselves caught up in the pursuit of personal independence payments, particularly as the system will become congested when the changes are introduced.
How will people with variable conditions be measured in the context of assessment and reassessment? Will they be unlucky if they are interviewed on a good day, or lucky to be seen and reported on on a bad day? The Government must tell us more about that.
There will be an impact on other entitlements. For example, currently the mobility allowance is a passport to the blue badge, road tax exemption and disability premium. What thought has been given to the implications of the move to personal independence payments? Will people who lose out in the change also lose out on those other benefits and entitlements? Will the conditionality link between the new benefit and the old benefit remain? If so, have the Government factored into their impact assessment the effect on other entitlements?
As the hon. Member for Arfon has said, there will be an impact on carers. We need to know, for example, whether eligibility for carers allowance will come from both levels of the personal independence payment daily living component, or only from one level. Those who are entitled to carers allowance will see the circumstances not only of the person they care for being jeopardised by the change, but their own. Entitlement to carers allowance may be affected, and we must consider that.
We have not heard enough from the Government about some age-related issues. For example, pensioners who received the mobility component of the disabled living allowance before pension age continue to receive it when they reach pension age. Will that continue to be the case with the personal independence payment?
Fiona O'Donnell (East Lothian) (Lab)
Does the hon. Gentleman agree that we also need clarity on how the changes will impact on children, especially those with sudden impact conditions such as acute myeloid leukaemia? Will they have to wait six months, by which time their treatment will be well and truly finished?
Mark Durkan
I thank the hon. Lady for making that point. I introduced my comments about pensioners by referring to age-related considerations, and I was coming to children, including children in residential care, residential schools, and on holidays. What periods will qualify? Again, there is not enough in the Government’s papers and subsequent answers about those issues. The hon. Lady has rightly pointed to circumstances in which children may suddenly be affected by a condition. Will they have to wait for six months? Will families who receive a disability premium receive the universal credit when their child is in residential care? We do not know what is happening.
We must remember that families must cope with the concerns, needs and often the emotional upset not only of the child who is affected by a condition, but of the other children. Families must not be mired in new difficulties and complexities by the change. We must ensure that people of all ages are supported, not least children and families. The Government must provide more clarification, and I hope that the debate will present the opportunity for the Minister to do so.
Philip Davies (in the Chair)
Two more colleagues are seeking to catch my eye, and I intend to call the Front-Bench speakers at 10.40 am at the latest, so co-operation would be much appreciated.
Duncan Hames (Chippenham) (LD)
I congratulate the hon. Member for Arfon (Hywel Williams) on securing this important and timely debate, and I thank the Minister for her attendance. The Government’s proposals on welfare reform are undeniably substantial, but reform is undeniably due. The best elements of the wider proposals have the potential to create a simpler, fairer and more efficient system than the current array of credits, benefits and allowances that developed under the previous Government. However, the proposals that caused the greatest consternation among my constituents—that consternation is clear from today’s attendance by colleagues from both sides of the House—are the proposed changes to the mobility component of disability living allowance. The issue presents a particularly difficult balancing act to reform a complex welfare system, but never to jeopardise the ability of disabled people to live full, independent and active lives. We have been right today to determine what is a modern, efficient and, most importantly, fair system to meet disabled people’s mobility needs.
I have actively expressed my opposition to the proposed withdrawal of the mobility component of disability living allowance for those living in residential care homes, and I am grateful for the time that the Minister has spent listening and talking to me about that on the Floor of the House and separately. Without the mobility component, many of the most vulnerable people in our society would be unable to meet the cost of living independent and fulfilling lives, and to engage in the social activities that most of us take for granted. As I politely suggested to the Prime Minister, parallels drawn between those in hospitals and residential care homes are crude and unfair. It is clear that the Minister in her investigation of the matter has reached much wider, and those of us who have had most reservations should recognise her efforts to obtain a clearer handle on the matter than those who considered it previously.
I associate myself with the comments of the hon. Member for Banbury (Tony Baldry), who demonstrated a clear understanding of some of the issues concerning care home funding. In the light of the responses to the proposals that the Government first tabled, and the representations from me and many others in the House, I warmly welcome the Minister’s decision to postpone the change until the nature of mobility funding for those in care homes is fully understood. It is absolutely essential that we do not rush into any of the changes, and it is good news that the Minister is listening and accepts that we must take a longer, clearer look at the issue.
Given the Minister’s intention to give due consideration to the mobility needs of those in residential care homes before moving forward with any changes, I ask her to consider two issues in particular as part of the development of wider changes to DLA: first, the process of medical assessment for personal independence payments; and secondly, how the support given to those in residential care homes can be most effectively personalised.
The Government have stated their intention medically to assess all those currently in receipt of DLA. Assessment can bring advantages and ensure that help goes to those who need it most. Potentially, it can make it easier for some disabled people to claim and allow the provision of more individualised support. However, there are also pitfalls and possible side effects to assessment such as the cost, both of contracting out the assessments and of financing the appeals that are bound to follow in the wake of any large-scale assessment programme. There is also the pain that face-to-face assessment may inflict on those suffering from autism and similar disabilities, and the danger that an assessment of the mobility needs of those with spectrum disorders, mental health issues and fluctuating conditions such as Parkinson’s, may be prone to error unless conducted by specialists. We have seen that problem in the conduct of work capability assessments for employment and support allowance.
Nicky Morgan
Does the hon. Gentleman agree—he may be about to cover this point—that there is a question mark over the need for repeated assessments of certain conditions? I speak as the vice-chair of the all-party group on eye health and visual impairment, and I think particularly of those who are blind. Some conditions, such as the loss of a limb, will never change and more costs may be incurred in reassessment than are necessary.
Duncan Hames
The hon. Lady makes an exceptionally good point. Certainly, it is written in my notes that there is the potential for certain conditions, such as blindness, to benefit from an automatic entitlement.
I suggest it is worth examining a tiered approach in which a paper-based assessment would be sufficient for those with the most obvious need, thus eliminating the requirement for a detailed and stressful face-to-face assessment. I support the emphasis on personalisation in many of the Government’s statements about the reforms. That could prove helpful in addressing the alleged duplication that has been mentioned with regard to funding for care home residents.
I have suggested to the Minister previously, and continue to believe, that if those funds currently allocated by local authorities to care homes for meeting the assessed needs of residents were transferred directly to residents as part of their personal independence payment, that would ensure that the freedom, choice and independence currently offered by the mobility component of DLA is maintained. It would also ensure that money given to care homes for use by their residents is used by those residents, and not lost in administration or meeting other costs. That is not what has been proposed to date, but it is in tune with the thrust of many Government changes, and I hope that it will be considered. The current confusion over where responsibility lies for the funding of mobility needs for those in residential care homes points to the need for reform. However, the fundamental reference point for that reform must be a guarantee that people who live with disabilities should be supported to live active and fulfilling lives.
I conclude by reiterating my welcome to the Minister’s decision to look again at the support given to those in local authority funded care homes, and by repeating my hope that she will investigate the suggestions I have made today, which are among several constructive suggestions raised during the debate.
Guto Bebb (Aberconwy) (Con)
I, too, congratulate the hon. Member for Arfon (Hywel Williams) on securing this debate. I feel nervous about contributing to the discussion that he has led, as he understands the issue and the field extremely well. I associate myself with the comments of my hon. Friend the Member for Banbury (Tony Baldry): although I feel unqualified to comment on the issue, as an MP, I respect the fact that people come to my surgeries with concerns, and it is important to raise those concerns with the Minister.
I also associate myself with the comments made about the active way in which the Minister has responded to correspondence, especially in relation to constituency matters that I have raised. An effort has been made to communicate, and that communication has been detailed and worth while, and it has been appreciated by constituents. The fact that we are looking at delaying changes to the mobility component until 2013 is welcome. It is a difficult and complex area, and that complexity must be looked at carefully before we implement any changes.
Before I look at the mobility component of DLA, I would like to make a point about the work capability assessment process. I am MP for a constituency where about 42% of the population are first-language Welsh speakers. Time and again, people who come to my surgeries are expected to attend a work capability assessment in which they must explain their position and say whether they are capable of working. Often, they have to do that in English, even though the Welsh Language Act 1993 requires them to be able to do it in Welsh. When someone is in a stressful situation such as that, it is unacceptable that the Department is unable to provide a bilingual service. I have received assurances that the Department is working within the demands of the Welsh Language Act, but time and again the situation on the ground in north Wales does not correspond with those assurances. I would like the Minister to respond to that point.
When I received a letter from the Minister, I almost felt as if she had been in my constituency surgery. The arguments about the complexity of the mobility care component in care homes show that the current situation is not coherent. From talking to people in care homes, it becomes clear that each care home deals with the mobility component in a different way. I have been quite proactive on this issue because I represent a constituency with a high average age—I think I am right to say that the constituency of Aberconwy has the highest average age of any constituency in Wales—and as a result, there are a lot of care homes. My office has spoken to 17 care homes to discuss how they deal with the mobility component and whether it is funded by the local authority. From those 17 care homes, we have had 17 different answers, so the chaos surrounding the issue is clear. It is difficult to move forward with a policy unless we acknowledge that the duplication mentioned by the Department is not constant or ongoing, and that the situation is very different from one case to another. The Government, and the Minister in particular, are trying extremely hard to address the issue in a fair and coherent manner, but to do that we need a long consultation process, which I will certainly feed into.
On a more personal level, it is crucial that consultations take place in a responsible manner. It was distressing to see the parents of a 57-year-old individual who has been in a care home all her adult life come into my surgery. Both those parents are over 80 years old, and are distressed because they believe that the mobility component will be lost. They feel distressed by that, and it is important to point out to constituents that we are genuinely undergoing a consultation process. It is important to ensure that that process is understood and communicated.
Mr Nigel Dodds (Belfast North) (DUP)
The hon. Gentleman makes an excellent point as part of an excellent speech. These are real anxieties and concerns because people see that the mobility component is scheduled to be removed. I welcome the fact that the consultation period has been extended, but that compounds the period of great uncertainty for people. There is a bit of a dilemma.
Guto Bebb
There is, but I am sure the right hon. Gentleman would agree that a Government who consult and listen are a Government who will succeed. The Department is genuine about the consultation and about listening, and that must be communicated to individuals. We do not want to create undue distress, but I do not think that the Government have communicated well on this issue, and we must take responsibility for that.
I understand that I must conclude my comments before 10.40 am, so I will raise a couple of important points. As I have said, the Minister has been good in responding to almost all my questions, but one question about the discussions the Department has held with the Welsh Assembly Government on this issue has not yet received a response. An excellent point was made about the fact that we are dealing with a complex situation in which the Welsh Assembly Government are responsible for care and social care, but the benefit system is with Westminster. I am slightly concerned that, as yet, the question about what discussions have been held between the Welsh Assembly Government and the coalition Government has not received a response. I am sure that the Minister will write to me or confirm that there have been discussions. We are trying to ensure that the system works, and it is imperative that the social care element and the benefit system interact positively. Part of that interaction in a Welsh context involves good, positive discussion between the Government in Westminster and the Government in Cardiff Bay.
Margaret Curran (Glasgow East) (Lab)
I am pleased to be back in this Chamber debating this issue; I was at the earlier debate. I congratulate the hon. Member for Arfon (Hywel Williams) on initiating this debate. He gave a passionate and eloquent description of the challenges in this field, and his knowledge will be of great assistance to this Parliament as we proceed. Of course, his timing is perfect, as the Second Reading of the Welfare Reform Bill takes place today. This subject includes many challenges and issues, and I am grateful to him for giving us the opportunity to focus on particular issues in this debate.
I shall say a few introductory words about welfare reform generally, but I want to focus on the mobility component of disability living allowance, particularly in relation to residential care, because the issue is of imminent importance. It presents a great challenge and is of great concern to many people. I still require much more clarity from the Government about the position, but I shall return to that, because a few hares have been set running this morning that we may need to catch.
The hon. Member for Arfon made very significant and reflective comments in relation to welfare reform. I am on record as having said during the last debate and in many of my exchanges with the Minister that I believe passionately in welfare reform. I have a background in this field and have been dealing with it for many years. Welfare reform will always be required, and we should never be frightened of it. Sometimes it is difficult. I absolutely accept that it presents challenges, because it affects so many people of great vulnerability. None the less, I have substantial criticisms of the way in which the reform has been conducted.
As the hon. Member for Foyle (Mark Durkan) said, many questions are still outstanding about the reform and the impact that it will have. In particular, many disabled organisations will tell you that they are very worried about the premise of the reform. Rather than being cuts-based reform, it should be evidence-based reform. We should work with disability organisations and try to take them through this. Fundamentally, it should be based on the social model of disability, but the Chancellor of the Exchequer and other people are espousing a medical model of disability, so there are tensions in what the Government are telling us.
We are told that the driving factor behind welfare reform is simplicity. That has been mentioned today. However, if you go along with the Welfare Reform Bill as it stands, you could end up with greater complexity. I have heard this directly from disability organisations, and the hon. Member for Foyle also pointed it out. You could have children under 16 on DLA. You will have adults between 16 and 64 on PIP—the personal independence payment. Then you will have attendance allowance. Elderly people are now saying that they have to get attendance allowance even when they reach that threshold age. There is some confusion from the Government about that, but perhaps the Minister will clarify it.
There are big issues about how we are doing reform, and the Government must think carefully before they charge around telling everyone else that they must just follow suit on the reform. They cannot criticise those of us who are in favour of reform if we say, “This is not how it’s done.” Many people are saying that the reform has been rushed and not thought through and that some of the implications, if the Government go ahead, will be very far-reaching for the most vulnerable members of our society. The Government must take stock and demonstrate that they are listening to people, but a demonstration that they are listening to people has not been evidenced yet.
Chris Skidmore (Kingswood) (Con)
Would the hon. Lady maintain the current spending of £12.3 billion on DLA under her own model of reform? She says that she is keen to see reform, but would she keep the spending at £12.3 billion? Obviously, it will increase, but can she tell us about any proposals for what she would do?
Margaret Curran
I can tell the hon. Gentleman what I would not do—I would not start from the premise of a 20% cut. I would work with disability organisations under a partnership approach. We do need to manage costs. Disabled people and their organisations agree with you that we need to manage costs. We do need to look at how the budget is increasing. I would be the first to acknowledge that, but we need to do it in a completely different way from how it is being done at the moment. You should not rush at it and you should not say that your only motive is cuts. I take the point made earlier. I intended to say that I would be polite in this debate. I may not have managed that so far and I may not manage it later, either.
Margaret Curran
Thank you very much. Of course we shall be polite to one another in the House, but we must remind ourselves of the scale of the anger in the country about what is happening, particularly on the mobility component of DLA in relation to residential homes. People’s concerns are deeply felt. People are deeply worried, but there is also anger about how it is being done. We have all received representations from the voluntary sector, the charitable sector and local authorities that are confused about what is happening. The debate has also involved Members of Parliament. I had thought that it was cross-party—that it went across many parties, including the Government parties. Perhaps not, but we shall come back to that.
I have not yet heard the case for the reform. This morning, some hon. Members have said that we need to introduce the cut in relation to residential care homes because all of a sudden care homes are very confused by the funding and all of a sudden local authorities are very confused by the funding. I have not had any representations in all my time as a Member of the Scottish Parliament or in my time in this Parliament about that confusion. It seems to me that yet another argument is being put forward for why we are doing this.
I have asked the Minister a parliamentary question about how many people have advocated the change to the Government. How many people have gone to the Government and said, “This is a real problem and it needs to be sorted out”? I have not had an answer yet. Perhaps the Minister could give me an answer later today.
Many interesting points have been made in the debate. We have been given individual examples by the hon. Member for Caerphilly (Mr David). We heard from the hon. Member for the secret garden—I do not know whether I can call him that. I am referring to the hon. Member for Banbury (Tony Baldry), who also talked about the secret garden of policy in the previous debate. He has raised many significant questions that have still to be answered.
Perhaps the most substantial point came from the hon. Member for Arfon, who said that the mobility component of DLA for people in residential care is about normalisation. I have not heard any Government Member be able to challenge that. You do not give that payment to an institution; you give it to the person so that the person can make their own personal choices. With the greatest respect, ironing out the so-called overlap or trying to ensure that you give it to a care home does not address that fundamental point. That is the issue—the payment goes to the person.
Let me establish a few of the facts. Some 80,000 people are affected by the cut, and it is a cut. It represents a saving of £160 million. I fundamentally believe that it is driven by the need for that saving. It will affect not only people living in residential care homes, but young people in residential schools. I accept the comments made about the Minister. They were very flattering and positive, and I am sure that they are all true. I also welcome the review. However, I am not as optimistic as some people are that somehow we are going to see a change. Therefore, I would like to ask the Minister a few questions about the review. Who is involved in the review? What is being considered? Do you have on the agenda the option of completely cancelling the cut?
Philip Davies (in the Chair)
Order. May I gently remind the hon. Lady to refer to people in the third person, rather than dragging me into the debate?
Margaret Curran
I apologise, Mr Davies. I will not drag you into the debate. I am referring to the Minister. I would be grateful if she could outline the parameters of the review. Is there any possibility that the cut could be cancelled as a result of the review? Will she clarify that?
As other hon. Members have said, a document has today been published by 40 organisations in the sector, which represent a vast swathe of opinion in this field. Those very credible organisations have told us that the Government’s arguments have shifted eight times. I think that they will need to issue another document, because I think that there has been another shift in the argument. I say that because the “road map” has been presented to us today. Somehow that is the solution to the cut; everything will be solved by a road map. As long as people know exactly where the funding is coming from, all will be solved. I think that that is fundamentally wrong and I hope that we are not seeing yet another attempt to explain an unjustifiable cut. The cut is wrong. It should be off the agenda now. We have the opportunity in the Welfare Reform Bill to ensure that that is the case. Labour will be arguing very strongly that we reject the cut. We need to ensure that we continue to give people in residential homes the personal independence that they have now. That should be maintained. That is what the Government should be doing.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
It is a great pleasure to serve under your chairmanship for the first time, Mr Davies. I am grateful to the hon. Member for Arfon (Hywel Williams) for calling the debate, which has given Members from across the House the opportunity to talk about their personal experiences on this issue.
I am sure that everyone here shares a deep concern to ensure that we get provisions right for disabled people in all our communities, and the coalition Government are certainly absolutely committed to doing so. That is why we have taken the Equality Act 2010 through to Royal Assent, put in place the right to control for thousands of people, driven a personalisation agenda and promoted a new project on access to elected office to help more disabled people to be involved in debates such as this, because, all too often, they are not.
I welcome the support across the House for the need for welfare reform. I think the hon. Member for Glasgow East (Margaret Curran) supports it—at least, the leader of her party does—and we obviously need to debate some of the details today. I certainly welcome the support of the hon. Members for Arfon and for Caerphilly (Mr David).
When it comes to the Welfare Reform Bill, what is certain is that the Government have inherited a mess after 13 years of Labour, and nowhere is that more evident than with DLA, which is almost a case study in how not to run a benefit. DLA lacks any objective test; it has no in-built system to check people’s continued needs for support; and there is a real chance that some people will continue to claim it when they are no longer entitled to. That is no way to manage a really important means of supporting disabled people, and it is certainly no way to manage the spending of £12 billion of taxpayers’ money—an amount that was never envisaged when DLA was first outlined.
It is good to hear the hon. Lady accept that we need to manage costs, and I welcome that acceptance. The previous Government allowed spending on DLA to spiral unchecked. This Government firmly support the principle behind DLA of providing a non-means-tested benefit to support independent living, but the simple truth is that we cannot let DLA go on as it has, especially at a time when we are committed to making the welfare system fit for the 21st century. DLA reform is long overdue, which is why we are proposing in the Welfare Reform Bill today that the personal independence payment should replace DLA, creating a more transparent benefit that is better targeted and more affordable in the long term.
Fiona O'Donnell
On transparency, the BBC carried a statement from the Government this morning saying that they had no intention of extending the entitlement onset from three months to six months. Can the Minister confirm that that is the case?
Fiona O'Donnell
Extending entitlement onset from three months to six months.
Maria Miller
The hon. Lady will know that it is absolutely our intention to make changes so that the new PIP assessment supports people with long-term conditions. That is the—[Interruption.] I cannot possibly comment on something reported in the media that I do not have sight of. It is probably easier for me to get back to the hon. Lady to clarify the point than to debate it today.
As part of the wider DLA reform, we have looked at how the mobility component affects people in care homes. As many hon. Members have indicated, we discovered that, much like DLA, the mobility element is characterised by a lot of uncertainty and red tape, and my hon. Friend the Member for Aberconwy (Guto Bebb) picked up on that extremely well. Like him, I have talked to care homes, and every one I have been to has had a different experience of trying to tackle what is one of the most fundamental issues for disabled people—how to get about. That is driving me to make sure that we not only reform DLA correctly, but ensure that people living in our care homes get the support that they need.
When it comes to determining care homes’ duties and contractual obligations, the interpretation is very wide. It is not that people thought it was all rosy in the garden in the past, as the hon. Member for Glasgow East perhaps implied, because there is long-term concern about the lack of clarity over these obligations. There has been almost a sticking-plaster, pragmatic approach to trying to ensure that disabled people, who are some of the most vulnerable people in our community, get the support that they need. The situation has not been helped by an array of very different legal duties and contractual responsibilities, which mean that service providers and residents are unclear in practice about where responsibility lies. Indeed, the hon. Lady might pick that up if she talks to even more of her constituents.
My hon. Friend the Member for Banbury (Tony Baldry) picked up on this issue in his contribution. I do not pretend to be able to give him answers to all his questions, but part of the problem is that responsibility for provision of mobility is spread across at least three separate pieces of legislation in a not entirely consistent manner. That is one of the issues that I will be looking at. We have the Health and Social Care Act 2008 (Regulated Activities) Regulations 2010. We also have the 2008 Act itself, which deals with the registration of care homes. It includes a clear obligation on care homes to promote independence, and mobility is part of that. There is also an important role for the Social Security Contributions and Benefits Act 1992, which makes it clear that local authorities should not take account of DLA when assessing people’s needs. All those things mean that care homes and local authorities have a complex set of measures to deal with. The previous Government could have taken time to provide more joined-up thinking on the issue, and we have put our efforts and energies into dealing with the issue.
Maria Miller
If the hon. Lady will forgive me, I am trying to reply to as many points as I can. Perhaps she can raise any points that she has separately with me.
I have been told of cases where DLA payments have not been passed on to the person who should have been in receipt of them. As hon. Members will know, that is a serious offence. Some people have told me that they are having to pay charges for basic services in care homes, which should, by rights, be freely available. I am sorry if all that is anecdotal, but it paints a worryingly consistent picture of arrangements that are no way to ensure the best support for the most vulnerable people in our society, no way to ensure accountability and no way to ensure the best value for disabled people or taxpayers. In short, the situation is really unsatisfactory.
As much as the hon. Lady may not agree, it is my job as Minister with responsibility for disabled people to stand up and speak about these things and to ensure that we get some action. I want a far clearer approach in the future, so that disabled people everywhere in the country can know what they can reasonably expect. That was one of the issues that was usefully raised in the “Don’t limit mobility” report. Only with a clearer approach will we achieve the outcome that all hon. Members present want.
In the remaining couple of minutes, let me move on to some of the detailed points that I hope to cover. The hon. Member for Arfon raised a number of issues, but he focused particularly on budgets. It might be useful for hon. Members to know that when we talk about the DLA budget, we are talking about ensuring that we keep control of the growth in it. The expenditure that we are talking about for the future will be the same as we had last year for DLA, after a 30% increase in the number of people claiming DLA over the past eight years. I hope that that reassures hon. Members that we are not talking about the sort of swingeing cuts that have been painted by some less responsible Members, but just trying to ensure that the rapid growth that we have seen is brought under some control.
The hon. Gentleman also raised important issues about the application process. Let me reassure him that this will not involve a medical test, but an objective test built on the social model of understanding the barriers that people face when they have disabilities that they need to cope with. He raised a number of other issues, including, in particular, eligibility after 65, and I assure him that the personal independence payment will continue past retirement, as long as an individual continues to be entitled to it. If I have not picked up any of the issues that the hon. Gentleman has raised, I am sure that my officials will ensure that I write to him.
The hon. Member for Foyle (Mark Durkan) raised a number of extremely important issues, some of which I have already covered. He also mentioned children, and I draw his attention to the report that my Department is doing with the Department for Education. It looks at how my Department will assess children in future in conjunction with the DFE, rather than putting children through multiple assessments, as at present.
My hon. Friend the Member for Aberconwy made an important contribution. I agree with his characterisation of the situation as chaotic. I will make sure that I get back to him about our communications with the Welsh Assembly and about the importance of making the work capability assessment available in a way that is consistent with legislation on the Welsh language.
My hon. Friend the Member for Chippenham (Duncan Hames) made a number of important and constructive suggestions, and I thank him for that. I will perhaps talk to him separately.
In an important intervention, my hon. Friend the Member for Winchester (Mr Brine) reiterated the importance of treating people as individuals. I am sure that he, too, will welcome the commitment to personalisation given by the Minister with responsibility for these issues in the Department of Health—
East London Tech City
(13 years, 8 months ago)
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Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
I am very grateful for the opportunity to address the House on the question of the east end tech city. As some hon. Members may be aware, in November, nearly six months ago, the Prime Minister made a speech that attracted the attention of all the east end. We are anxious to know what progress has been made with the plans that he outlined.
In his November speech, the Prime Minister said:
“We’re not just going to back the big businesses of today, we’re going to back the big businesses of tomorrow.”
Who could argue with that? He went on to say, thrillingly for us in the east end:
“Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make East London one of the world’s great technology centres.”
That idea of the east end as Silicon valley was very engaging. The Prime Minister said:
“Something is stirring in East London”
and pointed out that
“three years ago, there were just fifteen technology start-ups around Old Street and Shoreditch”
but that as he spoke there were more than 100. Certainly anyone who knows and lives in Hackney can see how the Shoreditch and Old street areas—despite the challenging economic circumstances—continue to blossom and to show any amount of creative energy. As the Prime Minister pointed out, one reason for those two areas becoming a hub is to do with cultural and artistic life, quite outside Government planning. That is what happened in San Francisco, and it is happening in parts of the east end.
The Prime Minister made some specific points, however, and it is on those points that I want to press further. He said that the Olympic Park Legacy Company had agreed to create an accelerator space in the Olympic park,
“providing office space for companies that grow out of East London and beyond.”
I should like to know what progress has been made in creating the accelerator space. He also said that Imperial Innovations, the venture capital arm of Imperial college London, was to advise on making the accelerator space
“attractive to spinout companies from academia and beyond.”
What sort of advice has Imperial Innovations given? How many meetings have happened, and what progress has been made? The Prime Minister spoke also about University college London and Loughborough university agreeing
“to work with the Olympic Legacy Company to build a bridge between academia and enterprise in the Olympic Park.”
I assume that that will happen after the games, but I should still be interested in any information that the Minister may have.
One of the companies that the Prime Minister mentioned was Cisco. Last month, he and John Chambers, the Cisco chairman and chief executive officer, announced the details of the British innovation gateway, a five-year effort by Cisco to drive economic growth through high-tech innovation. The British innovation gateway aims to increase the number of pioneering high-tech companies. The programme will include the creation of two network innovation centres, the first of which will be in Shoreditch.
The Prime Minister went on, in his speech, to discuss other companies and businesses that would contribute. We understood that McKinsey and Company will share expertise, and that British Telecom has agreed to bring forward the roll-out of superfast broadband. I particularly want to know what is happening about that, because it is the key to the sort of businesses that we are considering. I understand also that Qualcomm, one of the world’s leading wireless technology companies, will provide expert advice.
The other issue that the Prime Minister touched on was finance. He said that Vodafone had committed to bringing its Vodafone Ventures investment fund to the capital. It would be interesting to know whether it has invested any money since then. He said that
“Silicon Valley Bank, a West Coast institution…will become a fully fledged bank in the UK”.
Has it become a fully fledged bank yet? He also said that
“Barclays will create a new facility in East London to provide specialist banking services to high growth technology”.
Again, we should like to know more.
The Prime Minister went on to talk about some of the US companies that are to set up research and development space. He mentioned Intel setting up a new research lab. I am not sure whether it has been set up yet. Google was to create an innovation hub. I am not sure whether that has happened. The speech also mentioned that
“Facebook has agreed to create a permanent home in East London for their successful Developer Garage programme”.
On all those issues, I would be interested to hear what those American businesses are doing, and what has been done about business and finance.
I want to talk a little also about the possible involvement of the local authorities in the exciting new developments that I have outlined. I could say, on behalf of Hackney council, that it very much welcomes the Prime Minister’s initiative—and not only Hackney council, but boroughs across London. However, I think that local government leaders—what we might call the big society—want to know when the Government will align their investment and support with Hackney’s local regeneration activities. It is one thing to bring in American and British businesses, make more money available and roll out the broadband; but it would make sense to align that with what the local authority is doing.
A number of small and medium-sized businesses have flourished in the creative digital centre in Shoreditch, Dalston and Hackney Wick, on the back of investment initiatives proposed by the previous Mayor, Ken Livingstone. We believe that the western half of the Olympic park in Hackney Wick holds significant opportunity. Will the Government work with Hackney borough council and the Olympic Park Legacy Company to ensure that our global ambitions for growth are integrated with our innovative local economy and the people of Hackney?
We are also concerned about investment in skills and training. It is fine to have coffee bars and cultural activity, and even to roll out broadband. However, we do not want a Silicon valley-type development in the east end that will be like a cuckoo in the nest, to which local people have no access, and where they cannot find opportunities. If local people are to be involved, skills and training are important. How do the Government see their further and higher education policies supporting what the Prime Minister announced in November and Hackney’s successful network for delivering training to local people of all abilities?
The Government are meeting and encouraging big global companies such as Google and Cisco, but we are concerned that they are not connecting them to the local economy and the local authority, which would mean that their investment could make a real difference. We are anxious that the Government’s activities, which we welcome in principle, should be aligned with what the local authority does. I have lived in Hackney for 23 years and I have seen every sort of Government regeneration programme going, all the way back to Michael Heseltine. Sometimes I have said about regeneration programmes, under Labour and other Governments, that if we stood on a street corner giving people bags of money, ordinary people might have benefited more. I have seen all that is good and all that is bad about Government-led regeneration.
I think that the Prime Minister is probably right that sometimes regeneration is a bottom-up activity. That is what happened in Silicon valley—and in parts of Hackney. It is extraordinary: Hoxton, which was a very run-down area when I first became an MP, is now the Soho of the east. If I go through it at night there are clubs and entertainment, culture and art galleries. Some of that was helped by local government and Government regeneration, but much was bottom-up. One of the things that helped the east end to regenerate was the amount of cheap warehouse space, which meant that artists such as the new British artists—Tracey Emin, and so on—found it cheap and practical at the beginning of their careers to go and work there.
I am very open. Having seen how the east end has developed over 20 years and how Government and local government intervention work, and sometimes do not, I appreciate and understand the bottom-up approach that the Government are taking. However, we must have a clear outline and infrastructure. I would like to know what is happening about broadband. I would also like to know what is happening in relation to the businesses and financial-sector people that the Prime Minister mentioned in his speech last November.
I am anxious to find out whether the Government are willing to align what they are doing with the successes that we have had, both at the London level under the Mayor and also at the borough level. I wait with interest to hear what the Minister has to say.
The Minister for Universities and Science (Mr David Willetts)
I congratulate the hon. Member for Hackney North and Stoke Newington (Ms Abbott) on securing this debate, on what is indeed an important subject. It is about our high-tech strategy for the nation as a whole, and for one of the crucial places where we are delivering it—the hon. Lady’s constituency, especially in and around Shoreditch.
I particularly appreciate the way in which the hon. Lady quoted so liberally from the Prime Minister’s speech on 4 November. I was at that event, as was the Mayor and many investors and entrepreneurs. She summarised an excellent speech, in which the Prime Minister made clear how committed the Government are to the area. At the heart of the area—it is part of the east London tech city initiative—is Shoreditch, which is increasingly becoming the location of choice for budding entrepreneurs.
The hon. Lady has given us these figures, but I remind the House that in July 2008, the area was home to some 15 high-tech companies; our latest estimate is that there are now 200, and there have been some conspicuous examples of successful companies being developed and sold on. Last.fm was sold to CBS for $280 million; others successes are TweetDeck and Songkick; and Dopplr was sold to Nokia for $22 million. Some valuable companies are being created there, and the coalition Government are committed to helping the area to continue with its impressive growth rate. We believe in it as a cluster.
The Government cannot create clusters out of nothing, but once clusters have emerged organically, it is absolutely the responsibility of Government to push them forward whenever they can and to remove barriers. That is what the Prime Minister’s speech of 4 November was about; it followed an announcement about the area. I assure the hon. Lady that progress is continuing. I shall give some examples.
John Chambers, Cisco chairman and chief executive officer, was in London recently, and I met him with the Prime Minister. He unveiled details of the British innovation gateway scheme on 31 January. That new $500 million scheme will see Cisco pledging a long-term investment of money, technology and manpower to help boost entrepreneurship in the United Kingdom, particularly in east London tech city. Having been present at the discussions between John Chambers and the Prime Minister that took place at No. 10, I can tell the hon. Lady that we got into the practicalities of encouraging John Chambers to consider investment in the east end of London. Indeed, that is where a significant part of his investment will go.
Ms Abbott
I was not at the Cisco meeting, but when I read the press reports of what was said it seemed quite unspecific. When will the programme of investment start? The Minister says that he urged the Cisco chairman to invest in the east end, but did he commit himself to doing that? If so, what proportion of that money will be invested in the east end?
Mr Willetts
We do not know exactly what the time scale will be or exactly what the allocation will be, but the decision has been made by Cisco’s CEO to commit $500 million. That key decision was taken by the CEO and discussed with the Prime Minister, and work is now under way in Cisco to allocate the funding.
Cisco is not the only example. Google has announced that it will open its innovation space in 2011 in Old street. That will be a creative space for its researchers to come together with developers and academics to create the next generation of applications and services.
Mr Willetts
We do not yet have that information. I admire the hon. Lady’s impatience on behalf of her constituents. She wants detail about the pounds, shillings and pence and the number jobs involved. I should explain that, in short order, we have delivered strategic commitments from big businesses. Decisions to commit to the area have been taken at the highest level.
Of course, the challenge—United Kingdom Trade and Investment is working hard on this—is to convert the big decisions into practical jobs on the ground. Having seen the commitments made by Cisco and Google, including when Google’s Eric Schmidt was in London recently, I have no doubt that the follow-up will happen and that we will get there. Commitment has been made at the highest level.
Mr Willetts
I understand exactly the point that is being made by the hon. Lady. There will be various opportunities, perhaps in a follow-up debate in a few months’ time, when I will be happy to report progress to the House and to the hon. Lady.
On behalf of the Government, I am also in close touch with the entrepreneurs and business community in east London tech city. I shall report to the House some of the activities that we have been involved in—and there are more coming. I was at the launch in the east end of the Google-Boston Consulting Group report, “The Connected Kingdom”, on 28 October.
I met a group of entrepreneurs and business people at London’s TechHub on 20 December. I visited the new branch of the Silicon Valley bank on 10 January, which the hon. Lady mentioned. It is a valuable business model, and I know that the Financial Services Authority is close to reaching a final decision on a banking licence. The Department for Business, Innovation and Skills sponsored an event with McKinsey on 17 January. The Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk) met 60 angel investors, specifically aimed at enabling entrepreneurs in tech city to pitch to them for investment; that took place on 26 January.
I have had meetings with the vice-chancellors of some of the universities that the hon. Lady mentioned, and with others. I can report to the House that the Secretary of State and I will meet University college London, Imperial college London, the Olympic Park Legacy Company and Loughborough university next week further to discuss progress on the Olympic legacy site. We are continuing to work actively on the matter, and there will be a series of further events. I shall be going to a workshop on access to finance at Shoreditch on 4 April, and I shall continue my close contact with that community.
As for local initiatives, I understand that BT will deliver on its commitment and that it will upgrade its services. It confirms that it will upgrade both telephone exchanges in the area, in Clerkenwell and Shoreditch, to its superfast broadband service.
The hon. Lady rightly asked about the involvement of the local community. I shall focus on that aspect in my closing remarks. She can play a crucial role. I know that she is committed to her community. It would be great if we could improve links between the entrepreneurs and the business start-ups at tech city and, for example, local schools. There is a really good atmosphere around the TechHub at what is called Silicon roundabout. It should be possible to involve Hackney schools more, so that teenagers could meet the entrepreneurs in tech city, see what software programmers do and some of the apps that they are developing. They could even come forward with ideas on apps for their mobiles and watch the software developers trying to rise to the challenge.
That would be fantastic. It would be for the good of the young people in the hon. Lady’s schools and a fresh challenge for the entrepreneurs. If she wants to work with me on this, I am confident that we could make those connections. Looking nationally, one of the things that I worry about is that, despite large numbers of students doing IT and computer science, we do not do very well on getting them into the right kinds of jobs that use their skills. If we can improve the links to entrepreneurial business leaders at an early stage, we could do better. I would be up for working with her on such a project, and hope that she would be willing to consider it.
Ms Abbott
The Minister makes an interesting point. In Hackney, children are very much interested in IT, but they do not make the move from an interest in IT to the IT professions. I would welcome the challenge of trying to link young people with what is happening in tech city. Moreover, there is the broader concern that young people in areas such as mine often have relatively narrow horizons. Anything that opens up their horizons and makes them understand the connection between studying today and an interesting and exciting job tomorrow is clearly a good thing.
Mr Willetts
I am grateful to the hon. Lady for her positive response. Let us try to work together on that. I bet the kids are much more sophisticated users of the apps on their mobile phones than either I am or she is. We should cut out the middle man and get them to talk directly to the software developers. I assure her that I will keep in very close touch with tech city. We will bring in another set of major venture capitalists from not just the UK but internationally to consider investing in businesses in the area. I know that the negotiations have not yet been concluded, but we are also focusing on specific businesses that are considering undertaking training and apprenticeships in the area. As well as the high-tech software programmer-type jobs that are on offer, we know that the local community wants to fill the technical jobs that can come through apprenticeships.
Ms Abbott
I mentioned aligning what the Government are doing with the local authority. There is a concern at local authority level that it is not involved or cited in the Government proposal. If the Government do not want to align themselves with the local authority, they could at least let it know what they are doing, but the local authority is sort of being kept in the dark.
Mr Willetts
I am sorry that the hon. Lady thinks that. I am sure that it will be possible to arrange for the chief executive of the council to have a briefing on what UKTI is doing. I am up for working with the local community. If it would be helpful for such a meeting to take place, I undertake to ensure that it happens—if it is not happening already. We want to work with the local community. This economic development is, of itself, good for the local community. As the hon. Lady rightly says, having all this activity has transformed the area in the past 20 years. If it would be helpful to have a meeting, I would be happy to suggest it to UKTI.
We are delivering on the ideas set out in the Prime Minister’s speech three months ago. We are making progress and we are absolutely committed to the scheme. I am confident that we will continue to achieve the high ambitions that he set us, and I am very happy to keep the hon. Lady closely in touch with progress as we advance.
Water and Sewerage Charges (South West Water)
(13 years, 8 months ago)
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Mr Adrian Sanders (Torbay) (LD)
It is a pleasure to serve under your chairmanship, Mr Amess. I have not had the experience before, but it is certainly a pleasure.
Today, I am raising a matter that is of great concern to the people of Devon and Cornwall and has been for as long as I have been a Member of Parliament, and I suspect for longer than any of us here today have represented our local communities. I had the pleasure of raising this issue in an Adjournment debate previously, but this is the first time that I have been able to do so as a Member of Parliament on the Government side of the House. The fact that the problem has remained almost exactly the same for so long is both a reflection of the intractable nature of the issues involved and a sad reflection on the record of previous Administrations. They had time to tackle this injustice, but sadly they were unable to come up with a solution. I sincerely hope that the Minister who is here today will not let our Government follow the same path.
Of course, the problem is the disproportionately high water bills in the south-west. Although the new Ofwat settlement has only just been released, the indication is that the average bill in the region will be £517 a year and the price rise will be about 8.1%. Rather mischievously, Ofwat had initially told the press and the public that the rise would be only about 5%, but that forecast assumed that customers would adapt their behaviour in the future. It is accepted that more people will move to using water meters. Around 70% of water customers in the south-west already have one and Anna Walker predicted that that figure would rise to 80% by 2015. Moving to water meters would save those south-west customers around £400 per year, but the money still has to be found from somewhere. Metered bills will rise in response to the dwindling supply of high-paying unmetered customers, adding more than £200 to the bills of metered customers.
Metering and in-region social tariffs have long been identified by Ofwat and the Government as an easy solution, but they do not have an impact on the underlying problem. Even if one takes the price rise as a 5% average, that is still far too high for most people to cope with in this age of austerity. It is also important to remember that I am talking about average bills. Many of my constituents now face water bills far in excess of £1,000. That reflects a range of circumstances, from medical conditions that require extra water to simply having a larger family. As always, unmetered customers suffer the worst. The average bill of £517 in the south-west compares starkly with the average bill in London, for example, which even for unmetered customers is only £332 per year.
The privatisation of utilities was meant to open up sectors to competition and to empower consumers, but the privatisation of water has done nothing of the sort. Can one imagine the outcry if electricity prices were 60% higher in Newcastle than they are in London? Any electricity company that tried to implement such price disparities would simply see its regional market share evaporate.
Hopefully, we are all aware of the background to this problem. The privatisation of water in the late 1980s left South West Water with a backlog of infrastructure improvements to invest in. Combined with a tiny customer base and a lengthy coastline, that backlog meant that under the system of regional monopolies South West Water customers would pay higher bills in perpetuity, with their only recourse being to move somewhere else in the UK.
For all its inaction, the previous Government at least recognised the problem. The result is Anna Walker’s report on water charging, chapter 14 of which focuses specifically on the south-west. The coalition is about to respond to her report, which again makes this debate timely.
I want to cover briefly three points that are relevant to what is happening now and hopefully the Minister can take them into account when he is developing the final policy on this issue. First, the role of Ofwat needs to be assessed very closely. Ofwat’s role as the regulator must be to protect customers and as Regina Finn, its chief executive, said herself:
“People can shop around for the best deal on many things, but not water. Our job is to do this for them.”
I am afraid that the overwhelming view of my constituents is that that “job” is not being done. Many of them see Ofwat as hindering rather than helping the situation in the south-west. Whereas bills fell slightly ahead of inflation in other areas, the south-west has seen the very large rise that I described.
Mr Ben Bradshaw (Exeter) (Lab)
Is not the real scandal of this year’s price increase that customers were assured at the time of the last price review under the Labour Government that there would be reductions in their water bills in this price period? South West Water is hiding behind the current Government’s failure to control inflation. That is a sign of gross insensitivity compared with the situation in, say, local authorities, where everybody else is having their pay frozen.
Mr Sanders
I only half-share the right hon. Gentleman’s view, because Ofwat is the body that should protect the consumer and it has allowed South West Water to raise charges by the amounts that I described.
Alison Seabeck (Plymouth, Moor View) (Lab)
I agree with the hon. Gentleman’s assessment that Ofwat’s role in this regard is key, although I also accept the points made by my right hon. Friend the Member for Exeter (Mr Bradshaw). I have just received an e-mail from one of my constituents that makes exactly the same point as the hon. Gentleman. My constituent says that he lives in a three-bedroom house; there are two residents, and he has received a bill for more than £1,000 for the coming year. Ofwat has agreed these prices. My constituent’s question is, “Do they realise just how much individual customers are having to pay and the impact on those households?” I urge the Minister to look again—please—at the role of Ofwat in all this.
Mr Sanders
Indeed. I would rather like Regina Finn to spend perhaps a year in the south-west on average wages. If that were to happen, I think that we would see a change in Ofwat’s policy.
I also question the use of the retail prices index in setting price rises. Although Ofwat technically enforces price ceilings, it is de facto setting prices. We are moving to a system of uprating pensions and benefits by the consumer prices index. We should do that for water bills too, at least to make the price rise somewhat defensible.
On the wider issue, however, Ofwat has consistently failed to engage with the real problems highlighted in Anna Walker’s review. At the moment, Ofwat does not seem to be interested in finding a resolution to the south-west problem and so it cannot be seen to be standing up for south-west customers. When it comes to the protection of consumers’ interests in the south-west, Ofwat is as useful as a chocolate teapot.
In our discussions with Ofwat, its representatives have told us that solving this problem would be complicated and that we should focus on a social tariff instead, which is where Ofwat is investing its time and energy. Curiously enough, the official line is that Ofwat took that decision unilaterally. Parliamentary answers revealed that neither the Department for Environment, Food and Rural Affairs nor the Treasury gave any instructions or guidance and that Ofwat has not even written down a plan of its work for reviewing Walker. All we have had is a vague indication from the hon. Member for Ogmore (Huw Irranca-Davies), who was the Minister with responsibility for water in the previous Government, that Ofwat should look into reviewing Walker.
The plot thickens, however. When I submitted a freedom of information request on this issue, it emerged that the Treasury briefed Ofwat on what it wanted Ofwat to achieve in its work, but as yet, exactly what that entails has not been disclosed. Perhaps I have been unfair to Ofwat in that the Government are the reason why it is useless at protecting South West Water customers. Maybe the Minister will reveal the truth.
Andrew George (St Ives) (LD)
One of the reasons why Ofwat might not be particularly effective in protecting South West Water customers is that when water was privatised, a risk-free money-making system was effectively created. When somebody has a monopoly on services such as water and sewerage services, that is bound to happen. However, the problem in the south-west is that there is a national asset—the beaches—that has to be cleared up and cleaned up at great expense by a very small part of the population. The south-west has 30% of the national beaches, but only 3% of the national population. Of course, if we compare that with the National Gallery or the British Museum, which are funded from national taxation, we in the south-west have to protect a national asset on the basis of having only 3% of the population. That is simply unsustainable.
Mr Sanders
My hon. Friend makes a very important point, and I made that same point in a Radio Cornwall interview not an hour ago. It is amazing that that station can be picked up so far away.
My main point is that the development of a solution is fundamentally undemocratic and beyond scrutiny. Deciding which combination of Walker’s recommendations to implement should be down to the political will of Ministers and the Government. It should be for them to take the courageous decision to put an end to this injustice or suffer the political consequences. The solution should not be watered down—excuse the pun—by quangos and officials who have no inherent interest in standing up for water customers, especially not those in the far south-west. Ofwat claims that a levy on other water company areas to bring down bills in the south-west, or to equalise bills across the country, would breach Treasury rules, and it is not keen to explore changing those rules, but the nationwide social tariff suffers from that very same problem, because it involves moving money around between water customers, outside the Government’s coffers.
Dan Rogerson (North Cornwall) (LD)
I am very grateful to my hon. Friend for all his work on this issue over a great number of years, and I congratulate him on securing the debate.
Does my hon. Friend not agree that there is perhaps a misapprehension among some people that the south-west is a wealthy part of the country, and that that somehow informs the view that costs could not be shared across the country? There is an idea that many wealthy people are sitting down on huge estates in the south-west and being subsidised by poorer people in urban areas elsewhere when, in fact, areas such as Cornwall are some of the most deprived—there are very low incomes there. That is what ought to inform the decision about a more equitable way forward.
Mr Sanders
My hon. Friend is absolutely right. In my constituency of Torbay, the unitary authority area now has a gross value added level lower than Cornwall’s was when it qualified for objective 1 assistance, and there are other such pockets in the south-west.
Alison Seabeck
I would like to reinforce the hon. Gentleman’s point. Does he not agree that, with the current increase in water rates, we will see more pensioners, particularly in the area around Torbay and in my constituency of Plymouth Moor View, falling back down below the poverty line? The Government would not want to see that happen, but undoubtedly they will.
Mr Sanders
The hon. Lady is absolutely right on that point.
If Ofwat is not supportive, we at least have political unity around the idea that something more than a social tariff and something specific to the south-west needs to be done, and I need only consult the Hansard report from a previous debate on this very issue, in January 2010, to see that. In that debate, we had the support of the then Labour Members for Plymouth and some warm words from the then Minister with responsibility for water, the hon. Member for Ogmore. The right hon. Member for West Dorset (Mr Letwin), who is now one of the Prime Minister’s chief aides, stated that
“there seems to be a strong case for some kind of spreading of cost”—[Official Report, 27 January 2010; Vol. 504, c. 323WH.]
The Liberal Democrats have, of course, championed the cause for many years. I see that I am joined today by Members from all parties, who are united in wanting to get something done for their long-suffering constituents, and I hope that many of them will be able to contribute later in the debate.
The overarching problem, which Walker ably demonstrates, stems from privatisation. On privatisation, South West Water had the smallest asset base—what was called the regulatory capital value—per customer, and it now has the highest, at 210%. South West Water customers will therefore pay far more for longer. If that situation were to occur in any other utility it would be outrageous, but for some reason successive Governments have tolerated it in the water industry. The previous Government sadly never understood the damage caused by the failed privatisation. I describe it as failed not because the water companies have not provided a good service—on the whole they have—but because it has simply not delivered a market, not even a heavily regulated one. No domestic consumer can choose between water companies, and instead of being reinvested fully in the service, the surplus created is converted into profit for shareholders. The water customers in the south-west do not like that, and I suspect that if it happened to other regions they would not like it either.
That brings me to some potential hope in this doom and gloom. We have a new Government. We are in the era of new politics, and appear to have a listening Government, and so I invite the Minister to join in this spirit of new politics and listen to the people of the south-west. If he spoke to them, they would tell him that they do not want just a social tariff or some adjustments around the edges, but a fair and transparent system, whereby they pay the same as everyone else in the UK for the water and sewerage services they use.
The Minister’s party was in power at the time, so he might not join me in wishing that privatisation had never happened in this industry, but I hope that he will acknowledge that it was carried out in a wrong-headed way. The company in the south-west needed a much bigger customer base, and needed to be compensated for the poor state of its infrastructure. If the Minister does join me in this, I hope that he can take the next logical step and support something that addresses these historical problems and lifts the unfairness. I particularly mention unfairness because it is important not to conflate it with affordability, and it would be very foolish if the Government pretended that addressing the problem of water poverty also solved that of unfairness. I shall give an example to illustrate the problem. A family earning £35,000 would never come under the scope of WaterSure or any improved social tariff. They would, however, feel incredibly aggrieved if they had to pay anything up to £400 more for exactly the same service and product than if they lived anywhere else in the country, and that insult is made worse by the fact that the service is a basic necessity.
I understand, however, the Minister’s difficulty in being able to give concrete answers to many of the questions that will be raised today. There will necessarily be input from the Treasury as well as from No. 10, and in a way it is a shame that we cannot have Ministers from both Departments—the Treasury and DEFRA—here today, as some might argue that the solution is to be found at the Treasury. The Treasury can make or break another Department’s plans, but I hope that the Minister is pushing the case both for a social tariff and, more importantly, a solution to the south-west injustice.
Overall, we know the problem. Water bills for all customers in the south-west are far too high, as a result of the way in which the industry was privatised. We need a structural solution, through Government intervention, to remedy that unfairness. I am not sure how much detail the Minister can give in response, but I want him to recognise the difference between addressing water poverty and addressing unfairness. I hope that he can restore, or shall we say maintain, my faith, and that of others, in this Government, by promising to address both those issues.
Alison Seabeck
On a point of order, Mr Amess. To avoid any possible misunderstanding, I should draw Members’ attention to an entry in the Register of Members’ Financial Interests by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), in whom I have an indirect interest: he is my partner.
Dr Sarah Wollaston (Totnes) (Con)
I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing the debate and on raising this really important issue.
I shall start by reading from an e-mail that I have received from a hard-working 52-year-old constituent of mine, Mr Bamber. This is the first time that he has written to his MP:
“I’m having a pay rise of 0.0% this year, but being a good bloke it’s for the good of the country. Then my water bill arrives—it’s risen by 9.75635%. I’m mad, and I’d like something done about it.”
He is not alone; I have received several e-mails. Another disturbing fact was raised in an e-mail from a constituent who pointed out that his elderly mother, who is 80, has a water bill of £1,040, despite existing on a post office pension and being in substantial difficulties.
Although we all appreciate schemes such as WaterSure, many constituents have great difficultly in accessing them. I was particularly disturbed by a visit to my surgery this week by the husband of a constituent who suffers from severe multiple sclerosis. He brought with him evidence that he had sent to South West Water of her very much increased water usage as a result of her condition, and of the fact that she is on the higher rate of disability living allowance. They have, however, been declined access to WaterSure, which I am sure hon. Members agree is a complete disgrace. I hope that South West Water address that matter immediately.
The issue is one of unfairness. As my hon. Friend the Member for Torbay has pointed out, our constituents do not have any choice in the matter, other than to live somewhere else in the country, which is clearly ludicrous. The rises have been described as 8.1%, but for many constituents, they are nearer 10%.
Anne Marie Morris (Newton Abbot) (Con)
Does my hon. Friend agree that there is a case for suggesting a cap, which would not allow the 8% rise to apply in the south-west?
Dr Wollaston
I agree completely. If Ofwat were doing its job properly, it would see that that is inherently fair. It is completely unreasonable to expect anyone to deal with a rise of more than 5%. Near 10% is totally outrageous, particularly given that our constituents have no choice whatever in the matter.
As other hon. Members have said, we are not, as is often assumed, a wealthy area. Some 22% of people in the south-west are pensioners, which is well above the national average. No one would suggest that pensioners are a wealthy group, but they are none the less being subjected to outrageous rises in their water bills. Will my hon. Friend the Minister take all those points into consideration? It cannot be fair for 3% of the population to shoulder the burden of cleaning up 30% of the coast. Of course, none of us feels that we could have continued using 200 sea outfalls to dispose of sewage, and we all welcome the economic boost from the infrastructure programme instituted by South West Water, but it is clearly unfair that the burden of that necessary programme should fall on our constituents.
Andrew George (St Ives) (LD)
It is a pleasure to serve under your chairmanship, Mr Amess. I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing this important debate and articulating so well the case for taking action, and my hon. Friend the Member for Totnes (Dr Wollaston) on reinforcing his points.
My contribution will be relatively brief. I want to emphasise some of the points made by my hon. Friend the Member for Torbay. The privatisation of the water industry 20 years ago effectively created a risk-free money extortion system, as I said earlier. The company knows full well what the circumstances are in the south-west. It can almost print its dividend the year before, because it knows how the market works: it is not competing with anyone else, and the only variables are uncertainties about its input costs during the year and the risk that it might not be able to recover payments from all its customers, which is increasingly occurring in areas such as mine. Incomes in Cornwall have been at the bottom of the earnings league table since records began, and South West Water’s prices are and have always been significantly higher than in the rest of the country. In those circumstances, people have great difficulty paying the water charges with which they are presented. The legacy of basing water charges on the archaic and unjust rating system, which is not used for any other purpose, re-emphasises that significant reform is needed.
The one beneficial outcome of the circumstances in which the system operates is that it encourages people to recognise the advantages of water metering. South West Water has not engaged in an evangelical campaign to encourage people to install a water meter in their homes or premises; people have simply recognised that they can at least attempt to control their bills by various means, and in many cases the most effective way is to install a water meter. If there is a silver lining in the cloud, it is that people have pursued that. I think that it is accepted across all parties that the increasing move towards universal metering is broadly desirable in public policy terms, and certainly in environmental terms, if we are to address the proper management of natural resources.
In my intervention on my hon. Friend the Member for Torbay, I drew parallels with other, similar national assets. Our beaches are a national asset, which people come to from all over the country all year round. It is not just a summer thing, as it used to be; in my constituency, kite surfers come down from London and from other parts of the country throughout the winter months to enjoy the beaches and the sea around our coast, and they do so with some confidence that they will not go away with a bug, due to the efforts of South West Water to clean up those beaches and ensure a significant reduction in the public health risks associated in the past with bathing in some waters in the south-west.
Those beaches are a national asset, like the British Museum, the National Gallery and the Olympic stadiums, which are being funded by everyone in the country. We do not ask London taxpayers alone to fund them.
Anne Marie Morris
I support what the hon. Gentleman is saying, because the heart of his argument is about fairness. Everything that we have heard to date has been about affordability. As crucial as that is, I would be concerned if any future review or consultation did not address fairness. The points that he is making are absolutely right.
Andrew George
I know that Ministers are wrestling to produce a fair and equitable solution, and I know that this Minister has been engaging constructively and is well seized of the problem and the challenges that we in the south-west face—I have no doubt that he understands the issue fully. Discussions with other Departments, especially the Treasury, will inevitably be involved. I hope that the issues can be resolved to the satisfaction of the long-suffering water rate payers of the south-west. My hon. Friend is absolutely right that any solution must emphasise fairness.
It is worth while, when considering the issue, to compare water with electricity, telecoms and other utilities. In any other part of the country, it is at least possible to opt for another supplier of services. Therefore, whichever part of the country someone happens to live in, they will know that a regulator is regulating the market to ensure that there is fair competition and an even playing field, so that anyone in the country has the opportunity to at least obtain services—in this case, we are talking about water and sewerage services—that are no worse and no better than anywhere else in the country. We pay a significant amount more.
Alison Seabeck
On the glamorous subject of sewage, does the hon. Gentleman share my concern that, apart from the current pressure on bill payers in the south-west, we will have additional pressure from the transfer across of the private sewer network? It seems to be a completely unknown quantity—South West Water does not really know what it is taking on and what the impact will be. Will the hon. Gentleman join me in urging the Minister to offer reassurance on that?
Andrew George
The hon. Lady is absolutely right. I do not know whether this is area in which she is declaring her interest.
Andrew George
I am sure that her interest is in something far more glamorous than the adoption of private sewers. I have raised the matter with the Minister and there has been consultation on it. Water companies are aware of the issue and some have undertaken their own calculations of the impact that it might have. I am confused and uncertain about how far down the water companies will have to go—it is possible to get stuck on these issues due to the number of metaphors that could be adopted in relation to them, but I shall not dwell on that for too long—before they take on those obligations. Other issues include the state in which those sewers would have to be in order for them to be fit to be adopted and, indeed, whether the companies will have the opportunity to assess the condition of those drains and sewers in the first place.
The information that appears to be coming from the marketplace and from those who are engaged in the industry is that both the previous and present Governments have not properly assessed the true impact that the proposal is likely to have. The knock-on effect will be on all customers—not only in the south-west, but countrywide—although it will be disproportionately worse for those in the south-west, because any increase in their bills will be on top of something that is already extortionately high. I know that the Minister is looking into the issue. The matter clearly needs to be resolved before we go down the track of finally forcing water companies to adopt private sewers and drains. I hope that the Minister will address the issue in his comments.
The hon. Member for Newton Abbot (Anne Marie Morris) has left the Chamber, but she raised the issue of fairness. When we have debated how we can address the legacy of unfairness that has been left to South West Water customers, we have talked about the potential adoption of a national levy, which is one of the options proposed by the Anna Walker review. A national levy would be a very small, gnat bite of a charge, which few people would notice and which would address some of the inherited legacy of additional unfairness in the south-west and other parts of the country. However, if we adopted such a levy, and if it were simply a flat rate charge for all water rate payers, poor water rate payers in one part of the country—the north-east, for example—might end up subsidising wealthy second home owners, who already pay, if they have water meters, significantly less than most people in their locality. Clearly, to address the issue of fairness, if we were to adopt a national solution, it would have to be significantly more sophisticated than a simple, flat-rate solution. I know that the Minister is well aware of the issues.
Mr Sanders
It is worth putting on the record the amount that would be asked of each customer. It is in the Walker review. It is £1.50 per customer per year.
Andrew George
I am grateful to my hon. Friend—he has the figure to hand, but I do not. As I have said, it is an imperceptible gnat bite of 3p per week throughout the year. It is not a significant charge for people, and the potential benefits to this country’s water rate payers, such as those in the south-west, who are significantly disadvantaged, would be considerable.
Finally, I have emphasised the benefits to water rate payers if they, in most cases, adopt a water meter. Many of those living in houses in multiple occupation, sheltered housing and so on are not able to install a meter in their own individual property. When they query that and ask South West Water how, given the unfairness of the system—particularly if they are elderly, do not use a lot of water and live n their own—they might reduce their bills and the exorbitant charges that they have to endure, they are told that they have a range of alternative options, one of which is to return to South West Water, which is obliged to offer them an assessed charge, which assesses their notional water usage and charges them on the basis of what they would have been levied had they had a water meter.
In all such cases with which I have dealt over the years, those charges have usually reduced bills by half or more. My point to the Minister is that, rather than expecting water rate payers—particularly those living in sheltered accommodation who do not have assessed charges—to believe that there might be an alternative solution and to then be articulate and confident enough to approach the company to ask for one to reduce their charges, it should be the company’s default position to make those customers aware of the availability of an assessed charge. Many vulnerable people live on their own in sheltered accommodation without the benefit of reduced charges on water meters, but they could at least be given the opportunity of an assessed charge. That is what the company should be doing in the first place.
I have run South West Water down something rotten this afternoon, and to be fair, the chief executive, Christopher Loughlin, is fully engaged with these issues. When I raised the issue of assessed charges, he accepted that the company can be much more on the front foot and assured me that it wants to tackle the issue. He is conscious of the impact on his customers of issues such as the fairness of billing and the charges levied by South West Water, and he is fully behind the campaign by Members from all parties. The company is aware of these issues and would welcome any solution that, while not giving it any particular benefit, would reassure its customers that arrangements can be put in place that are more equitable than those they have had to endure for the past 20 years.
George Eustice (Camborne and Redruth) (Con)
I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing this important debate on the problem of water charges in the south-west. As he said, it is good to see colleagues from all parties here, many of whom have campaigned long and hard on this issue over a number of years.
I want to focus much more on the difficulty that we have solving this problem than on the problem itself, which has been comprehensively articulated by previous speakers. As I see it, the problem comes down to three key issues, which are often highlighted by Ofwat. First, half a dozen MPs from the south-west face the brutal problem of persuading 600 MPs elsewhere in the country that it is worth their while voting through legislation to require water customers in their areas to pay a sum of money—albeit only £1.50 a year—without, as they would see it, getting anything in return.
The second difficulty is one that the Minister has previously raised: someone on benefits or a very low income—someone living on the minimum wage in somewhere such as Manchester—could end up subsidising the bills of a millionaire with a second home in Cornwall.
The third problem that is sometimes cited is that we might set some sort of precedent. Thames Water is, for example, doing a lot of infrastructure work with the Thames tunnel, and the argument is that if we make an exception for the south-west, recognising what has been done there, the injustice that has been suffered and the infrastructure that has had to be put in place, we would be setting a precedent for other water companies.
The answer is to design a scheme to address those concerns—something that should not be beyond the wit of man. I have raised the issue with the Minister before, so he will be aware of my suggestion for a fair discount scheme. There would be two key criteria at the heart of that formula. First, there would be affordability. We would use the definition of affordability cited in Anna Walker’s report, which says that anyone who spends more than 3% of their household income on water bills is water poor. We should ensure that all those who spend more than 3% are eligible for some form of discount. That would catch about 70% of South West Water customers, and millionaires with second homes in Cornwall would not be eligible because they would not spend more than 3% of their household incomes on water. That would deal with the second argument that I set out about people on low incomes subsidising millionaires.
The second key criteria at the heart of the scheme would be recognising fairness. The scheme would recognise in absolute terms the scale of the bills in the south-west. People often have bills of £700 or £800 a year, and I have even heard anecdotally of people getting bills of £1,000 a year. That is why water charges are a political issue in the south-west in a way that they are nowhere else. There is a real issue of fairness just in terms of the absolute size of the bills.
We would, therefore, have a discount, which would be tapered depending on how much people’s bills varied from the national average. We would say that people in the south-west, whose bills are double the national average in many cases, were entitled to the full discount, which might be £80 or £100 a year. They would still pay more than anyone else, but they would receive a significant discount, which they would recognise as making a real difference.
In areas such as that covered by Thames Water, people might be technically water poor, but the fairness criteria would recognise that water bills in London are already very low and, indeed, below the national average. The taper would ensure that the discount given to those who were water poor in the Thames Water area was far smaller, because we would be recognising that their bills were not such a difficult issue and started from a low level.
The provisions would ensure that we had a national scheme that was open and available to all. Such a scheme would target affordability and not subsidise millionaires. It would also recognise unfairness and the fact that water charges are a political issue in places such as Devon and Cornwall by having a taper and changing the discount depending on the variants.
I put those thoughts to the Minister a couple of months ago, and lots of work is going on. I commend the approach that he has taken; he has worked incredibly hard to find a solution. The coalition has given a commitment to address the problem, and we all have a reason for wanting a successful outcome. I very much hope that we can find a solution together.
Mr Jamie Reed (Copeland) (Lab)
It is an absolute pleasure finally to serve under your chairmanship, Mr Amess. I congratulate the hon. Member for Torbay (Mr Sanders) on securing this debate. I have taken note of the attention that he has given these issues in parliamentary questions and, most recently, in early-day motions. I am well aware of the anger, frustration and even desperation that many of his constituents feel as a result of the long-standing problems with water and sewerage charges in his area.
As the hon. Gentleman will acknowledge, MPs of all political persuasions across the south-west have focused a great deal on this issue. I have talked about it at length with my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) and my right hon. Friend the Member for Exeter (Mr Bradshaw), who are particularly exercised by the lack of progress on the Walker review—an issue to which I will return—and by the continued suffering of their constituents, particularly the poorest ones.
It would be wrong of me not to pay tribute to the outstanding work of Linda Gilroy, who did a huge amount of work in ensuring that the previous Parliament was aware of and understood these issues, and any future progress will necessarily be down in part to the remarkable effort that she expended.
Andrew George
It is worth ensuring that that commendation for the work done by the former hon. Member, Linda Gilroy, has cross-party support. As a fellow officer of the all-party group on water, I know that her commitment and involvement took the campaign a great deal further than it would have gone otherwise. Her work certainly should be commended, and the Minister will no doubt recognise that, too.
Mr Reed
I thank the hon. Gentleman for those remarks. With his typical generosity, he demonstrates that a solution can be found on a cross-party basis.
As somebody who is closely associated with my own region, the north-west, I understand how Members of Parliament can form a regional identity and share concerns across party lines about issues that are of outstanding regional importance, as water is in the south-west. I also understand how politicians from other regions who pontificate about regional issues, where those almost certainly require national solutions, can quickly arouse suspicions among MPs from the region in question. As a Member of Parliament from Cumbria, which is surrounded by the Irish sea and the Cumbrian fells, which is partly within the Lake district, which is sparsely populated, where tourism is incredibly important and where water and sewerage bills have risen exponentially since 1989 to become the highest outside the south-west, I understand.
The average annual bill for water and sewerage services in the south-west has risen by 72.2% between 1989 and 2010-11—the highest increase in the country. As my hon. Friend the Member for Plymouth, Moor View stated in her Adjournment debate last year:
“The problem we face is simple: water rates in the south-west are 25% higher than the UK average, placing an unfair burden on…my constituents and all residents across the south-west of England.”—[Official Report, 14 June 2010; Vol. 511, c. 710.]
The average bill for South West Water customers is significantly higher for 2010-11 than elsewhere in the country, at £486, as opposed to a national average of £339, as I think has been mentioned. In addition, unmetered customers also face much higher bills, with an average of £721 for South West Water consumers, as opposed to a national average of £394.
As has been roundly discussed, that does not happen by accident. The widely condemned Thatcher privatisation of the water industry in the 1980s led directly to many of the problems that we face today, but the south-west’s significant demographic and economic characteristics reinforce the problems associated with high bills. They must be understood in an integrated way. They cannot be considered in isolation. As has been touched on, 22% of South West Water customers are pensioners, although being a pensioner should not be used as a blanket term to denote people living in financial hardship; many hon. Members would share that view. In addition, I think that it has been proved that lone parents have more affordability problems than single pensioners. The percentage of lone parents in the south-west is at the national average.
An extremely high proportion of the population live in sparsely populated rural areas—something that I am familiar with. That makes service provision more expensive and diminishes economies of scale. The policy solutions should address the problems that are faced today. The fact that housing affordability issues are the most acute in the UK outside London should be considered. As has been alluded to, the region is the UK’s top tourist destination. The population rises more than by 25% in peak tourist weeks, with the result that the demand for water is a third higher than for the year as a whole.
I understand that South West Water understands those issues, and it should be commended, as it has been, in part, by hon. Members on both sides of the Chamber, for investing more that £1.5 billion in the clean sweep programme, which has done so much to transform sewage treatment and the natural environment. However, bills for consumers in the south-west are now 25% higher than those in the rest of the country, and for the most vulnerable in the south-west community—those struggling alone on a pension, lone parents trying to raise their families and single people living in rented accommodation—water bills present a struggle. It has been estimated that their bills can take 10% of their incomes. Surely, that cannot be acceptable. I pay tribute to the Consumer Council for Water for the work that it has done and continues to do in trying to influence prices for consumers not only in the south-west but throughout the country.
We can talk at some other stage—I have no doubt that we will—about the current economic situation, its causes and its potential remedies, but it is certain that the people in our society who will feel the effects of the recession the most, and who will without doubt feel the brunt of the Government’s cuts the most, will be those who already suffer the most from rising water charges, by comparison with other consumers. It cannot be right for up to 10% of their incomes to go on purchasing what is a basic entitlement—a right—while food and fuel costs are rising, the Government have raised VAT to 20%, unemployment is rising and job insecurity is everywhere. Action must be taken sooner rather than later.
The issues associated with water and sewerage charging in the south-west are difficult. The hon. Member for Torbay called them intractable. The Minister knows that they are difficult and has said as much in this place and to the Select Committee on a number of occasions. He understands the difficulties of the decisions and recognises the difficulty for many people who face such water charges. I believe that the Minister wants to do the right thing, but wanting to do the right thing and doing it are very far away from each other. Intentions count for little. The difference between intention and action is the same as the difference between night and day. It is difficult for DEFRA Ministers, as the Secretary of State hovers around the exit door to get things done, and the Department risks becoming inert, like many others in Whitehall, as sackings loom and the near 30% departmental cut begins to bite, but a lot of the heavy work on this issue has already been done, in the form of the Walker and Cave reviews.
The Government announced in August 2010 that they would review the regulation of the water industry to assess whether the current framework, including Ofwat’s statutory duties, remained fit for purpose. Does the Minister believe that Ofwat is fit for purpose, and if not, why not? The industry review is also meant to assess how well Ofwat translates guidance from the Government and its statutory duties into its decision making. With that in mind, did the Government give any advice to Ofwat with regard to water pricing in the south-west before Ofwat set the price for the region for this financial year? Did the Government give any guidance to Ofwat about the problems being faced by south-west customers before the latest price rise was announced? Inflation is currently 4.7%, yet Ofwat’s allowed increase for South West Water customers averages at 5.1%. Have the Government discussed that with Ofwat at any stage, before or after the announcement, and is the Minister happy with that level?
I understand that the water review will directly inform the Government’s White Paper, to be published in June. Will the Minister confirm that the White Paper will be published no later than June? He will understand that it needs the fullest parliamentary scrutiny if it is to command broad support. The fundamental question is whether, almost a year after taking office, the Minister can explain what is halting the implementation of the Walker review. It was a superb piece of work that commanded support from hon. Members on both sides of the House and that held within it, as has been mentioned, many potential remedies to the problems of the south-west and South West Water consumers.
Will the Minister today give hon. Members a categorical assurance of a commitment in principle by the Government to implementation of the Walker findings and to a timetable for implementation? That is not much to ask. Further, will he confirm that the reduced capacity of DEFRA has in no way affected the implementation of the Walker recommendations? Will he also address fears that the Government’s review and the production of its White Paper have prohibited the implementation of Walker thus far? There are fears, which so far are justifiable, that the Government are backtracking on Walker. In the words of the American gospel hymn, “How long, O Lord, how long?”
Finally, the Chartered Institute of Environmental Health has defined water poverty as beginning when a household’s water bill equates to more that 3% of its income after tax. As we have heard, in the south-west, some households pay in the region of 10% of their income on water bills. Does the Minister know what percentage of people living in the south-west live in water poverty? Will he undertake to publish an assessment of how many people are living in water poverty by region and by constituency, and ensure that his White Paper will contain measures with which to eradicate water poverty? I believe that there is much common ground on which we can build.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
It is a great pleasure to serve under your watchful eye today, Mr Amess. I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing this important debate. I also congratulate him on his long association with this issue and on standing up for his constituents, like so many other hon. Members, of all parties, this afternoon.
My hon. Friend raised several issues, but a key point was about the role of Ofwat. Other hon. Members, not least the Opposition spokesman, mentioned its role, and it is important to understand how it operates. I am surprised that the hon. Member for Copeland (Mr Reed) has not quite grasped the fact that it is an independent body. It would be entirely wrong of me, as the Minister, to try to influence its approach to its independent role, which is written in statute. That is not to say that we are sitting back and allowing the status quo to go on existing. We are testing, deeply and in great detail, whether Ofwat is fit for purpose and in a suitable condition to go to the next phase. Twenty years after privatisation, it is right for us to examine all aspects of the water industry.
David Gray, a highly respected individual who has great experience in the regulatory world, is carrying out a detailed review. I urge the hon. Member for Copeland and all those who are interested in this fascinating subject to understand the review that is taking place, and the role that Ofwat plays. I am determined that the constituents about whom so many hon. Members have spoken so movingly should be at the forefront of our minds while we consider the issues in question. Ofwat has an important duty to protect and stand up for them, independently of the Government. When the Government get things wrong Ofwat has a duty to tell them so. It also has a duty to ensure that the water companies, which have monopoly interests, are responsible to the people concerned. I take that duty very seriously.
The hon. Member for Plymouth, Moor View (Alison Seabeck), who is no longer here, made a point about water poverty. My hon. Friend the Member for Torbay and others mentioned that there might be some people in the House—I am yet to meet them—who believe that the south-west is full of comfortable people who have moved there in retirement and are relatively wealthy. I know that, largely, the opposite of that is true and that many people and communities suffer high degrees of deprivation. Of course, there are wealthier communities. However, if people assume that any community in the south-west can take such a water bill increase because there is no poverty, they make a fundamental error. That is something I take very seriously.
Yes, I speak to people from the south-west, and, yes, I will listen. That point was raised by my hon. Friend the Member for Totnes (Dr Wollaston). I have listened and will continue to listen to people in the area. I know what an important issue this is and that it is a political as well as a social issue. The matter is fundamental to the concerns that hon. Members have voiced for much too long. I recognise that we must come forward with solutions and, in a moment, I shall talk about how we will achieve that.
I hope that I can address some of the other issues during my remarks and, of course, I remain willing to deal with them. A point was made about the adoption of private sewers. I cannot say precisely when we will introduce proposals on that, but the coalition has a very clear commitment to dealing with that important issue and to ensuring that we do so as equitably as possible. The hon. Member for St Ives (Andrew George) also has a long background in talking about the subject, and I appreciate the support, the many conversations that we have had and the assistance that he has given me on the matter. I accept his point about a default position, and I will follow that up with South West Water and continue to have conversations with him.
My hon. Friend the Member for Camborne and Redruth (George Eustice) has provided me with an interesting idea. I can tell him that officials are crunching his numbers as we speak and that he has contributed some thoughtful suggestions. At this stage, I cannot say how we will take that forward, but I will keep in touch with him. In passing, comments have been made about privatisation. All I shall say is that £90 billion has been invested in the water industry, which is a considerable achievement, and that other Governments have had endless opportunities to reverse what happened 20 years ago. I recognise the very real belief in the south-west that, in the case of that area, not enough thought was given. I will address some of those points, too.
First, I shall discuss the specific issue at hand. Ofwat has announced that average bills for household customers of South West Water in the coming year will increase from £486 to £517, which is an increase of 5.1%. Nearly all that increase is due to inflation, as water bill increases are linked to inflation.
Dr Wollaston
May I raise the point that the accepted figure is 8.1% because the figure that the Minister quotes assumes that people will be switching to water meters?
Richard Benyon
My understanding is that that is the figure over the piece. However, I am happy to look into that and give my hon. Friend an absolutely clear and unequivocal answer, because it is important that we know that figure. In her earlier remarks, I think she raised the point about why we use the retail prices index rather than the consumer prices index. [Interruption.] Sorry it was not her; it was my hon. Friend the Member for Torbay. Bills have been tied to inflation since privatisation because, when inflation is higher, water companies’ costs increase. As is the case with other regulators, Ofwat uses RPI. Although RPI was higher than CPI this year, it was actually lower than CPI when last year’s bills were calculated, so average bills that year were lower. We can argue about percentage points, but that is an important factor. Let us take that matter forward in our consultation, which I will come to in a moment.
I am acutely aware that nobody wants to see higher bills, particularly in these tough economic times. However, we should not lose sight of the fact that the money raised will pay for £159 million of investment in the region during the next financial year, which will benefit customers. I know that that sounds trite, and I am not diminishing the effect of the increase, but we must recognise that there are also benefits, including £14 million to improve tap water quality, £10 million to repair crumbling sewers and £28 million to further reduce pollution incidents.
Mr Bradshaw
Given the severe squeeze on family incomes, would it not have been better for South West Water to have delayed some of that expensive investment and to have frozen the rise? The Minister seems to be giving the impression that the Government do not bear any responsibility for inflation, but it is, of course, his Government who have let inflation rip.
Richard Benyon
I chose to ignore the right hon. Gentleman’s earlier remarks about the Government being responsible for the rise in inflation at a time when commodity prices and oil prices are rising. He only has to read the newspapers to see what is happening to food prices and how that is being influenced by so many other different factors. I think I shall move on, because I simply do not accept his point.
Mr Bradshaw
Why is inflation in Britain more than twice as high as it is in Germany?
Richard Benyon
We could debate that at great length and talk about our reliance on oil, how that might differ from other countries, where we were working from a year ago and the impact of the previous Government’s activities, of whom he was a part. I will be happy to have that debate at another time but, at the moment, I want to talk about the right hon. Gentleman’s constituents and the impact of the increase in water bills. I also want to talk about the actions that are in my power to take to improve that. I am happy to take any interventions that he may wish to make on that.
We have been carefully considering Ofwat’s final advice in relation to the south-west, which I only received in January. These are difficult issues, and, as has been said, there are no simple solutions. It is essential to ensure that our proposals are workable, fair and affordable, particularly in the current economic climate. We hope to issue our consultation on the Walker review soon, but it is essential that we get this right.
Hon. Members have discussed the differential between metered and unmetered bills. The average bill for a metered household in the south-west is around £400, while the average bill for an unmetered household is around £720. Hon. Members have given examples where both types of bill are considerably higher than those averages. That is because—as we have heard—70% of households in the south-west are metered. Average metered and unmetered bills reflect the estimated water consumption between those households. Unmetered households pay more, because, on average, they use more water than metered households. As hon. Members are aware from previous debates, bills vary between companies. That reflects the cost of providing water and sewerage services in an environmentally sustainable way in different regions with different circumstances.
In all cases, Ofwat—as the independent economic regulator of the water industry—ensures that bills are no higher than they need to be to finance the investment required to provide water and sewerage services. My hon. Friend the Member for Totnes and others have discussed how unfair it is that 3% of the population pay to clean up 30% of the coastline, and I know that that is the prevailing view in the south-west. The Walker review looked closely at whether environmental improvements are public or private goods and who should pay for them. Anna Walker concluded that spending on environmental improvements, such as cleaner beaches, is largely required to make sure that the disposal of sewage does not harm the local environment and that the benefits are mainly local. In particular, having a sewage system and beautiful clean beaches delivers huge benefits to the region through tourism. I know that there are many people—I am one of them—who enjoy the beaches and the coastline, but who do not pay those bills. The complication of trying to devise a scheme where we can hypothecate is something that not just I, but my predecessors and many others in this House, have sought to tackle.
Support is available now for low-income and vulnerable households. Currently, the national WaterSure tariff caps the bills of qualifying households at the average metered bill for their company. Households qualify for WaterSure if they are metered and in receipt of means-tested benefits, and either have three or more children living at home under the age of 19, or someone in the household who has a medical condition that necessitates a high use of water.
Individual cases were raised today. As they were described to me, those people should qualify, but are not receiving WaterSure. I want to take those cases up. My hon. Friend the Member for Totnes raised a case about a multiple sclerosis sufferer. I would like to know whether multiple sclerosis has an increased water requirement, and why that case is not covered by WaterSure. That is something that we may have to look at through the consultation that we are about to undertake.
WaterSure ensures that such households do not cut back on their essential use of water due to fears about the size of their bill. This year, some 31,200 households are benefiting from WaterSure and approximately one in three of those households live in the south-west. We are looking at whether WaterSure should offer a more generous cap, which could cap bills at the lower of the national average metered bill, or the company average metered bill, as recommended by Anna Walker. That would deliver substantially lower bills for those households that live in high-cost areas. We are also looking at whether it would be more fair to share the cost of WaterSure across customers in England, rather than fund WaterSure at the company-specific level. We will be inviting views on that when we publish our Walker consultation.
Some have asked why the Government have not made those changes already. We have been considering them alongside Ofwat’s advice on tackling the problem of high water bills in the south-west. I received Ofwat’s final advice only in January. I am sure that hon. Members agree with me that we must ensure that our proposals are workable, fair and have the support of interested parties. I am determined, as I have said frequently—I make no apologies for saying it again, although I wish that we had got there by now—to get this right.
Andrew George
On the various alternatives, I know that each one is not easy, as the Minister has made clear. He is clearly very seized of the challenges of coming to an equitable solution. Does he not agree with me that in having a solution that is simply within the company itself—a social tariff within the company boundaries—there would be inevitable unfairness, wherever the line was drawn? People on moderate incomes, who would have difficulty paying the bill, would be subsidising other people in the same company area, when they are already suffering from very high water bills.
Richard Benyon
I entirely accept what my hon. Friend has said, which is why I am sure that in the south-west it would be more popular for us to use the national average, which is one of the suggestions that we will be taking forward.
We have started to prepare our guidance on company social tariffs under section 44 of the Flood and Water Management Act 2010, which will enable companies to introduce social tariffs within their own areas to help households that would otherwise struggle to pay their bills in full. We hope to issue our guidance in the autumn, so that companies can consider it ahead of the 2012-13 financial year. Indeed, this afternoon the Department for Environment, Food and Rural Affairs is hosting a discussion with water companies and others to exchange views on what the guidance needs to cover. South West Water is participating in that discussion. I understand that it is very keen on the possibility of bringing forward a company social tariff. It has indicated to me that changes to how it levies sewerage charges could potentially raise about £7.5 million per annum to fund a company social tariff without adding a penny to household bills. That would potentially reduce the bills of 100,000 households in the south-west by about £75 per annum. I strongly encourage the company to look favourably at that possibility.
The hon. Member for Copeland asked when we are going to implement the Walker review. The Walker review identified a number of options. Implementing the review would involve implementing all those options, some of which were more-or-less dismissed by Anna Walker herself. She did, however, identify a number of options that would help to address the problems associated with high water bills in the south-west, in addition to proposed changes to WaterSure. Ofwat has been exploring those options, and we are currently considering the information that it has provided. Some options could potentially benefit all households in the south-west, and not just those on low incomes, which should address some of the comments that have been made today. Options include a one-off, or annual, adjustment funded by the Government, an annual adjustment funded by water customers nationally, a range of tariff options, rebalancing charges and the sale of surplus water. Decisions will be taken imminently, and we will set out our proposals for the south-west in our Walker consultation.
I recently received Ofwat’s final recommendations. I can address the concerns raised by the hon. Member for Copeland and others by saying that we will be taking those forward very soon. I should also mention some of the initiatives that South West Water is taking. Since 2007, its WaterCare scheme has helped households in debt by offering them a benefit and a water tariff check including, if appropriate, a meter. Metered customers also receive a free home water audit and simple low-tech water-saving devices. I have seen those schemes in operation, and they are successful in reducing the amount of water that households use, with minimal impact on their lives. In fact, in some cases there is an improvement, and I applaud any roll-out of such schemes.
South West Water recently announced that it is enhancing its current WaterCare scheme to WaterCare Plus. That will include home energy audits and advice on claiming grants. In addition, in the coming year, it is investing £1 million in its FreshStart programme to offer advice to customers with general debt problems. Both the WaterCare Plus and FreshStart schemes are fully funded by South West Water and do not impact on customer bills. The company will also be making free water-saving packs available to its customers, and it will be promoting them through the local media this month and next. I very much welcome and support those initiatives.
Metering offers an opportunity for some households to save money. Ofwat estimates that three in 10 single pensioners, working-age adults who live alone and, to a lesser degree, pensioner couples in the south-west are currently unmetered and could expect to see their bills go down, if they were metered. South West Water has already undertaken two advertising campaigns—in Plymouth, and in Exeter and Torbay—aimed at encouraging low-income unmetered households to look at whether a meter can reduce their bills. I believe that more can be done to build on that. For example, all unmetered households can investigate whether a meter can save them money by using the Consumer Council for Water’s water meter calculator, which is available at the Consumer Council for Water’s website.
May I reiterate to my hon. Friend the Member for Torbay, who secured the debate, and to other hon. Members for whom the issue is of great concern to them and their constituents, that the Government are very aware of the problem of high water charges in the south-west? Support is already available to help the vulnerable and low-income households with their bills. We will build on that, and our Walker consultation will point the way forward. I hope that hon. Members will bear with me for just a little while longer. I will, of course, be happy to meet any hon. Members with constituencies in the south-west to discuss this and to ensure that they have the understanding that they need to communicate our consultation, when we bring it out. I again commend my hon. Friend the Member for Torbay for bringing this matter to the Chamber today.
Mr David Amess (in the Chair)
Order. If no other hon. Members want to contribute to this debate, the sitting is suspended until the Minister arrives for the next debate.
Animal Welfare
(13 years, 8 months ago)
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George Eustice (Camborne and Redruth) (Con)
It is a pleasure to serve under your chairmanship, Mr Amess, for this debate on animal welfare and trade negotiations.
The importance that we place on the welfare of other animal species on the planet is a measure of how civilised our society is. We all know that animals feel pain and fear. They have maternal instincts. Anyone who has ever had a dog knows that they can even feel emotions such as loneliness and jealousy. How we treat sentient animals that are raised in captivity for food really does matter and says something about us as a society.
Animal welfare is an area in which legislators should be prepared to take action. The truth is that the public care deeply about the welfare of animals, but the paradox is that in a modern, sophisticated society, people are often separated from farming practices and the slaughter of the animals that they consume. There is therefore a danger that the human conscience of consumers ends up being dissipated by the simple fact that, for the majority of people, farming and slaughter processes are, frankly, out of sight and out of mind. The only way to bridge the gap between the empathy that people might feel for animals and the information that they have about farming is by legislators exercising judgment and implementing laws that recognise the ethical dimension of how we produce our food.
There is another element to this. Farming is sometimes described as an industry, but I would say that it is not like any other industry—it is unique. It is not just about churning out a product for consumption at a given unit price. Farming is intrinsically linked to life itself and entwined with the environment, of which humans are just one part. If we take the special nature of farming for granted, we end up in trouble with animal health problems, disease and even human health problems. In recent decades, that is exactly what has happened. Consideration of animal welfare standards has been trumped by an apparently more important theory about free trade. That is wrong.
I am a Conservative, and no one believes in the concept of free trade more than I do, but even I can see that the concept of free trade is frankly a lower order consideration when compared with more fundamental issues such as animal welfare and the health of our environment. All too often in recent decades, moves to take a lead and to improve animal welfare standards at home end up being stopped in their tracks by the threat that we will merely export our industry to countries that have even lower welfare standards. That fear is entirely justified.
When the UK unilaterally banned sow stalls for pig production, our industry lost out to that in other countries where pigs were treated less well. The concern that our farmers will lose out as a result of improved welfare legislation means that the policy response has typically been to trim our ambitions and to stifle our consciences, because the theory of unfettered free trade has been considered to be a concept that is beyond challenge in any circumstances, and seen as a principle that trumps concerns such as animal welfare.
It is time to challenge that muddled thinking. A civilised society should have a system that encourages competition to raise animal welfare standards, not to lower them. We should not jeopardise our farming industry simply because of some arbitrary rules set down many years ago in the general agreement on tariffs and trade and since enforced by the World Trade Organisation. I shall return later to some of the relevant articles in GATT, because I shall argue that many of the provisions to recognise animal welfare standards in the world trade system already exist, but we have not been good enough at taking them up.
First, I shall speak about the coalition Government’s position, and that of the Conservative party. Just a year ago, in February 2010, the Conservative party published a very good document, “A New Age of Agriculture”, which was our agenda for British farming. The section on animal health and welfare contained an explicit commitment:
“We will promote animal welfare at an international level and work towards the inclusion of production standards in WTO negotiations.”
That could not be more unequivocal or clear, but I decided a couple of months ago to follow it up and to see what progress there had been in making the case to the WTO and internationally for the changes. I tabled a parliamentary question asking what discussions had taken place on this important issue. The response was:
“None. The World Trade Organisation’s…Sanitary and Phytosanitary Agreement only allows controls on food safety, plant and animal health grounds. While we are totally committed to improving animal welfare standards the situation is that unanimous agreement of the WTO’s membership would be needed to change this to include production standards such as those relating to animal welfare. Such agreement is unlikely to be forthcoming because many of the WTO’s members would regard such standards as likely to facilitate protectionism rather than trade.”—[Official Report, 2 December 2010; Vol. 519, c. 957W.]
What I really want to know from the Minister is whether that represents a change in the Government’s position, and if so did the coalition require that? I would find that surprising. The Conservative party has its differences with the Liberal Democrats, but I would have thought that Liberal Democrats cared about such issues as much as we do. I wonder whether it is simply that the Department has other priorities and has not yet managed to put the matter back on the agenda. I would like some clarity on that from the Minister.
Returning to GATT and the WTO, I want to say a little about how we can get from A to B—from wringing our hands about the problems of animal welfare and how we improve it within the WTO system to being able to implement and obtain agreement. I am conscious that it is easy for people to say, “Oh well, it’s impossible to achieve change because of the difficulty of getting worldwide agreement.” The WTO is undoubtedly reluctant to recognise what are described as process and production methods—PPMs—when dealing with world trade disputes. As I said earlier, farming is unique and unlike any other industry. That is why we must ensure that the WTO opens its eyes to those wider considerations and takes a look at issues such as animal welfare. The truth is that the provisions to do that already exist in GATT. All we need is the confidence to get on and implement them effectively.
First, article XX makes it absolutely clear that animal health is a legitimate factor to be considered in trade negotiations, but the European Union has been weak in arguing that. It states that
“nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:
(a) necessary to protect public morals;
(b) necessary to protect human, animal or plant life or health”.
We should be arguing that the health of an animal is intrinsically linked to its welfare, and that under article XX that should be a legitimate consideration that is factored into trade negotiations.
Secondly, article III is also relevant to the issue. It deals with regulations within countries and says that there should be equal treatment for like products. It states:
“The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin”.
The debate is about the definition of “like products”. All too often in the recent past, people have said that a chicken is a chicken regardless of how it is produced. That is simply not the case. In the egg industry, it is recognised clearly that the method of production counts and that eggs are not all alike: all eggs sold in the UK must have a number from 1 to 4 to designate whether they were produced in cages, or are barn eggs, free range eggs or organic eggs.
The Minister will be aware that there is much discussion in the poultry industry about the danger that the new EU legislation being introduced to improve conditions for cage-reared birds may be implemented disproportionately. It may be implemented properly in the UK, but not elsewhere in countries such as Poland. That is causing a lot of concern in the poultry sector, and I understand that the Government may even be considering banning eggs from EU countries where they have not been produced to the new legally required minimum standard.
What an upside down world it is when we argue that it is okay to ban products that do not match our legal standards in the EU, where we supposedly have a single market and are all part of one happy family, but that adopting similar measures and a similar stance as countries outside the EU is considered to be a bridge too far and a step that simply cannot be taken, although the methods of production would be illegal in the UK. Clearly, something has gone wrong. When it comes to agriculture, we must be very clear that a “like” product must mean a product produced to the same standard of animal welfare. The principle that we have established in the egg industry, for example, should be applied to all meat products.
Before concluding, I want say a little about labelling and consumer choice. We have got ourselves into a bit of a muddle in some areas. We sometimes apply asymmetric legislation to farmers, and then tell them to compensate for those new laws by trying to command a premium in the market, to have better labelling and to try to obtain a higher price for their product. I think that is a cop-out because an important principle is involved. If a farmer makes the conscious choice to adopt farming practices such as organic farming, which go well beyond the legal minimum required, he does so voluntarily and having made a judgment that he will be able to command a premium in the market. However, if that farmer is forced by law to improve animal welfare standards, the responsibility is on legislators to ensure that he is not exposed to unfair competition due to others using practices that would be illegal in this country. Otherwise, we simply export cruelty abroad, and no one wants that.
My second point about consumer demand is that, notwithstanding my earlier argument about farming practices and slaughterhouses being remote from modern, sophisticated societies, in recent years there has been a sharp increase in demand for ethically produced food. There has been a huge growth in demand for free range eggs and other organic foods. Some argue that that is the solution, and that it is evidence that we do not need to change the rules of the World Trade Organisation, but I think it proves something different. If consumers are willing to recognise that there is a difference between products based on how they are produced, why cannot legislators recognise the same? During one test case at the WTO, it was held that
“differing consumer tastes and habits”
was a legitimate and relevant factor in determining whether products were, or were not, alike. The fact that consumers distinguish between food products based on the system of production strengthens the case for the Government to argue under article III that we should recognise higher animal welfare standards. Food produced to such standards is not like food that has had a lower level of production.
To conclude, it is time to modernise the World Trade Organisation and the world trade system generally. We should give nation states the right to safeguard their markets against imports produced in third countries to less civilised standards. We should not be asking the World Trade Organisation how to interpret articles III and XX, we should be telling it. Some say that such an approach risks protectionism and would undermine the interests of developing countries, but that claim does not stand up to scrutiny. It does not follow that welfare standards are lower in developing countries. Indeed, some of the worst excesses of the industrialisation of agriculture and factory farming tend to be associated with developed—not developing—countries. In many cases, developing countries pursue less intensive and more traditional farming practices that are better for animal welfare. Quite often, production processes in those countries are already informally regulated by large retailers in the UK who often insist that food produced in developing countries is produced to the same welfare standards as in the UK.
In truth, the latest Doha round of the World Trade Organisation has been stalled for several years. Rather than leave those negotiations in limbo, bogged down and making no progress, why should we not be realists and reconcile ourselves to the fact that, for all the reasons that I have identified, farming—especially livestock farming—is a special industry and a special case? That would free up the position as far as negotiations on other products and industries are concerned.
Requiring all exported meat to be produced at least to the same standards of the country to which it is destined is less radical than it sounds, and it could have a huge impact on our culture and on attitudes towards animal welfare. I hope that the Minister will take some of those points on board.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)
I congratulate my hon. Friend the Member for Camborne and Redruth (George Eustice) on securing this debate, and I am sorry that it is only a short Adjournment debate. The issues that he raises go to the heart of things that the Government and I hold dear. He started by reminding me of what I wrote in the Conservative document on agricultural policy about a year ago, and I do not resile from those objectives. I want to explain to the House what we are doing and how we are trying to take forward the objectives that we share. As part of the business plan for the Department for Environment, Food and Rural Affairs, we want to support and develop British farming, encourage sustainable food production and improve standards of animal welfare.
The previous Government’s Animal Welfare Act 2006, which had cross-party support, makes it an offence to cause unnecessary suffering to any animal and contains a duty of care and the five freedoms and so on. The 1999 treaty of Amsterdam requires the Commission and member states to consider animals as sentient beings. I was a Member at that time and know that that was seen as a significant step forward, and it was later reinforced by the Lisbon treaty. Therefore, a large body of EU legislation improves animal welfare. As my hon. Friend said, we have experience in this country of taking unilateral action for the most noble of motives, such as improving the welfare of pigs. I am thinking of pig stalls and tethers, but that action had a catastrophic effect on the pig industry in this country, and there was probably no substantial gain in pig welfare.
My hon. Friend referred to a chicken being a chicken. I was going to relate that not to production in the way that he described, but to concern for animal welfare. It may salve our consciences to raise standards of animal welfare in this country and not care about the rest of the world, but if that means that we simply export those lower standards of animal welfare, it is not a case of a chicken being a chicken—the chicken in England has moved to being a chicken in another country kept at a much lower standard. There is a tremendous amount to be said for doing our best to raise standards across the piece, not just unilaterally, and that is important.
My hon. Friend referred to the directive on caged hens, and I do not want to be led at this stage to say what we might do in this country if the situation does not improve. We have strongly emphasised our views to the Commission, and we believe that the matter must be dealt with at European level. It is abundantly clear that a number of European countries will not have complied by the end of the year with the requirement to replace all their conventional battery cages. Sadly, the Commission seems to suffer from the illusion that that is still possible, but I assure my hon. Friend that the Secretary of State publicly stated in an Agriculture Council meeting a fortnight ago that we are not prepared to contemplate any extension of the time scale, that the measure must work and that the deadline should not be delayed.
My hon. Friend also referred to competitiveness, which is what we saw in the pig industry. Extra costs can be involved in higher welfare standards, and the European Commission—thankfully—now considers international competitiveness as part of the impact assessment of new policies.
My hon. Friend made a significant point about the World Trade Organisation. What I said in the written answer to which he referred is factually correct. As we see it, the WTO does not allow measures to be taken to ban imports on the grounds of animal welfare. It is, of course, wide open to any member of the WTO—or in our case, the EU—to impose a ban on whatever it likes. However, that would be done in the knowledge that the ban might be challenged and various trade measures taken to deal with that.
My hon. Friend referred to the fact that the Doha round is in a complete state of stagnation. My colleagues in the Foreign Office and the Department for Business, Innovation and Skills are anxious to get those negotiations back on track, but that will take time. That is the reason for the perhaps somewhat terse written answer that I gave my hon. Friend. While all eyes are on Doha, we cannot start changing the very framework of the WTO.
I shall now deal with the specifics about the WTO, the general agreement on tariffs and trade and various other global agreements to which my hon. Friend rightly referred. He referred to article XX of GATT and read out the relevant justifications: protecting public morals and protecting human, animal or plant life or health. Another justification is conserving exhaustible natural resources. Whether animal welfare could come under any of those headings is, frankly, untested, and I fully understand his desire that we should seek to test that.
It is worth making the point that certain measures have been taken internationally. In some cases, they have been contested. They do not relate directly to farmed animals, at least not in the UK. My hon. Friend will be aware of the seal trade ban—the ban on products from sealing. The European Commission banned them and used the justification of a distortion of trade, but I stress that that is being challenged under the GATT treaty. There is a serious risk that the WTO court will find against it.
The Commission also imposed a ban on importing cat and dog fur, which came mainly from China. That was also done on the basis of distortion of trade. It has not been challenged, although it may be in the future, so one could argue at the moment that we have got away with it. A longer-standing ban, which the previous Conservative Government pressed hard for back in 1991, is the EU prohibition on furs and pelts—primarily from Canada—harvested by using leg traps. That has never been challenged.
I am giving my hon. Friend some encouragement that some ways through this issue have been found, but those are not mainstream agricultural issues, as I am the first to recognise. I fully agree that, in an ideal world, we would get this issue considered at WTO level.
I want to pick up some other comments and then, if there is time, I might return to one or two other aspects of the WTO. My hon. Friend referred to the sanitary and phytosanitary rules, known as the SPS rules. To refer to an issue that is closer to home, Europe has banned the use of hormones in beef production on the basis that we believe that there are public health risks in not doing so. However, the United States has challenged us, and the matter is progressing through the judicial process at the moment.
Again, we have a problem there and we have to think through carefully what we do, but we can do other things in the immediate term. I do not think that even my hon. Friend would expect us to get the WTO rules changed very quickly, and I want to spend a few moments on that. The first point to impress on people is that improving animal welfare standards can benefit producers, because quite often they get higher productivity from animals if they are kept in better conditions, although some costs can be involved.
The second issue, to which my hon. Friend rightly referred, is the role of what are sometimes called private standards—the role of the retailers in demanding higher standards. That has been very successful across the world in raising production standards. There is some evidence, as we might expect, that when the cash figures go the wrong way, retailers turn round. This example is directly pertinent to a point that my hon. Friend made. I was very concerned to hear only last week that one of our major retailers that until now has been sourcing all its organic pig meat from the UK—that meat is certified to Soil Association standards—has now decided to stop doing that and to source organic pig meat from abroad. That meat is up to European organic standards, but they are not as high as the Soil Association ones. If what I have said proves to be correct, it is a pretty shameful approach and does not show much support for our own industry.
My hon. Friend made the point, which I have to repeat, that many people and organisations see welfare restrictions as some sort of ban on trade. The same can apply to the private standards to which I referred. The EU made a commitment to support international initiatives to raise awareness and to create a consensus on animal welfare through its action plan for the period from 2006 to 2010, and we want that to be continued through the strategy for the period from 2011 to 2015.
It is fair to say that animal welfare has not been a major priority for many Governments in recent years, either because they have believed that it is a trade issue and market forces will work, as my hon. Friend described, or perhaps because the alleviation of human poverty has been the predominant concern. However, we are making progress. The EU has recognised that the first step in getting third countries fully engaged in the development of animal welfare standards is to create a wider understanding and awareness of animal welfare, including among Government officials and the exporters. A conference on global trade and animal welfare was organised by the Commission in 2009.
We also have to recognise the OIE—the World Organisation for Animal Health—with which the Commission is working closely. The OIE was created a long time ago, in 1924, and has 178 member countries. However, it began getting involved in animal welfare only in 2001. By the end of 2004, it had developed guiding principles for animal welfare, and it held a conference in 2008 with more than 400 participants. The most important outcome of the conference was the identification of key needs and the tools necessary to help OIE member states to strengthen their capacities, including in relation to good governance and relevant infrastructure. The world assembly of OIE delegates has adopted seven animal welfare standards. Therefore, there is clear evidence that most of the world is moving in the right direction. I hope that my hon. Friend will take a lot of comfort from that. On-farm animal welfare issues are now beginning to be addressed by the OIE, but that will take a bit longer. I cannot get away from that.
None of that prevents higher standards through bilateral agreements. The EU is now emphasising that. Since 2004, we have addressed animal welfare specifically in a number of trade agreements with Canada, South Korea, Colombia, Peru and central American countries. I understand that it is also part of the negotiations with the Mercosur countries that are taking place at present. That work is clearly a step in the right direction.
My Department is working hard to provide training in welfare science and legislation to the veterinary services and non-governmental organisations in a number of countries. We have made a significant contribution to the EU Better Training for Safer Food programme and on welfare-during-transport training for veterinarians. Of course, we also continue to invest in research, because that is hugely important.
My hon. Friend and I are in exactly the same place on this issue. There may be a slight variation in nuance on precisely how we go forward. However, the Government remain determined to do whatever we can to increase animal welfare standards, not just at home but across the world, and to ensure that our producers are not unfairly discriminated against by imports produced to lower standards. I conclude by reminding my hon. Friend that we are also committed, in the document to which he referred, to ensuring that Government money is not spent on buying food produced to lower standards than pertain in this country, and that policy commitment will come to fruition in the next few weeks.
Health and Safety (Construction Industry)
(13 years, 8 months ago)
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Jim Sheridan (Paisley and Renfrewshire North) (Lab)
It is a pleasure, Mr Amess, to serve under your chairmanship. May I express my sincere appreciation for being given time to debate this important subject?
I wish first to express my thanks and appreciation for the helpful information and advice given to me while researching for the debate by a number of organisations—none more so than the Union of Construction, Allied Trades and Technicians, the National House-Building Council, the National Federation of Roofing Contractors and the TUC.
As the construction industry hopefully recovers, the number of fatalities and serious injuries is likely to increase—an increase in fatalities followed previous recoveries in the construction industry. The rise was the result of good practices being lost when companies were forced to lay off staff. Due to inadequate training as the industry recovers, new inexperienced companies and workers will enter the industry, and their lack of safety knowledge will often prove fatal.
The cutting of corners to get one job finished quickly in order to start the next is a major killer. Another is workers working excessive hours. Working long hours leads to tiredness, which leads to mistakes. Indeed, the Prime Minister recently said on television that he does not work long hours, because it leads to bad decisions, so we have at least one supporter.
The most common cause of death is falls. In 2009-10, 25 workers were killed through falls, a 19% increase in deaths over the previous year. The number of people being killed as a result of being hit by a moving vehicle slightly increased in 2009-10.
As part of the comprehensive spending review, the Health and Safety Executive’s budget will be cut by at least 35% by 2015. It is impossible to make such large cuts without affecting front-line services. It has already been announced that the contracts of the 20-plus temporary construction inspectors, whose contracts run out later this year, will not be replaced.
As well as the loss of temporary inspectors, there will be a reduction in the number of front-line inspectors. That is directly contrary to the Donaghy report, which recommended an increase in the number of inspectors. Cuts in the number of inspectors will inevitably lead to a reduction in inspections, enforcement activity, prohibition notices, prosecutions and convictions.
Mr Andrew Smith (Oxford East) (Lab)
I am grateful to my hon. Friend for giving way. I congratulate him on securing this tremendously important debate and on the research that he has done for it. On the theme of the impact of the cut in the HSE grant, has he heard of the letter that was leaked to the BBC yesterday, which said that the Health and Safety Executive was proposing to reduce unannounced workplace inspections by a third? That would be disastrous if it affected the construction industry, as workers there are six times more likely to lose their lives than those in other industries.
Jim Sheridan
I have not seen the letter, but I have heard of it. My right hon. Friend is correct that it would be disastrous, not only for the HSE but for workers in the construction industry. We should watch this space and see what happens.
Recent research shows that the level of enforcement activity and the number of prosecutions being undertaken by the HSE is at a record low. Due to a lack of resources, the HSE can investigate only one in every 10 accidents. Cuts to the HSE’s budget are likely to increase the under-reporting of accidents under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995, which are otherwise known as RIDDOR.
Research by the university of Liverpool shows that only 32% of injuries involving employees were reported under RIDDOR—for the self-employed, the percentage was only 12%. The proposals under consultation will weaken those regulations, which were originally proposed by the Young review. That will increase under-reporting, and, as a result, poor health and safety practices will not be picked up early, which could result in further fatalities.
There have been several notable deaths recently. The circumstances are indicative of the industry. On Friday 21 January, four construction workers were killed in Great Yarmouth. The men were working on foundations when adjacent steelwork fell on them. It was the worst accident for more than a decade, given how many workers were killed. Despite that, there was little or no mention of the accident in the national papers. In October 2010, immediately following the announcement that the HSE could lose 35% of its budget, seven construction workers were killed. The deaths occurred all around the country.
Mr Stephen Hepburn (Jarrow) (Lab)
I congratulate my hon. Friend on securing this important debate. He speaks about the incidence of deaths. Does he not agree that the figures will inevitably increase with the reduction in the Health and Safety Executive budget? The story that is doing the rounds at present—we should be pressing the Minister on this—is that unannounced inspections at construction sites will be scrapped altogether. There were 42 deaths on building sites last year. Does my hon. Friend agree that that figure will inevitably increase?
Jim Sheridan
My hon. Friend is right. It is obvious that the cuts will result in increased fatalities. I am sure that the Minister will respond to this, but it is important to remember that even though we are trying to reduce the deficit—if, indeed, it is reduced—such people will not get their lives back, and they will not get their limbs back. It is important that we try to keep focused on health and safety.
We warmly welcomed the publication in July 2009 of Rita Donaghy’s report on construction fatalities. The then Government commissioned that independent report following strong lobbying by a number of trade unions and other agencies. It was the most significant and far-reaching report into construction safety for well over a decade. The 96-page report was entitled “One Death is too Many: Inquiry into the Underlying Causes of Construction Fatal Accidents”. It made a number of major recommendations, two of which were the extension of the Gangmasters (Licensing) Act 2004 to cover the construction industry, and the introduction of statutory directors’ duties. The extension of the 2004 Act was recommended in recognition of the fact that
“The further down the subcontracting chain one goes the less secure the worker and the less satisfied with the management of health and safety on site. Society should accept that there needs to be a standard below which no construction worker should have to work.”
We have long campaigned for the introduction of statutory directors’ duties. It is virtually impossible to hold individual directors to account if a worker is killed at work. The report states:
“As with most advances in society, e.g. seat belts in cars, drink driving, there comes a time when good practice has to become a legal requirement.”
Rita Donaghy explicitly said:
“I recommend that there should be positive duties on directors to ensure good health and safety management through a framework of planning, delivering, monitoring and reviewing.”
The introduction of directors’ duties would mean that if a worker is killed and it is discovered that a company disregarded health and safety legislation, there is the possibility of an individual director receiving a custodial sentence.
The construction skills certification scheme was set up in 1995 by the construction industry to maintain a record of construction site workers who achieve, or can demonstrate that they have already attained, an agreed level of competence. The CSCS card issued to successful applicants offers a vital means by which cardholders can record and provide proof of their skills and occupational competence. Cardholders are also required to take a health and safety test relevant to their occupation. The aim of the scheme is to help the construction industry reduce accidents and improve competency and safety for individual site workers.
There are currently more than 1.6 million cardholders, and the CSCS works with 10 affiliated organisations to cover more than 350 construction-related occupations. The scheme is now widely used on the majority of construction sites, and all major contractors and homebuilders—
Ian Lavery (Wansbeck) (Lab)
I congratulate my hon. Friend on securing this debate. Does he not agree that there is a need to enshrine the CSCS in legislation? Such a move would surely have a huge impact on the safety and health of people working in the construction and building industries. If legislation were passed and the scheme were rolled out—it has been rolled out for 1.6 million people at this point in time—throughout the industry, does he not think that that would have a huge impact on health and safety?
Jim Sheridan
My hon. Friend is absolutely right. As I understand it, there will not be any major financial impact if this card is introduced. Perhaps the Minister can give us an insight into his thinking on the CSCS when he makes his reply.
All the major contractors and homebuilders insist on those cards, as the cards demonstrate their commitment to safe and efficient working for construction workers and clients. CSCS cards provide additional security and peace of mind, as a fully carded work force is safer and better trained. Government should lead by example and require the use of CSCS on all public sector sites. Indeed, they already require the use of these cards or their equivalent on public sector sites as set out in the Office of Government Commerce common minimum standards for the procurement of built environments in the public sector.
The CMS recommendations state:
“Clients are to include a contract clause requiring that all members of their supply teams who are workers on or regular visitors to a construction site are registered on the Construction Skills Certification Scheme (CSCS) or are able to prove competency in some other appropriate way.”
The CSCS welcomed these recommendations, which were accepted by the previous Administration in their response to the report. The CSCS would welcome clarification from the Government on which of the Donaghy recommendations they intend to take forward.
In a parliamentary written answer, published in December 2010, the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), said that the Government will
“therefore progress those of the Donaghy recommendations accepted by the previous Administration which we consider are supported by the available evidence.”—[Official Report, 1 December 2010; Vol. 519, c. 867W.]
In his reply, will the Minister commit to raise awareness of the need to specify CSCS in all public sector contracts? Will he say what progress has been made on the review of the OGC common minimum standards and whether the requirement to specify the use of CSCS will be retained and promoted? Which recommendations in the Donaghy report do the Government intend to take forward, and what action do they intend to take to monitor the eligibility of migrant workers to work, and their qualifications and training?
Let me touch now on the issue of blacklisting in the construction industry, which also has a major health and safety perspective. Safety representatives have been targeted by their employers, and many have had to leave the industry as they were unable to find work. Despite being the most dangerous industry in Britain, construction has the lowest number of independent safety representatives, and all the major contractors have been involved in blacklisting.
In recent years, there has been a huge increase in employment agencies and gangmasters operating in the construction industry. That has further casualised and fragmented the construction industry, which has implications for safety in a number of ways. Often there is little effective screening of workers, and inexperienced workers are placed on construction sites without the appropriate training. The workers are highly vulnerable, so they are unlikely to complain about dangerous practices. Agencies are increasingly forcing workers to pay for their own personal protective equipment, which is illegal.
Agencies often flout the working time limit of 48 hours a week. With workers undertaking excessive hours, accidents are more likely to occur.
Ian Lavery
Is my hon. Friend aware that there is a huge problem in the construction industry with regard to safety wear? In a meeting last week with the Health and Safety Executive, I heard about the huge problems with fake safety wear—helmets, boots and protective clothing. If that continues, we will see more problems within the industry. Does he agree that the Government should do everything in their power to uncover the source of this crooked gear and get rid of it to ensure that people in the industry are safe?
Jim Sheridan
My hon. Friend is right. If workers are placed in the position in which they have to choose between buying their own safety equipment or feeding their families, one knows which option they will take. The Donaghy report made the clear link between agency labour and construction safety.
Finally, let me touch on the false self-employment that is going on in the construction industry. Well in excess of 50% of the industry are falsely self-employed. The falsely self-employed do not have employment rights, so they can be sacked at a moment’s notice. They are unlikely to raise safety concerns or refuse to undertake tasks that they consider to be dangerous. Sites which use false self-employed labour are unlikely to have independent safety representatives, as no one will be willing to undertake this role in the fear of being targeted, victimised and sacked. Research has found that independent safety representatives can help to reduce accident rates by up to 30%.
In conclusion, I recommend the leaflet that was published by the all-party parliamentary group on occupational safety and health. It sets out our concerns, if those cuts were to go ahead. I certainly hope the Minister will read this document, so that we can do what we can to protect those in the workplace. Fundamentally, I believe that when someone leaves for work in the morning, they have the right to return home safe.
The Minister of State, Department for Work and Pensions (Steve Webb)
I congratulate the hon. Member for Paisley and Renfrewshire North (Jim Sheridan) on securing the debate, on all the work that he does as chair of the all party parliamentary group and on the well-informed and measured way in which he has raised these issues. As he rightly said, one death is too many, which is the title of the Donaghy report. There were 42 fatalities in 2009-10 and that is not something to be proud of. I should just say that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), who takes the lead on these matters, is on the Front Bench in the Commons responding to the Welfare Reform Bill and so I am standing in for him today. I know that he welcomes the fact that over the past decade there has been a significant improvement in the number of fatalities in the construction sector.
Let me give a feel of the progress that has been made. The reason I mention this is that if we can see that progress has been made over a decade—although that until we get to zero deaths we should not rest, and even then we should not rest—the challenge for us is to see what delivered the progress and whether we can continue doing more of those things or whether fresh duties, fresh structures and fresh obligations are the best way forward. I want, therefore, to give some figures for the record. Ten years ago, in 2000-01, there were 105 fatalities, compared with 42 last year. There are also figures relative to the scale of the industry, which obviously fluctuates. Measured relative to every 1,000 workers, in every year except one of the last 10, the rate of fatalities has fallen. The Health and Safety Executive, the trade unions and the industry deserve some credit for the improvements that have been made.
The hon. Member for Paisley and Renfrewshire North quite properly asked, “But what of the future?” He speculated that fatalities would rise. I know that the HSE will be working very hard, in partnership with industry, the trade unions and the Government, to ensure that that does not happen. However, although he rightly says that there have been construction industry inspectors at the HSE on temporary contracts, they were always intended to be on temporary contracts. This Government have not decided to make them temporary. They were always fixed-term appointments that were due to end this summer. Nevertheless, even if we exclude those inspectors, as at January 2011 we have more HSE construction division inspectors in post than ever before.
I just want to give some idea of the sorts of people that I am talking about. Currently, 150 operational inspectors visit sites on a day-to-day basis—up by nearly 25 from three years ago. There are 24 line managers who also conduct inspections. In addition, there are 16 inspectors in construction sector and policy; 20 specialist inspectors who provide expert input on the causes of accidents and advice on technical issues; and 27 visiting officers in the construction sector. As things stand, therefore, there is a very significant commitment by the HSE to the construction sector.
As with all aspects of Government, budget cuts have been required of the HSE, but I stress that the HSE will inevitably continue to concentrate its work on the highest-risk sectors—
Steve Webb
I hope that the hon. Gentleman will allow me to continue for a moment. As I was saying, the HSE will continue to concentrate its work on the highest-risk sectors, such as construction.
I also want to respond to the specific point made by the hon. Member for Jarrow (Mr Hepburn) in his intervention. He suggested that there might be an end to unannounced inspections in the construction sector. I am happy to confirm on the record that there is no intention to stop unannounced inspections in construction and indeed the HSE will be paying greater attention to smaller sites, where we fully recognise that there are still poorer standards. Indeed, it is on those sites that the majority of fatal accidents happen.
Steve Webb
If the hon. Member for Paisley and Renfrewshire North is happy for me to give way, I will give way, but I have only eight minutes left to respond to his speech. I am in his hands. If he is happy for me to give way, I will give way.
Mr Andrew Smith
I am grateful. I welcome the assurance from the Minister. Can he assure us that there will not be a reduction in the number of unannounced inspections?
Steve Webb
Obviously, the HSE will introduce its proposals for responding to the budget changes. Indeed, the Government will announce our health and safety strategy relatively shortly, in response to the Young review and other changes. Details about all those things will be made clear to the House in due course. However, the key thing is that I have no doubt—in preparation for this debate, I have obviously had helpful discussions with the HSE—about the HSE’s commitment to an ongoing and high level of effective intervention in the construction industry.
One feature of the construction industry is that it is clearly different from other industries. At its best, it is capable of great things and great successes, and it has a great deal of expertise in controlling health and safety risks to workers. Of course, even many of those temporary inspectors I mentioned, who soon will not be working for the HSE, will go back into the industry and take their expertise with them.
I said that there were just over 100 fatalities a decade ago. Two decades ago, 154 construction workers were killed. Progress, therefore, has been made—fairly considerable progress over a period of 20 years or more. The hon. Member for Paisley and Renfrewshire North mentioned the Donaghy inquiry and the issue of the Gangmasters Licensing Authority. I know that he has been involved with previous private Member’s legislation on the GLA and I also know that there is a private Member’s Bill on the matter before the House at the moment.
Jim Sheridan
The Minister has just announced figures about fatalities. Do they include people who lost their lives as a result of occupational or industrial disease, such as mesothelioma?
Steve Webb
The figures that I gave—for example, the figure of 154 fatalities for two decades ago—were for construction workers who were killed in accidents at work. I entirely take the hon. Gentleman’s point that issues that emerge during refurbishment work, for example with asbestos, silica and so on, are also very important. Indeed, I will try to reassure him on that particular point, as he raised it. The HSE is undertaking work on refurbishment and even as we speak that work is ongoing. The national refurbishment inspection initiative targets small refurbishment sites where a disproportionate number of serious and fatal accidents occur. The current initiative has been run periodically for several years and it is going on now between 14 February and 11 March. Although full data are not yet available, to date nearly 1,200 sites have been visited, involving more than 1,400 contractors and, alarmingly, breaches of health and safety legislation were found to be so significant that enforcement notices were required at 254 of those 1,200 sites. I join all hon. Members who have contributed to the debate in not being remotely complacent about where we are now on health and safety in construction.
The challenge is to ask what effective regulation would look like. I fully respect the argument that says, “Bring the Gangmasters Licensing Authority supervision into construction”. I can see why that argument is made. My reservation is that the health and safety rights of people in the construction industry are there already. The hon. Member for Paisley and Renfrewshire North mentioned bogus self-employment. Whether somebody is self-employed or employed, they have health and safety rights. Regarding some of the points that the hon. Gentleman made about those in bogus self-employment, there are obviously issues about tax. However, there is not much evidence—if any—that construction fatalities are higher among those who are notionally classified as self-employed as opposed to those who are employed.
The Gangmasters Licensing Authority is clearly a generalist authority that looks at issues such as minimum wage compliance, tax and national insurance, as well as health and safety. The danger is that if we bring construction within the scope of that authority we might get, at one level, duplication and potentially we might get a sort of box-ticking mentality, whereby people think, “We’ve got to satisfy this regulator and that regulator”. There could be regulatory confusion if we have different bodies trying to enforce health and safety.
I also want to give an idea of the scale of what might be required if we bring construction within the scope of the GLA. At the moment, the GLA licenses 1,200 gangmasters. If the licensing scheme was extended to cover the construction industry comprehensively, we could be talking about 200,000 licences. The cost of regulating the 1,200 licences in the sectors covered by the GLA already—agriculture, horticulture, shellfish gathering and associated industries—is just over £4 million a year, of which the taxpayer pays about £3 million. Clearly, there would be economies of scale if the GLA’s licensing scheme was extended to cover the construction industry, but simply pro rata-ing those figures to the full size of the construction industry would mean licensing costs of £600 million.
Steve Webb
I will give way shortly. Of that £600 million, the taxpayer would pay £400 million. On a pro rata basis, we would potentially need 8,000 new inspectors. I do not claim to be an authority on the subject, but I find it difficult to imagine that there are 8,000 spare inspectors out there to be had, although people could be trained to become inspectors. In addition, creating this type of parallel regulatory structure alongside the HSE’s work is problematic. If there was £400 million to be spent—or indeed anything like it—channelling it through what is quite an effective existing regulator, enabling it to do more, might be a better idea.
Jim Sheridan
The Minister has referred to £3 million of taxpayers’ money being used to pay the licensing costs of the GLA. However, does he take into account the fact that gangmasters are then registered and legalised, and migrant workers are registered and legalised and they then pay tax and national insurance, which they would not be paying otherwise, so there is a net benefit to the Treasury?
Steve Webb
The figures that I am referring to are the gross running costs of the GLA and the revenue from licences. I am not sure about the potential payback of such a scheme in the construction sector. One thing to consider is that we would end up licensing in practice the entire sector—as it were, the good guys and the bad guys—and there would be a lot of dead weight in areas where there already was compliance with tax and national insurance legislation.
The hon. Gentleman also asked about the role of the construction skills certificate scheme. That is certainly a well regarded industry-run scheme and a big one, although there are many similar schemes across the industry, as I am sure he knows better than I do. My understanding is that the CSCS or an equivalent is already required under Government contracts, which I very much welcome. However, when it comes to legislating for the CSCS, for example, one issue that arises is whether we should choose that particular scheme or others. On balance, the health and safety at work and construction regulations already require workers to be trained for health and safety.
To conclude, I take the issues that the hon. Gentleman has raised very seriously. We want to make more progress on them and further announcements will be made by the Government in due course, but we will continue to take construction industry safety and fatalities seriously, as the hon. Gentleman quite properly says that we should.
Written Ministerial Statements
(13 years, 8 months ago)
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Tax Avoidance
(13 years, 8 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are fully committed to tackling tax avoidance and will take necessary steps to protect the Exchequer and maintain fairness in the tax system.
As part of their work to improve tax policy making and the stability of the tax system, the Government published a discussion document on 9 December 2010 setting out a draft protocol on tax announcements outside scheduled fiscal events. This set out the criteria that Ministers will apply when deciding whether an announcement of immediate change is justified.
In line with that draft protocol, the Government are making such an announcement today, to tackle an aggressive tax avoidance scheme that has been disclosed to HMRC. By acting immediately, the Government are seeking to protect the Exchequer and maintain fairness in the tax system.
A lessee under a plant or machinery long funding lease can claim capital allowances. Some large businesses have entered into contrived, circular transactions involving the sale, leaseback, and reacquisition of their plant and machinery, over a period of three or four weeks, with the aim of claiming tax relief twice on one amount of expenditure.
HMRC has recently become aware that the scheme has been widely marketed and implemented with associated significant risk to the Exchequer. To date instances of the scheme that HMRC are aware of have involved expenditure in excess of £1 billion, putting hundreds of millions of pounds of tax at risk.
Legislation, which will have effect from today, will be introduced in the Finance Bill 2011 to confirm that lessees engaging in transactions of this type are only entitled to tax relief up to the actual amount of their expenditure on plant or machinery. This ensures that the rules continue to apply as intended by Parliament and will protect future losses to the Exchequer.
There should be no impact on commercial leasing arrangements, as the intended amount of relief will continue to be available. The legislation will simply put beyond any doubt that it is not possible to claim relief for some expenditure twice.
The legislation will apply both to new arrangements and to existing arrangements where payment under a guarantee has not been made prior to today.
Further details have today been published on HMRC’s website together with the proposed draft legislation and a tax information and impact note.
Armed Forces Compensation Scheme
(13 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
I have today published a report entitled, “The Review of the Armed Forces Compensation Scheme—One Year On”. The report summarises the recommendations from the review and provides an overview of the work undertaken by the Ministry of Defence over the past 12 months to implement the recommendations. Copies of the report are available in the Library of the House or can be accessed at the following website: http://www.mod.uk/DefenceInternet/AboutDefence/CorporatePublications/PolicyStrategyandPlanning
The outcome of Admiral the Lord Boyce’s review of the armed forces compensation scheme was announced in February 2010. While the review found that the scheme was fundamentally sound, it made a number of recommendations for improvement. I made some early legislative changes last summer.
I am today pleased to announce the completion of all remaining changes that will lead to significant increases in the value of awards under the scheme. Most notable is the change to guaranteed income payments—paid from the point of service discharge for life—which will be increased to reflect the lasting impact of more serious injuries on future likely promotions and on the ability to work up to age 65.
Other changes include:
An increase, which averages in excess of 25%, to all lump sum award payments. This is except the top award which was recently doubled to £570,000;
Nearly tripling the maximum award for mental illness from £48,875 to £140,000 in order to reflect accurately the impact of the most serious mental health conditions;
The creation of a new independent medical expert group to advise on compensation for specific, relevant illnesses and injuries such as hearing loss and mental health;
A revised approach to awarding compensation for multiple injuries, whereby all injuries sustained will receive some compensation.
No one will lose out as a result of these changes. All those who have already received an award under the scheme will have their case automatically revisited and will receive an uplift.
EU Education Council (14 February 2011)
(13 years, 8 months ago)
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The Minister of State, Department for Education (Mr Nick Gibb)
Andy Lebrecht, Deputy Permanent Representative, represented the UK at the Education Council, on behalf of the Department for Education and the Department for Business, Innovation and Skills.
Ministers adopted conclusions on the role and contribution of education and training to the implementation of the Europe 2020 strategy. These conclusions are consistent with the European Council conclusions agreed by the Prime Minister in June and we were therefore able to support them.
There was also a policy debate between delegations on the contribution of education and training to the European semester and annual growth survey. Member states supported the overall annual growth survey messages but there was wide agreement that national targets in member states’ national reform programmes (as part of the Europe 2020 strategy) should be realistic as well as ambitious.
Member states outlined their national reform programmes, with basic skills, adult education, the professionalism of teachers, and prevention of early school leaving given as key areas for action. Mobility issues were also raised, in particular by Germany, France and Finland. Germany also stated that, in their view, education should not be subject to the same Europe 2020 monitoring as fiscal areas and they specifically opposed country-specific recommendations in education.
The UK intervention supported the annual growth survey and recognised the importance of education to jobs and growth, explaining the focus of reforms in the UK following the education White Paper. On national targets, the UK was clear that we were not mirroring the EU targets. Instead we were using nationally owned indicators to measure and drive change. These indicators would enable us to measure progress against the headline targets.
Special Educational Needs and Disability
(13 years, 8 months ago)
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The Secretary of State for Education (Michael Gove)
Today the Government publish “Support and aspiration: a new approach to special educational needs and disability”.
This Green Paper is about the children and young people in this country who are disabled, or identified as having a special educational need. It is about their aspirations and their hopes. Their desire to become, like every child and young person, independent and successful in their chosen future, and, to the greatest extent possible, the author of their own life story.
It is about their families—who have consistently called for better support for their children and themselves. It is about families of the most disabled children who are providing 24-hour care from birth, or the families of children struggling at school who do not know where to turn for help.
It is also about their teachers, their college lecturers, and the many skilled staff from the health and social care professions who do their best, day in and day out, to provide the right support and encourage the highest aspirations.
Case for change
Life chances for the approximately 2 million children and young people in England who are identified as having a special educational need (SEN), or who are disabled, are disproportionately poor. By the time they leave school these young people are more than twice as likely to be out of education, training or employment as those without a special educational need.
We know that there is much that is excellent in the support for these children, young people and their families. But we also know that this is not happening nearly enough. While the circumstances of children, young people and their parents differ greatly; from young people requiring a few adjustments in class to children with life-limiting long-term conditions, hundreds of thousands of families with have a disabled child or a child with SEN have many shared concerns. Parents say that the system is bewildering and adversarial and that it does not sufficiently reflect the needs of their child and their family life.
Successive reports, such as the 2006 report of the Education Select Committee and Brian Lamb’s report in 2009, have described a system where parents feel they have to battle for the support they need, where they are passed from pillar to post, and where bureaucracy and frustration face them at every step.
Disabled children and children with SEN tell us that they can feel frustrated by a lack of the right help at school or from other services. For children with the most complex support needs, this can significantly affect their quality of life.
Children’s support needs can be identified late; families are made to put up with a culture of low expectations about what their child can achieve at school; parents do not have good information about what they can expect and have limited choices about the best schools and care for their child; and families are forced to negotiate each bit of their support separately. According to the Council for Disabled Children, on average a disabled child experiences 32 assessments as they grow up. Resources that could be spent on support and teaching are diverted into bureaucracy.
Proposed reforms
Our proposed reforms respond to the frustrations of children and young people, their families and the professionals who work with them. The vision set out in the Green Paper is informed by the views and expertise of families and national and local organisations working with them.
We want to put in place a radically different system to support better life outcomes for young people; give parents confidence by giving them more control; and transfer power to professionals on the front line and to local communities.
To support better life outcomes for young people from birth to adulthood we will help professionals: identify and meet children’s needs early by ensuring that health services and early education and childcare are accessible to all children; work in partnership with parents to give each child support to fulfil their potential; and join up education, health and social care to provide families with a package of support that reflects all of their needs. We propose:
a new approach to identifying SEN in early years settings and schools to challenge a culture of low expectations for children with SEN and give them effective support to succeed. A new single early years setting-based category and school-based category of SEN will build on our fundamental reforms to education which place sharper accountability on schools to make sure that every child fulfils his or her potential; and
a new single assessment process and “Education, Health and Care Plan” by 2014 to replace the statutory SEN assessment and statement, bringing together the support on which children and their families rely across education, health and social care. Services will work together with the family to agree a straightforward plan that reflects the family’s ambitions for their child from the early years to adulthood, which is reviewed regularly to reflect their changing needs, and is clear about who is responsible for provision. The new “Education, Health and Care Plan” will provide the same statutory protection to parents as the statement of SEN and will include a commitment from all parties to provide their services, with local assessment and plan pathfinders testing the best way to achieve this.
To give parents confidence by giving them more control over the support their family receives, we will introduce more transparency in the provision of services for children and young people who are disabled or who have SEN. Parents will have real choice over their child’s education and the opportunity for direct control over support for their family. We propose:
local authorities and other services will set out a local offer of all services available to support children who are disabled or who have SEN and their families. This easy-to-understand information for parents will set out what is normally available in schools to help children with lower-level SEN, as well as the options available to support families who need additional help to care for their child; and
the option of a personal budget by 2014 for all families with children with a statement of SEN or a new “Education, Health and Care Plan”, many of whom will have complex support needs. Key workers will be trained to advise families and help them navigate the range of help available across health, education and social care.
To transfer power to professionals on the front line and to local communities we will: strip away unnecessary bureaucracy so that professionals can innovate and use their judgment; establish a clearer system so that professionals from different services and the voluntary and community sector can work together; and give parents and communities much more influence over local services. We propose to:
give parents a real choice of school, either a mainstream or special school. We propose to strengthen parental choice by improving the range and diversity of schools from which parents can choose, making sure they are aware of the options available to them and by changing statutory guidance for local authorities. Parents of children with statements of SEN will be able to express a preference for any state-funded school—including special schools. Academies and free schools—and have their preference met unless it would not meet the needs of the child, be incompatible with the efficient education of other children, or be an inefficient use of resources. We will also prevent the unnecessary closure of special schools by giving parents and community groups the power to take them over; and
introduce greater independence to the assessment of children’s needs, testing how the voluntary and community sector could co-ordinate assessment and input from across education, health and social care as part of our proposals to move to a single assessment process and “Education, Health and Care Plan”.
Next steps
The Green Paper marks an important milestone in the development of the Government’s approach to supporting children and young people with SEN or who are disabled and their families. This marks the start of a four-month consultation period on our proposals.
Central Government cannot achieve this ambitious programme of reform through directing and managing change itself. The proposals we set out are for practical testing in local areas. From September 2011, local pathfinders will help demonstrate the best way to achieve our key reforms. We will also be working across Government and with our local and national partners to set out detailed plans by the end of the year.
Copies of the Green Paper “Support and aspiration: a new approach to special educational needs and disability” will be placed in the House Libraries.
Parliamentary Written Question (Correction)
(13 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Health (Anne Milton)
I regret that the written answer given to the hon. Member for Gravesham (Mr Holloway) on 11 February 2011, Official Report, column 477W, was partly incorrect.
Having given further consideration to the issue raised, I realise that the answer provided did not make it clear that while the protections provided to “employees”, under the Public Interest Disclosure Act 1998 (PIDA), do not apply to general practitioners (GPs) who provide primary medical services as independent contractors engaged under general medical services (GMS) contracts for services by local primary care trusts (PCTs), there are certain other protections under PIDA which do apply.
PIDA, which is inserted into the Employment Rights Act 1996 (ERA), is primarily designed to protect individuals who raise certain whistleblowing concerns (as defined in PIDA) relating to their work or workplace from suffering a detriment as a result of speaking out. This legislation has two layers of protection.
The first is for those who are “employees” of a particular organisation, who are protected from dismissal as well as other detrimental treatment such as being overlooked for promotion, denied training or a bonus. The second is for “workers”, which is defined in section 230(3) ERA, and includes those who work under a contract to personally perform work where their status is not that of client or customer. They have a more limited level of protection of not being subject to a detriment but they do not have unfair dismissal rights.
Generally, “workers” would not include self-employed individuals such as self-employed doctors. However, for the purpose of whistleblowing, PIDA has widened the definition of “worker” specifically to include other individuals. Section 43K(ba) ERA, includes a person who
“works or worked as a person performing services under a contract entered into by him with a Primary Care Trust under section 84...of the National Health Service Act 2006”.
Section 84 of the National Health Service Act 2006 relates to GMS contracts with GPs, and accordingly GPs who enter into such contracts with PCTs will be deemed to be “workers” for the purposes of PIDA.
Therefore if a GP raises a concern in the public interest (that falls within the PIDA criteria), relating to their GMS contract to the PCT with which they have the contract, this would be a protected disclosure. They would have a right to bring a claim under PIDA if they should suffer a detriment as a result.
While the Government’s priority since May 2010 has been to raise awareness for NHS employees about their rights and protections and to ensure that staff have a contractual right to raise concerns, the hon. Member for Gravesham has raised an important point about awareness of existing protection for GPs.
Tobacco Control Plan (England)
(13 years, 8 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
The Government are today publishing “Healthy Lives, Healthy People: A Tobacco Control Plan for England”.
The recently published “Healthy Lives, Healthy People” White Paper sets out the coalition Government’s determination to improve the health of the nation and to improve the health of the poorest, fastest. The White Paper recognises that reducing smoking rates represents a huge opportunity for public health, and makes commitments to publish a number of follow-on documents on how we will improve public health in specific areas. The tobacco control plan is the first of these.
Smoking remains one of our most significant public health challenges, and causes over 80,000 premature deaths in England each year. While rates of smoking have continued to decline over the past decades, 21% of adults in England still smoke. Smoking prevalence has fallen little since 2007 and we need renewed action to drive smoking rates down further.
Smoking has a devastating impact on health and well-being in our communities and we must keep up the momentum to reduce the health harms of tobacco use. Smoking contributes significantly to health inequalities and is the single biggest cause of inequalities in death rates between the richest and poorest in our communities.
Localism will be at the heart of the Government’s new radical approach to the delivery of public health services, with directors of public health, jointly appointed by local authorities, to be the strategic leaders for evidence-based public health. They will also lead action in their local communities to reduce health inequalities.
The tobacco control plan sets out how comprehensive tobacco control will be delivered over the next five years within the new public health system, and includes confirmation of our intentions for ending tobacco displays in shops and for further work to explore the plain packaging of tobacco products. The plan includes specific ambitions to reduce smoking prevalence by the end of 2015:
to 18.5% or less among adults (from a baseline of 21.2%);
to 12% or less among 15-year-olds (from a baseline of 15%); and
to 11% or less among pregnant mothers (from a baseline of 14%).
These ambitions represent faster reductions in smoking rates in these groups in the next five years than we have seen in the past five years.
The plan is built around the six strands of comprehensive tobacco control that are recognised internationally:
stopping the promotion of tobacco;
making tobacco less affordable;
effective regulation of tobacco products;
helping tobacco users to quit;
reducing exposure to second-hand smoke; and
effective communications for tobacco control.
Take-up of smoking by young people is a particular concern. Smoking is an addiction largely taken up in childhood and adolescence, and so it is crucial to reduce the number of young people taking up smoking in the first place. Nicotine is extremely addictive and young people can develop dependence on tobacco very rapidly. Each year in England an estimated 320,000 children under 16 first try smoking and the majority of adult smokers were smoking regularly before they turned 18 years of age. The plan recognises that we must do as much as we can to stop the recruitment of new young smokers.
We know that teenagers are susceptible to experimenting even when there is clear evidence of the dangers. We believe that eye-catching displays encourage young people to try smoking. They also undermine quit attempts by adults by tempting them to make impulse buys of tobacco.
This is why we are implementing legislation to end tobacco displays in shops. This will help to change perceptions of the social norms around smoking, especially by young people who are often the target of tobacco promotion.
While maintaining the expected public health gains, we will amend the display regulations to mitigate burdens on business. The growth review announced by the Chancellor of the Exchequer in November 2010 aims to reduce the regulatory burden on small and medium enterprises and micro businesses. In keeping with this approach, we will make the legislation more practical by:
giving retailers longer to prepare by delaying commencement until 6 April 2012 for large shops and 6 April 2015 for small shops;
increasing the size of temporary displays allowed when serving customers and re-stocking (from 0.75 square metres to 1.5 square metres); and
adding to the circumstances in which such displays can occur, for example, to carry out stock-taking and other activities necessary in running a business.
In this important area, I am interested in any measure with the potential to promote positive social norms around tobacco use and to diminish the impact of anything which promotes tobacco use, especially as this affects young people. We must continue to try new approaches, particularly those that may encourage behaviour change. We will, therefore, explore whether the introduction of plain packaging would bring additional public health benefits. The Government have an open mind on this and we want to hear what people think.
The tobacco control plan confirms a commitment to consult by the end of this year on options to reduce the promotional impact of tobacco packaging. To do this we must review the evidence and draw up an impact assessment on the costs and additional public health benefits of policy options. We will, as well, explore the competition, trade and legal implications, and the likely impact on the illicit tobacco market of options around tobacco packaging. While similar measures are currently being considered actively by a number of Governments around the world, we must be sure about the impacts of policy options in the legal and trading circumstances of tobacco control in this country. Only after this work, and gathering views and evidence from public consultation, will we be in a position to know whether, or how, to proceed.
An academic review “The Impact of Smokefree Legislation in England: Evidence Review” has been published today.
The Medicines and Healthcare products Regulatory Authority (MHRA) has also published today the outcome of the consultation on the regulation of nicotine-containing products. The MHRA will co-ordinate a period of further scientific and market research to inform decisions about the regulation of nicotine-containing products.
All documents have been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
Supporting Community Transport
(13 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Transport (Norman Baker)
Today I am announcing £10 million of new funding to be distributed to rural local transport authorities to kick-start the development of community transport services in their area.
In addition, we have formed a partnership with the Community Transport Association to provide each of the 76 rural local authorities in England with £2,600-worth of consultancy advice on how to establish, manage and make sustainable community transport operations within their area. There is the option for local authorities to supplement this with their own funds to receive further services.
This additional funding complements our recently announced local sustainable transport fund, which allows local authorities to bid for a share of £560 million over four years, aimed at encouraging sustainable transport solutions, including community transport, that will create economic growth and cut carbon.
Public transport remains a key element in the sustainability and independence of rural communities: offering young people access to education and employment opportunities, linking customers to shops and services, and providing a lifeline to those without access to a car.
Where commercial bus services are not viable, community transport can play a valuable role in preventing isolation. I therefore strongly encourage local authorities to work in partnership with operators and local communities to examine how more flexible services might be provided.
Services such as dial-a-ride can, in some areas, be more efficient, effective and sustainable in the long term. I know that there are already many good examples of community groups and local authorities working together to deliver innovative solutions to rural transport needs and this is something we wish to see increased.
Today’s package of support for community transport represents an important opportunity to invest in the future to provide more sustainable transport for local communities.
Grand Committee
(13 years, 8 months ago)
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The Deputy Chairman of Committees (Lord Faulkner of Worcester)
My Lords, before the Minister moves that the first statutory instrument be considered, could I remind noble Lords that, in the case of each statutory instrument, the Motion before the Committee will be that the Committee do consider the statutory instrument in question. I should perhaps make it clear that the Motions to approve the statutory instruments will be moved in the Chamber in the usual way. If there is a Division in the House, the Committee will adjourn for 10 minutes.
Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2011
(13 years, 8 months ago)
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Lord Freud
That the Grand Committee do report to the House that it has considered the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I start with the formalities. It is a requirement that I confirm to the Committee that these provisions are compatible with the European Convention on Human Rights. I am happy to so confirm.
I am pleased to introduce two sets of regulations, increasing by 3.1 per cent the lump sum amounts paid under the Pneumoconiosis etc (Workers’ Compensation) Act 1979 and the mesothelioma scheme set up by the Child Maintenance and Other Payments Act 2008. These new amounts will be paid to those who first satisfy all the conditions of entitlement on or after 1 April 2011.
The increases in the amounts paid under these two schemes are not part of the process that increases the benefit rates across the whole range of social security benefits. As a result, there is no statutory obligation to increase the rates paid under these schemes. However, previous Ministers have made a commitment to annually increase the rate of payment benefit alongside the general increases applying to all social security benefits. I am very pleased to make the same commitment.
At this point I must briefly refer back to the increases made to the payments under these two schemes in 2010. As a result of the economic downturn, the retail prices index in September 2009—the date at which the rates for the following year are fixed—was negative for the first time in 50 years. Notwithstanding that negative figure, the rates were increased in 2010 by 1.5 per cent. It was planned that this increase would then be set against the amount of the increase in 2011—in other words, the planned increase for this year would be reduced from 3.1 per cent to 1.6 per cent. I am pleased to report that this reduction in the increase for this year will not be made. It is proposed instead to increase the rates under these two schemes by the full 3.1 per cent. I am sure that noble Lords will endorse this approach. I would also add that, as the retail prices index at September 2010 was 4.6 per cent, not seeking to offset the 1.5 per cent interim payment now means that people will not lose out from the change to using the 3.1 per cent CPI figure as the measure of inflation to increase the rates of payment in 2011-12. The figures happen to be the same.
Noble Lords will be aware of the background to these Acts but it might help if I briefly recap. A person who is injured or contracts an industrial disease as a result of their work may sue the employer for damages. However, some diseases can take a long time to develop and may not be diagnosed until many years after the exposure to the agent that caused the illness. This is particularly so for asbestos-related diseases such as mesothelioma.
The understanding of diseases linked to exposure to asbestos continues to expand. It is now recognised that it may be up to 40 years between the original exposure and the linked disease, which is longer than first thought. Because of that long latency period, the employer responsible may no longer exist and it may be very difficult for that person to obtain compensation. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979 was introduced to help such people by paying lump sum compensation to sufferers of certain dust-related diseases, or their dependants, if they are unable to pursue civil action. The 1979 Act covers a number of respiratory diseases, many of which are directly related to asbestos exposure. The scheme also covers a number of non-asbestos-related diseases such as coal-workers’ pneumoconiosis.
Noble Lords will need no reminding that all of the terrible diseases covered by this scheme are a heavy legacy of our industrial past. Although people who develop mesothelioma through their employment have had access to lump sum payments through the 1979 Act for some time, there was previously no provision for people who developed mesothelioma outside the workplace. This weakness in the provision of compensation was remedied by the introduction of the mesothelioma scheme in 2008. This scheme provides, for the first time, lump sum payments for mesothelioma sufferers who have been exposed to asbestos outside the workplace.
As a result of these regulations, from April 2011 the amount payable to a person under both the 1979 Act and the 2008 mesothelioma scheme will, for a person suffering from mesothelioma, increase to £59,896 for a 50 year-old and £36,422 for one aged 60 at the date of diagnosis. As these two figures show, the amount of money paid as a lump sum varies depending on the age at which they are diagnosed. The highest amounts are paid for those diagnosed at an early age and for those with higher levels of disability.
All payments made in respect of mesothelioma are paid at the full 100 per cent rate appropriate to the age at diagnosis. Your Lordships will not be surprised to learn that about three-quarters of payments made under the 1979 Act are in respect of mesothelioma—a particularly unpleasant and fatal disease, caused almost exclusively by exposure to asbestos. Those diagnosed with mesothelioma usually have a short life expectancy, generally of between 12 and 18 months. It is common that the sufferer is severely disabled soon after diagnosis.
I am saddened to report that the number of deaths from mesothelioma in Great Britain continues to rise. In 1968, 153 people died from it; by contrast, more than 2,000 people a year are currently dying from the disease. I have a further great regret in stating that we will not reach the peak in the number of deaths from mesothelioma until around 2015. The latest estimates are that between 2006 and 2020, 30,000 people in the UK will die of the disease. Put another way, one out of every 100 men born between 1940 and 1950 will die from mesothelioma. These are chilling figures.
The rise in the number of deaths is reflected in the continued rise in the number of payments made under these schemes. In the year 2008-09, a total of 2,351 payments were made under the 1979 Act; the following year, there were 2,625 payments; and for the full year from April 2010 to March 2011, we expect to make about 2,900 payments.
It may also help if I briefly give you some figures to illustrate the important role fulfilled by the two schemes in providing financial support. In the three years from April 2008 to December 2010, 7,088 payments were made under the 1979 Act, amounting to over £95 million. In the time since the 2008 scheme was introduced in October 2008, about 1,200 payments have been made at a cost of just under £20 million.
These regulations increase the levels of support through the government compensation schemes; and noble Lords will, I am sure, agree that while no amount of money will ever compensate individuals and families for the suffering and loss caused by mesothelioma, those who are suffering rightly deserve some form of monetary compensation, and it is essential that sufferers receive compensation before it is too late. I commend the uprating of the payment scales to noble Lords and ask approval to implement them. I beg to move.
Lord McKenzie of Luton
My Lords, I thank the noble Lord, Lord Freud, for introducing these orders in a very sympathetic way. As we have heard, one of the orders increases the amount of compensation paid to sufferers of mesothelioma under the scheme legislated for in 2008, and the other uprates payments made under the Pneumoconiosis etc (Workers’ Compensation) Act 1979. My noble friend Lord Jones has spoken passionately about the scheme in the past and was involved in it from the start. I am sure that we will hear from him further this afternoon.
It is noted that in both cases the uprating is by reference to CPI, at 3.1 per cent. Given the Minister’s reference to what uprating by RPI—minus 1.5 per cent—would have done this year, we are in the same place on that issue. Nevertheless, had it been uprated by RPI at the top end of the scale, there would be something like an additional £1,000 of compensation. However, within the context of our overall position on the change to CPI, we can and do support both of these orders.
The scheme brings some relief to sufferers of certain industrial-related diseases. They are all terrible diseases. As the noble Lord said, they are a dire legacy of our industrial past. We have heard that the number of deaths from mesothelioma continues to rise and is still a few years away from its peak, which we were told will be in 2015. I was going to ask the Minister whether he could give us an update on the number of payments made to date in the current year under the 1979 and 2008 Act arrangements, with an estimate for both for next year. I think that he may have given us that, so I will look at the record. If it does not fully cover that query, perhaps he will drop me a line, unless he has the figures available today.
The resources for the 2008 Act payments were to be found from compensation recovery from civil claims related to the 1979 and 2008 Act schemes. Will the Minister give us an update on the current level of successful claims and the compensation recoverable? What amounts are estimated to be due to be received in the current year and next year? He will recall that last year we were able to announce an alignment of the 2008 Act scheme payments with those of the 1979 Act for sufferers of mesothelioma and their dependants. This was about a year earlier than we had originally expected. It would appear that this parity which has been obtained is to continue, and we welcome that.
However, we also took steps last year to reduce the gap between awards to sufferers and awards to dependants. Seemingly no further progress has been made in this regard with the current year's uprating. We should recognise the terrible effect that these diseases can have on families who have to cope with the effects of pain and suffering on their loved ones. Differential payments between sufferers and dependants can put pressure on the former at the most difficult time in their lives. What are the current Government's intentions in this matter? Is it still their intention to narrow or to close the gap, and when is further progress likely to be made?
Lord Jones
My Lords, I support the regulations, and I thank the Minister for his considerate and detailed exposition. I certainly welcome all that he said. However, it was daunting to hear of the number of deaths; those details are very sobering. We are all glad that there is compensation—that persons can receive payments of between £12,040 and £77,506. Surely we are all glad that lump sums of between £7,524 and £40,335 can be paid to dependants, and that the Secretary of State of the day can put his signature to these regulations.
This is a dreadful disease. When a diagnosis is made and the facts imparted to the patient, death is usually never far away. It is very good that British Governments can come forward with such compensatory schemes. The regulations are the printed details as referred to in the Explanatory Memorandum. However, they cannot describe adequately the humanity of these desperate cases, or the ignorance which existed then, or the bewilderment, the suffering or the familial anxieties. Surely the departmental staff teams can take some credit, at the very least, for presenting these regulations.
I very much appreciate that the 2008 scheme is wholly funded from compensation recovery, whereas the 1979 Act and 2008 scheme payments are recovered from any subsequent civil damages paid in respect of the same disease. I also understand that consultation is not necessary, because there is no change in policy and no scope to change the outcome, and that these increases are at the rate of inflation as measured by the consumer prices index, in line with other social security benefit rates which are increased under the existing statutory provisions. With regard to regulating small businesses, can the Minister say why the legislation does not apply? Can he, for the record, spell that out?
Finally, there is a history to these regulations. I recollect, first, Mr Harold Walker, the Member of Parliament for Doncaster. He and I served in the Wilson and Callaghan Administrations in the 1970s. Mr Walker was the Minister of State in the Ministry of Employment, as I think it was then called. In that decade the department was very busy and pressured—the old smokestacks fell; the Upper Clyde shipyard was occupied; Rolls-Royce was bankrupted, and then nationalised by the then Mr John Davies MP; the OPEC nations quadrupled the price of oil; and then there came forth a great inflation and many industrial and labour disputes. That was the context whence came the concept that led to these regulations. However, the plight of the workforce in the coal and quarrying fields made it necessary to address these diseases. The menace of asbestos was also demanding compensation.
Harold Walker MP subsequently became Chairman of Ways and Means, then Lord Walker in your Lordships’ House. In his Commons role, he assessed how our departments—the departments for employment and for Wales, in which I served—might jointly address the challenge of those diseases and the demands of families and of sufferers. What should be done in that context of high inflation, industrial labour disputes and all manner of impediments to statecraft, if I may put it like that? There were Ministers looking at these specific problems who wanted very much to address the challenge of these lung diseases.
Mr Walker told me of a tragedy. He had previously been a craftsman and a shop-floor union leader. At a location at Hebden Bridge, he had met workers who had innocently had constant contact with the deadliest of asbestos, which is the blue. Those poor men had literally waded in the blue stuff and kicked it about. They had played snowballs with blue asbestos, throwing the deadly stuff at each other. At that time in our industrial society, nobody had warned them, nobody had briefed them and nobody had considered them. That was taking place across the nation. Now, with the benefit of hindsight, those poor men at Hebden Bridge had frequently gone all the way.
There was no health and safety at work Act. At the time of those great confrontations in British society, as measured in the House of Commons and in disputes throughout the nation, there was a need for consideration about how to make work safer. It was the then Minister, Mr Michael Foot, who brought forward health and safety at work measures. He also brought forward an employment Act. I believe that those measures helped to protect men and women at work. I think that those Administrations who brought them forth and enabled the workforce of Britain to benefit deserve great credit. I would like to put on record that Ministers sought to address these problems brought about by asbestos. I welcome the Minister’s exposition and the team that backs him in enhancing and widening these regulations.
Lord German
My Lords, first, I welcome the Minister’s statement this afternoon in respect of these regulations. I thank him for the manner in which he delivered them, the understanding with which he delivered them and, more importantly, the way in which he has supported what has been for many people an almost lifelong campaign to ensure that we bring some retribution for the damage caused to so many members of our society by diseases at work. For me, pneumoconiosis is almost a household name. It became the natural word that would roll off your tongue, especially recently. Visiting constituents and seeing men sitting in the corner of their homes with an oxygen bottle alongside them, the last vestige of their survival as individuals, was a frightening and disgraceful comment upon the nature of our industrial landscape of many years ago. For many of us, it is ingrained within us to see the way those people have been dealt with in such a cruel way by these diseases.
As the Minister pointed out, we have not yet seen the peak of these diseases because, while the industrial heritage may have moved away, the diseases are still firmly implanted within the bodies of those people working within those industries. I welcome the fact that these regulations are being dealt with today and that the Minister has chosen—there is no obligation on the Government to bring forward these regulations—to follow the current practice of uprating on a yearly basis.
There are a number of short questions that I would like to place before the Minister. The first concerns dependants, who have been referred to earlier. Will my noble friend tell us the effect on the gap as a result of the changes we are seeing today? With more and more of these sufferers dying as we reach the peak, the dependants will be becoming more and more dependent upon the payments that are made to them. I wonder whether we have some feel for the direction of travel on that gap at this time. Is there any prospect in future of dealing much more with the dependants? For very tragic reasons, that is where we are going to be ending up with this disease.
My second question concerns the issue of tracking down the employment and the vestiges of the employers. Does the Minister have any knowledge of the split between those who have worked for public sector bodies—in the area where I reside the National Coal Board was probably the biggest problem—and the private sector employers around the country in both the coal and asbestos areas of industry?
No matter how often we come forward with compensation schemes and how much work is done on this matter, and although the changes that have been brought about bring comfort to people, nothing can alter the fact that many in our society have died, and are dying, as a result of industrially related diseases. It is pleasing to note that we have moved on so far in understanding such diseases and what happens in the workplace, and in protecting people. Let us hope that we do not have to introduce any other scheme of this nature in the future.
Lord Boswell of Aynho
My Lords, the whole Committee appreciates the tone and sensitivity of the Minister’s remarks, as well as the good message he has conveyed. In areas such as these, it is incumbent on any Government to err on the side of generosity and to show a certain breadth of spirit—and not, as it were, to retreat into the small print or the least that they can get away with—even in difficult times. That is easy to say because, obviously, the scale of the overall outlay, and the fact that some of it is potentially recoverable, is rather small in comparison with other matters we have debated in this place. Nevertheless, it is the right approach when these diseases are as unpleasant as they are unspellable and, other than by a Welshman—I say to my noble friend Lord German—unpronounceable. They are extremely unpleasant and should not be treated lightly.
I have had some experience as a Front-Bench spokesperson across the wider aspects of the Department for Work and Pensions, where we held an annual debate on the uprating. The issues have not substantially changed—although they are, perhaps, in clearer perspective than they were—and one should be at least aware of the possibility of relating them to either a constituency or personal experience. A late kinsman of my wife was a pneumoconiosis sufferer, not through coalmining but through his work in the flour-milling industry. His lungs filled up and he died prematurely. I am sure that many people, particularly those from heavy industrial constituencies, could say that. The person I knew who was a mesothelioma sufferer was a former Member of this House. I shall say no more about that, but it is interesting that these diseases can affect people who are beyond the heavy industrial profile.
As to the substance of the regulations, I think we are doing the right thing for the reasons I have given. However, in addition to the points to which the Minister is going to respond, can he give some indication of the emerging actuarial build-up? He has already told us that the peak, sadly, has not been reached, but obviously that is subject to re-evaluation in the light of the claims experience. There will be difficult judgments to be made as to whether it is accelerating and people are presenting claims earlier or whether there is a wider aetiology of claims than was previously thought—that is, whether it is going to be more expensive or, more importantly, more extensive in terms of the number of people who are suffering. I get the impression from the figures and the nature of the debate that the picture is one of broad stability, but it would be useful to have that assurance.
It would also be useful if the Minister could say whether the way in which the system is now set up—particularly under the Health and Safety Executive—will ensure that we do not make similar commitments in relation to other long-term diseases as a result of carelessness.
My second point has already been made by other noble Lords but it is worth a moment. We all feel very strongly that there is a need for good record-keeping and a clearing house method of allocating the liabilities to insurers and employers, as appropriate, to ensure that they do not escape. I should like to make two points about that. First, that should be equally in the interests of good employers and good insurers as otherwise, because if there is an elaborate game of pass the parcel and one is the only one left standing because all the others have cleared off or ceased to exist, that is a very unfortunate position and may be disproportionate. As the noble Lord, Lord McKenzie, indicated, there are some fraught issues about the moment of onset and who is liable.
I draw the Committee’s attention to my concern that this is a somewhat wider issue—we have seen it in relation to motor insurance and the Motor Insurers’ Bureau. However, in relation to the whole field, including the pensions field, I think that many people across the private sector feel—as we have also debated—that the record-keeping has perhaps not been as good as it might have been. People may have little entitlements of which they have no continuing knowledge. There might be others who should have obligations that have somehow been lost with the passage of industrial change. That is understandable over a 40-year period. One has only to look at Andrew Marr’s recent series, “Britain from the Air”, to see how everything is different from what it was two generations ago. Nevertheless, the people, their needs and their need for support remain. It is a serious issue and I am sure that the Minister will want to attend to it.
For the moment, I think that we are content, with a measure of real consensus on this, to reflect on the situation that people and their families find themselves in, and on the need to be as generous as we reasonably and possibly can in dealing with and meeting their immediate needs and their family problems.
Lord Freud
My Lords, this has been a debate in which I think we are all in exactly the same place. It is a very difficult area, as we all know. I shall try to deal with the issues that have arisen as well as I can.
With the consent of the noble Lord, Lord McKenzie, I think that we might just park CPI/RPI in this context. We will have another chance to look at it today, another on Monday and another on Tuesday. I shall say a few words on it later, but it is one of those things that, in this context, might feel slightly uncomfortable. I am very relieved that the figures are such that we do not need that debate.
The noble Lord, Lord McKenzie, asked for some figures on payments and so forth. I can give him some up-to-date figures. The payments made in 2009-10 amounted to £42.3 million. In 2008-09—I am sorry that I am going down the years—the payments amounted to £37 million. In the current year, up to January, in combination, they amounted to £38.8 million.
Lord McKenzie of Luton
Can the Minister clarify whether that was under both the 1979 Act and the 2008 Act?
Lord Freud
Yes; it is a combination of both Acts.
The recoveries picture is also improving. In 2008-09, it was £5.3 million; in the following year, 2009-10, it was £16.1 million—which, as a percentage, is 38 per cent; and in the year to January 2011, it was £12.4 million. We are estimating, next year, to get recoveries of £20.7 million. So recoveries are currently running at roughly one-third of the payments.
Both the noble Lords, Lord McKenzie and Lord German, were interested in the relationship between the sufferers’ and the dependants’ rate. As they both mentioned, historically, that has been lower. The gap was closed by £5,000 and because of the age factor in many cases, the dependants’ rate can be the same as the sufferers’ rate, and that might not be a particularly valid argument in people’s eyes. At the moment, all I am empowered to say is that raising those levels by CPI is what we have decided we can do. Currently, we are not looking at any acceleration of that gap.
I should perhaps emphasise that the department is currently engaging very actively with customer groups to try to ensure that claims are made before death. That maximises the rate at which payments are made at the sufferers’ rate rather than the dependants’ rate.
The noble Lord, Lord Jones, brought a historical perspective to the subject. One of the horrific things about mesothelioma is that a single fibre can trigger the disease; he talked about snowballs made with blue asbestos. That is almost overkill, but as we see, and as the noble Lord, Lord Boswell, pointed out, people can also get this disease without knowing where they have got it from. It could be contracted from air conditioning even when they had not been in work. I suspect it is the most dangerous thing that we have.
There were other questions on the regulations for small businesses. In practice, the regulations ensure that anyone suffering from mesothelioma can get compensation, so there is not a problem with employment.
On the matter of public versus private bodies, raised by my noble friend Lord German, I do not have the figures. We are trying to improve the tracing, but I shall write to interested Peers with that figure when I get it.
The noble Lord, Lord Boswell, asked about the profile of suffering. We expect it to peak in 2015 but, thereafter, we are expecting a gradual decline in the numbers. From earlier estimates, we might see a slight pushing back of the rates but the shape of the curve has not changed dramatically.
The most difficult questions, slightly wider than these regulations, concern what we do with the tracing and with the bureau. The ABI’s ELTO database will begin to operate from this April, which is a positive step.
The court case, as the noble Lord, Lord McKenzie, pointed out, is a real issue. The Court of Appeal handed down its judgment in October and said that insurance policies should be interpreted on actual policy wordings. That has thrown an important level of uncertainty into what we do about tracing and the bureau because if we do not know what the actual wording was, it creates an extra problem. The judgment has been appealed to the Supreme Court and for obvious reasons it is quite difficult to do anything absolute until we know where we are.
This area is part of my portfolio of responsibility; I am taking very seriously the idea of an insurance bureau or something to find out how we can get compensation for people for whom the records are no longer there. I know there has been a relatively long gap since the public consultation that closed in May 2010. I assure the Committee that I have been in very active talks with various interested parties. I am pursuing some strategies, and hope to be able to achieve an appropriate outcome and bring the proposals forward to the House in due course. Sometimes it is better to get a result than to do things in a hurry. That is what is happening here. I can only give a personal assurance that I am taking this very seriously.
I think I have dealt with virtually all the questions. There is just the public-private split to deal with. The Government recognise that these two schemes perform a very important role and that it is vital that the value of these payments is maintained. I am pleased to confirm the Government’s commitment to review the level of these payments on an annual basis and, where necessary, to increase the payment. I am sure that noble Lords are in full agreement with these sentiments. Indeed, they have expressed that. I therefore commend the uprating of the payment scales and ask for approval to implement them.
Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2011
(13 years, 8 months ago)
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Lord Freud
That the Grand Committee do report to the House that it has considered the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
Occupational Pension Schemes (Levy Ceiling) Order 2011
(13 years, 8 months ago)
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Lord Freud
That the Grand Committee do report to the House that it has considered the Occupational Pension Schemes (Levy Ceiling) Order 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I shall speak also to the Pension Protection Fund (Pension Compensation Cap) Order 2011 and the Financial Assistance Scheme (Revaluation and Indexation Amendments) Regulations 2011; and I shall first give a relatively short account of what the Occupational Pension Schemes (Levy Ceiling) Order 2011 and the Pension Protection Fund (Pension Compensation Cap) Order 2011 do. Many noble Lords will be familiar with these orders, which have appeared annually and been the subject of amicable debate in Grand Committee on a number of occasions.
I turn first to the Occupational Pension Schemes (Levy Ceiling) Order 2011. Your Lordships will be aware that the compensation provided by the Pension Protection Fund is in part funded by the pension protection levy, which is paid by those schemes eligible for the protection provided by that fund. The pension protection levy is the responsibility of the board of the Pension Protection Fund. However, the Pensions Act 2004 provides a levy ceiling that restricts the amount that the board may raise through the pension protection levy in any year.
The levy ceiling for the financial year beginning 1 April 2010 is £871,183,684. This order provides for an increase in the ceiling for the financial year beginning 1 April 2011. The Pensions Act 2004 requires that the increase must be in line with increases in the general level of earnings in Great Britain, in this case using the rate published by the Office for National Statistics for the 12-month period to 31 July 2010. The order therefore increases the levy ceiling by 2.4 per cent, bringing it to £892,092,092 for the financial year beginning 1 April 2011. This does not mean that the pension protection levy will increase to that figure. The board of the Pension Protection Fund has already determined that, for the period covered, it estimates it will collect a pension protection levy of £600 million.
I turn to the Pension Protection Fund (Pension Compensation Cap) Order 2011. The pension compensation paid to people who are below their normal pension age at the date their scheme is assessed for entry to the Pension Protection Fund is subject to a cap. The compensation cap for the financial year beginning 1 April 2010 is £33,054.09. However, people below their normal pension age are paid pension compensation at the 90 per cent rate. This means that the compensation payments for people below normal pension age shall not exceed £29,748.68, which is the 90 per cent figure.
The Pension Protection Fund order provides for an increase in the compensation cap for the financial year beginning next April. Again, the Pensions Act 2004 requires that the increase must be in line with increases in the general level of earnings in Great Britain, in this case using the rate published by the Office for National Statistics for the financial year ending March 2010. The order therefore increases the compensation cap by 0.5 per cent to £33,219.36 for the next financial year, which means that, with the cap in operation, the compensation payment for people below normal pension age shall not exceed £29,897.42. The new cap will apply to people who first become entitled to pension compensation on or before the coming 1 April.
I should point out that when the more sharp-eyed or sharp-eared of your Lordships spot the difference between the 2.4 per cent and the 0.5 per cent, that simply reflects what happened to the relevant earnings index in those three months. It just so happened, but clearly, over the period, there will be catch-ups and so on.
Lord Boswell of Aynho
On that specific point, perhaps it might be convenient to ask my noble friend whether he can confirm what I thought I heard him say—that both those figures, although they differ from each other, are derived from calculations made by the Office for National Statistics?
Lord Freud
Yes, they are Office for National Statistics figures. I think that it is the average weekly earnings figure, which is the new figure that is updated from the annual earnings index—no, it is the general level of earnings.
I turn now to the Financial Assistance Scheme (Revaluation and Indexation Amendments) Regulations 2011. Many noble Lords will be familiar with FAS; indeed, the noble Lord, Lord McKenzie of Luton, has in the past brought a number of sets of regulations on the scheme to this House and presented them most eloquently, despite the material. I hope that noble Lords will listen to me with the same patience that they extended to the noble Lord, Lord McKenzie.
The scheme provides financial help to members of qualified pension schemes who face significant losses because their schemes wind up underfunded. It is mainly funded by the taxpayer. It has never been intended that FAS should replicate what might have been provided to members had their schemes wound up fully funded. Payments made by FAS have their value protected against price inflation through revaluation before payment begins and indexation after payment begins on rights accrued after 1997. This reflects the broader legislative position. The changes being made to the FAS revaluation and indexation rules by these draft regulations are a consequence of a wider decision. Noble Lords will know that the Government intend to use the consumer prices index—the CPI—as their general measure of inflation for a range of payments. These include state pensions, statutory minimum increases for private sector occupational pensions and increases to pension compensation payments made by the Pension Protection Fund.
Much has been said about the move to the CPI since we announced our intentions. We are moving to using the CPI as we believe it is a more appropriate index, although we acknowledge that no index is perfect. Without going into the kind of elaborate detail that I think we may be going into in the next few days, let me summarise why it is the most appropriate index.
The key difference between the RPI and the CPI is what is known as the “formula effect”. Put simply, the CPI is calculated in such a way that it takes account effectively of consumers switching to substitute goods when prices rise. That consumers behave in this way is a cornerstone of economic theory, and it has been borne out by empirical research. Let me be clear that we are not talking about switching from rump steak to lamb shoulder, for example, but from rump steak that has seen a sharp increase in price to rump steak that has seen a lower one. The substitution effect is nothing more than that.
This methodology is uncontroversial, and once we accept it as preferable to the RPI’s, which the Institute for Fiscal Studies and the Royal Statistical Society do, we have accounted for 60 per cent—two-thirds—of the historical gap between the CPI and the RPI and already the CPI becomes the more suitable index. We will have the opportunity to talk about this in great detail, although I will do so now if noble Lords want.
Lord McKenzie of Luton
My Lords, I thank the Minister for his eloquence in introducing these orders. If I am not mistaken, the first two will no longer be subject to the affirmative procedure as a result of provisions in the Pensions Bill, so perhaps we must make the most of this occasion. Together with the levy ceiling earning percentage increase order, they set the compensation cap, as we have heard, limiting the amount of compensation payable by the PPF and the levy ceiling which controls the maximum amount of levy the PPF can charge pension schemes. As we heard, the levy ceiling for the year commencing 1 April 2011 is £892 million, which is comfortably above the proposed levy for that year, which the Minister told us is £600 million. In respect of that levy, I do not know whether the Minister is able to give us a split between the risk-based and scheme-based components. Could he take the opportunity to say something about collection rates and how we are doing in terms of collecting what we think is due?
The increase in the general level of earnings for the period 1 August 2009 to 31 July 2010 is 2.4 per cent. On the current compensation cap, the maximum level of compensation which is payable before applying the 90 per cent requirement is increased by 0.5 per cent to £33,219. In this case, the uprating is still by earnings but by reference to a different period.
We have no problem with these two orders, although, not surprisingly, they prompt wider questions. First, it is right to reflect on the importance of the PPF and how, alongside the Pensions Regulator, it has played an important role in ensuring some stability in a turbulent period for defined benefit schemes. It has ensured that something like 55,000 individuals already receive, or can expect to receive, a decent income in retirement which, because of the insolvency of their employers, they might otherwise not have achieved. From my experience, it is a highly professional organisation. According to the website, some 212 schemes are in the PPF at the moment and, as at January 2011, almost £236 million has been paid in compensation, with the oldest recipient being 105 and the youngest four.
Things seem to be in a far from steady state, with 10 schemes just transferred into the PPF and 409 schemes and 200,000 members in the assessment stage. Perhaps I can ask the Minister about the time taken for assessment. Clearly in some cases the assessment has not been completed within two years, although in the Pensions Bill we are considering removing the requirement for the assessment period to last for a minimum of 12 months. I accept that there is no inherent inconsistency between those two positions—we support that—but what are the barriers to speeding up the assessment process?
Given the levy ceiling we are discussing, perhaps we could get an update on the PPF’s exposure to the universe of eligible schemes. It would appear that before taking account of the RPI/CPI changes, the number of schemes in deficit and the aggregate deficit has declined over the past year. It is presumed, therefore, that the headway created by the levy ceiling is something with which the Minister is wholly content. In the past, the ability of the PPF to fund the consequences of a big influx of schemes was often called into question. I think that we responded robustly then and I imagine that the Minister is in a position to do at least that this afternoon, given the change in the background to those schemes. Can he say how many compensation payments are currently limited by the cap? I tried to get my mind round this issue—I am not sure that I have completely—but, going forward, what will be the relationship between the level of the cap and what would have been provided for by underlying schemes and the PPF arrangement? If the cap gets uprated by earnings, but compensation amounts going forward are uprated generally by earnings, because that is the nature of defined benefit schemes, and partly by reference to the CPI, is there potentially a divergence of the cap from underlying compensation which thereby would weaken its purpose?
The order concerning the financial assistance scheme puts into effect, as we have heard, the RPI/CPI switch for revaluation, indexation and annual increases in the maximum cap. The Minister will be aware that we have concerns about the switch to CPI, certainly as currently constructed, as an appropriate measure of inflation. Doubtless we will have a substantive debate on that in Committee next week and on subsequent occasions.
I share the Minister’s view that no index is perfect and I was interested in his example about the formula effect and switching. When he referred to it in the Chamber he spoke about moving from one kind of biscuit to another. I am comforted to know that we can go from one jammy dodger to another and we will be okay. It was good to hear about the work going on in the ONS.
As we have heard, FAS, unlike PPF, is funded by government—net of assets taken in, of course—and a reduction in costs can make a contribution to deficit reduction. We could, in principle, support this for a period, but there is a dearth of information about how much is involved and no impact assessment has been provided. Perhaps the Minister can help on that
I am aware that the final settlement for FAS arose from a tortuous process involving, among other things, legal action in the UK and in Europe. I presume that there is nothing in the CPI/RPI switch which could be said to negate that settlement. Perhaps the Minister can confirm that. I welcome the proposals dealt with in the Explanatory Notes to consolidate the FAS regulations.
For both FAS and PPF, before entry into the appropriate scheme there would have been a judgment of what an individual could have obtained in the market and whether FAS and PPF would provide a better outcome. This judgment, presumably, would have been made on the basis that FAS and PPF payments would be uprated by RPI. If this is not the case, is there the prospect that individuals will be worse off in retrospect because of the decisions made? What analysis have the Government made of this situation? If it is not to hand, perhaps the Minister will write to me.
Let me make one further point on the PPF levy. It appears that there is to be a new levy framework introduced in 2013. What can the Minister tell the Committee about this and what are the ramifications, if any, for the levy ceiling? I look forward to his responses in due course.
Lord Stoneham of Droxford
I support these regulations and I have only limited points to make on them. The role of the Pension Protection Fund is very important—all credit to the previous Government for introducing it—and we want to make sure that it is maintained and sustained. Obviously in the current environment the investment levels on the stock market have helped some of these schemes, but can the Minister give the Committee his view on how the economic situation is impinging on companies, particularly those on the borders of insolvency, and the pressures that that is likely to place on the fund over the next couple of years as we move, we hope, towards economic recovery?
I accept that we will be discussing the CPI issue in the coming week but I make the point that none of these indices is perfect; they measure inflation for all consumers on different bases. The Minister will perhaps answer this point more fully next week, but is any further research being done on the CPI to ensure that, as we are now moving towards using it more fully across a number of measures which affect pensioners particularly, we can make the index more representative of pensioners’ expenditure and fairer in the long term? I support the regulations.
Lord Boswell of Aynho
My Lords, I, too, am very pleased to support these regulations. The purpose of my intervention on my noble friend, for whose reply I was grateful, was to confirm that there was a principled basis for the slightly different, heterogeneous nature of the figures set, in that they all have their root in the ONS and are related to the principles of the particular component parts of these three orders or, to put it the other way round, that Ministers were not setting the rules in order to suit themselves or with the intention of saving money. Of course I accept that assurance.
I should make it clear to the Minister, if it is not already self-evident, that partly because it came in the lacuna between my Front Bench service and today, I would not claim to be very ready to sit an exam on the pension protection scheme and am less familiar with it. In relation to the cap, which if it is raised is relieving as a measure, is there an impact on a significant number of individuals or on just a handful? I would be interested in that. The Minister knows that I am now, for the first time, a pension trustee.
There is another point that he might like to say a bit about. There is concern, certainly debate, across the sector about the balance between the scheme levy and the risk-based levy and how that is to be conceived. That forms two categories. First, will he report to us on where we are on it? Secondly, given that he is, in a sense, setting limits under which the levy should be set rather than the level of the levy itself, which he said is the responsibility of the scheme, is it the case that he will stand back and allow that balance to be struck by the professionals? Does he have a view and what is the state of play on that?
Lord Freud
My Lords, again I thank noble Lords for taking such an active part in the debate and, as ever, looking at these issues in real detail. I will aim to answer as many of the questions as I can before I resort to the expedient of the letter.
The noble Lord, Lord McKenzie, is completely right about this being our last opportunity—last unforced opportunity, if you like—to do this under the affirmative procedure, so we should—and we are—taking advantage of that opportunity. He asked about the spilt between risk-based and scheme-based. Eighty per cent of the quantum is designed to be risk-based. That varies slightly, but the figures have held pretty firm over the years so, without going through endless figures, if we look at the £600 million for 2011-12, which I referred to at the outset, the risk-based element is estimated to be £480 million and the scheme-based element is £120 million.
The noble Lord, Lord McKenzie, and my noble friend Lord Boswell asked about the impact of raising the cap and about how many people are affected by it. As at January 2011, 92 scheme members receiving compensation were affected by the cap. The noble Lord, Lord McKenzie, asked about time in assessment. The real driver in that is legal action, which can take many years. As he saw, that is connected to the change in the Pension Bill. The problem we have is that resolving some of these issues can take a lot of time. On top of that, assessment is often delayed by poor scheme data and uncertainty about what the scheme rules are. It is not people being dilatory; there are genuine problems.
My team has just informed me that, in opening, I made a mistake. I said that the newer cap applies to people entitled to compensation before 2011 and I should have said after 2011. I am sure noble Lords knew what I meant. I apologise to the Committee.
The noble Lord, Lord McKenzie, asked whether the cap was overrated if it was linked to earnings. That is not the case because, to take an example, the comparator is the position of a 50 year-old at the insolvency of the employer. We want someone whose employer goes bust this year to be capped at the same relative level as someone whose employer went bust, for example, in 2005.
The calculation of the levy formula is something for the board of the Pension Protection Fund. The proposals concern the distribution of the levy between schemes and not the overall quantum. Will individuals be worse off due to the switch from RPI to CPI? The current market conditions mean that the cost of providing RPI or CPI are equal, but we have to recognise that there may be a divergence in future and we shall review that over the summer in the light of emerging evidence.
The noble Lord, Lord Stoneham, asked about indices. Without going into a full-blown techie analysis, the question was about whether we can make CPI a better fit with pensioner inflation. The ONS is working to include owner-occupied housing costs in its statistical programme. It is a very active programme. Rather than using mortgage costs, according to its research, the likely outcome—I may be jumping the odd hurdle to reach that conclusion, but bear with me—would be to take the cost of an average house and see how that moves up and down. I cannot see that happening much before two years, but an active process is taking place and the ONS will work very closely with European statistical organisations because it would need to be a general move.
One of the most interesting things is that the CPI has been adopted as the main measure, certainly for comparative purposes in Europe. The Americans took the decision to go down this route because of the geometric approach, which basically gets elasticities closer to one, which reflects substitution, as opposed to any elasticities closer to nought, which do not show much substitution, and that is seen in the arithmetic mean used mainly in the RPI. In the CPI, interestingly, about 70 per cent is done geometrically. The other 30 per cent of goods, which are hard to substitute—oil, for instance—are left at that low-elasticity arithmetic mean. We will have more of that next week.
The noble Lord, Lord McKenzie, asked whether the implications of this switch to CPI mean that some FAS members would find that the total value of their protection from the UK Government is reduced to a level that the European Court of Justice indicated would be below the minimum lawful percentage for protection. Perhaps I slightly overinterpret the question, but we have looked at that closely and we believe that the Government continue to meet their obligations under Article 8 of the European insolvency directive.
Lord McKenzie of Luton
My question was slightly broader. It was not just on the EU judgments but on whether, given any of the negotiations—there were quite complex and tortuous discussions with various lobby groups—the switch is true to that position as well.
Lord Freud
I think that I hesitate to answer that on the Floor. Is that sensible? Yes, my team is nodding, not vigorously, but gently. We should write the noble Lord a letter on that matter.
The last real question was on the impact assessment on FAS costs. The overall change to CPI for FAS purposes is estimated to deliver around a 10 per cent reduction in assistance costs over the lifetime of the FAS, which has been projected at about 90 years. Clearly, the impact on individuals will depend on the characteristics of the member, such as age and period of service.
On the economic situation, I think I have some data on what has been happening to the overall level of surplus in the PPF. I was asked about that and I know that I have those figures. It would be easier for me to tell the Committee than to write, but if I do not have them in a microsecond I will write. I cannot put my hand on them but the question raised was: where is the overall level of surplus, by schemes, and how many of them are in deficit and how many in surplus? I wanted to look at the overall risk levels but I cannot put my hand straight on that. If we could deal with that issue of economic conditions and the place that the market got to, that would also address the question from the noble Lord, Lord Stoneham. I am irritated with myself for not having it absolutely to hand.
As your Lordships know, the Government recognise the difficulties experienced by those who lost their pensions through no fault of their own.
Lord McKenzie of Luton
I am grateful for the full reply that the Minister has given us on a range of questions but I wanted to make sure that we had covered this point or that he was going to respond to it. Looking at the PPF before a judgment is made, for example, as I understand it before somebody enters the PPF you look and see what the market would have produced. If the market would have produced something which was at or above the PPF levels, that is what would happen. Presumably when those judgments were made, they were made on the assumption that PPF levels would be uprated by RPI—obviously, that is not going to happen, at least for a period—with the expectation that indexation would be lower than RPI. Is there the prospect that that means—at least with the benefit of hindsight, and it may not matter that it is hindsight—that judgments were made that might have been made differently? In some instances, the market would have been able to do better than the PPF on a CPI basis.
Lord Freud
The answer is that currently CPI is the same as RPI in terms of current annuity pricing. Clearly that may or may not be the case in the future. At the current time, that does not make a difference. The Pension Protection Fund and the Financial Assistance Scheme will continue to provide help to people whose pension schemes fail them. These regulations will enable the continued delivery of that help in a manner that is fair and equitable to both scheme members and the taxpayer. I commend these draft regulations to the Committee.
Pension Protection Fund (Pension Compensation Cap) Order 2011
(13 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do report to the House that it has considered the Pension Protection Fund (Pension Compensation Cap) Order 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
Financial Assistance Scheme (Revaluation and Indexation Amendments) Regulations 2011
(13 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do report to the House that it has considered the Financial Assistance Scheme (Revaluation and Indexation Amendments) Regulations 2011.
Relevant document: 15th Report from the Joint Committee on Statutory Instruments.
Social Security (Reduced Rates of Class 1 Contributions, Rebates and Minimum Contributions) Order 2011
(13 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do report to the House that it has considered the Social Security (Reduced Rates of Class 1 Contributions, Rebates and Minimum Contributions) Order 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, the draft order sets out the proposed contracted-out rebate rates that will apply from April 2012. Before I go into the detail of what those rates will be and why we have decided on our particular approach, I think it would assist the House if I were to explain what the rebates are and how the process to review them works.
Under the contracting-out arrangements, individuals may contract out through membership of a contracted-out salary related or money purchase occupational pension scheme or through an appropriate personal pension. Employees forego all or part of their state second pension entitlement and in return pay reduced rate national insurance contributions and/or receive an age-related rebate paid to their scheme after the end of the tax year. Employers with contracted-out occupational schemes also pay reduced national insurance. These reductions and payments are known as the contracting-out rebate.
The Pensions Act 1993 requires the Secretary of State to review the level of the contracted-out rebates at least every five years after giving due consideration to a report by the Government Actuary recommending what the level of the rebate rates should be. The legislation requires that there should be a full tax year between parliamentary approval of the rebate order and its coming into force. The last full review of the level of rebates was in 2006 for rebates from April 2007.
The present review began last year. The Government Actuary issued a consultation paper in August 2010 on the actuarial assumptions that he proposed to adopt for his report to the Secretary of State. The Government Actuary gave the responses to that consultation careful consideration before drawing up his final report. His advice to the Secretary of State has been taken into account in the proposals before the Committee. The proposals in the Government Actuary’s report reflect his view of the factors affecting the cost of providing benefits of equivalent actuarial value to the state pension foregone as a result of contracting out. These include, for example, increasing longevity; rates of investment returns; increases in earnings and prices; the future change in the indexation of the state additional pension by the consumer prices index; and future changes to state pension age.
The Government Actuary’s report and the report by the Secretary of State were laid before the House, together with the order, on 3 February. In this order, rebate percentages have been provided for members of both salary-related and defined contribution schemes. This is in spite of the Government’s plans to abolish contracting out on a defined contribution basis on 6 April 2012. This is because the requirement to review defined contribution rebate rates under Sections 42B and 45A of the Pension Schemes Act 1993 will not be repealed until the enabling legislation for abolition—primarily Section 15(1) of the Pensions Act 2007—comes into force. So, rebate rates for members of defined contribution schemes have been provided but, because these figures are not expected to be used, they have been provided for only one tax year.
Therefore the focus of today’s speech will be on the reduction in national insurance contributions which should apply to those contracted out on a defined benefit or salary-related basis. Unlike his previous reports, the Government Actuary has, with this report, provided three alternative approaches for valuing the costs of the benefits foregone by contracted-out workers in salary-related schemes: a best estimate basis; a typical funding basis; and a gilts basis. In deciding which of these alternative approaches should be adopted, we have considered that the reduction in national insurance contributions is provided at considerable cost to the taxpayer and that, therefore, the Government have a duty to ensure that the rebate is set at a level which is fair to all. Taking this into account, we believe that adopting the Government Actuary’s best estimate basis is the correct approach.
Furthermore, we believe that the assumptions upon which the Government Actuary has based his best estimate basis are justifiable. That basis provides for two different rates which may be adopted by the Secretary of State: one which takes into account the existing arrangements for state pension age; and one which takes into account the proposed changes the Government will legislate for, which will see the state pension age rise to 66 from April 2020. We have decided that the proposed rise in state pension age to 66 needs to be reflected in the revised rebate rate. This will mean a reduction in the rate of national insurance contributions from April 2012 from 5.3 per cent to 4.8 per cent of relevant earnings. If, however, it becomes apparent that the proposed state pension age changes will not take place, we will consider conducting a further review of rebate rates before the end of a further five-year period, the time by which we must review rebate rates again.
We propose broadly to maintain the division of the reduction in the level of employee and employer contributions. This will mean that the level in the reduction of employee contributions will be reduced from 1.6 percentage points to 1.4 percentage points, and the reduction in employer contributions will be reduced from 3.6 percentage points to 3.4 percentage points. For personal pensions and money purchase occupational schemes, we have again accepted the Government Actuary’s proposed rates of reduction in national insurance contributions and age-related payments which should apply but for the plans to abolish contracting out for defined contribution schemes in April 2012. This will mean that the flat rate element for contracted-out money purchase schemes will decrease to 2.4 per cent of relevant earnings for members of contracted-out money purchase schemes. This will be split between employees at 1.4 per cent and employers at 1 per cent. We have also decided to maintain the level of the age-related rebate cap. This will stay at 7.4 per cent.
As I mentioned earlier, these rates have been provided simply to meet an ongoing statutory requirement that will not lapse until contracting out for defined contribution schemes is abolished. I am satisfied that the order is compatible with the European Convention on Human Rights. I commend it to the Committee. I beg to move.
Lord McKenzie of Luton
My Lords, I again thank the Minister for his full explanation of this order, which sets out the revised national insurance rebates for contracted-out pension schemes. As we have heard, the figures are provided for contracted-out money purchase schemes and appropriate personal pensions, although the planned abolition of contracting out on a defined contribution basis from 6 April 2012 means that these will never come into effect.
Again, as we have heard, these changes are based on a report by the Government Actuary which, in contrast to previous reports, sets out three alternative valuation approaches. The Government, of course, have adopted the basis which provides the lowest level of rebate—4.8 per cent—and taken account of the changes in state pension age provided for in the Pensions Bill. I noted that the Minister hinted that should those changes not proceed, there would be a review of the 4.8 per cent figure. The rate is below the 5.3 per cent rate adopted for the five-year period to 2012.
The Explanatory Notes make it clear that the annual savings to the Exchequer from reducing the rebate is about £600 million. I am trying to understand what the other side of that saving is. Is it that the cost is greater on employers and employees; and/or is it that the cost of providing the relevant benefits is reduced? What is the other side of the saving that the Government make?
The note also states that a full impact assessment has not been published because it will have no new impact on the private sector. How does this differ from public sector employees and employers, where it is confirmed that there will be a small increase in national insurance contributions by each? I do not fully understand how it can have an impact on the public sector but not on the private sector.
More fundamentally, can the Minister expand on the rationale for adopting the best estimate approach? Paragraph 6.4 of the actuary’s report states that this basis of valuation means that the rebate,
“is expected to be sufficient, half the time, to cover the cost of providing benefits equivalent to the state second pension forgone”.
What about the other half? On what basis were the other valuation approaches rejected? To the extent that the best estimate falls short, where are the costs and risks being borne? It will be interesting to have data on what the difference will be for someone on median earnings and at or above the UAP.
The Government Actuary’s report is a complicated document and I am not sure that I have absorbed all of it. I hope the Minister and his team will be able to help us out on those particular inquiries.
Lord Stoneham of Droxford
I have very little to say on this. This is a shadow document in many respects because it is provisional on what we are doing on the current legislation. I think we are broadly supportive of it.
Lord Freud
My Lords, I thank, in particular, the noble Lord, Lord McKenzie, for his interest in this and the noble Lord, Lord Stoneham, for making that point. To summarise, this sets out the level of contracted-out rebate rates that will apply to employers and employees within defined benefit contracted-out occupational pension schemes from April 2012. As I said earlier, while we have provided rates for defined contribution schemes, that is purely to meet the statutory requirement. As I said before, we are looking at a reduction for contracted-out defined benefit schemes from 5.3 per cent to 4.8 per cent.
As I understand it, the central question that the noble Lord, Lord McKenzie, put was about why we have picked that one rather than the funding basis or the gilts basis. I shall go a little into the concepts behind the three different approaches. Each approach is designed to provide the employer with a different level of guarantee about it being sufficient to cover the cost of the additional state pension foregone. Taking into account the considerable cost to the taxpayer of providing the reduction in national insurance contributions, the Secretary of State decided that adopting the best estimate approach was the most reasonable. When you think about it, the point about it working half the time is really saying that we have reached the point of indifference between whether you provide a pension scheme or do not do so and rely on the state. There is a rationale there. The other approaches in practice provide a much more powerful bias towards contracting out.
The noble Lord’s supplementary question was about defined benefit schemes. The risk is now essentially being run by the schemes. Different schemes will, of course, have different contributions rates for employers and employees, so there is no simple answer. The core answer is that moving to the point where, on balance, there is a point of indifference between whether you go in or out means that it is a neutral decision.
On the question about public versus private, for public sector schemes there is no extra cost to the employer as the Government are the employer so there is a degree of funds being recycled. Both public and private sector employees will see a slight reduction in take-home pay as a result.
Lord McKenzie of Luton
Perhaps I can clarify that. The note to the order, which I cannot now put my hands on, refers just to the public sector in that regard. It puzzled me because I understand that these rebates operate between the LEL and the upper accrual point, which is fixed in cash terms, in order to move towards a flat-rating of the state second pension, so I would have thought that there would potentially be a loss to all contracted-out employees. Therefore, I do not understand the distinction that is made in the Explanatory Memorandum between public and private sector.
Lord Freud
I think the noble Lord is right in saying that the loss is shared by the public and private sectors. Clearly, there is something slightly confusing in that note that has led him in a different direction. There should be an equalised effect.
Lord McKenzie of Luton
I am looking at the Explanatory Memorandum to the Social Security (Reduced Rates of Class 1 Contributions, Rebates and Minimum Contributions) Order that we are discussing. The impact paragraph states:
“There is no new impact of the changes to the contracted-out rebate rate. However, the reduction in the rebate rate will lead to a small increase in the National Insurance contributions of public sector employers and employees. The value of the increase will depend on individual employee earnings”.
Lord McKenzie of Luton
That is paragraph 10.1. Paragraph 10.2 states:
“A full impact assessment has not been published for this instrument as it has no new impact on the private sector and civil society organisations”.
Lord Freud
The impact is common across both the public and private sectors. The noble Lord asks about the impact assessment. I imagine that that is a reference to where the obligation to have an impact assessment is, rather than to the differential impact. By definition, we are saying that it does not have a new impact on the private sector and civil society organisations. By reference, that would also apply to the public sector.
Lord McKenzie of Luton
I am happy for the noble Lord to write to me on that. It is confusing. It specifically identifies public sector employees and employers as taking a hit. Paragraph 10.2 suggests no new impact on the private sector. That did not make sense to me.
Lord Freud
It is easy to see that confusion. I shall write to the noble Lord, but I am comfortable in stating that it is a reference to where the obligation to have an impact assessment is, not to who is getting the impact. That is the reason for the difference. However, I shall write to the noble Lord to lay that out very clearly. I am very impressed that anyone has got to note 10.2. I think I have dealt with all the outstanding issues.
Lord McKenzie of Luton
I am sorry to press the noble Lord but this may be part of the discussion we have just had. Is the £600 million saving by government just replicated as an extra £600 million of costs on employers and employees?
Lord Freud
Yes, I can confirm that, obviously. There is an argument there: it is a rather complicated sum, not just the sum of what has gone in and out in terms of all of the factors. To the extent that there is an extra cost, it is partly because it has become more expensive to get pensions for one reason or another. Some of that reflects the marketplace and what it costs to purchase annuities outside the Government’s scheme. Rather like me, the noble Lord will, I suspect, have gone through this understanding some, but not all, of the bits in it. However, that is the process, so the saving becomes a cost for employers and employees, given how we have split it.
I have one main item on which to write formally to noble Lords but, with that, I hope that I have dealt satisfactorily with the issues. As everyone in this Room will realise, they are highly technical. I commend the draft order to the Committee.
House of Lords
Big Society: Britain in Bloom
Baroness Gardner of Parkes
My Lords, in asking the Question, I declare an interest as I have a daughter who is a council member of the Royal Horticultural Society.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, I commend the Royal Horticultural Society for its Britain-in-bloom campaign. I know that the campaign inspires an enormous number of people to act as volunteers and to get involved in caring for and improving their neighbourhoods for the enjoyment of everyone who lives in them. It brings communities under the horticultural banner and brings local people into a new sphere.
Baroness Gardner of Parkes
My Lords, I thank the Minister for that. This is a long-standing scheme. At the present time, when lots of people face major difficulties, it is particularly important for people to feel a sense of achievement in what they are doing and a sense of community. Local authorities should be asked or encouraged to help this to continue. As I understand it, they are not asked to contribute financially. Can the Minister comment on that?
Baroness Hanham
My Lords, as I understand it, the Royal Horticultural Society is very generous in supporting local authorities and people within them who want to take part in the competition. I have absolutely no doubt that all noble Lords would agree that the work that is done and what is produced as a result of the competition makes London and local authorities look much better. I have no difficulty at all in agreeing with the noble Baroness or in again congratulating the Royal Horticultural Society on what it does in this initiative.
Lord Hunt of Kings Heath
My Lords, I am sure it is right to congratulate the Royal Horticultural Society, but is there not a wider point about local authorities and support for voluntary organisations? What does the Minister say to Birmingham City Council—a Lib Dem-Tory council—which is withdrawing all funds from the citizens advice bureaux? How on earth can that support the big society?
Baroness Hanham
My Lords, that is a bit off the Question, which is about flowers and gardens. I thought that such matters might come up under the next Question, so I do not know whether the noble Lord will want to ask it again. The straight answer is that Birmingham City Council, like other councils, has to make its own decisions on its expenditure. There has been and will continue to be considerable pressure on councils to ensure that the voluntary sector is protected from such reductions. If I may bring the noble Lord back to the Question, there is no doubt that people will make a plea to ensure that they can plant their gardens and have them competitively looked at.
Lord Palmer of Childs Hill
My Lords, may I bring the Minister back to the original Question by asking whether she believes that colourful flower displays have a good-feel factor for people and they should be encouraged? Will she deprecate the fact that in so many areas of public life flower-beds are being replaced by shrubs? I am not against shrubs, but colourful flowers do produce a good-feel factor. Would the Minister like to comment?
Baroness Hanham
Well, my Lords, we all like flowers and we like to see them in public places. It gives life to areas if there are planted flowers rather than bushes, which can be rather drab. I agree very much with that and with any other schemes that are taking place. Indeed, as I am sure noble Lords know, local authorities run their own schemes. The Royal Borough of Kensington and Chelsea, which is my borough, runs Kensington and Chelsea in bloom and has its own competitions, there is the wider London in Bloom competition, and there is the green flag award, which is run for public open spaces and provides an incentive for people to beautify the areas.
Lord Brooke of Alverthorpe
What will the Government do about those councils that are slashing their budgets and their expenditure on plants and flower displays?
Baroness Hanham
My Lords, as I said in response to a previous question, that issue perhaps moves us on to the next Question. It is entirely up to each local authority to make its own decisions. If a council decides that it wants its borough or council area not to look very prepossessing and very nicely flowered and bushed, that is up to that council.
Baroness O'Cathain
My Lords, has my noble friend the Minister heard of the seed exchange scheme? This is happening in very small communities throughout as part of the big society on a small society level. People do not have to spend money on plants and flowers because those who have seeds left over from the previous year give them to others. The results are amazing and competitive and look fantastic.
Baroness Hanham
Yes, my Lords, you can do that with plants as well, if you are clever enough and can work out how to make them grow. Anything that improves and makes places look beautiful is to be greatly encouraged. A seed takes a little longer to grow than a plant, so perhaps a plant is more effective.
Viscount Montgomery of Alamein
Although this Question is about flowers, will the noble Baroness not agree that there are beautiful trees, and their foliage is equally beautiful and changes with the seasons as well? Therefore, they should be encouraged as well as flowers.
Baroness McIntosh of Hudnall
My Lords, I am sure that the Minister is aware of the excellent work done by the Royal Horticultural Society and others in education and schools. Does she agree that, for example, the value of learning about the connection between what we eat and how it is produced is extremely important in the way in which children are educated? Will she pass on to her colleagues in the Department for Education my hope—which I hope is shared by other Members of this House—that any reorganisation and cuts in education will not fail to take account of the importance of that work?
Baroness Hanham
My Lords, I am willing for messages to be heard and I am sure that my colleagues in the Department for Education will hear what has been said. However, I do agree that the training schemes that help people into jobs around horticulture are to be encouraged.
Baroness Farrington of Ribbleton
My Lords, would the Minister care to comment on the fact that, given the differential depth of the cuts for the north of England, many local authorities will not be able to take on trainee young people in their parks departments? Would the Minister, who has a fine record in local government, please resist the pressure that is put on Ministers opposite to say on every question that it is purely a matter for local authorities? The Government have stolen the flexibility with the differential cuts.
Baroness Hanham
My Lords, this Question has really strayed very far from where it started. If I may, I shall leave that to be asked, if necessary, under the next Question.
Pensions: Britons Living Abroad
(13 years, 8 months ago)
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Lord Shipley
To ask Her Majesty’s Government what help they will give to British pensioners living abroad whose United Kingdom state pensions are not uprated annually.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, we have no plans to make any changes to the current arrangements that allow for the exportability and uprating of UK state pensions. The UK state pension is payable worldwide but is uprated outside the UK only when there is a legal requirement or reciprocal agreement to do so.
Lord Shipley
My Lords, is the Minister aware that there are some 500,000 UK pensioners in the USA and the European Union whose pensions are uprated, and a further 500,000 in the rest of the world, notably in Commonwealth countries such as Australia, New Zealand and Canada, where their pensions are not uprated? Many people in those latter countries now receive only £10 a week. Given that we are the only country in the OECD that discriminates in that way, does the Minister think that this situation is just?
Lord Freud
My Lords, the figures for non-frozen pensioners are 610,000 and for frozen pensioners 550,000. The difference in payment is currently between £57 for the non-frozen and £32.70 for the frozen. I am satisfied, as are the courts, that what we have is objective and justifiable in this area.
Lord Clinton-Davis
Would the Minister apologise for yesterday’s tantrum? I am very concerned about his mental health.
Lord Freud
My Lords, the expert in thumping Palace woodwork, who is Black Rod of course, suggested that I did not make a habit of maltreating the furniture. I am happy to take that advice to heart.
Lord Hamilton of Epsom
Would my noble friend accept my condolences that he was provoked to such an extent yesterday? I thought that he showed remarkable restraint.
Baroness Golding
My Lords, I have had a letter from a friend of mine who lives in Spain and has lived there for 20 years, and who is in his eighties. The letter from the Department for Work and Pensions says: “I am writing to tell you that we cannot pay a UK state pension at the moment. This is because we cannot be sure that the amount of money that we pay you is correct. Payment of state pension has been stopped from 24 January”. There is no right of appeal against this decision. Is this how we are going to treat our pensioners?
Lord Freud
My Lords, clearly I will not be familiar with the facts of this particular case, but if the noble Baroness would like to write to me with those details, I shall make sure that they are looked into thoroughly.
Baroness Gardner of Parkes
I have asked about Commonwealth pensions both in writing and verbally over many years because, as noble Lords will appreciate, I get lots of letters. No Government have at any time ever considered it feasible to try to upgrade the pension, because so many people are involved. However, it is important to appreciate that in some countries it is different. In Australia, the national Government see that pensioners have the means to survive.
Lord Freud
My Lords, this is a much more complicated issue than it seems on the surface, because it is not a question of making a payment to a pensioner the entirety of which they then put into their pocket. The country where they are living will often supplement their pension, so it can often be a case, for instance, of us making a higher pension payment and the equivalent of pension credit being reduced. It is money out of the UK taxpayer’s pocket into the pocket of the taxpayers of another country. It is a far more complicated issue than it seems on the surface.
Lord McKenzie of Luton
My Lords, I agree with the Minister that now is not the time to change the uprating of pensions paid abroad. The priority should be to push back against the aggressive acceleration of the state pension age for women. However, does he agree that British pensioners overseas have the benefit of the reduced number of years of contributions to receive a full basic state pension, which came in under our legislation in April 2010, and still have the ability to top up entitlements by class 3 buy-backs on a basis whereby for £655 you can buy extra pension of about £170 a year for life? That seems a pretty generous deal.
Lord Freud
My Lords, I am happy to congratulate the noble Lord opposite on those changes, which I know that he was involved with. I think they have been valuable. The point about costs in the current environment is that this change to uprating in the frozen areas would cost us £620 million a year, and in the context of the austerity position that we are in—all noble Lords will be very familiar with the terrible dilemmas that we face as we look to get the budget under control—we should consider how much that £620 million represents.
Lord Skelmersdale
My Lords, would my noble friend accept that what matters when paying British pensions to pensioners in places such as Canada is reciprocity? In other words, if the Britons in Canada are paid the Canadian pension and the Canadian pensioners in this country are paid British pensions, that would be regarded as a fair deal. What discussions on reciprocity are going on at the moment between his department and overseas Governments?
Lord Freud
My Lords, there are currently no discussions on reciprocity. That is not a strategy that we have. The reciprocity agreements are, if you like, a little like a double tax treaty network of agreements. We are not going into that at the moment. There are 30 countries with which we have reciprocal agreements, and currently we are not planning to expand that. However, this is a policy that we keep under review.
Local Authorities: Redundancies
Lord Beecham
To ask Her Majesty’s Government what is their estimate of the redundancy costs to be met by local authorities in the current and next financial years; and what they forecast to be the impact on local authority budgets of the proposed restriction to £200 million of permission to capitalise those costs.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, the Government do not make any estimates of redundancies in local government. Decisions about managing workforce reductions in local government are now rightfully for individual councils to make as employers. Following representations, £300 million of capitalisation will now be available, which will provide important support in 2011-12. That cannot meet all restructuring costs: it will be for authorities themselves to assess how they best manage costs from their own resources, including from reserves.
Lord Beecham
I thank the Minister for her reply. However, in the light of the guidance note on capitalisation published by the ODPM in 2004 that capitalisation,
“does not in itself increase public expenditure”,
and the DCLG’s press release of 3 March stating that,
“The Government is not providing authorities with extra funding for this purpose, but simply allowing a managed and affordable extension of existing flexibilities”,
will the Minister invite her honourable friend the Parliamentary Under-Secretary of State Mr Stunell to correct his letter to council leaders in January stating that,
“Whether it is through borrowing or the use of capital receipts … capitalisation scores as public spending, and has national implications for the wider economy and deficit reduction programme”?
Will she also confirm that the Government will reconsider the position if, as anticipated, the cost of job losses in local government exceeds the £300 million thus far announced?
Baroness Hanham
My Lords, capitalisation impacts directly on deficit reduction plans. Capitalisation is capital being used for revenue so there is no doubt, I think, that what my noble friend said in his letter was correct. The permission for capitalisation—which has now been increased from £200 million to £300 million, largely because of representations being made—is not intended to be the full way of meeting redundancy costs. Councils are meant to look to their own resources to make up most of what they need when there is a reduction of staff through either voluntary or compulsory redundancies.
Lord Vinson
My Lords, will the Minister agree that no Government can enjoy making cuts? It must be difficult to watch when some cuts are made inappropriately by local authorities, but the fact remains that, without these cuts, council tax would rise exponentially as it has done in the past. Would the Minister make it clear that the alternative to cuts is a rise in council tax? I wonder how popular that would be with the British public.
Baroness Hanham
My Lords, I point out immediately that the Government have made it possible for a council tax freeze for the next two years. Indeed you cannot have numbers of personnel rising exponentially every year, which happened under the previous Government, under which there was a widening out in the number of people employed in local government. There have to be, and there will be, rationalisations of services and new ways of doing things. Not all councils are lost in the depths of despair about what is happening, because this is opening up opportunities for them. However, I do not deny that it is a great hardship for people who are losing their jobs without the benefit of having anywhere to go, and none of us would reject that.
Lord Tope
My Lords, the Minister said in answer to the Question that it was for local authorities to make their own decisions on spending. Given that there is no additional public expenditure involved in this, will she say why the Government will not allow local authorities to decide for themselves how they will meet these redundancy costs?
Baroness Hanham
My Lords, they can make their own decisions about it. All that the Government are doing at the moment is providing some flexible resources with the £300 million capitalisation for those that are finding it particularly difficult. They will have to implement that capitalisation against criteria, and if they do not meet those criteria they will not be given permission to do so.
Lord McKenzie of Luton
My Lords, is the Minister aware that the tired mantra that she keeps trotting out that it is all down to local authorities is growing very thin? People are well aware that it is the Government that are responsible for making these cuts and that they are simply hiding behind local authorities and local councils.
Baroness Hanham
My Lords, I suppose I could also produce the statement that I have made frequently in this House that if it were not for the previous Government’s mess we would not have to make these reductions. I point out that the previous Government had also seen the ill of the way in which they were going about this, as they were also making provision for substantial reductions in the budgets for local government in this financial year. The fact that this Government have had to make slightly more reductions than expected should not have been totally unexpected by local authorities—they knew perfectly well that they were going to have to make reductions.
The “tired mantra” that the noble Lord refers to is not a tired mantra; it is just a truth. The truth is that all the money for local government has now been given to local government by this Government. It is no longer ring-fenced—there are now only two areas that are—so local government can use every bit of money that the Government get, except in the areas of education and health, and can decide how to use it. Local government can decide how to provide its services and how to provide the most value to its own communities with all the resources that it has.
Lord Hamilton of Epsom
My Lords, does my noble friend have any figures for natural wastage in local government? Does not natural wastage contribute to the reduction that there will be in the number of jobs—although obviously it will not contribute all of them?
Baroness Hanham
My Lords, I do not have the figures, but the noble Lord is correct. There is always natural wastage—amazingly, people do leave jobs voluntarily—and there are ways of leaving jobs other than through redundancy.
Lord Liddle
My Lords, does the Minister accept that because of the Government’s refusal to be more flexible on the capitalisation of redundancy costs, cuts in current spending are going to be deeper than they would otherwise have been? This will have a particular impact on grants to the voluntary sector and the prospects for the big society.
Baroness Hanham
My Lords, we have made it clear that we expect the voluntary sector to be part and parcel of the future of local government. If local authorities do not wish to do that—although they will be put under great pressure to do so—they will cut voluntary sector grants, but in doing so they will be cutting off their nose to spite their face. Much good work is done by voluntary organisations. Under the Localism Bill, there will be a greater expectation that they will be able to take part in running and managing services.
Arms Trade: Libya and North Africa
(13 years, 8 months ago)
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Lord Alton of Liverpool
Lord Alton of Liverpool to ask Her Majesty’s Government whether they will review their policy on the sale of arms and military equipment in the light of events in Libya and north Africa.
The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Green of Hurstpierpoint)
My Lords, we continue to believe that the assessment of all export licence applications on a case-by-case basis against the consolidated EU and national arms export licensing criteria is the right approach. In the light of the rapidly changing events in Libya and north Africa, we acted to revoke licences where there was a clear risk that the equipment might be used for internal repression or human rights abuses.
Lord Alton of Liverpool
My Lords, I welcome the Minister to his first appearance at Question Time. What are the Government doing to prioritise a legally binding arms trade treaty, and will they now support the enactment of my Re-Export Controls Bill, the provisions of which have been endorsed by three separate Select Committees in another place and supported throughout proceedings in your Lordships’ House? It has also been reintroduced as a Bill in another place by Mr Tony Baldry MP. Have not recent events in north Africa and the Gulf demonstrated that we have a clear duty to do all we can to prevent British weapons and munitions being used to crush dissent, to attack unarmed civilians, to destabilise whole regions, and to kill and maim those who are trying to give birth to democratic institutions?
Lord Green of Hurstpierpoint
My Lords, I think the whole House shares the instinct that lies behind the noble Lord’s questions. It is absolutely imperative that we conduct our defence and security sales business on the basis of high standards and under strict controls. Those controls are in place, but we always need to make sure that we take account of new experience. As for the proposal on the re-export of arms and control of that, the difficulty is that it is always the case that once arms have passed from this country to the buying country, there is no jurisdiction for any law passed in this country. We therefore remain concerned that any such Act would remain effectively null and void. We should continue to base our approach on careful pre-licensing scrutiny of export sales.
An arms trade treaty is a priority of the Government. We are committed to agreeing a strong and comprehensive arms trade treaty. We have a unit in the Foreign and Commonwealth Office that provides official support. We are working with key partners, such as the European Union, the United States and the co-authors of the treaty proposal—Argentina, Australia, Costa Rica, Finland, Japan and Kenya.
Lord Judd
Does the Minister agree that the real issue of concern is the underlying drive in policy? Armaments should never be another useful export unless there is some specific reason for not exporting them. Surely the culture in the unstable world in which we are living, with all the recent experience, should be that arms are an extremely dangerous export to promote, and should be exported only when there is a specific strategic purpose that can be monitored and held to account in the context of our relationship with the people who are receiving those arms. At the moment, we need to bring the emphasis in that direction, instead of the one that has prevailed.
Lord Green of Hurstpierpoint
I thank the noble Lord, Lord Judd, for that question. It is important to keep a balance. Every country has a right to self-defence. We live in an imperfect world; if it were a perfect world we would have no need of defence industries, needless to say. It is clearly extremely important that sales of defence and security equipment are conducted to the highest possible standards, and that we work with recipient Governments to ensure the proper use of such equipment and services. We must also make sure that we learn from experience. We would all acknowledge that we have some things to learn from the terrible events in Libya.
Lord Razzall
My Lords, does the Minister agree that the question goes slightly beyond the sale of military equipment and arms referred to in the Question asked by the noble Lord, Lord Alton? Will he confirm that the sale of such items as Taser guns, tear gas and other material, which are clearly being used in north Africa and the Middle East to suppress legitimate democratic uprisings, will be banned by this Government?
Lord Green of Hurstpierpoint
I thank my noble friend but, as I said earlier, we believe that the right approach to defence goods is a case-by-case one. There are legitimate uses of many defence products and services. Some we do not market or manufacture in compliance with international restrictions, but in general the right thing to do is to follow a case-by-case approach.
Lord Mackay of Clashfern
My Lords, is there any harm in the Bill to which the noble Lord, Lord Alton, referred? It seems to me that it could do good. When the Bill was being debated here, I could not understand on what basis it was suggested that it could do any harm, if enacted.
Lord Green of Hurstpierpoint
I thank my noble and learned friend for the question. The point is not whether it could do any harm but the fact that there is real concern about whether it could do any good as it is effectively unenforceable. We do not want any distraction from the important focus on thorough pre-licensing scrutiny.
Lord Elton
My Lords, a question at the back of many minds, which we do not much like to ask, is this: if we are going to be engaged in a no-fly zone and in enforcing it, is there any prospect that British pilots will face air defences supplied by British companies?
Lord Green of Hurstpierpoint
I thank my noble friend. This is clearly a very difficult position. The situation is evolving from day to day. It is tragic; civilians are being killed and the outcome is unclear. The right thing for Her Majesty’s Government to do is to work with the international community to try to find a way forward that protects the citizenry of Libya.
European Union Bill
Joint Committee on Human Rights
The Chairman of Committees
That Baroness Stowell of Beeston be appointed a member of the Joint Committee on Human Rights in place of Baroness Morris of Bolton.
Information Committee
The Chairman of Committees
That Lord Black of Brentwood be appointed a member of the Information Committee in place of Lord Taylor of Warwick.
Consolidated Fund (Appropriation) (No. 2) Bill
Public Bodies Bill [HL]
(13 years, 8 months ago)
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Lord Roberts of Llandudno
Lord Roberts of Llandudno
My Lords, I remind the House of the great struggle to establish a Welsh-language television channel. A Member of the other place who was highly respected in Wales, Mr Gwynfor Evans, even fasted in order to ensure that we would have a Welsh-language channel. We owe a tremendous debt to my noble friend Lord Roberts of Conwy, who overcame many obstacles in order to make sure that S4C—S Pedwar C—went on to the statute book and became a reality. We say to my noble friend, “Thank you, again”.
There are many English-language channels. You can switch from one to another and spend most of your evening doing it, but if you want a Welsh-language channel, there is only one, S Pedwar C. It serves the 600,000 or so viewers who speak Welsh, for many of whom Welsh is their first language. In an age of high technology and digital advances, it is a poor nation indeed that does not have its own television channel in its own language. We owe so much to this channel. The previous census recorded an increase from 18 per cent to 21.5 per cent in the number of folk in Wales who spoke Welsh; 28 per cent said that that they might not speak the language but had an understanding of it. We should look at what has happened for the past generation or two—the establishment of Welsh-language schools, major cultural advances in the Welsh language and S4C, the Welsh-language television channel. As a result, there has been a larger increase in the number of people who speak Welsh than there has been for many generations.
S4C, with its full range of programmes, is the natural channel for all who cherish living much of their lives with their own language. S4C starts with children’s programmes in the morning and continues until 11 or 11.30 pm. If you are Welsh and live in a Welsh area, you can receive all your entertainment, information and news programmes on this Welsh-language channel. S4C is not so much the icing on the cake for us in Wales; it is very much the cake itself.
S4C is not a static but a developing entity. It has changed and needs continually to change. Including it in the Bill would very much undermine that change and would be a backward step. We do not dispute the fact that S4C has had a turbulent past couple of years, with resignations and oustings. It needs time and the breathing space to get itself in order again to create different and more modern structures to perform its task. It needs different people with different directions. If the Bill included the Welsh-language channel, immense harm could be done. The channel needs time to develop in its own natural way.
I question whether the issue of the channel really belongs with the Department for Culture, Media and Sport. Surely its proper place today would be with the Wales Office. It is the Welsh channel and it serves the people whom the Wales Office also seeks to serve. Many others may also be uncertain and consider that this is the wrong time to give the last word on S4C’s character and funding to a Minister here in Westminster. Before long, there will be a full consultation about the media in the United Kingdom. Surely that would be the time for us to determine the future of S4C, not today. The day before yesterday, I read a letter in which the leaders of the four parties in the Assembly in Cardiff all said that they needed breathing space and time before there was any change in the status of S4C. I am sure that they are right. If Plaid Cymru, the Conservatives, Labour and the Liberal Democrats all agree, surely this is the wrong place to say that Wales cannot take the avenue that it wants.
Lord Morris of Aberavon
My Lords, I support the amendment moved so ably by the noble Lord, Lord Roberts of Llandudno. I hope that the House will forgive me if I elaborate a little on the matters that he raised. I never thought when I became a Member of your Lordships’ House that I would take part in two debates on matters crucial to the nation of Wales and its nationality within weeks of each other. The result of the debate on the appropriate parliamentary representation for Wales was disappointing. Wales has every reason to believe that it was let down by the Benches opposite. I hope that when this Bill completes its journey through the House—and I take the hint of the noble Lord, Lord Roberts—Wales will not again feel let down and we shall see the withdrawal at some stage of S4C from the Bill.
The setting up of the fourth channel to meet the needs of the Welsh language is the jewel in the crown of the Conservative Party in Wales. After a ghastly and monstrous U-turn and universal national protests, including that of Gwynfor Evans, the Tory Government were persuaded to provide for Wales’s needs. I was glad that the noble Lord, Lord Crickhowell, made the point a few weeks ago that the visit of the three wise men—Lord Cledwyn, the Archbishop of Wales and Sir Goronwy Daniel—came at a crucial moment. The resulting Act of Parliament, setting up an independent, properly financed body, S4C, is now to be thrown on one side. The Government protest that they wish to maintain the independence of S4C. If the BBC is to be its main financier, it will be the ultimate accounting officer and all S4C’s expenditure will have the stamp of BBC accountability. If I am wrong, perhaps the accounting provisions can be explained.
Having paid tribute to the Tory Government’s decision, perhaps I can reveal that for six years as Welsh Secretary I battled for the Labour Government to meet their commitments, despite the difficulties of the IMF crisis. Ultimately, on 6 March 1979, weeks before the election, Lord Merlyn-Rees was able to move the Second Reading of the Independent Broadcasting Bill permitting the setting up of transmitters generally, and particularly for Wales, so that broadcasting could commence by the autumn of 1982. This was the vital building brick that the new Government seized upon and operated.
All this work, of which we can all be proud, is now in real jeopardy because the Government, without any consultation, decided to offer this piece of saving to the Treasury. There was no consultation with the Welsh Assembly, and the plea of all the party leaders in the Welsh Assembly for an independent review, referred to by the noble Lord, was ignored.
S4C has not been without its faults. I happen to listen to some of its programmes most evenings, even in London. I have complained as far back as 2002 that the mix of programmes on any particular evening, the overdependence on cheap football matches in remote parts of Europe and the overreliance on some performers, good though they may be, are not enough. S4C has failed to realise that Wales is no longer an agricultural country. It was no surprise to me to discover that the viewing figures had dropped substantially, although they do not include people such as me in London, or those in Liverpool or elsewhere across the border. I do not think that the board of S4C has served Wales well in recent years. There are individual talents on the board but they obviously failed to work with the chief executive and agreed to an organisational structure much criticised in Sir Jon Shortridge’s report on governance.
In 50 years in politics, I have had only one dispute with a broadcaster, which was regarding a major programme celebrating the 10th anniversary of the setting up of the Welsh Assembly. I fear that the whole programme had to be withdrawn. The conduct of S4C was pathetic. However, there is much to be done within S4C and I hope that, with the vision of a new chairman of standing in Wales and a new chief executive, we can see better things.
None of this exonerates the Government from the process employed in riding roughshod, and in the face of an Act of Parliament, by demanding and getting back £20 million from S4C, denying long-term financing to S4C in the future and transferring most of its responsibilities for finance to the BBC.
I was grateful to Mr Vaizey for seeing me twice last year, whatever his relations with the Welsh Assembly. He listened very carefully to what I had to say and seemed seized of the importance of the points that I had made. Reading his evidence to the Welsh Affairs Select Committee, I was a little disappointed. The Government’s conduct in refusing a meeting with the Welsh Assembly and ignoring a plea of all the party leaders in the Assembly for an independent review is beyond the pale. The Welsh Assembly has the statutory duty under Matter 20 of Schedule 5 to its own Act of,
“promoting or facilitating the use of the Welsh language”.
What of the future? How is the relationship to work? There is only a short-term guarantee of finance. How is the independence of S4C, as promised by the Government, to be fulfilled? The accounts that I get, though disputed, of a lack of input at present by S4C into the 10 hours a week of broadcasting provided by the BBC do not augur well.
The first requirement in the new relationship between the BBC and S4C is for firm guidelines as to who does what. Perhaps an independent person—someone such as Sir Jon Shortridge, who is much respected—should be asked to draw up the guidelines on the relationship between the two parties; otherwise, a much larger BBC will overwhelm the tiddler that is S4C.
Secondly, there should be proper and adequate financing over a longer period of time than is envisaged at present. After all, careers are at stake and individuals are entitled to know, with as much certainty as possible, what sort of S4C there will be and whether there will be jobs for them.
Thirdly, money for S4C must come direct from the licence fee and not through the BBC. The licence fee is not the property of the BBC; it is our money. The BBC in the past has strenuously fought against top-slicing and it might well do so again. Should it succeed, we are back to the accounting officer problems that I posed earlier. In any event, a question has been raised as to the legality of the BBC paying money to a body that is not a subsidiary company of the BBC. Can the Minister assure us that the arrangements proposed have been legally approved?
Lastly, in the absence of an effective Act of Parliament continuing to guarantee S4C’s existence, I would seek to ensure that part of the BBC’s new charter, coming about in a few years’ time, should set out the terms and duties of whatever body operates Welsh-language television. The alternative is a separate charter for S4C. After all, it had a special Act of Parliament promising and guaranteeing it revenues each year, but all that has been brushed aside—so much for the rule of law. It would have been wiser and more prudent to have had a proper and more independent review first. If there was a case for change, it should have been evidence-based.
I close by saying that it is a matter of regret to me that the Welsh Assembly, when economic conditions were so much better, did not propose that Welsh-language TV should become part of its responsibilities. I fear that there were two reasons why it did not do so. First, it feared taking over financial responsibility, although at that stage, when we were in better economic climes, that could have been negotiated. Secondly, I think that S4C preferred to be answerable to a distant Whitehall, with very few Welsh speakers overseeing it, than to neighbouring Cardiff, which would see exactly what was going on. This may be part of the reason why so much has gone wrong in recent years. It was a missed opportunity. I advocated this as long ago as 2002, when I was installed as chancellor of the University of Glamorgan. Welsh-language broadcasting is intrinsically essential to the well-being of the nation of Wales. The time is ripe—if one understands what devolution is—for Welsh TV broadcasting to be devolved.
Lord Wigley
My Lords, perhaps I may first declare an interest. Between 2003 and 2006, I was a member of the S4C authority, and my son, daughter, son-in-law, daughter-in-law and my wife—and I occasionally—receive some benefit from participating in their programmes. My great interest by far, however, is as a Welsh speaker and a television viewer in Wales.
I support Amendment 83 standing in the name of the noble Lord, Lord Roberts of Llandudno. I also speak to Amendment 113D, standing in my name.
As has been said, this is a very sensitive subject in Wales. When I entered the Commons in 1974 the structure of television in Wales caused immense frustration to both language camps. Welsh language television programmes were carried by both BBC and ITV main channels in Wales, a small proportion of which were at peak viewing hours. Non-Welsh-speaking viewers were frustrated at having programmes they could not understand thrust upon them. Equally, Welsh speakers were frustrated that at best they received a fragmented service, with BBC and HTV duplicating news and current affairs programmes. The sum of the parts just did not add up to a comprehensive service. Most of the programmes were away from peak hours. There were protests; many language activists refused to pay their television licence fee; and some went to prison.
Before the 1979 general election, the Conservative Party promised a dedicated channel for the Welsh language. A few weeks after the election, the then Home Secretary, in a speech in Cambridge, announced that the Conservative Government had done their first U-turn, abandoned their election promise and were not going to provide a single-channel solution. This led to massive protests, which culminated in Plaid Cymru’s former leader, Gwynfor Evans, announcing that, unless the Government kept their word and provided a Welsh channel, he would starve himself, if necessary, to death. Thousands protested, including many senior people in Wales. Hundreds of us refused to pay our television licence; I myself went to court for so doing, as did many colleagues.
Cutting a long story short, the Government realised that they had badly misjudged the situation. People from all parties intervened. The noble Lords, Lord Crickhowell and Lord Roberts of Conwy, both Welsh Office Ministers at the time, pressed colleagues with the strength of representations they were receiving from figures such as the Archbishop of Wales, the former chief civil servant in the Welsh Office, Sir Goronwy Daniel, and the former Secretary of State for Wales, Cledwyn Hughes, later Lord Cledwyn of Penrhos.
It matters not for the purpose of this debate whose representations carried most weight or for what reason. Suffice it to say that the Thatcher Government recanted. Discretion was quite rightly the better part of valour. A further U-turn took place and the channel was given the go-ahead. The rest is history.
However, understanding the significance of that history is essential to understanding the situation which faces us today, which seems almost like a rerun of history. For the first time since 1979, last May we had a new incoming Conservative Government. The Conservatives had during the preceding election campaign made no reference whatever to their intention to restructure S4C. As in 1979, with no consultation in Wales, policy was reversed after the election. Need I say more?
As has been said, the Welsh language is spoken by 20 per cent of the 3 million people living in Wales, amounting to about 600,000 people. There are probably a further 100,000 Welsh speakers living in the rest of the UK. It has been estimated that 57 per cent of homes in Wales have at least one person who understands Welsh. S4C is watched by more than 600,000 people in the course of an average week.
That figure is less than the reach of almost 1 million people which existed six years ago, which has been mentioned. There are two reasons for the change, both associated with the changeover to digital television. First, while it undertook analogue transmissions, S4C broadcast English-language Channel 4 programmes during off-peak hours when it was not transmitting Welsh programmes. Clearly, when those were no longer available, many English monoglots no longer tuned in to S4C. Secondly, digital switchover led many viewers of all four old analogue terrestrial channels to migrate to explore the offering available elsewhere. S4C was not immune to that trend. The drop in viewers was predicted by the DCMS as far back as 2005. Having suffered those setbacks, I am glad to say that the graph has turned over the past 12 months, with an increase of 10 per cent in the channel’s reach across the UK to an average level of 616,000 in 2010. In the week ending 23 January, almost 1 million people tuned in across Britain—no doubt aided by the fact that the Cardiff City against Stoke City FA Cup match was being broadcast live.
It is also worth emphasising that the average programme viewing figures have been affected by the setting up of the brilliant toddlers’ space called Cyw, which provides programmes for the under-fives on weekday mornings between 7 am and 1 pm. Those programmes can never aspire to more than the few thousand viewers: the available cohort is probably no more than 15,000 and the likely viewership under 5,000.
Some people have poured contempt on figures as low as that, yet as a service it is critical for language transmission, particularly in households in English-speaking parts of Wales. I am glad that Cyw was awarded international recognition in New York earlier this year. The facile use of statistics by DCMS Ministers to denigrate S4C has been unworthy and reflects a failure to understand the reality of the Welsh language, the channel and its role.
I make one thing quite clear. There is no question of saying that everything has to stay exactly as it has been over recent years. Indeed, S4C has in recent years already cut back its central staff from 210 to 154 at present, and is committed to further reductions down to 114. Surely that is an adequate indication of its intent.
Everyone in Wales realises that, in the current financial constraints, all services funded by the public purse are likely to face cutbacks and S4C cannot be immune from these. To that extent, the funding formula of RPI, which has looked after S4C for two decades, cannot be regarded as sacrosanct. We did, however, note last weekend the emphasis of the Prime Minister, David Cameron, in Cardiff when he stated that Wales was being protected from the worst level of the cuts hitting other parts of the UK because of our difficult economic position, and that the average cuts would be 2 per cent per annum over the next four years. I am sure that S4C, however reluctantly, could live with cuts of that order, but not with the 24 per cent cuts in real terms that have been predicted—or more likely some 40 per cent in cash terms over that period.
The importance of securing guaranteed funding for the channel, removed from the annual political dogfight, was the reason it was safeguarded in legislation by the RPI formula. Unpicking that legislation, however inevitable in today’s climate, is not something to be undertaken lightly. There is, however, a feeling that any cash cutbacks to be faced by S4C should be no greater than those faced by other public services.
The worst aspect of this saga is probably the way in which it has been handled by DCMS Ministers. Decisions were taken without any meaningful discussion with those in Wales who have a legitimate interest in these matters, and without any engagement with S4C itself, its audience, or its stakeholders in Wales. We should also remember that some 40 private companies are dependent to a greater or lesser extent on S4C and will be affected by the changes which were unilaterally announced by the DCMS last year. S4C, in fact, paid over £88 million into the Welsh economy in 2010—money that has been vital in building up the private sector television and film industry in Wales so that it can compete in world markets.
The initial discussions with the BBC were overwhelmingly at a UK level, with even BBC Wales out on a limb. Involvement with S4C itself has been less than open, with the channel finding out at second hand what DCMS Ministers had in mind. The DCMS seems to have studiously avoided engaging directly with the Government of Wales, despite the fact that both the Welsh language and education are fully devolved functions and that S4C has a significant contribution to make to both those portfolios. Furthermore, when the junior DCMS Minister in another place, Mr Vaizey, appeared before the Select Committee on Welsh Affairs on 18 January, he admitted—he almost boasted—that no, he had not ever watched a single S4C programme. This was despite the fact that he had ministerial responsibility for the channel and that 80 per cent of S4C’s output could be watched with subtitles.
Your Lordships will hardly be surprised that over recent weeks there has been growing demand for responsibility for S4C to be transferred from the DCMS to the National Assembly. This has been augmented following last Thursday’s referendum. To my mind, there appear to be three elements which are essential for a solution to gain support in Wales. First, there has to be an acceptance that S4C is currently an independent public body, set up by statute. It is not acceptable for such a body to be abolished at the whim of a Minister using Henry VIII-type powers to do so. That is why I included in my Amendment 113D a provision that the powers given to the Minister at Westminster can only be used with the consent of Ministers of the Government of Wales.
It should be noted that those in the Assembly recognise that there must be change. Reference has already been made to the letter sent to David Cameron dated 29 October 2010 and signed by all party leaders in the Assembly, which proposed,
“a comprehensive examination of all aspects related to the governance and regulatory oversight of S4C, including where political responsibility should lie, on the basis of ensuring a secure and sustainable funding stream for the Channel”.
That was a very positive proposal, but it does not seem to have led to anything. Whatever new structure might eventually transpire, I would urge that the corporate and commercial independence of S4C should be guaranteed. I am not persuaded that this can be done by bolting S4C on to the structure of the BBC. If it was, the campaigning target in Wales will inevitably switch to securing that what is currently BBC Wales becomes more independent from the BBC in London. I know that there is sympathy for such restructuring in Scotland and in some quarters in Northern Ireland. However, such fundamental changes should be part of a comprehensive new communication Act, not matters that arise from the ill thought-out schedules to a rushed Public Bodies Bill.
Secondly, whatever the model of the constitutional governance of S4C, there is also the question of the editorial independence of the channel. If the corporate independence of S4C is guaranteed, then of course its editorial freedom should per se be implicit in such a solution. If anything less than full independence is provided, the editorial freedom of S4C becomes a pressing issue, and it would have to guarantee the right of S4C to reject the editorial line taken by the BBC or, indeed, by politicians.
Thirdly, and crucially, there is the issue of the guarantee of finance. I have no objection whatever to S4C being funded from the licence fee because the proposal has much logic. However, if it is to be funded from the licence fee, that must—it really must—be done through a route that is independent of the BBC, as has already been mentioned. Once S4C becomes a supplicant of the BBC, it is finished. He who pays the piper calls the tune. It is my belief that S4C should have a proportion of the licence fee safeguarded by statute, perhaps around 2 per cent of the total licence fee take for the UK. The present formula gives S4C £90 million a year from the DCMS budget. The department sees its contribution dropping from £90 million down to £6.7 million by 2013, a 90 per cent cut in its contribution. Perhaps the Government of Wales might be able to contribute a sum similar to that £6.7 million and thereby secure an equal voice in terms of the channel’s future. Securing an acceptable financial deal is basic to S4C and to retaining any meaningful independence for the channel.
Whatever way things move forward, there is a pressing need for the Government to clarify how they see the channel being funded post 2015. At present, there is a vacuum and great uncertainty, and frankly that is unacceptable to the small private companies in the sector which may be reluctant to invest if they feel that there is no ongoing financial certainty. But it is not enough to guarantee funding for the independent producers, important though that is. S4C itself needs some £20 million a year to maintain essential services such as transmission costs of over £7 million a year, subtitling costs, programme and viewer research, promotion of the channel and its legal and administrative responsibilities.
Securing a stable, practical and sustainable model for the future of S4C is immensely complicated and not something to be decided on the margins by unamendable orders in Parliament. It is therefore my preferred option for your Lordships’ House to cut S4C entirely from this Bill and, if necessary, for the Government to bring forward new proposals after proper consultation in Wales and elsewhere as part of the development of a communications Bill in a few years’ time. I hope that the Minister will accept at least the spirit of Amendment 113D on such a basis, but if she is not prepared to give a commitment to explore these possibilities and to come back with the necessary amendments on Report, I hope very much that the noble Lord, Lord Roberts of Llandudno, will press Amendment 83 to a vote and that it is supported by noble Lords on all sides as an indication made by this Chamber that the Government really must give further thought to this matter. Whichever way, I urge the Government to think again long and carefully on such a sensitive issue.
Lord Roberts of Conwy
My Lords, first, I thank those previous speakers who have referred to my part in the birth of S4C when I was a Minister in the Welsh Office. Since we began our proceedings on this Bill, my noble friend Lord Taylor of Holbeach has tabled some very welcome amendments, in particular the new clause in Amendment 114 requiring consultation on any draft order proposed under Sections 1 to 6. The new clause set out in Amendment 118 specifies the detailed procedure to be followed. That differs, of course, from the normal procedure with orders, but is not quite the super-affirmative procedure in full. These new clauses and the amendments tabled to them are yet to be discussed, so they are not in their final form. But whatever the final outcome, these clauses allow ample opportunities for consultation on a proposed order by Welsh Ministers, interested parties and parliamentarians. The many organisations and individuals who have written to us about S4C will, I hope, have the chance to have their say on the future of the channel in the consultation on whatever orders may eventually emerge.
The inclusion of a body in Schedule 4, in this case Sianel Pedwar Cymru or S4C, means that the Government have the power to modify its funding arrangements by order. Its removal from the schedule would mean that the power was removed from government. I am not quite convinced at this stage that removal is in the best interests of the channel or its viewers. The reason for my hesitation is that I am not sure what the financial position of S4C will be if there is no order. Does the channel continue to be financed as prescribed in the Broadcasting Act 1990 as amended? I should be grateful if the noble Lord who is to reply would clarify the position.
It is well known to most of us that the Government have advanced quite far in their plans for the future financing of S4C. We know this from a letter, which has been made public, from the Secretary of State at DCMS, the right honourable Jeremy Hunt, to Sir Michael Lyons, chairman of the BBC Trust, dated 21 October last year. A subsection of the letter, headed “New partnership and funding model for S4C”, states:
“The government remains committed to a strong and independent Welsh-language TV service”.
This statement of principle is repeated later in the subsection in the context of future funding of the service after 2015 when the comprehensive spending review period has ended and the funding situation of S4C is again under review.
Quite frankly, the critics have not given the Government the credit due for this very clear affirmation of their commitment to sustaining the Welsh language service. It has been reiterated by Ministers on a number of occasions, but it goes unheeded by those who do not wish to hear. A reduction in funding for S4C is not an attack on the Welsh language, as some have alleged, any more than a cut in defence spending is an attack on our forces.
The letter makes it clear that the DCMS will continue to fund S4C in 2011-12 and 2012-13 at agreed levels. The current level is not sustainable because, under the Broadcasting Act 1990, the channel’s annual grant increase is tied to the retail prices index. It is clear that that link must be broken to effect the deficit reduction programme which is fundamental to the coalition Government.
I understand that S4C will receive some £90 million from DCMS next year, plus £20 million of cost-free programmes from BBC Wales as well as some £3 million of revenue from advertising and commercial activities. It also has some £27 million in reserves. Therefore, S4C is not facing an imminent financial crisis. Indeed, it appears to have financial security for four years ahead, which is not to be deprecated. After this two-year period of DCMS funding, the BBC will contribute £76.3 million in 2013-14 and £76 million the following year, 2014-15, from licence-fee money collected from the public by the BBC. One must stress, as has already been done, that those moneys do not belong exclusively and as of right to the BBC, although it is responsible for them. DCMS will give a further £6.7 million and £7 million in those two years respectively. S4C will also have funding again from the sale of advertising and other commercial operations.
Why is all that spelt out in a letter to the BBC? It is because S4C is part of the new funding package negotiated between DCMS and the BBC whereby the BBC World Service, some local TV services and BBC Monitoring will be funded from the licence fee as well as S4C from 2013 on. It is worth noting that only DCMS with its extensive responsibility for broadcasting matters could have made this arrangement for S4C to be funded from the licence fee, which is collected by and so jealously guarded by the BBC. The National Assembly for Wales and their Government could not have done it. Besides, broadcasting is not a devolved matter anywhere in the United Kingdom.
All this provision for S4C funding—I stress that funding is all I am referring to—makes reasonable sense to me in our current, straitened national circumstances. Some have said that there is no provision beyond 2015, but four years of certainty as regards funding is not to be despised. Furthermore, we are promised a review in good time before that period comes to an end. There is also a thinly veiled threat to the BBC that if the new partnership with S4C does not work for any reason, the Government will not take the licence fee money themselves but nor will the BBC have it either, except to reduce the licence fee.
There is strong pressure on all sides to make the funding system work and it probably will. I cannot see any other satisfactory alternative being produced in time. Of course, if the final order to implement the new funding scheme is grossly unsatisfactory, both Houses have the power to reject it—rarely used though that power may be in your Lordships’ House. Where the problems will arise is in the inter-relationships between the organisations involved, but these cannot properly be resolved in the context of a Schedule 4 order and belong more properly to another schedule, possibly Schedule 3, which relates to the power to modify constitutionally in the sense of internal arrangements of public bodies. Clearly, the Government have not yet decided the detailed arrangements for the governance of S4C, which has come in, as the noble Lord, Lord Wigley, said, for some hefty criticism recently from Sir Jon Shortridge, formerly Permanent Secretary of the National Assembly and the Wales Government. It is understandable therefore that the UK Government placed S4C in the pending tray of the purgatorial Schedule 7, now to be abolished with certain exceptions.
S4C may well need to adapt its internal organisation, not only because of the new situation that will result from its new funding arrangements, but also because of recent events and public concern about its governance, which is the subject of Sir Jon Shortridge’s very thorough report. The present position, as it has developed, is that there is a supervisory authority and an executive team which manages and provides the day-to-day service. To put it mildly, this system has not worked satisfactorily in recent years, possibly because of the curious, and I believe wrong headed, separatist policy pursued since 2006 of keeping the authority and the management of the service as far from each other as possible. I shall not go into the painful consequences, which have become all too public, but I shall quote from the Shortridge report:
“Too many decisions were taken by management which should have gone to the Authority; there was too little transparency; when members of the Authority were invited to take decisions they too often felt that they were not given sufficient time and that they were denied the information they needed to enable them to make the necessary judgements; and they also lacked the information they needed to assess the decision taking and performance of management”.
Clearly, that was an unhappy state of affairs and it is surprising that it was allowed to continue as long as it did. A new authority will, I hope, have learnt lessons from the past and will be constituted differently, with a fresh mandate, mission statement and declaration of duties and responsibilities. The foundations are clearly laid down in Sir Jon’s excellent report. I am glad to say that some of his recommendations have already been acted upon by the existing authority.
I turn to the new partnerships scenario implied by the new funding arrangements agreed between the DCMS and the BBC Trust, incorporated in the same letter from the Secretary of State to the chairman of the BBC Trust, dated 21 October last. The key principles are clearly stated:
“The S4C service must retain its brand identity and editorial distinctiveness, as well as its special relationship with the independent production sector in Wales”.
The Secretary of State goes on:
“HMG holds that a new partnership model with the BBC is the best way of securing the long-term future of the service”,
and adds that the partnership would be,
“along similar principles to BBC Alba”.
That similar partnership would not be acceptable in Wales. It is difficult to see how that could be reconciled with the independence of S4C. It is not that the BBC’s extensive contribution to Welsh language programming on radio and television is not recognised and highly valued, but pluralism is all important in Wales as elsewhere, especially in news and current affairs. We do not like to see all our eggs in one basket.
The Secretary of State’s letter describes a fairly complex bipartisan series of negotiations, beginning with the BBC Trust and the authority setting out the strategic goals and broad editorial requirements of the service. Then, a combined board of the authority and the trust would oversee delivery of the same and, finally, there would be a joint management board to operate the service with its own commissioning structure and composed with a majority of independent directors appointed by the trust and the authority. It is no wonder that the Secretary of State’s next sentence is that,
“further discussion will be required about the exact form of the partnership, and the Government will play its part in those discussions”.
It is a curious set-up which requires a lot of tidying up.
What is the alternative? If possible, the licence money which is to provide the bulk of S4C’s money from 2013-14 should be allocated alongside the DCMS grant and be subject to the same accounting procedures. Could the Minister say whether this is possible now or in the context of the BBC licence renewal negotiations? It is crucial to split the BBC from the dispersal of the licence fee moneys that it gathers. At present, as Sir Michael Lyons, chairman of the BBC Trust, pointed out in a letter dated 10 November to the then-chairman of the S4C Authority, John Walter Jones, the trust is accountable to Government for the use of the licence money and that would extend to such moneys as were received from the licence fee by S4C in future years. This puts the BBC in a very dominant position vis-à-vis the S4C Authority.
Lord Rowlands
I support this amendment. The noble Lord, Lord Wigley, was right to remind us of the situation before S4C was first created. The bitter, divisive nature of the arguments that surrounded Welsh language broadcasting in my days as a Member in the other place were some of the most violent and angry ones that I had ever heard from constituents. They were split right down the middle. It ended up with people taking extreme positions. There were those who did not want to see a single Welsh language programme on either BBC or what was then HTV, and those who wanted to see a lot more and realised that these channels were not going to provide it. The creation of S4C has been an extremely important aspect in developing a consensus around broadcasting in Wales. Even with the best of intentions, we would be very foolish to break that consensus unnecessarily by one means or another. First of all, the consensus was built in establishing S4C, as has been described by my noble and learned friend Lord Morris and by others, and gained enormous cross-party support.
Despite all the problems that S4C has had since, I believe that one of its successes has been to maintain or sustain a degree of consensus around broadcasting and that we have not had the divisiveness that accompanied some of the broadcasting of earlier times. The Government ought to be very careful, in the way that they handle all these issues, that they do not break the consensus and reopen some of the old divisive arguments that were injurious to Welsh broadcasting as a whole. That is the first point that we have to get across to Ministers: that they cannot take a blunderbuss approach to this issue because it is too important that it be maintained. The consensus was created and developed as a result of careful consultation and bringing everybody along together. This has not happened so far in relation to the proposals now being floated.
I hope noble Lords do not mind if I mention, in a personal sense, that I had an opportunity for quite a period to watch closely the affairs of the S4C Authority because my wife was a member for a number of years. I realise what my noble and learned friend Lord Morris has said and what the noble Lord, Lord Roberts of Conwy, has said about the more recent problems of the S4C Authority. However, I remember, over the whole period of S4C’s establishment, that independent members of the S4C Authority played a crucial role in developing the new provisions and making sure that the channel was trying to reach out to audiences and was not going to be an enclave just for Welsh-speaking communities. My wife and others spent a great deal of time promoting what the authority was about, what the channel was about and what the service was about in communities that were not Welsh-speaking, such as the constituents of Merthyr Tydfil, whom I represented. The consequence of that and, I believe, a factor that was promoted by the independent members of the authority was that people in Merthyr felt that it was just as much their channel as it was in Caernarvon or Ceredigion. That was the success of it. Members of the authority itself played a very important role in achieving that aim and purpose. It had amazing spin-offs, such as the growth of Welsh medium education in communities such as Merthyr. Ysgol Santes Tudful started out with 22 children. My eldest son was a founder member of the school, which now has more than 400 students. S4C’s role in promoting and linking up through its children’s programmes has been a vital part of that development. It is one of the most exciting things that has happened in the Welsh language scene—that in Merthyr we have such vibrant and thriving Welsh medium education arrangements.
All this is part and parcel of a very important situation. My fear is that, in an effort to try this or that solution, if the S4C Authority loses its measure of independence and is seen to be subsumed within the BBC empire in one form or another, that will do harm, not good, to the future of Welsh language broadcasting. I ask the Committee and Ministers to ponder on this: we created a consensus to establish the authority, and a consensus is needed now on essential changes that need to be made, but that consensus has to be worked at. A blunderbuss approach of this kind, trying to promote an order of this kind as a solution, is not the way forward. It is the most inappropriate process by which to develop the change necessary in Welsh language broadcasting. The Minister will not lose any face. He has already made amazing changes to this Bill, and I suggest that this could be one more change that the Government could accept.
Lord Elystan-Morgan
Everybody who has spoken in this debate already and very probably everybody present in the House would probably agree with the proposition that if the Government make a mistake in how they deal with this matter, a death blow could be struck at the very existence of the Welsh language. S4C is a unique body charged with a unique commission to safeguard the very existence of the Welsh language. Well, you may say, that is nothing very much—but I doubt whether many Members of this House would take that view. A living language with a living literature is a jewel in the treasury of human culture, and the Welsh language no more and no less than any other living language is such a jewel. It is 1,500 years old and was in existence at least 500 years before the French language came into being. The French language came into being only at the end of the first millennium; up till then it was a patois of Latin. That shows something of the pedigree of the language that we are talking about.
If anybody thinks that those of us who are Welsh-speaking or committed in some way or another to a loyalty to the Welsh language are overdoing the case, I ask humbly of each and every Member of this House whether, if the English language were in such jeopardy, they would not take up honourably and gallantly exactly the same position. If you thought that the language of Milton, Shakespeare and Chaucer was in jeopardy and that its very life was in doubt, I know exactly what you would do. We are prepared to say exactly the same of the Welsh language.
The next question is about how unique the circumstances were in which S4C was set up. They have already been dealt with in some detail. There was a very ugly situation in Wales; there had been massive civil disobedience, and I have no doubt that Gwynfor Evans would have given up his life. A very wise, statesmanlike Englishman who had great experience of conflicts not dissimilar to these, William Whitelaw, made an agreement with the Welsh people. He said that if they called off their protests he was prepared to give them this channel. That is exactly what happened, to his eternal credit. I think that we should be very careful with this legislation that we do not go back upon the word of that splendid statesman and gentleman.
Indeed it was an agreement. A very great jurist, many centuries ago, spelt out in Latin the principle of agreements: pacta sunt servanda—agreements are binding. This agreement is binding and I would have thought that is the strongest possible case that one could have for not including it in Schedule 4. There are two jeopardies that S4C faces: it could be starved of a sufficiency of funds so as not to allow it to be able to carry out its true purpose; and it could be so boxed in with any form of association with a greater, more powerful body, the BBC, that it would render its independence something utterly unreal.
We have heard regarding finance how a 24 per cent cut might very well reduce S4C to the point when its very existence is placed in jeopardy. I am sure I am not exaggerating the situation. The other side of it is what would happen if it was brought under the aegis of the BBC. I am not entirely sure under what authority the Government have in fact suggested that there should be such a merger—Clause 4 deals entirely with funding; nothing else. Clause 7(1)—I will not go into the detail of it—might touch upon that but I doubt it. Are there any other statutory authorities that allow the Government to do this? I doubt it. Maybe the Government are relying only on the financial pressures brought about—not in relation to S4C alone—by the general economic situation to box S4C into a corner that it would not wish to be in.
Lord Elystan-Morgan
I am sorry; I have not yet resumed my seat. I was only collecting my notes. I shall not delay that event very long.
Lord St John of Fawsley
My Lords, I have been entirely convinced by the noble Lord’s eloquence in support of Welsh as a living language which it would be a tragedy to have lost. However, I think I detected, in the middle of his eulogy to the Welsh language, a Latin phrase. Would he add his zest and enthusiasm to reviving Latin as a spoken language?
Lord Elystan-Morgan
It is very late in this debate but I wholeheartedly agree. A survey carried out about 100 years ago showed that of words in general common parlance in the English language, 75 per cent were of Latin derivation. In Wales, it was well over 85 per cent. I believe that Latin should be revived, not as a dead language and not as a part of history, but as part of the building blocks of the languages that we use from day to day. I am very grateful to the noble Lord for that intervention.
I wish to raise a very narrow lawyer’s point. It would be ideal if the licence fee or an appropriate and guaranteed part of it could be diverted across to S4C straightaway without passing through the hands of the BBC at all, but I doubt very much whether that would be possible under the 2006 charter. I will not go into great detail about that now. If you try to deal with the licence fee then a price has to be paid. The Government, not cynically, but I think quite deliberately, are acting in a mercenary way. They are saying that they would be saving 94 per cent of the DCMS’s expenditure on S4C by transferring it to the licence payer. That is exactly it. In so far as the effect of that is concerned I will refer only very briefly to Article 47 of the 2006 charter, which sets out, almost like the main clause in the memorandum of a company, the main purposes. Article 47(4) says:
“However, the BBC may use these general powers only for the purposes set out in articles 3 to 5”.
Articles 3 to 5, of course, govern the situation completely in this connection. Article 3 says:
“The BBC exists to serve the public interest … The BBC’s main object is the promotion of its Public Purposes”.
Then it says this:
“In addition, the BBC may maintain, establish or acquire subsidiaries through which commercial activities may be undertaken to any extent permitted by a Framework Agreement”.
In other words, is the price of diverting part of the licence fee to S4C the fact of making S4C a subsidiary and slave of the BBC? As a lawyer, or an ex-lawyer, I have grave doubts that that is exactly the case; if so, it is a price that simply should not be paid.
Baroness Morgan of Ely
I support the amendment put down by the noble Lords, Lord Roberts, Lord Elystan-Morgan, Lord Rowlands and Lord Morris, on taking out any reference to S4C, the Welsh-language broadcast channel, from the Public Bodies Bill. I declare a slight interest, as the channel was the first organisation brave enough to employ me following my graduation from university, although its trust in me extended only as far as allowing me to photocopy the “SuperTed” scripts, which I am proud to say I did very well.
We are discussing a serious situation that, let us face it, has arisen due to some last-minute haggling before the comprehensive spending review was announced last year. That is why we are in this position. To place in question the future of a channel that had such a traumatic birth is naive in the extreme. We have heard how that came about; it was traumatic and divisive. The Welsh language in particular has been a divisive issue, but it has been put behind us with the establishment of S4C. I do not want to see that awful box reopened, but the danger of this action is that it could do exactly that.
We have to understand the historical context. The current proposal to include S4C in the Public Bodies Bill places a serious question mark over the channel’s future. There are lots of reasons for that, not least the 24 per cent cut. That is a dramatic cut, more extensive than many of the other already extensive cuts that we have seen from the Government. People should be reminded that the number of speakers of the Welsh language had been on a substantial downward spiral over the past century. The stabilisation of the language has been due in part to S4C, not just in allowing the language to be perceived in a modern context through new media but in helping to keep young, talented Welsh speakers in Wales who have contributed to the economy and might otherwise have left, denuding the language of Welsh-speaking young families of the future.
The economic aspects of the channel should not be underestimated. This investment, which until now has amounted to about £100 million a year, has helped to establish Wales as a key cornerstone of the media industry in the UK. The knock-on impact on the economy has been immense.
Is it going too far to suggest that including S4C in the Public Bodies Bill will place a serious question mark over the future of the channel? I do not think so, largely because now there is no legal certainty for the channel, which there was prior to the spending review. There is the principle of the matter to consider. It is an extremely serious matter to decide via secondary legislation on the structure, budget and very existence of a channel that was established by statute. There is now no guarantee for the channel beyond 2015. I know that the noble Lord, Lord Roberts, suggested that four years gives an amount of certainty. That is typical of the short-sightedness of the view that the Government are taking on the economy. We must look to the long term; that is where our future is. If we do not invest now, we will be in serious trouble in the future. It is a serious situation for the autonomy and political independence of a TV broadcaster.
You have to remember that in Wales there is already very limited media plurality. The European Charter for Regional or Minority Languages, to which the Government are a signatory, notes under Article 11 that media provision should be made available in regional languages and that the independence and autonomy of the media should be respected. It is difficult to envisage how this can be respected within the proposed new structure.
Finally, it is worth noting that S4C has been poorly run of late. Comprehensive political oversight of the channel has been lacking over the past two decades of its existence. It is now clearly an anomaly that S4C’s political oversight is based in London when Wales has its own political Chamber. The Welsh Assembly has clearly been concerned about being passed the responsibility without the budget in the past; that is why it has not asked for it. There needs to be a serious, comprehensive and detailed discussion about the channel and its future, particularly if the proposed new structure—whereby S4C’s budget comes from the BBC licence fee—is to continue. It was wrong to rush this through because of a comprehensive spending review deadline.
I would like the Minister to assure the House that the channel’s long-term financing, economic impact, editorial autonomy and independence, and political accountability mechanism were considered prior to the proposal that it should be included in the Public Bodies Bill, or is the treatment of the channel simply part of a slashing strategy which we saw as part of the comprehensive spending review and which was undertaken without any reference to these issues or the historical background of the channel? I would like the Minister to comment on that.
Lord Nickson
I apologise for speaking in this debate. I did not come into the Chamber expecting to speak today. My sympathies are very much with the Minister for having to reply to a debate that has inspired such eloquence and passion and will inspire great feeling. When I listened to the first three speeches, I found myself persuaded by the noble Lords, Lord Roberts of Llandudno and Lord Wigley, and by the noble and learned Lord, Lord Morris. Had this amendment been put to a vote, which it may yet be, I was minded—with an open mind—to vote in favour of it. I then listened to the noble Lord, Lord Roberts of Conwy, and began to change my mind.
Now, why on earth should I wish to contribute to this debate? My contribution is emotional, rather than rational or economic. I live in Scotland and have been there all my life. I know more about the Gaelic language than I do about the Welsh language. However, I was brought up as a boy in the Conwy valley. My father taught himself to speak Welsh as a schoolmaster in middle age. He thought that, living in the Conwy valley, he should speak Welsh. The noble Lord, Lord Roberts of Conwy, may remember him. I should also say that my middle name is Wigley. For those reasons, I am deeply moved by this debate and feel strongly that the emotion inspired should—I hope—bring the Minister to dwell in her reply on the words “consideration” and “consensus”, and to give careful thought to what is happening here.
I still have not made up my mind which way to vote, should the amendment be put to a vote, and will not do so until I hear what the Minister has to say. It is only one vote but I will listen with great care to what the Minister has to say.
Lord Howe of Aberavon
My Lords, despite my Welsh ancestry and, indeed, my part-Welsh title, the House will have noticed that I do not frequently take part in debates on this subject. That perhaps uncharacteristic diffidence is because I do not speak Welsh. It does not mean to say that I have failed to take account of the language. I can add to the satisfaction of my noble friend Lord St John by saying that in my last year at Winchester College—I will come back to that later—one of the tasks that I undertook was to write a thesis on the influence of Rome on Wales and the Welsh language. That inspires me to enter this debate.
I am, indeed, Welsh. My father was Welsh and Welsh speaking. He had the wisdom to marry a Scottish/Cornish bride, so I am a completely Celtic creature. I speak in support of the amendment with that in mind. I understand, and have sympathy with, the arguments on both sides but my clear view is that—as the noble Baroness, Lady Morgan, said—S4C does not require, and should not have, a place in this legislation. I do not begin to understand the complexities of the discussions that have taken place with the authority in recent years, but to put it in a Bill of this kind, which is designed to sweep away organisations of broadly this kind by ministerial signature, is not the right approach.
Familiarity of Latin by the Welsh is demonstrated by the choice of the Welsh word for the Welsh Assembly. The Scots have been left with the Scottish Assembly but the Welsh word for the Welsh Assembly is “Senedd”. If you look that up in a Welsh-English dictionary, you will find that it means a law-making body. That is a pretty firm undertaking on behalf of the independence of Wales, the Welsh language and, indeed, the Assembly.
Lord Elystan-Morgan
“Senedd” indeed means senate; it is one and the same. However, the origin of senate is “senex”, meaning an old man.
Lord Howe of Aberavon
I am not sure whether that learned classical intervention is designed to undermine the case that I am making or to demoralise me as I am an old man.
Considering my Welsh origin, I have not contributed a great deal to the structure and politics of the Principality. Tom Hooson was the cousin of the noble Lord, Lord Hooson, who, alas, is not with us and is unwell—we send him our best wishes. Tom Hooson was for some time—not long enough—the Member for Brecon and Radnor. In 1959, we together wrote what I think was the first booklet on the Welsh economy to be written by a political party, entitled Gwaith i Gymru, or Work for Wales. One of the propositions that we rather tentatively put forward in that booklet was one that I was able to advance, together with Tom Hooson, at the Welsh area conference at Llandrindod Wells, when Mr Henry Brooke was the Secretary of State for Wales. It was that we should have referenda—we did not call them that—in Wales on a county basis to vote yes or no for the continued closure of Welsh public houses on Sunday. We had those referenda every seven years for 35 years until my noble friend Lord Howard—Michael Howard—was able to repeal that legislation because Wales had been completely liberated. That is the way in which to achieve an objective in this case.
Lord Richard
My Lords, I detect that the atmosphere in the House is that we are anxious to get on, listen to the Minister and hear what the Government have to say. I therefore wish to give her two or three sentences of advice and then sit down.
First, I say to the Government: do not underestimate the importance of this issue in Wales. Do not do that, because the whole idea behind Lord Whitelaw establishing S4C was to take the sting out of the argument about the position and the future of the Welsh language. Like the noble and learned Lord, Lord Howe, I was not brought up to speak Welsh but I was brought up in a very Welsh-speaking part of Wales. My father spoke fluent Welsh; his father was a Methodist preacher, as was his father. I come from a long line of non-conformist divines. However, the fact of the matter is that my mother came from Cardiff and we therefore did not speak Welsh at home, although we spoke Welsh in the village.
All that I can say to the Government is that this matters in Wales. It is not a question of pounds, shillings and pence or the cash. It matters to Wales that there is now a television channel that broadcasts in the natural language of the Principality and our nation and it needs to be preserved. The idea that in a Bill dealing with quangos the Government can come along and suddenly thrust in this proposal regarding S4C is frankly ludicrous. The Government should be ashamed of doing it in this way. If they have views about S4C, they should produce a Green Paper or a White Paper, or whatever, and consult the people in Wales who are interested—in particular, the National Assembly. To strike a potential blow at the Welsh language and its future in Wales in this way is absolutely disgraceful.
Lord Sanderson of Bowden
My Lords, I had not intended to take part in this debate because I come from Scotland. However, I was encouraged by the noble Lord, Lord Nickson, putting his foot in the water. I appeal to the Minister, whom I know from times past has had a very successful time in party politics, to think very carefully before he jumps into this deep water. I remember only too well the times when Lord Whitelaw was dealing with this very tricky issue. Something about Lord Whitelaw that we all appreciated was that he would say: “Hold on a minute, let us see what the outcome is going to be. If there is a real case to be answered, let us hear it”. He heard it and took his decision thereafter—and persuaded the Prime Minister, Mrs Thatcher, to take the same view. I urge the Minister, in the words of the Scottish anthem, “tae think again”.
Baroness Finlay of Llandaff
My Lords, I will speak briefly. The history and complexities of the issue have been eloquently outlined by the noble Lord, Lord Wigley, and the noble and learned Lord, Lord Morris, and by others. As a non-Welsh-speaking person who adores living in Wales, I impress on the Minister that this goes beyond language. It concerns the cohesiveness of the people living in Wales. I watch S4C. I do not understand all the language but I love some of the programmes. They provide a unique opportunity for people to start and develop their careers. They provide a sense of community and society that you do not get in any other television broadcast in the UK. There is something quite special in the depth of the culture that comes through, which is far beyond language. My concern is that if we look only at the language, we will miss some of the essence of the feelings expressed in this debate.
Baroness Gale
My Lords, it gives me great pleasure to speak in the debate. I say to all noble Lords who have taken part a great big diolch yn fawr. I am not a Welsh speaker, unfortunately, and can only say little things like that. However, I am sure that the Minister will appreciate the strength of feeling in the passionate speeches that we heard from so many experienced noble Lords from Wales and elsewhere. It has been good to hear them.
S4C is a unique example of public service broadcasting devoted to representing Wales through the medium of the Welsh language. The status of the language and culture of Wales is of great importance to Welsh speakers and non-Welsh speakers alike. My noble friend Lady Morgan of Ely spoke of the importance of the Welsh language channel for young people.
Lord Richard
My noble friend is making a speech from the Front Bench. With great respect, the Minister ought to have the courtesy to listen to it.
Baroness Gale
I was commenting on what my noble friend Lady Morgan of Ely said about the importance of the Welsh language channel in respect of young people who speak Welsh, and children in particular. It is the only channel that caters for Welsh-speaking children. My noble friend Lord Rowlands spoke about the development of the medium schools in Wales. They have been a great success in Merthyr and in all the valley constituencies. I speak from experience as I sent my children there and I am proud to say that they are fluent Welsh speakers. Their children are, too. My children, grandchildren and great-grandchildren all speak Welsh, so, although I cannot speak it myself, I can say that I have done my bit for the language. S4C has also helped to develop their language skills. Many of the pre-school children’s programmes are absolutely great, and children do not have to be Welsh speakers to listen to them. Therefore, S4C plays a very important role at all stages of a Welsh person’s life.
From the views that have been expressed this afternoon, I think that the Public Bodies Bill is perceived as a threat to the very existence of S4C. That view can also be seen in the many letters that I, and I am sure many other noble Lords, have received from individuals and organisations in Wales. Of course, they have all been bilingual letters. Understandably, small businesses in Wales, particularly those in the creative industries, are very anxious about what this decision means for them. Therefore, there is much concern about the future of S4C in Wales.
In his evidence on S4C to the Welsh Affairs Committee on 18 January, the Culture Minister, Ed Vaizey, admitted that he had no specific Welsh-based adviser giving him a Welsh overview, although he said that he had had informal discussions with former Secretaries of State for Wales. He also admitted that he had not spoken on this matter to Nick Bourne, the leader of the Welsh Conservatives in the Welsh Assembly. When asked whether he had ever watched S4C, he said that he had watched “Fireman Sam”. As this is a children’s programme in English, I do not think he would have gained much knowledge from it if that was his only viewing of S4C. With the Culture Minister having so little knowledge about Wales and the importance of S4C to the culture and language of Wales, is it any wonder that we are having such a debate today, showing, as it does, the strength of feeling on this matter?
Does the Minister agree that there has been no consultation with the Welsh Assembly Government or with S4C itself? It has been mentioned that the four party leaders in Wales wrote to the Prime Minister in October calling for an independent review commissioned jointly by the UK Government and the Welsh Assembly Government. The four leaders were seeking a review into the future of S4C because, as we have heard this afternoon, there seems to have been a problem with the Government’s approach. Such a review would examine all aspects relating to the governance and regulatory oversight of S4C, including the question of where political responsibility should lie, and it would seek to ensure that the channel remained independent. The review would also seek to secure a substantial funding stream for the channel. I do not know what has become of this letter or whether there has been any discussion with the Minister on it. Perhaps he will be able to tell us.
Surely there must be a much better way of going forward than the way in which the Government are dealing with S4C in this Bill. I think that there is general consensus around the Committee that S4C should not be included in the Bill. Can the Minister allay fears that these measures, if implemented, could mean the end of S4C as an independent broadcaster? Many have mentioned the funding issues. They will of course need to be looked at and some solution will need to be found.
I hope that the Minister has listened carefully to the grave concerns that have been expressed all around the Committee. I am sure that by now he will understand the strength of feeling that Welsh people have regarding S4C. It is seen as one of the national assets of Wales. Therefore, I hope that, as others have mentioned, the Minister will be able to have discussions with all of us between now and Report with a view to finding a solution to this matter.
Baroness Rawlings
My Lords, I should like to make it clear that I am answering as the Minister from the DCMS, as this is the DCMS part of the Bill.
This has been an impassioned and eloquent debate. We all agree on the importance of Welsh-language television broadcasting. It is not in doubt, as we have heard from a very full debate this afternoon.
This Government remain committed to making certain that Welsh programming is a key part of the UK broadcasting landscape and that a dedicated channel for Welsh language broadcasting is maintained. The amendment of my noble friend Lord Roberts, Amendment 83, would remove S4C from Schedule 4. This would prevent us amending the funding formula. Following the point made by the noble Lord, Lord Wigley, that in the current economic climate it is not possible to have funding linked to the RPI, I say that the Secretary of State needs the flexibility to allow the funding settlements appropriate to the prevailing fiscal climate, so that all relevant factors are taken into account. The Government have had to make some difficult decisions about the organisations they fund directly, and S4C is no exception. The comprehensive spending review made a firm commitment to funding S4C. Subject to this piece of legislation, the funding levels are secure for the next four years, as I said to my noble friend Lord Roberts on 28 October 2010 in answer to his Question on funding for S4C, and to the noble and learned lord, Lord Morris. I give reassurance that there will be a review before the end of the four years.
Lord Rowlands
The noble Baroness mentioned the need for the particular order-making power to change the financial arrangements. Does that mean there is nothing in the original Act which would allow that?
Baroness Rawlings
I do not think there is. That is why it is in this Bill.
In relation to Amendment 113D in the name of the noble Lord, Lord Wigley, it is right that S4C should remain a responsibility of the Department for Culture, Media and Sport.
My noble friend Lord Roberts of Conwy is absolutely right in his well argued speech. As he started S4C, he rightly said that no order can be laid without consultation. Broadcasting is reserved as part of the Welsh devolution settlement and is, therefore, not devolved. This Bill does not represent an opportunity to reopen what was agreed as part of the devolution settlement—
Lord Howe of Aberavon
I wonder if my noble friend would allow me to intervene for a second? I understand that she may be making a very good point about the need for financial readjustment, but I should have thought that any sensitive Chancellor of the Exchequer or Treasury Minister, without needing to be Welsh, would recognise that relying on legislation of this nuclear kind to address the issues that she is rightly focusing on would be politically unwise and disastrous. I am quite certain that it would be possible to find a method of adjusting the financing without continually mentioning it.
Baroness Rawlings
I understand the concern of my noble and learned friend Lord Howe, but we go back to the current economic climate. It is not possible to have funding linked to the RPI. The reason for doing this is to secure the funding through the DCMS and the BBC. If we do it in that way it will be secured; otherwise it will not.
Lord Thomas of Gresford
Is the Minister ready to listen? Her Majesty’s Opposition have suggested that there could be discussions between this stage and Report; indeed, some very important points have been made with great force and with great vigour, from all sides of the House. Is the Minister saying she is not prepared to move from this position? That would help my noble friend decide what to do.
Baroness Rawlings
I appreciate what my noble friend Lord Thomas said, and I am getting there, but if I am interrupted all the way through, I will not be able to get there. I will come to that point.
The reservation of broadcasting is for sensible reasons. We have both European and international broadcasting obligations, and it is appropriate for those obligations to be secured on a UK basis, largely because of the nature of broadcasting itself. It is clear that spectrum does not respect boundaries, and we know that S4C can be and is viewed in parts of England. We are committed to ensuring that all the nations in the UK are properly served with broadcasts which suit their individual needs, but it is right that it should continue to be a UK function to do so.
The Secretary of State for Culture, Media and Sport works closely with the Secretary of State for Wales on S4C matters to make certain that a Welsh perspective is fully taken into account. The interests of S4C will be protected by the coalition Government and the new arrangements. In addition, to make certain that the Welsh aspects are fully taken into account, the Secretary of State for Culture, Media and Sport and the Secretary of State for Wales have agreed new arrangements whereby Wales Office Ministers will be involved in all ministerial meetings relating to S4C. Wales Office officials will be involved in the drafting of all submissions on S4C matters. I hope that that satisfies the noble Lord, Lord Rowlands.
In recognition of the importance of Welsh language programming and in the light of the changing financial situation, the Government believe that the best way for the audience to have a high-quality service is through a partnership with the BBC. My officials are currently in talks with the BBC and S4C about the arrangements for such a partnership. A review of the service, which should cover both its funding and output, will be conducted towards the end of the current spending review period. It is important that we give the partnership some time to grow and to deliver the efficiencies and increases in quality that we fully believe can be achieved.
I assure the noble Lord, Lord Wigley, and the noble Baroness, Lady Morgan, that DCMS is in discussion with the BBC and S4C to develop the new partnership arrangements. DCMS officials have engaged with Welsh independent producers as part of that process, and we continue to do so.
Lord Wigley
I am grateful to the Minister. Can she confirm that the discussions that she mentioned—DCMS officials discussing with the BBC, S4C and the independents—took place before the decision was made?
Baroness Rawlings
These discussions have been ongoing throughout. The noble Lord also asked whether there was prior consultation with the Welsh Assembly Government. Given the scale and pace of the spending review and the licence fee settlement discussions, it was not practical to have in-depth discussions with all the interested parties ahead of the announcement. The timeframe reflected the Government's desire to put the UK finances in order.
Lord Morris of Aberavon
If the sole or main problem for the inclusion of S4C in the schedule is the problem of the RPI formula, will the noble Baroness go back to consider by Report whether S4C should be withdrawn from the schedule and the Government table in its place a particular amendment dealing with the problem of the RPI formula?
Baroness Rawlings
I am coming to that a bit later, but it is taking longer every time somebody interrupts. I will get to that point.
The noble Lord, Lord Roberts of Conwy, asked whether the licence fee money could go directly to S4C from DCMS. Discussions between S4C and the BBC are ongoing. However, the BBC Trust is the established guardian of the licence fee, as set out in the royal charter and the agreement, and we do not see this position changing.
Following the Government’s decision to table an amendment to remove Clause 11 and Schedule 7 from the Bill, S4C will not appear in Schedule 7 as previously tabled and referenced in Amendment 164. Consequently, we are now exploring further options for how S4C’s proposed constitutional arrangements can be given legal effect. I can reassure the noble Lord, Lord Elystan-Morgan, that it is the clear view of the Government that we have no intention of abolishing S4C.
In a letter to the Prime Minister on 29 October 2010 the leaders of all four major parties in the Welsh Assembly stated that they,
“recognise the difficult financial climate and … no body that is in receipt of public money can be exempt from funding cuts”.
These reforms simply reflect this reality in a way that will protect S4C’s future and not undermine it, as my noble friend Lord Roberts said.
Lord Elystan-Morgan
My Lords, I hope I make this point sincerely and in an attempt to assist the situation. At the moment, the funding of S4C is tied to RPI under Section 61A of the Broadcasting Act 1990. That can be changed without putting S4C into Schedule 4. That is the short point. Speaking for myself and, I suspect, many others, I will be delighted to support such an amendment on Report. It can be done quite simply and effectively.
Baroness Rawlings
I will come to the point made by the noble Lord. I appreciate the way in which the noble Lord, Lord Nickson has approached this debate; it is to be commended. He has arrived open-minded and will be persuaded by the strength of the argument. It is an example of your Lordships’ House at its best and I hope that he has been persuaded. This has been an impassioned debate, but not on party lines, as the noble Baroness, Lady Finlay, said. It has been on the actual subject. We fully recognise, as the noble Lord, Lord Richard, rightly said, the iconic status of the channel and the contribution it makes to the cultural and economic life of Wales and to the Welsh language.
We have had a really good and interesting debate today. We are all united here in the Chamber in wanting a secure future for S4C. We have had lengthy dialogues with Cardiff to secure the future of S4C within the BBC partnership with DCMS funding. The problem lies, as had been mentioned by many noble Lords, with the index-linked funding, which is not viable anymore. Public service broadcasting is for all parts of the United Kingdom and it is not devolved. S4C’s editorial independence and its distinct entity, as the noble Baroness, Lady Morgan, said, are of paramount importance. I share the passion of my noble friend Lord Roberts and all noble Lords who have supported the amendment. I understand it and of course I, along with my noble friend Lord Taylor, am fully prepared and willing to have a discussion next week to go through many of the points that have been brought up today. I therefore ask my noble friend to withdraw the amendment.
Lord Roberts of Llandudno
My Lords, I thank the Minister for replying to these points. I am in a dilemma. We could go to a vote today and we might win it for the amendment, but we might not. I understand that the Minister in the other place, Mr Vaizey, is in the United States and that he would have to consult Ministers in the upper House before giving authority to drop S4C from the Public Bodies Bill. Of the many speakers, we have had one and a quarter who were uncertain about the amendment, which means that something like 14 speakers have all spoken in favour of it.
If we wait until the Report stage, that will give Ministers time to consult Ministers in the other House and they themselves can then come forward and, I hope, remove S4C from the Bill. I would rather do that than press the issue to a vote today because it might be very close. We could also have discussions not only with Peers and those in the other House but also with the Welsh Assembly Government in Cardiff. We have two or three weeks in which to do that. We can all see that those who have spoken today would vote very strongly to drop S4C from the Bill. I am sure that if nothing has been done by the Report stage then we will be doing just that. I beg leave to withdraw the amendment.
Lord Hunt of Kings Heath
The Earl of Sandwich
“( ) An order under this section may modify the functions of the Office of Fair Trading (“OFT”) by—
(a) conferring the function of Groceries Code Adjudicator upon the OFT; and(b) transferring that function to another person.( ) In this section, the function of “Groceries Code Adjudicator” is to enforce the Groceries Supply Code of Practice as specified in the Groceries (Supply Chain Practices) Market Investigation Order 2009.”
The Earl of Sandwich
My Lords, I can promise the Minister that we will move more swiftly on this amendment, which obviously has a much lower standing in the House. In moving Amendment 85A, I shall speak also to Amendments 174A and 174B in the names of the noble Lord, Lord Borrie, and the right reverend Prelate the Bishop of Wakefield, although I welcome the right reverend Prelate the Bishop of Exeter to this debate. I look forward very much to their contributions.
This is intended to be a helpful amendment, which is the first concerning the Office of Fair Trading in Clause 5 and Schedules 5 and 7, which I will come to later. It could be said to be a Cross-Bench amendment, since the proposal already has the approva1 of all political parties. It is simply a question of when and how the Government intend to act on this matter.
The background is as follows—I will be as brief as I can. A decade ago, in 2001, following a report by the Competition Commission, the four largest supermarkets signed up to a voluntary supermarket code of practice designed to encourage smaller suppliers and growers to enter the groceries market and to remove some of the obstacles in their way. However, those suppliers were unwilling to make formal complaints because of their effect on their relationship with the supermarkets and there was no means of enforcing the code. The Competition Commission was therefore asked to investigate further and, as a result of its report published in April 2008, the code of practice was updated last year as the groceries supply code of practice. All three political parties agreed to appoint an ombudsman, the groceries code adjudicator, as he is known, to monitor and enforce the revised code.
The new body, although independent of the Office of Fair Trading, is due to be housed within the OFT. Some confusion as to how this can be achieved if the Office of Fair Trading is to be abolished has already been expressed. I understand that functions of the Competition Commission and the OFT are to be merged. This has been confirmed to me by the Consumer Minister, Edward Davey, in a letter of reassurance. When he announced the Government’s decision to go ahead with the legislation last August, he said:
“We want to make sure that large retailers can’t abuse their power by transferring excessive risks or unexpected costs onto their suppliers. These sorts of pressures are bad for producers and bad for consumers—ultimately they can lead to lower quality goods, less choice and less innovation”.
So it is clear that the Minister’s heart is in the right place.
This is precisely why so many people would like the Government to go ahead immediately with the legislation. It has the backing of many organisations, which I shall not name today. It is also in line with the Conservatives’ new philosophy of stronger trading links with other countries. The reason for my interest in this is that I have for more than 30 years supported the efforts of charities and others concerned with fair trade, whether with developing countries or with smaller producers and farmers in this country. I also speak as someone who was involved in a small business in a rural community.
Why cannot the Government move a little faster on this? Is there some hesitation because of the power of supermarkets, which of course will have to provide the funding for the new office? The British Retail Consortium has consistently opposed the idea, but I remind the Minister that three major supermarkets, Marks & Spencer, Aldi and Waitrose, have now accepted that there will have to be a degree of monitoring and enforcement. Another cause for delay, as I have mentioned, may be the siting of the new office within an organisation that is being dismantled.
It is more than a year since the new code of practice came into force; it did so on Thursday 4 February 2010. I realise that this amendment is not the appropriate vehicle for this important proposal, but it carries a message from a wide section of the business and farming community. I therefore suggest that today would be the right time for the Government to give an early indication of the timing of this legislation and, better still, to accept these amendments, which would establish a groceries code adjudicator. I beg to move.
The Lord Bishop of Exeter
My Lords, I am pleased to speak to this group of amendments. I do so in the absence of the right reverend Prelate the Bishop of Wakefield, who regrets being unable to be in his place today. Five years ago, after a debate in the General Synod of the Church of England in which wide-ranging concerns were raised about the problems being experienced by farmers as a result of the buying practices of supermarkets, the church’s Ethical Investment Advisory Group agreed to investigate. In 2007, it produced the report Fairtrade Begins at Home: Supermarkets and the Effect on British Farming Livelihoods. I declare an interest because I wrote the foreword.
The report identified damaging practices around labelling, promotions, payments and contracts as well as other areas of dysfunctionality within the market. It carefully documented the harm inflicted on farmers and agricultural businesses by supermarkets’ buying practices. Pressure on price was identified as a particular problem in the UK dairy industry, an issue that is still of primary importance today, with the cost of production of a wide range of agricultural and horticultural products remaining significantly above the price received.
The report was submitted as evidence to the Competition Commission inquiry on the operation of the groceries market and the EIAG called on the Competition Commission to mandate the creation of an ombudsman—the case for that appointment has continued to be made—while at the same time pressing the Government, the Opposition and supermarkets to address the wide range of issues raised in our report.
Since 2007, there has been continued and systematic engagement with the major supermarkets in an attempt to encourage better practice and a more imaginative response to proposed regulation. There have been some improvements, such as supermarkets paying a premium for milk, working collaboratively to improve the efficiency of farmers in the supply chain and developing local sourcing initiatives for small suppliers. However, there is much evidence that serious problems remain, with examples of barriers to new products coming to market, or to scaling up supply, such as prohibitive payments for listing. Squeezes on the profitability and viability of primary producers, who find it hard to get fair prices, remain a recurrent complaint. This is particularly relevant for the dairy sector, beef production and pigs—both pork and bacon—where the price paid is often below the cost of production.
When the Government announced in August 2010 that it would establish a new groceries complaints adjudicator, an ombudsman, in the Office of Fair Trading, to adjudicate complaints from suppliers of breaches by supermarkets of the new groceries supply code of practice, many in agriculture and the food supply industry were encouraged to hope. That hope was further strengthened when we were further told by the Department for Business, Innovation and Skills that a draft Bill would be published later in 2010; that the Bill would be introduced in the second Session of Parliament; and that it would have teeth, including allowing for the possibility of introducing financial penalties if the naming and shaming of supermarkets was not working.
As the noble Earl, Lord Sandwich, has said, we are still waiting for action. The groceries supply code of practice has been in force since February 2010 and there is still no enforcement mechanism for it. Contrary to the intentions announced last August, no Bill has yet been published to establish the GCA nor has parliamentary time this Session been allocated. The issue is slipping. The noble Lord, Lord Henley, will recall that when I asked a question about this on 7 February, he replied that,
“there is a good chance that it”—
a Bill to establish the GCA—
“will start in another place first some time this Session, but I cannot give any precise timing at this stage”.—[Official Report, 7/2/11; col. 4.]
I am aware that the Consumer Minister has since announced plans to release a draft Bill on the groceries complaints adjudicator before the Easter Recess begins on 6 April, yet it remains a fact that difficulties in the groceries supply chain, which were identified more than a decade ago, are still waiting to be addressed as a matter of urgency. These amendments offer an opportunity for the Government to commit themselves to action and to put real flesh on the bones of their promises and to do so now.
I fully expect the Minister to resist these amendments but, should he do so, I hope that at the same time he will be able to give very clearly to this House further details of the nature and scope of the legislation that the Government have in mind and a clear statement of the timescale to bring such legislation into practice.
Lord Borrie
My Lords, I have been very happy to put my name to all the amendments standing in the names of the noble Earl, Lord Sandwich, and the right reverend Prelate. I should declare that I was the director-general of the Office of Fair Trading for 16 years, but that was some time ago. There is a certain shadow over the Office of Fair Trading at the moment through other parts of the Bill.
Leaving that aside, for some years there has been concern about the growing power of major retailers, especially supermarkets, in relation to their suppliers. It is worth providing a bit of balance. Supermarkets have done a great deal for consumers over the lifetime of noble Lords in the Chamber. They have made available to consumers a wide range of groceries and other goods with the emphasis on good value, quality and a pleasant shopping experience. Yet this has often been at the expense of small retailers who cannot match the lower price of supermarkets. As these small retailers have gone out of business, other businesses in the high street suffer the erosion and reduction of the number of visits paid by shoppers. People have gone instead to the supermarkets, usually on the outskirts of town, with their substantial car-parking space.
The rise of supermarket power has also been, as the right reverend Prelate emphasised, at the expense of suppliers, particularly farmers, who lack the clout to ensure that they can secure a fair price for their products. Supermarkets can play off one supplier against another. The Office of Fair Trading and the Competition Commission have wrestled with this problem in a number of references and studies in recent years. In 2009, the Competition Commission first proposed the appointment of a groceries ombudsman to assist fair dealing between farmers, suppliers and supermarkets.
Both the Labour Government and the present coalition Government have broadly accepted the need for such an appointment. Consultation concluded on 30 April last year; Members of the Committee will appreciate the significance of that date, because the matter was clearly left for the coalition Government coming into office in May to determine. They determined—it is in the coalition agreement—that there should be a groceries ombudsman within the Office of Fair Trading to enforce the groceries code of practice, of which the earlier speakers have spoken, and to curb the abuses of power that undermine farmers and are against the long-term interests of consumers.
In response to the right reverend Prelate the Bishop of Wakefield, on 7 February, the noble Lord, Lord Henley, whom I am delighted to see in his place on the government Front Bench and who has already been quoted in part, said:
“It is important that large retailers cannot abuse power by transferring excessive risks or unexpected costs onto their suppliers. We therefore propose to establish a groceries code adjudicator to monitor and enforce the groceries supply code of practice”.—[Official Report, 7/2/11; col. 1.]
That was the noble Lord a month ago. These amendments seek to put the Government’s own propositions into legislative form. The Government may of course have plans that have not yet borne fruit for some other legislative vehicle to carry forward these proposals. The suggestion of those putting forward the amendment is that the Government might find it convenient to use the Bill before us now as a convenient vehicle already available to them. The amendments are here for the Government to run with as they wish.
Lord Cameron of Dillington
My Lords, I support this series of amendments. It is a pleasure to be speaking on this Bill in the early hours of the evening rather than in the early hours of the morning.
All three political parties have committed themselves to putting in place a groceries code adjudicator, and this seems to be a golden opportunity to do so. It would make the Government popular with farmers, consumers and at least three of the supermarkets, which have agreed the appointment of such a person or body if it was to apply across the board. Some of the free marketeers among you might question why an ombudsman figure is necessary in an open and free marketplace. You might say: surely in a free market where there is more than one buyer, the seller can go elsewhere. However, that equal balance of interest implied in the phrase “willing buyer, willing seller” simply does not exist where the buyers are so big and the sellers are so small.
More importantly, that balance of interest does not exist when the seller and supplier has to plan his cropping as much as 18 months in advance, within probably a five-year rotation, and organise the acreage, and buy the seed, the fertiliser and the spray, often with the seed variety and the treatment being specified in detail by the particular buyer. The farmer has to have his whole farm often audited and inspected by the particular buyer. Without this audited inspection he cannot sell his crop, or the buyer will not buy it. Furthermore, each buyer or supermarket has a different auditing system in place, so the farmer cannot easily change the buyer; certainly not without a long notice period. The farmer also may have to invest in specified capital and machinery. All this takes place 18 months to a year before the crop is sold and before a price is agreed.
Unfortunately there is ample room for the big boy to manipulate the sale to his advantage when the little man has nowhere else to go when the buyer’s terms or the buyer’s price turn against him. If the farming venture has involved borrowing the large sums of capital for irrigation, cold stores processing and the like, the smallholder farmer probably has nowhere else to go for the next year either.
The supermarkets may claim that an adjudicator is not necessary. In that case, there is no danger to them or to the consumer if one is put in place. In my view, it will be a great insurance policy for the farmer—and for the consumer—if one is put in place. Therefore, I urge all three parties to use this opportunity to fulfil their election promises. It is crucial for the future of UK agriculture and the fair balance that we need to achieve.
Baroness Quin
My Lords, I, too, welcome these amendments and am glad that they have been tabled. I welcome the comments that were made by the noble Earl, Lord Sandwich, in introducing the amendments and the helpful background that he gave us. I also welcome the comments made by my noble friend Lord Borrie and by the right reverend Prelate, who I know has taken a great interest in this issue. Like the noble Lord, Lord Cameron, I welcome the fact that on this occasion we are dealing with this important issue at a civilised hour rather than in the early hours of the morning.
I believe that the amendments are necessary to try to clear up the confusion surrounding where in government machinery the adjudicator, formerly the ombudsman, will reside. In answer to a question by the noble Earl, Lord Sandwich, on 7 February, the Minister said that he did not know where the adjudicator was going to be situated. That might have been a commendably honest reply, but now that we have had the chance to return to this subject today, I hope that we will be able to get more information about the Government’s exact intentions.
My noble friend Lord Sewel on that same day asked if the adjudicator could be part of this Bill. That is another reason why I welcome the amendments. Given all the controversial inclusions in this jumbo Bill, it would have been good to have something in it on which there is such clear, cross-party support.
When the Government announced in August last year that they were going to establish the adjudicator, the original expectation was of a draft Bill coming forward this past autumn. Given the strong cross-party support for this measure, the delay is regrettable. However, the Minister has said that the intention is to bring in a Bill this Session. In the other place, in Answer to a Written Parliamentary Question, mention was made of a draft Bill coming forward before Easter. Will there be a draft Bill first, and what will be the timing of the draft Bill and the full legislation to get the adjudicator’s role and work up and running?
The establishment of a supermarket ombudsman was favoured and initiated by the previous Government following a recommendation from the Competition Commission. From these Benches, I reiterate our strong commitment to that, as the Minister will be aware. One issue that has surfaced in recent debates in this House has been the scope of the adjudicator's remit. I notice that the adjudicator is called the groceries adjudicator, and I assume that his main function concerns food. But I was interested that in a debate that we had a week or so ago in this House on the ethical clothing industry, the Minister said that consideration could be given to widening the adjudicator’s remit. I welcome the fact that the Government are prepared to look at that, because supermarkets sell a great deal these days and have a strong position on their suppliers, whoever those suppliers happen to be. At the same time, while I welcome the Government’s openness on this matter, I would not want to see that as the cause of any further delay in the establishment of the adjudicator, because a very clear message has come from this debate that speed is extremely important and uppermost in people’s minds. Obviously, if there is a draft Bill, the scope and remit could be looked at—and perhaps the Minister could comment on that point.
The powers of the adjudicator, including naming and shaming and what further sanctions might be possible as a result, were mentioned by the right reverend Prelate. Again, any clarification from the Minister about that would be welcome.
This Bill must seem like a Christmas tree Bill to the many departments, with various items of business that they wanted to lumber on a jumbo Bill of this kind. However, while it might be a Christmas tree Bill for departments, it is a nightmare Bill for parliamentarians. I was very much taken with the phrase used by the noble and learned Lord, Lord Howe of Aberavon, who described it as a nuclear Bill. It abolishes and changes so many bodies, some big and some small, and rides roughshod over parliamentary procedures. However, this matter is one on which there is agreement between Parliament and Government and for which there is cross-party support, so I hope that the Minister will respond positively to the points that have been made.
Lord Henley
My Lords, like other speakers, I am grateful that we are having this debate early in the afternoon. Sadly, I will also be doing the penultimate amendment that we are dealing with today, which might happen in the early hours of tomorrow morning—just as I did the penultimate amendment late on Monday, or early on Tuesday, a couple of days ago.
I should also say how grateful I was to hear quite such a large number of quotations from myself, from that relatively brief Question that we had on this matter on 7 February. It is gratifying to hear that so many noble Lords listened to what I had to say. I hope that I can add a bit to that in dealing with these amendments.
I start by repeating something that the noble Lord, Lord Borrie, said when he paid tribute to what the supermarkets have done for the consumer. That is very important to remember whenever we debate these matters; we forget it at our peril. They have given us greater choice, cheaper prices and, as the noble Lord, Lord Borrie, put it, possibly “improved the shopping experience”, whatever that means, but I think I have quoted him correctly.
The Lord Bishop of Exeter
I hope that I might just make the point that this year Easter falls as late as it possibly can do in the ecclesiastical calendar, and I hope that we will not have to wait very much longer after Easter for this particular Easter egg.
Lord Henley
Some of us who have been here for some time remember the late Lord Airedale, who annually moved a Bill—my noble friend Lord Carrington will remember this—trying to fix the time of Easter. I accept what the right reverend Prelate has said about it being very late this year, but that will mean it will be even easier for my colleagues in the Department for Business, Innovation and Skills to get that draft right and get it on time. It will then be published, as I said, around Easter—the latest possible Easter. It will be introduced and debated in Parliament—again, this is all I can say—as soon as parliamentary time allows. There are certain things that Ministers discuss with some trepidation and one is the timing of parliamentary business without discussing it with the usual channels. Certainly, I would not want to make any commitment as to when that will be but as soon as time allows we will bring that forward. We will also be able to then consider a point that the right reverend Prelate made about what sort of teeth the groceries code adjudicator should have—whether it is just naming and shaming or whether naming and shaming might not be enough and whether one should move on to greater powers. I think that is something for Parliament to consider in due course.
I want briefly to comment on where the groceries code adjudicator will live on his creation. Again I cannot take the Committee much further than that, but we are considering all the options. We will set out our intentions on where he or she should be and that will be available when we publish the draft Bill for pre-legislative scrutiny around Easter.
I appreciate that the assurances—particularly in terms of time—have moved on somewhat from earlier occasions, but I hope that with those assurances the noble Earl will feel able to withdraw his amendment. I am certainly very grateful for having had the opportunity to offer those assurances to him on this occasion.
The Earl of Sandwich
My Lords, I detect that the House will not want to dwell long on this amendment but I will just take a minute or two to respond. It has already been said several times that there is some confusion about the location of the adjudicator. Although I am grateful to the Minister for his clarification, it does sound a little like musical chairs, so we shall see who sits where.
I am also grateful for the contributions of other speakers: the noble Baroness, Lady Quin, referred to the political consensus and that is important. My noble friend Lord Cameron reminded us of the precarious relationship between farmers and supermarkets at this time. The NFU, the CLA, the CPRE and others are all behind this idea because it is urgent. The fundamental point is that the legislation is needed now. A 2009 survey by Traidcraft showed that eight in 10 shoppers want a watchdog to monitor and penalise supermarkets which treat suppliers unfairly. They believe that an adjudicator would mark a step change in helping reassure consumers that all the goods they buy do not come at the expense of bullying tactics by retailers towards suppliers and provide a proper context where the working conditions for farmers and workers can improve.
I thank the Government for their commitment, or their recommitment, to the adjudicator and for the noble Lord’s promise of a draft Bill around Easter. I beg leave to withdraw this amendment.
Lord Hunt of Kings Heath
My Lords, we come to an important group of amendments, which are in part probing but in part really urge the Government to take a rather more transparent approach when an order under this Bill is used.
Clause 5 gives power to modify or transfer functions and on the face of it appears to give huge discretion to Ministers. I would really like to hear from the noble Lord, Lord Taylor, the circumstances in which he envisages the power being used. In our earlier debates on Monday in relation to Clauses 3 and 4, Ministers gave a great deal of comfort when they described the circumstances in which orders in relation to governance and financial arrangements would be used and it would be helpful if the noble Lord were able to give similar comfort in relation to Clause 5. If this clause is used, will the Minister describe how that use of it will then be made transparent? When the order is used, what will happen to the functions; who will be performing them in future; why are the changes necessary; what about the future performance of the transferred and modified functions; and what do the Government intend to do to track the performance of those transformed or modified functions to ensure that the decisions made by passing the order were and remain appropriate? What assurance can the Minister give about the information that will be given to Parliament at the time of the order, if it is used? What further work will be done subsequent to the order in relation to performance scrutiny?
It is fair to say that some of these concerns were raised by my noble friends during the UK Film Council/BFI debate on Monday. My noble friend Lord Stevenson noted in that debate that while some functions of the UK Film Council were clearly marked as transferred to the BFI and Film London, there were other central functions, such as working film exports, upon which the Government remained rather silent until prompted. I would like to get some reassurance that if this order is used in future, there will be a way of providing Parliament with as much detail as possible about what has happened to those functions.
On Clause 7, I am looking for some comfort. We have been approached by the Royal Society for the Protection of Birds, which is concerned about the legal effect of Clause 7. While bearing the innocuous title, “Consequential provision etc”, this clause appears to give Ministers the power to modify the functions of the transfer or transferee organisations. What appears to be missing is a qualifying element of consent. Where, for instance, the Government would like a body such as Citizens Advice, in the case of Consumer Focus, to assume functions, surely it would be a requirement of the Government first to obtain the organisation’s consent to the changes. It would also be nice to know that the CAB was in a condition to accept those responsibilities. I point out to the Minister the dire situation in the great city of Birmingham, with the potential closure of all the CAB centres. As currently drafted, the clause essentially makes it permissible for the Government to change the constitution or funding arrangements of a body that is to assume those functions without consent or even bothering to consult that body. I have looked for comfort there.
The Minister will know of the quality of the briefing provided by the RSPB, since he used it extensively during the wonderful days when we debated the Marine and Coastal Access Bill. It is quite extraordinary that officials have found a defect in that Bill, given the extensive briefing that we received from bodies like the RSPB.
The other two amendments in this group deal with the related subjects of data protection, freedom of information and privacy. We have tabled Amendment 102 to ensure that where public functions of bodies listed in Schedule 5 are transferred to another body, the public will continue to have assurances that the performance of these functions is transparent. They will be audited, the responsible body will report to Parliament on the exercise and expenditure of these functions and the freedom of information and data protection provisions will still apply to the organisation to which the function is transferred.
Then we come on to Amendments 175A and 175B. They are in the name of my noble friend Lord Knight of Weymouth but unfortunately he is unable to be here. His amendments effectively prevent a Minister making an order to share personal data. He was using these amendments to emphasise the complexity of these subjects and his doubt whether it is wise simply to include them in a statutory instrument. If he were here, he would speak of his own experience with data protection in the context of the Education and Skills Bill, which required further amendment through the Apprenticeships, Skills, Children and Learning Bill. The point that he wanted to make is that these are complex and sensitive issues and that, in relation to parliamentary scrutiny, it may be that secondary legislation is not really the most suitable vehicle. As we have learnt in the past, if you get this wrong you have to come back and try to put it right at a later date. I beg to move.
Baroness Thomas of Winchester
My Lords, I speak at this point wearing my hat as chair of the Delegated Powers and Regulatory Reform Committee. As the noble Lord, Lord Hunt, has said, Clause 5 contains perhaps the widest power in the Bill now that we no longer have Clause 11 and Schedule 7. Schedule 5 includes bodies exercising a very wide range of statutory functions. The abolition or transfer of some of those functions could completely alter the character of the primary legislation that set up the bodies in the first place—added to which, any Minister in future could add new functions or alter existing ones considerably. Nothing in any amendments that the Government have so far proposed changes that fact.
That is why the committee of which I am chair has reiterated, in each of its three reports on the Bill so far, the inescapable fact that the powers in Clauses 1 to 5 and 13 are inappropriate delegations of powers. What we are looking for—and I hope that it may still not be too late—is that the Minister should consider amending the Bill to say briefly how these delegated powers should be exercised in relation to each body. The detail could then safely be left to delegated legislation.
Baroness Andrews
My Lords, it is a pleasure to follow the chair of the Delegated Powers and Regulatory Reform Committee, and I reinforce what she said. I declare an interest as the chair of English Heritage and as a member of that committee.
I will address the stand part debate regarding Clause 5, but it is difficult to do that without referring to Clause 11, Schedule 7 and indeed to Clause 8, which we will come on to later. I think that I am the first Member of this House—in this debate anyway—to congratulate the noble Lord on his success in getting rid of Clause 11 and Schedule 7. I know that as we proceed through the Bill today, he will be inundated with congratulations on what he has achieved regarding those clauses; it will be like his birthday. My thanks are very much a foretaste of joy to come.
I have always seen this Bill as more the product of William McGonagall than of Machiavelli in terms of how it had been put together and what it represented. Even for a Government who are fast establishing a reputation for recklessness, the Bill was a step too far. As I recall, the kindest thing that was said in our earlier debates about Schedule 7 was that it was “Kafkaesque”; it certainly created a feeling of victimisation without any sense of the crime that had been committed or indeed the sentence and the punishment that might follow.
I could end there, with unqualified praise, but I must pick up on the points that the noble Baroness, Lady Thomas, made. We are not yet done with this Bill—there are more changes that we have to press the Government to deliver. The problem that was widely recognised in this House, certainly at Second Reading and earlier in Committee, is that the whole Bill, frankly, is misconceived. It is an object lesson in making policy by prejudice. It demonstrates a failure to understand the nature, the role and the effectiveness of public bodies. It is an object lesson in how not to make legislation that will provide the substance of many a PhD thesis in future.
In recent days, the Committee has done its work very well by taking individual bodies and holding the implications of the Bill up to the light, defending their future and fate. The stand part debate allows us to say again to the Minister that it is not too late to recognise the fundamental problem that has been established in Clauses 1 to 5: that the powers in these clauses are far too wide. I echo what the noble Baroness, Lady Thomas, has said: Clause 5 is the widest power of all. We know where we are with Clauses 1 to 4; we know what “abolition” and “merger” mean. However, we do not know what Clause 5 implies and those bodies listed in the schedule certainly do not. It is very different in scope. It modifies or transfers functions, purposes and objectives, and could change the rationale for an entire organisation at a stroke—all by ministerial edict. Given the importance of the bodies that are listed in Schedule 5, this is a very serious predicament in which to put them.
It is no wonder, therefore, that the Delegated Powers and Regulatory Reform Committee reiterated in its 11th report on Monday that our original concerns were unmet. In our original report we were concerned about the inappropriate delegation of powers in Clauses 1 to 5. “Inappropriate” is a word that we have returned to time and again on this Bill. We are still concerned about those powers, which are still inappropriate. We said that the delegation of powers in Clauses 1 to 5 was “inappropriately broad in scope” and that there should be appropriate parliamentary scrutiny. That is still the view of the committee. We suggested in our earlier report that if Clause 11 were to be removed, it might make it easier for the powers in Clauses 1 to 5 to be better calibrated to matters that are appropriately left to delegated powers.
Clause 11 will, I am pleased to say, be removed. However, the powers in Clauses 1 to 5 are as yet unchanged. I say “as yet” because the Minister has said that he is considering these concerns. I certainly welcome that. I hope he will be as successful in dealing with that as he was in dealing with Clause 11 and Schedule 7. A crucial concern that we want him to consider before Report stage is spelling out more specifically the purposes for which the powers may be exercised. In Clause 8, the existing references are to matters to which the Minister may simply have regard. That is not strong enough. They do not deal with the fundamental problem of the Bill’s silence on the general purposes for which Parliament expects the powers to be used. They need to be so specified. It is extremely important that the Minister should address that point, at the end of either this debate or the debate on Clause 8.
Lord Mayhew of Twysden
My Lords, I, too, am a member of the Delegated Powers and Regulatory Reform Committee. I support everything that my noble friend Lady Thomas has said and much of what the noble Baroness, Lady Andrews, has said. She will not expect me, as a loyal supporter of the coalition Government, to endorse every epithet that she used— certainly not the word “reckless”, for which I might substitute the word “courageous”— but I warmly endorse the grateful compliment that she paid to my noble friend Lord Taylor for the changes that he has been more than instrumental in securing. As somebody who contributed to a rather torrid debate at Second Reading, when tremendous dissatisfaction with the Bill was expressed, I am extremely grateful that the answers that my noble friend returned with have turned away wrath for the time being. However, as the noble Baroness, Lady Andrews, has just said, that wrath has not gone away. It may have been turned away but it has not gone away entirely. I am afraid there is still more to come, particularly on expressing in the Bill the purposes for which these powers are to be used.
I take it to be a principle of the rule of law that an executive power may be exercised only for one of the purposes for which it was conferred. A ground that appears frequently in court judgments on judicial review proceedings is that a power has been purported to have been used in a way that was not authorised by the legislation giving rise to it. There is a good way to go yet, but I am heartened by the letter that my noble friend Lord Taylor sent to the committee—in appendix 2 to the report—in which he says that he is grateful to the committee for its report and goes on to say that the Government,
“continue to consider, in particular, the committee’s concern that the Bill should give greater clarity in clause 8 to the purpose for which the powers may be exercised”.
I hope that his efforts in that regard will be just as successful as they have been in relation to the appalling Schedule 7 and the equally alarming provisions affecting forestry. I hope he will be able to tell us that there is work still to be done and that he is looking forward to doing it.
Lord Walton of Detchant
My Lords, I feel just a little guilty in speaking to this amendment. On several occasions over the past few years, in debates in your Lordships’ House on the health service, I have said openly that I was deeply concerned about the National Health Service and health bodies being subject to control by “an intolerable quangocracy”. Hence, when I learnt that the Government were planning a bonfire of the quangos, I felt a minor sense of relief. However, having seen the detail, particularly the provision in Clause 5 that the Minister may modify by order the functions of a body or the holder of an office specified in Schedule 5, I am afraid I still have considerable concerns.
I was greatly relieved when the Minister agreed to remove Schedule 7 a few days ago. Looking at two organisations with which I have a special concern and interest—namely, the Human Fertilisation and Embryology Authority and the Human Tissue Authority—I am deeply concerned. I know full well that these bodies will be the subject of individual amendments, which will be discussed a little later in our debates. However, the principle embodied in Clause 5 is one that causes me considerable anxiety. The Government’s proposal that these two bodies should be merged with the Care Quality Commission, for example, carries all kinds of serious concerns and hazards. We may come to that later.
Lord Taylor of Holbeach
Perhaps I can start by reassuring the noble Lord that we will be able to debate both the Human Fertilisation and Embryology Authority and the Human Tissue Authority later this evening. I thank noble Lords for their contributions to the debate, and the noble Lord, Lord Hunt, for probing several issues through the procedure of whether the clause should stand part. It gives me an opportunity to address those issues, for which I am very grateful. This group of amendments deals with powers in the Bill to transfer functions and the question of public accountability, particularly in relation to data and freedom of information. I accept that it is important to provide reassurance on these issues and thank noble Lords for the opportunity to do so through these amendments.
Clause 5 gives Ministers the power to make provision, by order, to transfer or modify the functions of any body or office listed in Schedule 5. This includes the conferral of new functions, the abolition of functions or changes to the conditions or purpose under which functions are exercised. When we talked about Clauses 3 and 4, I gave examples of such changes, so perhaps I could give the example of the body that we will debate next. The Government intend to use the Bill to transfer the functions of the British Waterways Board to a new mutual body, removing powers from Ministers and giving the users of waterways a far stronger voice in the management and development of the system.
Baroness Andrews
My Lords, perhaps I may press the noble Lord on one point. I am very appreciative of what he said in his response about Clause 8, but the example he gave of what the powers would be used for was interesting. The example related to the British Waterways Board’s transfer from the public sector to the charitable sector. The list of 14 bodies in Schedule 5 involves very specific uses of powers. Given the mystery—and, frankly, slightly sinister nature—of Clause 5, which we have addressed in different ways, can the Minister publish some sort of schedule that identifies the powers to be used in relation to those bodies? I do not think that that would be onerous, although it would certainly have been onerous if Clause 11 and Schedule 7 had survived. That would go a long way to meeting our concerns. I do not speak on the committee’s behalf, but I suspect that such a schedule would help the committee and those who will read and use the legislation—as well as the public bodies listed in the Bill.
Lord Taylor of Holbeach
I thank the noble Baroness for her intervention, because it reflects outside conversations and my discussions with the chairman of the Delegated Powers Committee on this matter. I should emphasise that we have found it possible—and I hope noble Lords will agree that it has been helpful—to produce the A4 briefing sheets that more or less provide a background for the changes we have been discussing. Those briefings have been explicit in describing the framework of the changes—not the detail, only the framework. To include such details in the legislation, given the large number of bodies involved, would lead to an extremely large Bill and would not necessarily be the way to deal with this matter.
We are discussing these bodies in principle in primary legislation because of the way that the debates and this Committee have taken the Bill. We know, because of the exclusion of Schedule 7, that there can no longer be the “stroke of the pen” that the noble Baroness, Lady Andrews, eloquently described when she expressed her anxiety about these issues. We know that that cannot happen and we know what the nature of the changes that will occur under the Bill will be. It is important to emphasise that no Minister can act under the Bill without a period of consultation or without explaining in detail the reasons for the change, its nature and consequences, in the explanatory document that will be provided alongside the statutory instrument that will effect change under any of these schedules. That is an effective way to ensure that Ministers do not act precipitately. If we are to try to meet the concerns of the Delegated Powers and Regulatory Reform Committee, we need to focus less on that than on the wording of Clause 8.
However, I make no promises—and I do not want to make promises—on this matter because it may be that I have stretched my run of good luck too far already. However, I believe that an explanatory document is a much more effective way of answering the Committee’s concerns and those of the noble Baroness.
Lord Goodhart
I should like to add a few words in my capacity as the previous chairman, and a member for several years before that, of the Delegated Powers Committee. A strong case has been presented for further action on this matter. The final sentences in paragraph 20 of the committee’s latest report state:
“Especially in the absence of a convincing explanation, it is not appropriate for an existing power to make subordinate legislation to be transferable to another, unidentified, body. This renders the powers in clause 5 in relation to these bodies especially inappropriate. The Committee draws the attention of the House to amendment 99A”.
Schedule 5 lists a group of bodies that are among the most important to be covered by the Bill. They include the British Waterways Board, the Equality and Human Rights Commission, the Competition Commission, the Human Fertilisation and Embryology Authority, the Human Tissue Authority, the national parks authorities, Ofcom and the Office of Fair Trading. All are organisations of considerable importance. There is a very strong case for the arguments presented by my noble friend Lady Thomas of Winchester, the noble and learned Lord, Lord Mayhew, and the noble Baroness, Lady Andrews. This matter needs further consideration and I hope that my noble friend the Minister will use the period before Report to have a serious look at it.
Lord Hunt of Kings Heath
My Lords, first, I echo my noble friend Lady Andrews in paying tribute to the stewardship of the noble Lord, Lord Taylor. Clearly, he has listened to the House and we have made a great advance. We very much appreciate the briefing sheets from his hard-working officials.
It is good that the noble Lord, Lord Goodhart, has joined in our debates. I do not know whether the Government think the same, but the point that he raised underpins the remarks of his noble friend Lady Thomas, the noble and learned Lord, Lord Mayhew, and my noble friend Lady Andrews. They made pertinent remarks about how the powers in the Bill should be exercised. The noble Lord, Lord Taylor, and his noble friend Lord Henley have given us eminently reasonable explanations as to how Ministers intend to use the powers. The problem is that future Ministers may take a different approach. The noble Lord, Lord Walton, put forward the good example of the HFEA and the HTA.
We are looking for ways to build further reassurances into the Bill. We will have a later debate on what the noble Lord calls the enhanced scrutiny of orders and on my amendment proposing a super-affirmative procedure. That is one approach, but we should also pursue the suggestion of both the noble Baroness, Lady Thomas, and the noble and learned Lord, Lord Mayhew. I am glad to hear that work is in progress on Clause 8. The noble Lord said that he could not give any guarantees, but I encourage him in that direction.
I am glad that the noble Lord also said that reviews of these bodies will take place in future. We on the opposition Benches support that. It is right that these bodies and their functions should be kept under regular review. I was also glad to hear that accountability, reporting and FOI responsibilities will continue if the functions are transferred. However, does that apply only if they are transferred to a public body? What would happen in the case of Consumer Focus, whose functions will be transferred to Citizens Advice? What about the British Waterways Board when it transforms itself into a charity? What will happen to the accountability, reporting and FOI requirements?
I take the noble Lord’s point about the sparing use of data sharing that is likely to occur under any order arising from the Bill. However, I issue a caution that past experience suggests that this issue is very complex and will demand the careful use of orders. The noble Lord may want to write to me on the issue of non-public bodies in relation to FOI and accountability functions. In the mean time, I am glad that work is in progress.
Lord Bradshaw
Lord Bradshaw
My Lords, I move the amendment on behalf of my noble friend Lord Greaves, who is ill. We will wait for the Government’s proposals on the British Waterways Board. However, we are particularly concerned about whether a trust such as the National Trust would be able to shoulder the many burdens that will fall on it. Noble Lords who are members of the National Trust will know of the increasing number of appeals that it makes for extra funds to keep its portfolio of properties in good repair. They will also know that the National Trust is being offered more properties that owners cannot maintain. One of our major concerns about the British Waterways Board is that it carries a large burden of maintenance—maintenance of waterways not just as a recreation facility but as a facility for drainage and the conduct of water across parts of the country. There are also a number of public duties that the British Waterways Board undertakes and for which it gets government money. It is difficult to see how a charitable trust will carry out those duties.
I am particularly concerned to bring to your Lordships’ notice the fact that a number of waterways administered by the board carry considerable quantities of freight. Obviously, the board does not administer tidal waters, but it looks after the Aire and Calder Navigation, the South Yorkshire Navigation, the River Ouse to Selby and York, the Trent to Newark and Nottingham, the Severn, the Weaver in Chester and the Union Canal and River Lea in London. It has a big portfolio of interests in the freight business. I am not sure whether the charitable trust that the Government have in mind will take over these freight interests. If the trust is concerned mainly with amenity waterways, it will have only a passing and diminished interest in freight. That is important because these waterways convey very heavy freight which, if transferred to the roads, would add greatly to congestion and road damage, visiting more expense on the Government.
When the proposals come forward for the board, we will expect plenty of attention to be given to the financial burdens that it will take over and a reasonable estimate of the amount of money that it will be able to raise as a charity from walkers, fishermen, boat users, birdwatchers and whoever else uses the canals. We will also want to know in particular how the Government intend to shoulder the huge burden, which has been underfunded in recent years, of keeping the waterways in good repair. I beg to move.
Baroness Quin
My Lords, I am glad that the noble Lord, Lord Bradshaw, was able to move the amendment in the absence of the noble Lord, Lord Greaves, who takes a great interest in these issues. I welcome the fact that the amendment allows us to ascertain in more detail the Government’s intentions on this issue.
The future of British Waterways is very important. In many ways, the idea of a national trust for the waterways is exciting. The previous Government’s plans for the future of the waterways were not dissimilar. However, the noble Lord, Lord Bradshaw, was right to raise a number of detailed issues and to seek necessary reassurances about how the system will operate in future and how the wide and varied responsibilities of British Waterways can be assured to a high and satisfactory standard in the interests of us all.
I note that the provisions in the Bill deal with England and Wales. Will there be any alteration, given the recent transfers of responsibility and strengthening of responsibility within the devolution system in Wales? Have there been any discussions with the Welsh Assembly Government on that? I note also that Scotland has opted not to go down the same route as the Government have proposed for England and Wales. Again, given the fact that waterways are an asset to all of us in the UK, I would like to know what discussions there have been with the Scottish Government on this and whether any practical problems were identified in those discussions. The co-operation arrangements between a new English and Welsh organisation and the devolved Administrations are an important aspect, which must be given proper consideration.
A consultation on these arrangements is about to take place, although the Government have already made quite clear their preference for the future of British Waterways. Therefore, what is the main purpose of the consultation? Will it be simply about how the new arrangements will work? If the consultation came up with different proposals for the future of British Waterways, would they be taken into consideration? Our waterways are obviously very important to many of our citizens and to a variety of users, whether they are people involved in boating or whether they are anglers, walkers and cyclists or those who simply enjoy the peace and quiet of many areas administered by British Waterways. I agree with the Government when they talk about the need for local involvement in the way in which the waterways are operated. However, the waterways are also an important national asset and it may be necessary to strike a balance there in the future.
Lord Greenway
My Lords, I very much echo what the noble Lord, Lord Bradshaw, said in relation to freight carried on some of these inland waterways, as I do the concerns that he mentioned. How exactly will freight fit into a charitable organisation? I am sure that the Government have given this some thought, but we would be grateful if the Minister could give us an indication of how they intend to deal with that.
The Minister will be pleased to hear that the British Marine Federation, which is the representative body of the leisure marine industry, is broadly supportive of the Government’s move to transfer the British Waterways Board into the charitable sector. It sees it as a great opportunity to place the running of canals and certain parts of navigable rivers on to a sustainable footing for years to come and to create the right conditions for the continuation of what is a thriving inland marine economy.
The federation’s own members—boat operators and marinas—generate some £144 million a year and employ 2,500 people. However, many other businesses, such as pubs, hotels and boatyards, also depend on waterways for their livelihood. It is estimated that for every person directly employed in the inland marina sector an additional 10 jobs are generated from associated services. The overall related tourism spend on inland waterways is estimated to be in excess of the not inconsiderable sum of £1 billion a year. However, there are caveats, one of which is that the BMF thinks that the new body must be a completely new organisation, with a new board representative of those whose interests are concerned, and not simply a rebranding exercise. Navigation must be retained as its primary role.
We have heard concerns regarding funding, which I certainly share. Funding should not simply be sourced from boating and fishing licences. Other stakeholders who derive benefit from these national assets should also play their part, possibly even local authorities. I believe that the Government should provide some sort of contract or guarantee to ensure that the waterways are not prejudiced by commercial failure, which of course can happen to a charity. I hope that the Government are looking at that very seriously.
Lord Henley
My Lords, like the noble Lord, Lord Bradshaw, I regret that we have been deprived of the pleasure of having my noble friend Lord Greaves move this amendment this afternoon, but I am very grateful that his noble friend was able to step in and move it, because it is important that the Government set out their case in relation to the waterways.
As the Committee will be aware, the British Waterways Board was originally established under the Transport Act 1962 to operate and maintain much of Britain’s waterways network. In passing, I shall mention that we are dealing with England and Wales here; Scotland is another matter. I am not sure that any waterways go across the border, so there are not going to be any concerns there. However, I remember that with the passage of the Scotland Act we had problems with some of the rivers—
Lord Henley
Indeed, because the boundary moves. If the noble Lord remembers correctly, that legislation allowed the Scottish Government to have an interest in English matters relating to some rivers’ tributaries and vice versa. With England and Wales, the case is different. I do not know the answer to the noble Baroness’s question about the powers of the Welsh Assembly Government but I shall certainly write to her in due course.
In the intervening years since 1962, the British Waterways Board has done an excellent job in transforming what was a very run-down industrial transportation network, with its roots in the industrial revolution, into a hugely valuable environmental, heritage and leisure asset, but it is one which still—again, I am grateful to the noble Lords, Lord Bradshaw and Lord Greenway, for stressing this—also carries some freight, so it continues to have a commercial operation. Its network consists of some 2,200 miles of historic canals, rivers and docks, and it is visited by some 13 million people a year. Again, as I think noble Lords have made clear, it provides benefits that range from not just freight, which has been mentioned, but flood relief and sanctuary for wildlife, as well as its users, through to employment and recreational facilities for walkers and others.
The intention behind setting up a new waterways charity—and I am grateful to the noble Baroness, Lady Quin, for stressing that the previous Government were thinking of something along very similar lines—is to give waterways users and the communities alongside them greater involvement in how waterways are managed, thus contributing to their sustainability in the longer term. Moving the powers, functions and assets of British Waterways to civil society through the creation of what we would like to think of as a sort of national trust—a phrase used by the noble Lord, Lord Bradshaw—for the waterways will allow key stakeholders the opportunity to play a role in their governance and allow them to bring their expertise and passion to the organisation. Providing greater engagement by local communities will, we believe, lead to a range of enhanced public benefits, including green travel to work, health and well-being, support for inner cities and rural regeneration.
As I have mentioned governance, it is worth stressing that the consultation includes proposals for governance on the charitable company model. Subject to the passage of this Bill through Parliament, there will be further consultation on the draft order or orders—I cannot remember whether there is one or more than one—required to transfer the duties and functions of British Waterways to that organisation. However, in relation to the questions that the noble Baroness asked, following on from the speech of her noble friend Lord Hunt in relation to Clause 5, I hope she will await a response from my noble friend which, I am assured by him, will come before we get to Report stage.
There are obvious concerns over funding, particularly in the light of what has been, as we know, a very tight spending review settlement—and I will not say again why it has been so. British Waterways’ funding has seen a reduction in line with other bodies that are attached to Defra and to other parts of government. It is no greater because British Waterways is becoming a charity. We recognise, however, that the move to a charity will require a long-term contract for continued government support, and we have given a commitment to maintain levels in line with the spending review until 2022-23. That will obviously be subject to—
Lord Phillips of Sudbury
I am most grateful to my noble friend for giving way. Is the Minister quite sure that the ambition that the Government will have for this new charity can be assumed by it under charity law? Charity law is singularly unsympathetic to external control and direction.
Lord Henley
The noble Lord is somewhat more experienced in charity law than me, and I am going to be very careful when responding so as not to put my foot in it.
We believe that the charitable model—and this is, again, one of the reasons we will be consulting on governance—will be suitable and will operate in the right way. The Government are giving an assurance that they will continue to meet until 2022-23 the funding commitment I was stressing when my noble friend interrupted, and that is a commitment we can make. I very much hope that the charitable body that is created, after the appropriate decisions have been made and after the consultation, will meet the requirements that the noble Lord is addressing.
I hope I have given appropriate assurance to my noble friend. If I have not, I will write in greater detail in due course. I want to emphasise, however, that that spending review commitment is until 2022-23, which I understand is a pretty long time for any Government to commit to, but obviously it is subject to negotiation with the incoming trustees of the body when it is created.
In order to create a successful new waterways charity for the future, most of British Waterways’s existing statutory functions will need to be transferred to that new charity. For example, we would want British Waterways’ duty to keep the waterways in good repair to be transferred. That is why we had to list it in Schedule 5. It is a matter I imagine my noble friend will be able to deal with in the letter he has promised.
Having dealt with most of the concerns that have been put by noble Lords, may I just say a little about Amendment 99A that will be formally moved later on? This amendment disapplies the provision in Clause 21(2) to enable the transfer of the statutory functions of British Waterways and the Environment Agency to this new waterways charity.
Clause 21(2) provides an important legislative safeguard to prevent the transfer of functions to commercial companies or privatisation by the back door. This important safeguard, however, also prevents the transfer of the British Waterways and Environment Agency statutory functions and assets to civil society and, hence, the creation of a new waterways charity. This amendment will, therefore, enable the new waterways charity to receive important statutory regulatory functions, such as the power of entry on land to enable the carrying out of works on inland waterways for repair, maintenance, alteration, renewal or protection, that will be required for the safe and effective operation of the waterways. It will also enable the Government to deliver their vision for that national trust from 2015, with the transfer of the Environment Agency’s navigation functions into the new waterways charity after the next spending review.
The Government will fully consult on their proposals for the new waterways charity, as I have assured the Committee, over the next few weeks. That consultation will be supported by considerable stakeholder engagement. The Inland Waterways Advisory Council has indicated that it will respond to the consultation before it is wound down.
Finally, could I stress that it is a matter for the Scottish Government that they wish to maintain British Waterways across the border in its current form. One of the advantages of devolution is that different parts of the kingdom can behave differently; that is a matter for them. I reassure the noble Baroness that I will write to her about the Welsh Assembly Government and her concern whether they should or should not have these powers. I do not know whether they were a matter for the referendum that was completed some time ago.
I hope, with those assurances, the noble Lord, Lord Bradshaw, will feel able to withdraw his amendments.
Lord Bradshaw
My Lords, I thank my noble friend for that comment, and the other noble Lords who have contributed.
I would ask that in the forthcoming consultation paper there is a specific section on freight. The freight business is entirely industrial and heavy; the amount of freight carried on the rest of the waterways is infinitesimal by comparison. The big industrial interests using the freight facilities have reservations which they look forward to seeing answered in the consultation document.
Will the Minister also give his attention to the freight facilities grant, applicable both to waterways and railways, which has been discontinued by the Government due to spending constraints but reinstated by the Scottish Government, and give some indication of when this facilities grant may be reinstated?
With that, I have pleasure in withdrawing the amendment.
Lord Dubs
My Lords, the amendments in this group are to do with the Competition Commission and the Office of Fair Trading. These are among the most significant bodies covered in this particular Bill. They are fundamental to both competition policy and to consumer protection.
In passing, perhaps I may say that I regret that the BSkyB matter was not referred to the Competition Commission, but I appreciate that the topic is not one covered directly by this Bill.
I understand the Government want to merge most of the functions of the Competition Commission and the OFT, leaving some to go elsewhere. Clearly, these are matters of enormous concern but I am quite sympathetic to the idea of merging the two bodies. I have always felt there was surplus capacity in the two bodies, and they were not as sharply focused as they might have been in that one referred issues to the other.
It would be interesting to know, however, which of the functions of the two bodies will not be part of the new body. In other words, some of them are going elsewhere. I understand Trading Standards will have to take on some of the responsibilities. It would be useful to know what is in the Government’s mind as regards what the new Competition Commission will consist of, and what functions will go elsewhere and why.
This not an occasion on which to go into the details of how the Competition Commission—or, indeed, the OFT—operates, but it is complicated, because the Competition Commission takes references from other bodies, such as the OFT and sectoral regulators. It takes appeals against decisions by sectoral regulators, and matters of public concern may be referred to it by the Minister. So it is a complicated issue and I would like to know what will be the basis for references to the new Competition Commission. Will they be similar to the old ones? They cannot all be the same because the OFT itself refers issues to the Competition Commission. Can the Minister throw more light on that?
Even if we are to go down the path of merging the two bodies, surely significant lessons must have been learnt from how they operate. We can do things better, a bit differently and more economically, and we should take experience to heart. I think that the Government are going to consult on this, and I would very much like to know the nature of the consultation, how full it will be, how long it will take and what opportunity there will be to make full representations to the Government on what they have in mind.
Having said that, the Competition Commission and the OFT were, I understand, both set up by primary legislation and subject to extensive debate in both Houses. They are significant bodies. I wonder what it is about them that makes them susceptible to the rather truncated procedure under the Bill. I know that that argument has been used about other bodies in the various schedules, but surely it applies with enormous force in the case of the Competition Commission and the OFT. Parliament—I am sure, most Members of this House—would like an opportunity to debate that in full and to be able to move amendments on the proposed new body: to consider the implications, for example, of transferring some functions to local authority trading standards authorities, when they are under severe financial pressure because of the cuts. What will be left of trading standards authorities after the cuts have taken place in local authorities? Will there be sufficient to take on the functions that have come from these two bodies into a local area?
This is an unhappy way to proceed. Even if everybody agrees that the two bodies should be merged—and I would guess that a lot of people would—there is still a need to consider how it will work out in detail. I am unhappy that we are doing something so significant on what is, more or less, the back of an envelope. I beg to move.
Baroness Hayter of Kentish Town
I will raise a couple of issues on the consumer aspects—although there may be no other issues, as that is the purpose of these two bodies. I have three questions on which I seek information from the Minister. First, in transferring enforcement of consumer law to local trading standards bodies, how can trading standards enforce significant breaches of consumer law at national level, such as bank charges or airline practices? My second question regards supercomplaints. Is the Minister satisfied that taking supercomplaints about competition direct to the new merged body—without, therefore, the two-stage process of checking on a case—has been carefully considered before the merger was proposed?
My third question is in respect of those supercomplaints which deal with consumer detriment which arises from particular features of a market. I have in mind for example, the current supercomplaint by Which? on payment method surcharging. It is not clear to me where those sorts of supercomplaints, which come under general consumer protection regulations rather than breaches of law on competition, would be taken under the new architecture.
Lord Young of Norwood Green
I have sympathy with the amendment; I think that it is a probing amendment. I certainly welcome the framework document, because I think that it is an attempt to explain what is going on, even if it does not deal with every detail.
The Government state in that document that the challenge in creating a single competition authority will be to help create a framework which is genuinely greater than the sum of its parts—for example, by streamlining procedures and processes to the benefit of those who use or are affected by them. There is doubt about whether that can be achieved. My noble friend Lord Dubs was right when he said that both authorities when they were initiated were the subject of large debate and primary legislation. Is this the right way to deal with them in future? That is a major decision.
I certainly concur with some of the concerns expressed by my noble friend Lady Hayter. Indeed, I was going to ask about the consumer functions that are being transferred. The Government state that the focus is to create a single strong point of information on education and advocacy and that citizens advice services will also take on responsibility for the Consumer Direct helpline. Strong concern has been expressed in the Chamber about the idea that Consumer Focus will be merged with the citizens advice bureaux—mainly because there have been examples around the country of local authorities cutting those services. There is genuine concern about that aspect of the Office of Fair Trading’s activities being transferred to the citizens advice bureaux.
The document also mentions consumer credit functions being subject to a separate consultation as part of the HMT proposals for a new consumer protection and markets authority and that any subsequent transfer will be dealt with primarily through separate financial services legislation. It also talks about the possibility of the consumer functions being transferred in advance of the wider merger proposal. That only stresses our anxiety about whether there will be the ability at local authority level to deal with those aspects of consumer protection.
Those are our concerns about the proposals. I hope that the Minister will tackle the questions raised in his response.
Lord Newton of Braintree
My Lords, before my noble friend replies with his characteristic clarity, perhaps I may be a seeker after truth. There has been reference to consultation. I am now left totally confused. I read the briefing note that I took off the e-mail only yesterday in respect of today's proceedings, which contains the following line:
“The Government will consult on its detailed proposals in the new year”.
I am aware of the elasticity of seasons in respect of Her Majesty's Government, whoever forms it, but this seems to be getting ridiculous. Are we consulting or are we waiting?
Lord Myners
Will the Minister assure the House that nothing in the proposals made by the Government in respect of these bodies will in any way inhibit the freedom of recommendation of the Independent Commission on Banking? It is widely recognised that one of the key issues in banking is inadequate competition. That is evident in returns on capital and operating margins which most business sectors would die for. Banking is characterised by poor customer service, low standards of innovation and very little customer movement from one bank to another—although, on the whole, customers express themselves to be very dissatisfied with the service they receive from their current bank. To put it simply, they do not particularly like their own bank, but they have no confidence that any other bank is any better.
I fully commend the Government’s proposals to establish the independent commissioner on banking. Together with the establishment of the Office of Budget Responsibility, they represent novel and important proposals from the Government which should enjoy the full support of the whole House. However, we cannot see the freedom of recommendation in some way enfeebled by the Government denuding the effectiveness of some of the responses which Sir John Vickers and the commissioners might recommend in terms of the process, should they also be seized by the inadequacies of competition in banking for individuals and small businesses in the United Kingdom.
Lord Taylor of Holbeach
My Lords, the noble Lord, Lord Young of Norwood Green, described the amendment as a probing amendment. In fact, I am in a position to accept one of the amendments so it is rather different from how the noble Lord might have perceived it. This is a concession on the hoof, so to speak. I am grateful to the noble Lord, Lord Myners, for his intervention. I am not an expert on banking. My noble friend Lord De Mauley is and has apparently just written a letter on this very subject which he is going to bring to me so that I can give some authority to the answer. Otherwise I think I would be waffling when I came to tackle the answer—waffling more than usual.
As the Explanatory Notes state, the Government are proposing to merge the competition functions of the Office of Fair Trading and the Competition Commission and are minded to transfer most of the consumer enforcement functions and resources of the Office of Fair Trading to trading standards, and advice, information and education functions and resources to Citizens Advice. Merging the bodies will eliminate duplication of effort in the competition regime, while transferring the consumer functions will improve consumer empowerment and protection by simplifying the bewildering array of overlapping bodies faced by consumers when they have a problem. I can assure the House that our proposals would remove no substantive consumer protections.
A merger between the Office of Fair Trading and the Competition Commission would create a single, powerful competition and markets authority with a dynamic competition culture and more flexible use of competition tools. It would eliminate unnecessary duplication of effort for business, as well as for the authority. It would be able to attract the best competition skills and would create a powerful and unified advocate for competition in the UK and internationally.
Competition enforcement is an important element in the growth and productivity of the economy. While the UK’s competition regime already has many strengths, the Government believe that it is only right to consider where it can be further strengthened and rationalised in some way.
On the consumer proposals themselves, the transfer of most consumer enforcement functions will target resource where it is most needed—to support trading standards services, which the Government believe are best able to ensure robust enforcement against rogue traders, scams and businesses which abuse the law and their relationship with consumers. The resources that were available to the OFT would be transferred to trading standards. I assure the House that our proposals, on which we will consult, will include a range of options for keeping flexible powers for the new competition and markets authority to use consumer enforcement tools where they are the most appropriate remedy to cure a competition problem.
The transfer of the OFT’s advice, education and information functions, including the Consumer Direct helpline, to Citizens Advice and Citizens Advice Scotland, along with the functions of Consumer Focus, would place all these functions in a single organisation well-equipped to represent the consumer. The appropriate resources would accompany this transfer of functions.
The Government believe that trading standards and Citizens Advice provide a first-class service and operate much closer to the public. Transferring functions to them would be wholly consistent with this Government’s support for action and decision-making at local level. In particular, devolving key elements of consumer enforcement to a local level would target resource where it is most needed. It would reduce the potential for gaps and empower local authorities to find ways to address all threats which have a combined local and national dimension. Trading standards services already have experience of handling complex cross-authority cases successfully. We need to build on that and develop a body with the right capabilities, resources and prioritisation mechanisms.
Perhaps I may address this whole business of consultation. I think my noble friend Lord Newton of Braintree might have had an outdated briefing because the information on the local briefing makes clear that we are commencing a consultation process fairly soon. In fact, the consultation document may be available shortly, in the next 10 days or so, which means it will probably be available by the time we reach Report. The idea is that the consultation period should be completed within this year. The whole point of consultation is to address the detail of these proposals because it is in the mechanics of making this work that it happens.
We will consult on a model that ensures that money is targeted onwards towards national enforcement priorities, set and co-ordinated by a trading standards policy board made up of chief trading standards officers for England and Wales, with similar arrangements for Scotland. National threats could be addressed on the ground through one or more dedicated expert teams, either following the existing Scambusters model or through lead individual local authorities. The Government’s consultation will also address the most economically complex consumer enforcement cases and will consider the case for the newly merged competition authority to retain some consumer law powers to supplement its competition work.
Given that the Government’s proposal is to merge these bodies, noble Lords may query why they are listed in Schedule 5 to the Bill. I am happy to clarify the matter. At the time of the Bill’s introduction, there was a proposal to use Schedule 5 to transfer some functions from these bodies and consequently to use Schedule 7 to move the bodies into Schedule 2, facilitating the proposed merger. Given the removal of Schedule 7, this is no longer possible. I therefore confirm that the Government intend to bring forward an amendment at a later stage of the Bill’s passage to move these bodies into Schedule 2 to facilitate the merger.
The Office of Fair Trading will need to remain in Schedule 5, in order to facilitate the transfer of its consumer functions prior to the expected order to merge. Therefore, I cannot accept Amendment 97. However, the Government have concluded that it is no longer necessary to list the Competition Commission in Schedule 5, and on that basis, I am pleased accept Amendment 89 moved by the noble Lord, Lord Dubs.
I have received quite a lot of briefing on a number of issues raised by noble Lords and I will try to go through them. As we approach the dinner hour, I hope that the House will forgive me for doing so, but this is an opportunity to clear up some of these questions. The noble Lord, Lord Dubs, asked about consumer credit. It is subject to a separate consultation. In December, the Treasury and BIS issued a joint consultation on transferring the regulation of consumer credit from the OFT to the new Financial Conduct Authority. He also asked about trading standards resources, which of course will be addressed at the local authority level. But we are aware of the pressures on all services, including local authority trading standards. How local authorities allocate resources according to local priorities is a matter for them, but it is essential that any new money must be targeted on broader projects that respond to a national threat. It must complement work that is already being done rather than be seen as new funding for current projects. Nevertheless, there may be some positive benefits in the form of greater co-ordination and capacity building that would arise from these changes. Specifically as regards the future of the Local Government Group, it is our view that a board of chief trading standards officers, either as a successor to Local Government Regulation’s Trading Standards Policy Forum or the Association of Chief Trading Standards Officers, would in practice lead on the co-ordination work.
The noble Baroness, Lady Hayter, asked about economically complex cases. As I mentioned in my main text, trading standards departments have demonstrated their ability and professionalism over many years, and I hope that I have indicated, by the construction of national co-ordination within the trading standards world, that we are looking to build them up in order to be able to tackle the more complex activities that not only have local impacts but are of national significance. It is important that any changes can be addressed. In the same way, the noble Baroness asked about super-complaints. Competition elements would be part of the new Competition and Markets Authority, but the consumer, being sure of the issue, would go to the new authority for mixed market analysis. Where it is solely a matter of consumer interests, it would need to be part and parcel of the new co-ordination body within trading standards, as has been suggested.
The Government intend to consult and the proposed consultation will begin soon. No date has been set for the consultation to be concluded, but it is expected to be finished during the course of the year. In reply to the noble Lord, Lord Myners, I am pleased to be able to say that as a result of the question that my noble friend had to answer, the Government’s wider financial services agenda, the Independent Commission on Banking, chaired by Sir John Vickers, has been asked to look at the structure of banking in the UK and will consider how to promote financial stability and competition in the industry. This will include examining the complex question of separating investments from other matters. As regards the ICB, the Chancellor of the Exchequer said in the House of Commons on 9 February and my noble friend Lord Sassoon said in this House that the Government will not interfere with its independent remit.
I hope that I have managed to tackle the questions raised in the debate. I am grateful to noble Lords for bringing these issues to the attention of the Committee and I am happy to support Amendment 89, moved by the noble Lord, Lord Dubs.
Lord Dubs
My Lords, I am grateful to the Minister and I am delighted that he has accepted one of the amendments, although I am not sure that it is because he has accepted the full thrust of the argument. I think that he has done so for a slightly more technical reason, but nevertheless one should take one’s victories where one can get them. I am also grateful to my noble friends for the contributions they have made to this debate.
The Minister said that at a later stage the Government would be coming forward with further amendments. I hope that they will be tabled in this House. It would mean that I could say much less now than I would otherwise say if the amendments were not going to be introduced here. Does he know whether they will be brought forward in this House or in the other place?
Lord Taylor of Holbeach
There have been early discussions on this matter and I should like to be able to bring the amendments forward at the Report stage in this House.
Lord Dubs
I am most grateful for that helpful response. There is only one issue that I am not clear about. The present process for referrals to the Competition Commission is quite complicated, and as I indicated, referrals can come from a variety of sources. Will the new Competition and Markets Authority be able to investigate issues on its own initiative or will it depend upon referrals? Will those referrals come from the existing arrangements or will they come from elsewhere? I am not totally clear about this.
Lord Taylor of Holbeach
I think that I can reassure the noble Lord. The authority will not be entirely dependent on referrals. It will have the capacity, as does the current Competition Commission, to initiate investigations. This will be part and parcel of the consultation, which I hope will make the position clear for the noble Lord.
Lord Dubs
In which case, all I would say is that I still think it is too complicated an issue to be dealt with in this way. I understand that it is not of the Minister’s own choosing, but if we had been having a Second Reading debate today on a proposal to merge the two bodies and deal with other consumer protection and competition matters, it would have been much easier for us to handle it. It is not for us to change the Government’s approach, but I do regret it. However, I am grateful to the Minister for his response and I commend Amendment 89 to the Committee.
Drug Use and Possession: Royal Commission
(13 years, 8 months ago)
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Lord Norton of Louth
To ask Her Majesty’s Government what consideration they have given to establishing a royal commission on the law governing drug use and possession.
Lord Norton of Louth
My Lords, this is an especially appropriate time, or at least an appropriate year, in which to ask this Question. It is 40 years since the UN Single Convention on Narcotic Drugs was promulgated and the Misuse of Drugs Act was passed. Whether I am the most appropriate person to raise the issue is another matter. Other noble Lords taking part in this short debate are far more qualified than I am to speak; I approach as someone totally detached from the subject. I am conscious that, as an academic, this is not my subject, and hence I tread with some trepidation.
However, my background is relevant in two respects. First, as I have said in the House before, I believe strongly that we should have evidence-based policy. I am often appalled at how much legislation is brought forward more on the basis of hope than of evidence. Secondly, I recognise that the best way to affect attitudes and behaviour is through education—I do not just mean formal education—and persuasion. The law alone cannot achieve change, and indeed it can be dangerous to rest on the law in place of education. As a Conservative, I do not believe that the purpose of the law is to send signals. Perhaps it is because I come from a detached position that I am struck by the problems and the contradictions that we now find in our attempts to address the problems generated by drug use. We prohibit certain drugs, but we allow people to purchase and consume substances that may be far more dangerous and account for far more deaths each year.
There are two dimensions to the issue: drug use and drug prohibition. There are clearly appalling costs associated with drug use, not only to those who become addicted and their families but to the community. However, there are clear problems with prohibition. If drugs are illegal, the supply is therefore driven underground and supply becomes in the grip of organised and violent crime. What happened with prohibition in the United States, we see now repeated in respect of drugs and on a massive global scale. This has appalling consequences in some countries in terms of loss of life. The Government’s Drug Strategy 2010 concedes:
“The UK demand for illicit drugs is contributing directly to bloodshed, corruption and instability in source and transit countries, which we have a shared international responsibility to tackle”.
In this country, the problem manifests itself in the crime figures and the sheer amount of police time occupied by combating drug use and supply. The exercise is highly inefficient in that only between 1 per cent and 10 per cent of drugs are believed to be stopped from reaching their target market. Nearly half of all crime is related in some way to drug use and abuse. Heroin and cocaine users are responsible for most burglaries, shoplifting and street prostitution. The economic and social costs are staggering. In the UK, as the Government concede, these costs in respect of class A drugs alone are estimated at more than £15 billion a year. More than half of prison inmates are believed to have serious drugs problems. I am all for incarcerating those who engage in serious crime, but locking up drug addicts generates a vicious, and costly, cycle. To feed their habits, drug users steal, rob and then get locked up, costing the public even more, with recidivism a marked feature once they are released.
My starting point is that there is a demonstrable problem. What, then, do we do about it? A great deal has been written on the subject, though at times we appear to get much more heat than light and a tendency on the part of politicians to wish the problem away. That in itself then becomes part of the problem.
When I knew that I had secured this debate, I invited comments from readers of Lords of the Blog, a collaborative exercise by several Members of your Lordships' House. I received a good number of informed, and sometimes anguished, responses. One comment came from a father who had lost his son to a heroin overdose. He wrote in support of maintaining the present law. His son had been cautioned for cannabis possession, but he and his wife were unaware of this and felt that if their son had been charged then they would have known about it and may have been able to do something to save him. That is a tragic case, but it is clear that the law did not prevent the son taking drugs in the first place.
That is the problem with which we have to wrestle. The law as it stands is not having the intended effect. It may deter some, but it is clearly not preventing a great many people taking drugs, with all the attendant and consequent costs that I have mentioned. The Science and Technology Committee in the other place, in its 2006 report, Drug Classification: Making a Hash of It?, found no solid evidence to support the existence of a deterrent effect. I gather also that there is no evidence that the level of classification within the 1971 Act has any effect on consumption.
One solution may be to move towards decriminalisation. The chairman of the Bar Council, Nicholas Green QC, has said that there is a growing body of comparative evidence that decriminalising personal use can have positive consequences. He said:
“It can free up huge amounts of police resources, reduce crime and recidivism and improve public health. All of this can be achieved without any overall increase in drug use”.
This year is also the 10th anniversary of the passage of the law in Portugal to depenalise drugs. Drug deaths there decreased as did the prison population, and seizures of large quantities of drugs have increased. Even if we do not go down the road of decriminalisation generally, there may be a case for at least permitting the use of cannabis where there are medical grounds.
That may be the way to go; it may not be. It may be that we should strengthen the existing law or devote more resources to enforcement and to education. Police resources are stretched. Drugs education can and does have an impact but most schools, I understand, choose to provide drugs education once a year or less and all too often develop their own curricula rather than using evidence-based programmes.
My case is that we need to explore whether the present law is necessary and sufficient, whether it is necessary but not sufficient, or whether it is neither necessary nor sufficient. The Government's Drugs Strategy 2010 is silent on the issue. Implicitly, it takes the first of these three positions. There is no critical reflection. Can we improve on the existing law? What are the alternatives? If we are to stick with the existing law, we need to know why and not simply take it as given.
It is these points which motivate this Question. I have put it in terms of a royal commission. Royal commissions have somewhat gone out of fashion, in part because they are seen as time-consuming, cumbersome bodies. They need not be, as the royal commission under my noble friend Lord Wakeham demonstrated. They can enable salient evidence to be placed before an authoritative public tribunal on a transparent basis and the evidence to be weighed.
However, I am not wedded to a royal commission. Another form of inquiry may be equally appropriate or possibly even more so. At the very least, we need to undertake an impact assessment of the 1971 Act. We need a structured means for weighing evidence, not proceeding on the basis of prejudice, with people simply speaking past one another. I would not be averse to a broad-ranging inquiry; drug use, as the Government recognise, can encompass alcohol consumption. There is a case for a holistic examination.
I am delighted that my noble friend Lady Neville-Jones is to reply. She is too intelligent to fall back on crass or knee-jerk responses that we cannot change because it would send out the wrong signals, or that it is an international problem which means that we cannot do much on our own. Such responses would not in any case be relevant, because I am not making the case for change. I am making the case for a proper, thorough and detached review of the evidence.
Baroness Walmsley
My Lords, I support the call of the noble Lord, Lord Norton of Louth, for a royal commission on the laws relating to drugs. I would like its remit to be as wide as possible. I agree with him that policy should be evidence-based, as existing drugs policy is an expensive failure and based on ignorance and prejudice. All evidence points to drugs being a health issue. Only bad policy has turned it into a criminal justice issue, a public safety issue and an economic issue.
As a Liberal, I believe that what an intelligent adult chooses to put into his own body should be up to him. However, I cannot imagine why people use drugs when they know the harm that they cause and, of course, we have a duty of care to the young and vulnerable. The matter is therefore no business of government unless, first, users commit crimes in order to feed their habit; secondly, they do harm to other people; thirdly, the market that they create leads to organised crime and violence; and, fourthly, their habit costs the taxpayer money. All those four things are clearly the Government’s business. We should address the matter by way of vigorous fact-finding and taking of independent professional advice.
I shall take the above four points in turn. First, I do not believe that possession for personal use should be a crime. However, stealing is, and should remain, a crime. Addicts steal to buy drugs because illegal drugs are expensive. It is a seller’s market because many drugs are illegal. If addicts could get legal, safe supplies, their habit would be cheaper and safer for them. Most drug deaths occur because the drugs are cut with other substances or their strength is unknown. There is an incentive for dealers to cut the drugs and make more profit. This is the wrong incentive to have in the system.
Secondly, addicts harm other people as well as themselves. Many of those who abuse alcohol get violent. They get into fights on the street and, when they get home, they abuse their wives and children. Their children are not properly cared for because of the money that the addict spends on alcohol. The same applies to the children of drug addicts. I can also imagine the money spent on cigarettes being better spent on food and clothes for children. Perhaps I may ask the Minister whether the remit for the royal commission could include a section on the effect of drugs of all kinds on the lives of the children of addicts. It always amazes me that when drunks and addicts come into contact with medical services no one thinks to ask whether they have children at home so as to get the social services to look into the effects on them.
Thirdly, the market for drugs is primarily responsible for the gun and knife crime on our streets and the enormous amounts of money that attract organised crime. That is very big business but it filters right down into the heart of our communities, including our schools. Children know where to get drugs, guns and knives. Many of those who carry knives say that they do it to protect themselves. They do not realise that carrying a knife makes them even more likely to suffer injury from one. In order to stop our children wasting their lives, we must set up a study to look dispassionately at the facts and international experience and to act on recommendations.
Finally, the cost to the taxpayer of the current bad policy is enormous. At a time when we are trying to pay down the deficit, we must look seriously at this cost and consider how we could get better outcomes for less money. There are wide implications for public policy suitable for consideration by a royal commission. My Government, who were elected with 60 per cent of the vote, should have the confidence to defy the tabloid newspapers. They should get the facts and act on them. We should not be afraid of ignorant, misleading and downright evil tabloid headlines. It is the right thing to do. Please let us do it.
Baroness Finlay of Llandaff
My Lords, I am grateful to the noble Lord, Lord Norton of Louth, for introducing this important debate. There are two areas of real concern about our current drug laws: first, their enforceability; and, secondly, whether they are capable of achieving the desired goal.
The Misuse of Drugs Act, 40 years old in May, controls more than 600 substances, with more being added at an alarming frequency. Enforcement is becoming increasingly difficult as the remit of this Act expands. Officers are expected to identify controlled substances from a vast and expanding list. Tests are expensive and time-consuming. As the law becomes harder to enforce in full, it risks being brought into disrepute. Control of different psychoactive substances appears increasingly inconsistent. There is increasing public awareness of the harms associated with alcohol and tobacco, resulting in some action now in law, yet the law currently suggests that they are of less concern than the 600-plus substances already controlled under the Misuse of Drugs Act—a list to which about 40 substances a year will probably be added. The law is sometimes said to give a message but, unfortunately, in this area, even if it does give a message, it does not get to those who are at risk and can have the opposite effect to that intended.
The temporary one-year banning powers proposed in the Police Reform and Social Responsibility Bill will come under pressure in response to all newly emerging substances which are seen to have, or are just believed to have, potential harm. With about 40 new psychoactive substances a year, this will not be cost-free. Police time costs money.
Illicit substances have a perverse appeal to young people and fuel criminal trafficking of active and contaminated substances. When a substance becomes illegal, it is cut and diluted and the concentration of the contents is unknown. For example, despite the ban, mephedrone users are still obtaining the drug but with greater risk of overdose and poisoning from contaminants, adding to the NHS costs. Newer, more harmful substances may be replacing mephedrone, so the impact of bans such as that applied to mephedrone needs evaluating. The evidence has to be looked at.
Annually, more than 41,000 people are sentenced for drug possession, of whom 1,200 enter immediate custody, so alternative civil powers, such as trading standards or medicines regulation, warrant consideration. These may be just as effective at protecting young people, while avoiding some of the harms associated with a ban under the Misuse of Drugs Act, including stigmatisation impeding recovery programmes.
The UK Drug Policy Commission, of which I declare an interest as a commissioner, will shortly publish a report looking at the issues around the control of new substances. This will highlight the need for a more open debate about drug control and a complete review of our approach towards all psychoactive substances. The debate today is a welcome start to such a process.
The Earl of Onslow
My Lords, about 10 and a half years ago, two rather interesting things happened to me. First, I was elected a Member of this House. Secondly, on the same day, I went on “Have I Got News for You”. The first question that Angus Deayton asked me was, “Oh, Lord Onslow, are you in favour of the legalisation of drugs?”. I said, “Yes I am and I will answer this question seriously and not flippantly”. I said that drugs seem to me to be the greatest threat to social cohesion that there is. They produce crime and getting out of the vicious circle is impossible. Therefore, we must have a much more sensible policy than the one that we have. All the evidence shows that the present policy fails.
I was delighted when my noble friend Lord Norton stressed the importance of evidence. I continued on the programme by saying that, if the evidence shows that we are failing, why do we go on and on? I continued in that vein for some time. The interesting thing was that the audience—they were not way-out hippies but a respectable cross-section of society who had gone to listen to a flippant and funny programme—all clapped at the end. I think that we overestimate the attitude of what could be classed as the red-top newspapers.
The late Lord Colville, who was such a distinguished Member of this House, said that he reckoned that 75 per cent of the people whom he sentenced to get a slight suntan were involved one way or another with drugs as well as crime, including robbery or whatever. It is easier to get drugs in prison than out of prison. I wonder why.
It is not so much the respectable people who suffer from drugs, even though there are to my certain knowledge Members of your Lordships’ House with children who have had drug problems. We have even had—I am not breaking a secret—a distinguished Member of your Lordships’ House who was a mainline heroin addict and has admitted to it; he has gone on to make a major contribution to the proceedings of this House. It is obviously possible to get out of the problem into which we are looking. It could be made more difficult: the supplier has an incentive if drugs are illegal, whereas if they are not illegal there is no incentive to push.
I am obviously privileged beyond anything to live in a civilised and pleasant place. I do not live in a tower block where needles are lying about the place. For those people the policy of criminalisation makes their lives so much worse. It is for that that I support the noble Lord, Lord Norton.
Before I stop speaking, I should like to say one further thing. I have not been well recently and I should like to thank every single Member of your Lordships’ House who has come to me with really nice things to say. It has moved me beyond peradventure and I should like to put that on the record.
Lord Rea
My Lords, the noble Lord, Lord Norton, has chosen a relevant and important topic. We should thank him for securing this short debate. He and all other noble Lords who have spoken are right to point out that the current legal framework controlling drug abuse has been remarkably ineffective and very expensive. Recently, there has been a slight reduction in drug use by young people, but there has been a parallel increase in binge-drinking, with an alarming increase in death from liver disease.
Fashions change in the popularity of mood-altering substances but it has always been a characteristic of human societies to use one or other of them for enjoyment or relaxation. Prohibition merely drives trade in these substances underground and into the hands of criminals. The main problem with current drug legislation has been what was described recently by Antonio Costa, former chief executive of the UN Office on Drugs and Crime, as a raft of “unintended negative consequences”. These include a huge criminal market, policy displacement from healthcare to enforcement and geographical displacement—the “balloon effect” of enforcement activity in one area displacing the problem to another. We have a serious drug problem in the UK, but its extent stretches far wider. Illicit drug profits are fuelling crime, corruption and conflict across the globe. The recent spate of violence in Mexico is but one example.
I have been interested in the problem of drug abuse since my days in an inner-city general practice. The social and physical problems caused by excessive consumption of alcohol—a legal substance—were greater than those caused by drugs that are illegal. My strong impression was, as the noble Baroness, Lady Walmsley, has pointed out, that the health problems stemmed more from the fact that the street drugs that were used were adulterated rather than from the effect of the drugs themselves. The four deaths that occurred among my patients were all due to overdose from batches of street drugs that were unexpectedly potent. At the other end of the scale, I had several heroin-dependent patients who received pure pharmaceutical heroin from one of the few doctors still permitted to prescribe it. They were able to carry on responsible jobs and maintain normal households. They were eventually able to end their drug use while receiving careful counselling and medical supervision, but only when they felt ready to do so—a similar approach to that used in the most successful treatment units today.
The purpose of these remarks is to emphasise that most of the substances now listed in Schedule 2 to the 1971 Act, if used in moderate amounts in pure form, while not totally harmless are no more harmful than alcohol and tobacco. Tobacco actually raises mortality even when smoked as intended. The relative harm caused by different agents has of course been the subject of recent controversy and a bad-tempered spat between the Home Secretary and Professor David Nutt, the former chairman of the ACMD, resulting in his dismissal. He made the mistake of using a light touch in comparing the dangers of ecstasy with those of horse riding, for which he coined the term “equasy”.
To conclude, is a royal commission the right body to review our health policy? It would certainly bring clarity to a controversial area, but the Government would not necessarily be bound to follow its recommendations, resulting in the issue being in effect kicked into touch. I recommend the use, as the noble Lord mentioned, of impact assessments, as recommended by the committee of the noble Baroness, Lady Finlay, the UK Drug Policy Commission. The advantage of this method is not only that the Government are more likely to follow and take seriously the recommendations, being part of the process, but that it has flexibility, enabling it to be applied internationally as well as nationally.
Baroness Meacher
My Lords, I applaud the noble Lord, Lord Norton, for initiating this debate. The case for a review of the Misuse of Drugs Act 1971 is of course overwhelming. No one today would seriously argue that the possession of cannabis should be punished with a maximum penalty of two years or an unlimited fine, as in the Act. Likewise, surely no one would argue that seven years in prison should be on the statute book at all as a possible response to the possession of a few ecstasy tablets.
It is important for us to be clear about the meaning of success in the drugs field these days. The big change in the last 40 years has been the universal recognition that the call for a drug-free world was nothing but a pipe dream. The key question is what policies will minimise the level of drug addiction and of personal and societal harm. I applaud the Government’s emphasis on recovery, but that policy would be vastly more effective if it were introduced alongside the decriminalisation of drug users.
Many countries have introduced health-oriented approaches alongside decriminalisation, with positive results. The Portuguese policy, as already mentioned, of decriminalising the possession of up to 10 days’ supply of all drugs, linked to active treatment, has astonished the faint-hearted. Far from leading to a drugs tourist industry—which was well predicted—and soaring levels of drug addiction, the policy is recognised internationally to have been a resounding success. In many ways, the most important finding is that for young people—13 to 15 year-olds and 16 to 18 year-olds—the prevalence rates have declined in Portugal for virtually every substance since decriminalisation. This is the more remarkable because it goes against the trend of the surrounding countries that still have tough criminalising drug laws.
Of course, Portugal is not the only country that has moved away from criminalisation. Spain, Switzerland, the Netherlands, the Czech Republic, 13 states in the US and many other countries have liberalised drug policies in a range of ways. In no case have these liberal policies led to a general increase in drug use, more crime or more harm to individuals—quite the opposite. As the noble Lord, Lord Norton, said, we need evidence. Actually, we have it and lots of it. The Czech Republic is particularly interesting. It introduced criminalisation in 1999, undertook a detailed scientific study which showed that criminalisation had been a disaster, and in 2010 reversed the policy and decriminalised drug use. Even the United Nations Office on Drugs and Crime concluded in a recent document that,
“punishment is not the appropriate response to persons who are dependent on drugs”.
Surely our Government needs to take account of the UNODC.
We do not impose criminal penalties on patients suffering with cancer or heart disease. Of course, it is self-evident that such a response would be not only unethical but also counterproductive. Exactly the same arguments apply to drug addiction—punishment is unethical and counterproductive. The new All-Party Parliamentary Group on Drug Policy Reform, which I chair, together with the Beckley Foundation, supports further research on drug policies and the drafting of a new UN convention permitting—not asking—countries to introduce more liberal drug policies.
We are now 50 years on from the single convention of 1961, when it was hoped that drugs could be eliminated through tough, criminalising policies. These policies have failed. A royal commission lasting I hope no more than 12 months would be sufficient to pull together the evidence. If this were followed by sensible drug policy reform, it would do more to generate a safer world, reduce conflict and weaken al-Qaeda and criminal gangs across the world than any other initiative I can think of. The case for change has been made. I hope the Minister will be able to respond positively.
Lord Taverne
My Lords, all the speeches so far have made an overwhelming case for a really authoritative, weighty inquiry into the whole question of drug use. The first question is: should possession of drugs be a crime? When I was a Minister in the Home Office in that glorious period between 1966 and 1968, when Roy Jenkins was Home Secretary, possession of drugs was not actually a crime. Heroin addicts could get a GP’s prescription for uncontaminated heroin and they were much more likely to go for treatment. Of course, circumstances were very different, but it is notable that at that stage drug addiction was much less of a problem than it is now.
Is the criminal law the right instrument for dealing with drug abuse? The experience of Portugal, the Netherlands and a number of other places shows that education and rehabilitation are a far more profitable route. Why do the Government not recognise the reality that the war on drugs is not being won and never will be won? If you are losing a war—or certainly not winning it—at enormous cost, is it not time to look at the whole question again?
There is the further question of the reclassification of drugs. As the noble Baroness, Lady Meacher, has just said, it is absurd to have ecstasy put in the same category as hard drugs of other kinds, and the reclassification of cannabis has no scientific evidence behind it.
When it comes to alcohol, it is high time for us to consider what could be a much more effective approach. The recent inquiry by the independent committee on drug use showed, in a very systematic analysis, that alcohol was by miles the most harmful drug being sold at present. At the moment it is less directly harmful to the individual, but even that may change. On present trends, many people forecast that liver disease will soon be a bigger killer than heart disease.
The present policy is not based on scientific evidence. It is true that scientific evidence is not necessarily conclusive. However, if the policy is not based on scientific evidence, reasons should be given why it is not and it should be based on some other evidence. All these are eminently matters for a royal commission. The Government should recognise, if they make any pretence of having policy based on evidence, that the present way in which they approach drugs is not.
Lord Cobbold
My Lords, I rise to support the question proposed by the noble Lord, Lord Norton. It is high time that the drugs problem was subjected to an unbiased investigation. Prohibition has manifestly failed, a fact that even the United Nations ODC has recently acknowledged. To me it seems illogical to treat drugs differently from alcohol. It amazes me that democratic Governments can tolerate the global drugs market being totally in the hands of criminals.
Drug usage should be a health issue, not a criminal justice issue. Our prisons are overcrowded. Drug prisoners are frequent reoffenders because many of them have nowhere else to go and they are well looked after in prison. The drugs trade costs our country an enormous amount of money—unlike alcohol, which is licensed and taxed. The savings could finance further treatment and rehabilitation centres, as well as help to reduce the national deficit.
I strongly support the efforts being made by the noble Baroness, Lady Meacher, to bring together people from other countries that have taken a more sensible attitude towards drug laws to try to see whether a common process can be developed. This is a significant problem and it is extremely important that something should be done in the not-too-distant future.
Baroness Murphy
My Lords, I am tempted to say that I agree with everybody else and just sit down, but I have four minutes and I am going to make the best of them.
I add my thanks to the noble Lord, Lord Norton of Louth, for this opportunity to press for a serious review of drug misuse policy. I am not usually supportive of royal commissions because they tend to kick matters into the long grass. However, we are already in the long grass on this matter. We are saddled with a policy that we all agree has largely failed. Small bits of it may have been successful, but it has largely failed. We are rather frightened to focus on the alternative harm reduction policies for reasons that we have amply aired.
On the question of evidence-based policy and the research to support it, although we have plenty of evidence about the failure of current policies, I fear that we have surprisingly little evidence on which a royal commission could base its positive recommendations for future policies. As an academic, I am always pressing people to say, “Stop calling for more research and just get on with what we know”. However, there is an extraordinary lack of social research. After all, drug use is a social activity with social impacts.
To my mind, it is strange what large and fundamental gaps remain in our understanding. For example, we have not tackled the dramatic changes in cannabis use that have occurred over the past 20 years and we know very little about enforcement of the drug laws. Following the second reclassification of cannabis back to a class B drug, there is a pressing need to evaluate how this change is impacting on policing, for example. We lack a good understanding of the routes both into and out of problematic drug use and the long-term impact of drug use on families. For example, social workers are making difficult decisions every day about the placement of children and are placing them back with families in which there is profound drug addiction, yet the evidence that they have on which to make those decisions is very poor indeed. I could mention many other pressing topics. This is merely a short list of examples of the gaps in research.
Until recently, neither the Economic and Social Research Council nor the Medical Research Council had funded major programmes of work in this area, although in the charitable sector the Joseph Rowntree Foundation has published some admirable research with modest funding. The majority of government money devoted to drug research has been spent on usage surveys, monitoring and evaluation—quite properly, since that is the Government’s job—rather than on exploratory research designed to fill the gaps.
There have been positive developments. Early in 2009, the MRC launched its addiction and substance misuse research strategy and it has now launched a new programme. However, the ESRC seems to have spent a total of just £3,000 in the last year and has given no grants either in programme grants or responsive mode funding. I think that that is extraordinary for one of the major problems that society has developed over the last 40 years.
The major research centres are mostly focused in clinical or epidemiological centres. Senior academics are from medical disciplines. I do not want to detract from the importance of this work, but I think that we have to get the balance of government research funding right. It is not heartening for researchers to know that, if they get good evidence, it will not be implemented. We have already had some evidence of that.
Finally, drugs are a highly emotive topic, which generates hyperbole, controversy and political vacillation, but it is crucial that we invest in proper social research to advise any independent inquiry on the way forward. Will the Minister say what plans the Government have to invest in the social scientific research that we need to take forward evidence-based policies?
Lord Stevenson of Balmacara
My Lords, I congratulate the noble Lord, Lord Norton of Louth, on securing this excellent debate. When he introduced it, he said that he was not an expert. I am left with the feeling that I would hate to hear him on his own topics, but of course we hear him on them regularly and we are all the better for that. It was also interesting to hear his blog responses, which informed what he said. I think that they added a touch of absolute certainty about what is happening out there in the real world, which was very useful to hear.
I am sure that I speak for the whole House when I say how pleased we are to see the noble Earl, Lord Onslow, in his place. I thank him for his interesting anecdote about “Have I Got News For You”. I must watch that. I had not realised that the noble Earl had been a star of the small screen. It also shows, from what he said, that the public are well ahead of us in some of the things that we think about in this debate.
As the noble Baroness, Lady Finlay, reminded us, the Misuse of Drugs Act 1971 now controls over 600 or so so-called psychoactive substances, of which there seem to be about 40 discovered each year. We have too many regimes and approaches. Alcohol and tobacco are regulated separately, largely through trading standards legislation, while solvents and solvent abuse are regulated through the Intoxicating Substances (Supply) Act 1985. As a number of noble Lords have said, there is no evidence that the level of classification within the Act has any effect on consumption. When cannabis was reclassified downward to class C and then back up again to class B, there was no discernible change in the already downward trend in use.
Penalties for drug possession have a considerable impact on the criminal justice system. Two years ago, over 41,000 people were sentenced for drug possession offences, including over 1,200 people sentenced to immediate custody. Drug use and its associated problems have real and considerable implications for the justice, prison, education, health and mental health systems and, of course, for victims and families and generally for society.
As the noble Lord, Lord Cobbold, said, there is a good case for drugs policy being transferred to health and taken away from the Home Office. The Misuse of Drugs Act is now 40 years old and, arguably, ripe for review. The noble Lord, Lord Taverne, gave us an interesting insight into policy as it must have been around the time when the Act was passed. That gives us a chance to argue that a review is required. If the Act is going to be reviewed, there is a list of issues that need to be addressed, including enforceability, which is becoming more and more difficult and bringing the law into disrepute; inconsistency in our approach to controlling illicit and licit psychoactive substances; technology and the fact that new drugs are being developed all the time; criminality, with the huge and growing criminal black market and the associated violence that it brings; and collateral damage, in the sense that drugs and drug use have a significant and growing impact on our education, health and prison systems.
As the noble Baroness, Lady Finlay, said—and it was a good phrase—we have also to think about the perverse appeal that drugs have for young people. All our evidence is that the educational process at the moment is not effective. As the noble Lord, Lord Norton, said, we have a problem. The issue of decriminalisation has been raised. There is good evidence from other parts of the world that it can have an effect. As my noble friend Lord Rea said when he spoke about his experiences of general practice, there is in some sense a form of decriminalisation effected when people are able to prescribe directly and get around the laws. We obviously need to tackle that, as well.
As the noble Baroness, Lady Meacher, said, a balanced debate is needed—one that considers the impact of prohibition and the potential benefits as well as harms from use and abuse of psychoactive substances. We have to think about the costs involved in this process. This debate could then feed into a complete review of our approach to drug control, with the aim of producing a single, coherent, overarching framework for regulating all psychoactive substances.
If there is a case for a complete review, should it be done by a royal commission? There are those who feel that a royal commission just means a whole lot of people with letters after their names taking several years and spending a lot of public money just to tell us what we already know—so maybe not a royal commission. Should it be done by Parliament? One problem is that our political and legislative systems contain what has been described as a fundamental bias in favour of the prohibition of drugs. It has been persuasively argued that politicians find it very hard to deal with these social issues in any case. Even so, there is a case for this matter to be referred to Parliament, possibly through a Joint Committee of the two Houses and subsequent pre-legislative scrutiny. The Government are presumably nearing the end of their drug strategy consultation. Perhaps the Minister can shed some light on progress with this and, in so doing, indicate which of these options—royal commission or Parliament—she favours. As the noble Baroness, Lady Murphy, said, we are already in the long grass, so let us not leave ourselves there for much longer. Judging from the evidence that we have heard tonight, something clearly has to happen soon.
The Minister of State, Home Office (Baroness Neville-Jones)
My Lords, I thank my noble friend Lord Norton for the thoughtful way in which he introduced this debate on a subject of very considerable public import that, precisely because of the harms associated with it, excites very considerable strength of feeling and, I have to say, disagreement. There is a broad consensus on some of the damage that it does; where those who are informed as well as those who are uninformed part company with each other is on what we do about it.
I would like to respond to the points raised and set out the Government’s thinking as it has developed on the drug strategy. Between us and those advocating decriminalisation, which I have to tell noble Lords the Government are not going to engage in, there is common ground on some of the things that we consider need to accompany a policy that continues to classify drugs and criminalise the taking of them. Do we believe in an evidence-based policy? Most certainly. Do we think that the law can do it all by itself? Certainly not. We certainly think that both education and treatment need to be integral parts of policy. Do drugs contribute to global crime at all levels, violent as well as organised? Yes, absolutely they do. Do we need therefore to take action? Clearly, we do.
The example of Portugal has been mentioned, and I shall come to that in a moment, because the conclusions that you draw from the evidence in front of you is going to influence what you say about what should happen next. The picture that emerges from Portugal is somewhat more complex than some noble Lords have allowed.
Let me say something about how the Government’s thinking is developing and then I shall return in the light of that to some of the comments that have been made. As the House will be aware, in December last year the Government launched their new drugs strategy, whose component parts include: reducing demand; restricting supply; building recovery; and supporting people to live a drug-free life. The supporting part is very important.
The strategy has two high-level ambitions, one of which is to reduce illicit and other harmful drug use. I might say that we do take a dim view of alcohol abuse, which we also believe needs to be tackled. Some of the treatments that accompany that are much like those for the abuse of drugs. It is for the reason that alcohol abuse is certainly going up that we are clamping down on below-cost sales of alcohol and restricting their sale to young people, and so on. We do think that that needs tackling—so there is nothing between us on the subject of the evils of alcohol abuse. However, we do not believe that because alcohol abuse is going up, that is somehow reason for not being tough about drugs as well.
Our second ambition is to increase the number of individuals who are able to recover from their dependency on drugs or alcohol. In delivering these ambitions for the next four years, we are committed to an evidence-based approach, and we will undertake evaluation of the policy as we go along. We are not suggesting that we will pursue this policy irrespective of what the evidence shows that its results might be. I assure and promise noble Lords that constant evaluation will be an integral part of the approach that we pursue, and we will take into account the wider evidence available. I have to say to the noble Baroness, Lady Murphy, that I have asked whether we have any social research on the stocks at the moment. I fear that the answer is no, and I think that is something that we should take away.
High-quality advice on this complex field is obviously of the utmost importance. We value greatly the work of the Advisory Council on the Misuse of Drugs, and the proper consideration of its advice is at the heart of enabling us to deliver this strategy. We are developing with it an evaluation framework to assess the effectiveness and value for money of the drugs strategy. We will redo that on annual basis and from that annual review we will then develop further initiatives and actions as the programme develops. That I hope will give us the necessary flexibility to respond to changes in the drugs scene and the nature of the trade and based on the outcomes that we are managing to achieve.
The Government are also ensuring that our policies complement each other and build the necessary links between the strategy itself and sentencing, welfare and public health reforms so that we optimise the outcomes and the cost-effectiveness of individual policies.
A number of noble Lords have mentioned the whole question of impact assessment. I have some sympathy with this notion. It is very hard, however, to know what you are measuring. One reason is that it is extremely difficult to disaggregate the interaction of various phenomena. Two honest people can measure an impact and come out with a different answer. I hope the House would agree that we have to tackle the complexity of the interaction of various factors. I hope if we are able to do that it will give us a better clue as to how to proceed.
I suppose I need to say at this point that, although we are going to go through evaluation, we do not intend to go for a thoroughgoing review. We do not consider that that is warranted. What we want to do is to give the strategy that we are outlining, which contains new components of policy, a good try to see what it delivers. We are not a Government who will take no notice of the results of policy, but we certainly think that the case at the moment is made for proceeding with the policy on the basis of constant review.
As I said, we have decided that we are not going to decriminalise, but we are going to deal with a lot of the features of the scene. The four decades of the Misuse of Drugs Act have provided the UK with a coherent legislative framework. Although some noble Lords seemed to think that we could somehow duck our international obligations, we do not believe that is actually the case. We have to engage in policies which restrict the availability of drugs and their misuse and which protect public health and welfare. We will continue to try to do that.
We will engage in a number of positive features in our policy—I think it is important to do that—but before I come to that issue I want to say something about the relationship between the level of crime and drug use. The findings from the British Crime Survey 2009-10 show that drug use among young people in the 16 to 24 age group has fallen to 20 per cent, from 29.7 per cent when the survey began. That is quite a significant drop. The latest figures from the NHS Information Centre’s annual survey of drug misuse in England, which was published earlier this year, confirmed the downward trend of the past few years. That is why I mentioned the complexity of interaction. That is an encouraging phenomenon and we would like to know exactly why that is happening.
We want to empower young people to steer clear from drugs rather than encourage their consumption. In due course we shall be debating the Government’s proposals in the Police Reform and Social Responsibility Bill for the introduction of temporary banning measures, which was mentioned by a number of noble Lords. We believe that it is right and proper to have measures in place to be able to ban such substances. The experience of methadrone convinces us it is the right thing to have done. The ban had an impact on attitudes—consumption went down. We are certainly not of the view that it is wise to give the impression that, because a drug is legal, it is therefore safe. Indeed, some of those drugs are extremely damaging.
As part of reducing the demand strand of the drug strategy, we want to help people resist the pressures to take drugs and the encouragement that may come in their lifestyles and we want to make it easier for those who have taken drugs to stop. This is key to reducing the huge cost to society. We will focus in our strategy on early years prevention, particularly for families who have complex needs, and we will provide high-quality drug and alcohol education and information to young families and parents through schools, colleges, universities and the Frank service. Education was stressed by a number of noble Lords. We certainly intend to lay a lot of emphasis on that. We will provide intensive support to vulnerable young people to stop them becoming involved in drug and alcohol misuse.
We also wish to give discretion to the police on whether to prosecute in given circumstances and to the judiciary to take into account all the circumstances of an offence. In practice, the law enforcement element is one that we wish to see used judiciously. It is fair to say that some of the results in Portugal, where it has been said that legalisation has taken place, do the opposite in that they put people into treatment, which is what we want to see happen here. However, some of the picture in Portugal is not so good. It is the country in Europe, I think, that has the second highest level of HIV. There are relationships between these various phenomena.
Very few custodial sentences are imposed for simple possession offences and a fine is the most commonly imposed conviction.
Baroness Meacher
Before the Minister sits down, will she explain why she will not have a review of the Misuse of Drugs Act 1971? It has obviously now been in place for 40 years. Whatever may be said about Portugal, the reality is it had a very high level of HIV before decriminalisation and now has a very good record. Most importantly, young people there are now less and less likely to go into drug addiction. In view of this evidence, will the Minister explain to the House why the Government will not even look at and evaluate, whether through an impact assessment or a royal commission, their own policies? We have very high levels of drug use in this country, and we are not doing well.
Baroness Neville-Jones
The noble Baroness is doing us a slight injustice. I did not say that we would not look at anything; I said that we were going to base our current policy on constant evaluation. We understand that we need to look at how successful our policy is being. We do not believe, on the basis of the strategy that we wish to pursue, which has new elements to it, that the moment has come for a thoroughgoing review, but we are going to continue to evaluate the effects of our policy. I hope that that will convince noble Lords that we are not going into this absolutely blindly.
I would like to say one or two other things, but I must conclude. The Government will put resources, energy and ambition into pursuing a policy that we are endeavouring to make broader in its scope and more effective in its outcomes.
Public Bodies Bill [HL]
(13 years, 8 months ago)
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Baroness Thornton
Baroness Thornton
My Lords, I shall speak also to Amendments 93, 150 and 151. On Second Reading, many noble Lords expressed their disquiet at the inclusion in the Bill of the HFEA and the HTA. At the time, I wondered if they were included because the Minister’s department insisted that the Department of Health had to offer something up to the Bill, so the poor old HFEA and HTA were the sacrificial lambs. Indeed, in its own review of the arm’s-length bodies, the Department of Health gives a much more measured suggestion of the deliberation and consultation before decisions were taken about the HFEA and HTA over a timescale that is the life of this Parliament. Unless something has changed about the expected length of this Parliament, it seems precipitate and unnecessary to include these bodies in the Bill.
In a meeting convened by the Minister—the noble Earl, Lord Howe—to discuss this important matter with interested parties, which I was pleased to attend, he was concerned to reassure us about the consultation and discussion to take place before decisions were reached. We can add to those reassurances the proposal, as I understand it, that in the next Session—in other words, after May 2012—primary legislation will be introduced to establish a new science regulator in the department. If that is the case, the passage of that legislation would allow proper consultation and scrutiny across the field including the work of the HFEA and the HTA, which is the way in which such reforms should be carried out. So I ask again: why is it necessary for these bodies to be included in the Bill?
The HFEA and the HTA almost symbolise the concerns that noble Lords have expressed in relation to the constitutional propriety of the Bill in giving Ministers powers to amend primary legislation. Both organisations would have their work and their regulation fragmented unnecessarily when they need to be left alone to get on with the jobs that they do very well—although there is always room for improvement—until a proper period of consultation and pre-legislative scrutiny, which I am sure the noble Earl would wish to have, can precede the introduction of the science regulator Bill or whatever it will be called. That is the way to proceed.
What do these bodies do? The HTA licenses and inspects organisations that store and use human tissue for purposes such as research, patient treatment and post-mortem examination, teaching and public exhibitions. It also gives approval for organ and bone marrow donations from living people, including anatomy and stem cells and cord blood; public display—that is, the public display of any human body parts in various forms—post mortems; coroners; and transplants.
The advances made by science throw up new and sometimes complex ethical issues for the HTA to address. The cavalier use of body parts for research without the knowledge or consent of patients and their families was a huge scandal, leading to public indignation. Many in your Lordships’ House will recall the time and the thought given to the creation of a regulatory framework that would command public confidence. I fail to see what has changed that can allow any slackening off of the responsibility that the HTA bears for the use of human tissue.
The HFEA is the UK’s independent regulator of treatment using eggs and sperm and of treatment and research involving human embryos. It sets standards for and issues licences to centres and provides authoritative information for the public, particularly for people seeking treatment, donor-conceived people and donors. Very importantly, it also determined a policy framework for fertility issues which are sometimes ethically and clinically complex. The HFEA Act 2008 includes provisions for research on different types of embryos and changes the definition of legal parenthood for cases involving assisted reproduction. Therefore, the work of both bodies is of enormous scientific importance apart from anything else.
The arm’s-length body review in July 2010 concluded that the HFEA carries out essential functions which satisfy,
“the criteria for being undertaken by an arm’s-length body”.
The review states that the HFEA,
“deals with issues that are judicially and ethically complex and contentious”.
The HFEA is a world-respected model which has been used by other jurisdictions to deal with extremely technical and legally complex areas of practice. We have to ask what will happen to the high level of expertise and experience in both organisations and whether it will be in the public interest to transfer regulatory functions to other organisations where this knowledge may be lost to the detriment of patient safety.
I know that some noble Lords, particularly some of our very respected medics, for sometimes differing reasons have expressed the view that time has moved on since the original reason was established for setting up these bodies, human fertilisation is not the novelty that it once was, these medical procedures no longer need the attention of their own regulator and therefore change is necessary. That is a powerful argument but I disagree with it, or at least I have yet to be convinced. It seems to me that the powerful reasons that brought these two bodies into existence, and the reason we in Parliament paid such close attention to establishing their duties, responsibilities and independence, are still as potent today as they were when they were founded. These are not primarily medical or scientific reasons but concern the need to maintain public confidence in the uses to which human tissue is put, and sometimes in the very controversial issues arising out of human fertility and procreation.
Time and consideration need to be given to the contribution to scientific research made by the HTA and the HFEA, and, of course, they should carry out their respective functions in a cost-effective and efficient manner with appropriate public accountability. We may wish to see change in the way that the HTA and the HFEA functions are carried out but I believe many of the changes needed could be achieved without their inclusion in the Bill. Change should be helpful in achieving the broader stated aims of reducing bureaucracy and saving money rather than simply focusing on a reduction in the number of arm’s-length bodies. By and large, by the way, I believe that both bodies have sought to make and have succeeded in making improvements in their work and functions in recent times. I believe that more now even than at Second Reading, given the Government’s proposals on research. As the proposals for the reorganisation of the NHS are discussed it seems to me that the future of the HTA and the HFEA need more time and much more consideration. Apart from anything else, the CQC, which it is proposed should become the healthcare regulator for the HTA and fertility treatment, will have neither the time nor the expertise to carry out this function until it has swallowed the regulation of the whole of the rest of medical and social care. One might imagine that if a scandal arises in four or five years’ time regarding either fertility regulation or the use of human tissues, the excuse will be given that the CQC was too preoccupied with the rest of its enormous brief to give these matters the important attention that they warrant. I beg to move.
Lord Warner
My Lords, I have added my name to Amendments 92 and 93 in part in a spirit of helpfulness—I hope that is the case—to the Minister as I have traversed the same ground as him on Department of Health arm’s-length bodies. In 2003-04, I was the Minister who reviewed DH arm’s-length bodies and halved their number. Therefore, I cannot claim to be against reducing the number of Department of Health arm’s-length bodies. Indeed, my sins are fully catalogued by this Government in annexe B of their document on the arm’s-length body review, which was published last year. Therefore, I own up fully to these past misdemeanours. However, as I have previously said about the Government’s own arm’s-length body review, although I do not necessarily agree with every aspect of it, it comprises a serious, comprehensive, clear and coherent set of proposals, unlike some of the things which emerged from other departments under this Bill. Therefore, I do not in any way wish to argue that it was not a thorough piece of work.
Lord Willis of Knaresborough
My Lords, I added my name to Amendments 92 and 93. I congratulate the noble Baroness, Lady Thornton, on presenting a reasoned case for both amendments. I also congratulate the noble Lord, Lord Warner, on being able as a Minister to say that we should get rid of the HFEA and the HTA and now arguing that we should retain them. That is quite a trick—I am sorry; I should not use “trick” in East Anglia references.
I support the amendments not because I believe that the Government have got it wrong, but because in presenting Schedules 5 and 7, and in the Explanatory Notes to the Bill, they have failed to present a convincing argument for changing from two well respected regulators to something that has not been explained well and clearly leaves a lot of questions to be answered. There is a need for an equivalent of the Human Tissue Authority. Sometimes we overplay the organ retention scandal. It happened in one hospital in one area. The practice was not rife through the whole research base; it is important to state that. Nevertheless, there is a need for a regulator. In the case of the Human Fertilisation and Embryology Authority, despite the fact that so much time has elapsed since the original regulator was put in place, science is changing dramatically and the research, particularly on cytoplasmic hybrid embryos—admixed embryos—was something that the HFEA rightly referred back to government to ask for a view, whereupon the legislation was updated.
I had the pleasure in 2007, when I was in the other place, of chairing a Joint Committee on the Human Tissue and Embryos Bill. When the noble Lord, Lord Warner, presented the idea of a regulatory authority for tissues and embryos, I was hugely in support. It made good sense to bring everything together; it was efficient; and the less unnecessary regulation we have, the better. However, while I was initially supportive, I was staggered by the response from a host of organisations that supported two regulatory bodies. I remember a consultative session one evening in Portcullis House when all the organisations that were opposed to any research on embryos, or any use of the embryo other than for its God-ordained purpose, came together and argued for the regulators to stay on the ground that this would protect the embryo. I left with a clear understanding that the principled, ethical and moral stance on the special relationship of the embryo taken by the noble Baroness, Lady Warnock, was something that the Human Fertilisation and Embryology Authority had taken to heart and incorporated into its regulatory function. To be fair, the Government listened to the Joint Committee and dropped their proposals, which is why we are where we are today. The Minister has made it clear in several forums that this is not a rerun of RATE, and I fully accept that. However, he must today make absolutely clear how tissue and embryos will be protected in the new regulatory and research environment. If you throw out the current organisations, it is clearly necessary for the Minister to clarify what will replace them.
The HFEA was far from perfect but it commands huge support from the research and clinical communities and, in particular, from the public. Ultimately, we regulate to protect the public and not simply to ensure efficient and effective clinical practice. However, the Government have now given us some clarification and we should at least examine the proposals that they are making.
In terms of research, I strongly support the report of the Academy of Medical Sciences. It makes good sense to establish a health research agency and to try to bring all medical research together under one body. Indeed, as the Health and Social Care Bill is almost totally devoid of any reference to medical research, at least there would be a regulatory body, run by clinicians and scientists, with some clear understanding about the way that medical research is carried out. Therefore, I believe that the proposal for bringing all medical research together is excellent. It certainly gives me confidence that, provided the Government accept the recommendation of the Academy of Medical Sciences for a new health research agency, their proposals will take us forward in a much more positive sense.
Will the Minister assure the Committee that regulation regarding research and research techniques will also reside with the health research agency? The idea of placing research under the new agency but putting the regulation of research techniques under a different agency is totally unacceptable. Will the Minister also confirm that the new health research agency does not require primary legislation and that it can be established relatively quickly without such legislation? If he is able to confirm that, can he assure the Committee that when the Bill goes to the other place there will be a clear timetable for setting up the agency? That will provide some clarity about the path ahead regarding research.
Where clinicians have a strong case is that there is a sense that techniques approved for clinical application should come within the regulatory framework of NICE or the CQC. I have some clear reservations about the CQC and I recognise that the Government will have to make the case. My qualification is that the CQC is untried, and there is a huge difference between inspecting care homes and inspecting clinics which use the most advanced techniques of assisted conception, PGD, the use of saviour siblings and so on.
In closing, will the Minister assure the Committee that the current team of specialists dealing with clinical application in the HFEA and the HTA will be transferred en bloc and kept together within the new organisation so that we do not lose impetus or, more worryingly, make mistakes? There is, I believe, a coming together in terms of what the Government want and preserving the best of what the HTA and the HFEA have to offer. I think that the Minister has to make the case but I believe that the Committee is listening.
Baroness Butler-Sloss
My Lords, I have been looking with interest at the very helpful parliamentary briefing, particularly on the HFEA and the statutory functions that fall into four main groups. I am very concerned about each area. If licensing is to go into the Care Quality Commission, as has already been mentioned, will that commission have the same level of expertise to deal with the really difficult cases that may come up? I speak as a former judge who had a case where semen was put into the wrong eggs. Two families found that the non-white semen had been put into white eggs, and the children born to the white family were not white. It was the most appalling story. It caused grief to two families and, of course, to the twin children. It became public knowledge. It was a case that I tried. What is needed is careful regulation of the clinics and expertise in what the clinics are doing.
Another matter I would like to raise in particular with the Minister, and one which has not yet been raised in this evening’s debate, is the collection of data, the division of information, and the maintenance of a register. What is happening, according to the Government, is that the licensing and regulating will go to the Care Quality Commission but the provision of the information, the data collection, will go somewhere else.
What rather shocked me was the last paragraph of the helpful briefing saying that the arrangements for the transfer of the information-related functions will be based on assessments, and functions will be integrated into the most appropriate body. We do not know where the data functions will be going, which I find extremely disturbing. It leads me to the view that this plan to abolish both the HFEA and the HTA, whose functions are going to be divided, has not been given the sufficient thought or impact assessment one would have hoped for. We have not yet been given good reasons why these two functioning bodies should be got rid of.
I entirely support the wise words of the noble Lord, Lord Warner. It may very well be that each of these bodies could be streamlined, pared to the bone, have less back-up staff and cost less money. However, having asked in another debate on this Public Bodies Bill, “If something works, why break it?”, I say that these two organisations appear to work and so it is premature, at least, to be abolishing them now.
Lord Walton of Detchant
My Lords, when I came into this House almost 22 years ago, my baptism of fire was the consideration of the Human Fertilisation and Embryology Bill. I spent a great deal of time considering its provisions, based upon that splendid report produced by the noble Baroness, Lady Warnock.
The purpose of the Act, as it became, was to license experiments on the human embryo up to 14 days after fertilisation, first, for improvement of the management of infertility and, secondly, to help in the prevention of the birth of children with fatal and seriously damaging disease.
Those objectives were, very largely, fulfilled. We got to a stage of being able, through licences from the HFEA, to embark upon a programme of pre-implantation diagnosis of some of the severest diseases like cystic fibrosis and muscular dystrophy. It did a wonderful job.
It became quite clear, however, that, because of the developments in human embryology and the enormous advances in research, it was necessary that the Act should be further amended, not only in order to prevent the birth of people with severe diseases but also to be able to use human embryo material and the stem cells derived from it for the treatment of human disease. That resulted in a number of other amendments and regulations being introduced.
We then went even further with additional developments. As many in this House will know, one of the great developments recently under a licence from the HFEA has been the ability to prevent the birth of children—not yet feasible but on the verge of becoming so—with a devastating form of mitochondrial disease. I will not go into the scientific detail because it is extremely complex.
I mention the word complexity because I cannot conceive that the role and responsibility of the HFEA—I entirely agree that it is not perfect; it may be slimmed down, streamlined or modified—could possibly be carried out by the Care Quality Commission, which is, under its major new responsibilities, required to inspect hospitals, care homes, general practices and all bodies concerned with the supervision of health work of all kinds. To try to carry out those responsibilities under the Care Quality Commission is simply not feasible.
Last week, as the noble Earl will remember, we debated a Question on the role of the Academy of Medical Science’s report on the governance of medical research. I agree entirely with what the noble Lord, Lord Warner, said: this is a very exciting and important development, particularly in the conduct of clinical trials and the supervision of research in general. It certainly does not cover the responsibility which the HFEA is carrying out, and I therefore cannot accept the Government's proposals to put that body within the Care Quality Commission.
I move on to the HTA for a moment. When I was a medical student in the early 1940s, on the top floor of my medical school there was a museum which was full of organs held in formalin in plastic bottles. They were a wonderful teaching resource, because they were organs showing the signs of disease and, for the teaching of medical students, they fulfilled a major responsibility. No one had asked the patients involved before those organs were retained for teaching purposes.
The problem of the Alder Hey so-called scandal was that the permission of the individuals from whom the organs were removed had not been taken. What nobody recognised at the time was that if you were to carry out a post-mortem examination to try to determine the nature and causation of the disease from which the individual had died, there was no way in which the simple carrying out of the post mortem and visual inspection of the organs could give you the answer. The organs had to be removed; they had to be pickled in formalin; they had to be studied under the microscope, to give the answers which everyone wanted to know as the outcome of that post-mortem examination.
Where members of my profession were mistaken was that it became almost accepted by doctors, pathologists and clinicians that once permission for a post mortem had been given they could assume that permission had been granted to retain the organs for such an examination. They were wrong. Hence, the Human Tissue Authority was created to control that process. It has been very successful not only in that regard but also in issues related to the retention of tissues obtained for diagnostic purposes by biopsy. It has also been extremely successful in controlling the use of anatomical material for teaching purposes. It has fulfilled a whole series of other functions. My view is that it is so necessary that that function should be continued that I do not believe, for the same reasons, that the Care Quality Commission could feasibly absorb that task. It could do so only if it took on board the scientific experts on human fertilisation and embryology on the one hand, to deal with the responsibilities of the HFEA, and the scientific experts in pathology, anatomy, molecular biology and other branches of medicine, to look at the human tissue issues and also to be able to deal with issues relating to the donation of organs for transplantation. Those complex issues are so broad in their responsibility that I do not believe that the Care Quality Commission could conceivably handle them all. That is why I give warm support to the amendments.
Lord Newton of Braintree
My Lords, my reason for not pressing my case earlier was that I knew I was going to be out-gunned by the noble Lord, Lord Walton. He has demonstrated that conclusively, and I am certainly not going to try to compete with him. I ought in passing to declare an interest I had at the time of the passage of the Human Tissue Act: I was then chairman of the Royal Brompton and Harefield, a major transplant centre which clearly had an interest in this matter.
I ought to confess, in what is going to be a brief intervention, that I am getting to be rather worried about the number of occasions on which I find myself in some sympathy with the noble Lord, Lord Warner. He indicated earlier that he had hopes of enticing me to a different part of the Chamber, if I understood his remarks correctly—but his hopes will be frustrated. I want to make some simple remarks from what I call the coal face, as I am chair of another health trust in the mental health field, on the issue of the CQC. The CQC was asked to do a huge new task by the previous Government, and is doing it valiantly, not least in the mental health area that I know. However, it is struggling to fulfil in the originally intended timescale the jobs that were put upon it. I wonder whether the CQC actually wants yet more tasks, whatever the argument might be in an intellectual sense. Even if we agree in the end to go down this path, and that is some way ahead yet, I hope it will not be too quick and that the CQC will be in a position to digest the meals it is being asked to take in before being asked to consume them. As a specific question: does the CQC actually want this work?
Baroness Deech
I support this amendment, and I declare an interest as a former chair of the HFEA. In other words, I was a gamekeeper, and there were poachers on the other side, if I may use that term in respect of some very eminent clinicians and embryologists in this country. They may tell you that IVF reproductive work embryology is now routine. Yet at the same time, they will say—or at least not deny—that the work they are doing is ground-breaking. So it remains: every day brings something new.
I have spoken about this topic many times in this Chamber and elsewhere, and I will not repeat myself, save to say that my admiration for the Minister is such that I share his pain on each occasion when I feel that he is trying to defend the indefensible. He would be grateful, I think, if we could somehow get him off the hook. One of the ways of doing that is cost. The principle underlying the abolition and retention of various quangos in this Bill is, of course, streamlining, efficiency and cost. The HFEA currently costs £7 million, of which all but £2 million comes from the patients. No one who cares about the patients could possibly imagine that they will be charged any less—or not charged at all—if these functions are absorbed into an existing or new body. The poachers, who are very keen to get rid of the HFEA, seem to think, when you listen to them, that there will be no regulation, that there will be a free-for-all. They are under the misapprehension that if this amendment fails, which I hope very much it will not, a merger of the HFEA will mean no regulation; as I say, a free-for-all. But that is not so. Primary legislation remains and no one has suggested that we would cease to have regulation for which this country is world renowned, having followed the lead of the noble Baroness, Lady Warnock, in her esteemed report written more than 20 years ago, which remains to this day the very best report on the issue.
Those who really dislike the whole concept of embryology and in vitro fertilisation because of their religious beliefs have, as others have said, still shown respect for the HFEA because they regard it as something of a shield against the wholesale misuse of embryos, as has happened in some other countries. Before it had regulation, Italy was the place everyone went to if they could not get what they wanted elsewhere. It was where you would go if you were white and wanted a black baby or vice versa, or if you were 64 or 70 and wanted a baby. Italy now has regulation, albeit in my view too strict. America has a patchwork of regulation, but has seen more scandals than we have. As my noble and learned friend Lady Butler-Sloss said, things go wrong sometimes as a result of simple human error, which in the end is probably not preventable. But at least we do not have the birth of octuplets, as has happened in the United States. We do not have those websites which noble Lords may enjoy googling one evening. They can look up “California Cryobank” and see lists of apparently brilliant Californian PhD students, all of them six foot six and sporty with IQs to match, offering their sperm for sale, and indeed the female equivalents their eggs. This is not the route that we wish to go down. We wish to retain regulation.
If we are going to keep regulation, there is absolutely no reason for dismembering the HFEA and putting functions that are plainly closely linked together and of utmost importance to parents, babies and sick people into different bodies, some of which are untried. Again, I echo my noble and learned friend Lady Butler-Sloss in saying, “If it ain’t broke, don’t fix it”.
Lord Mackay of Clashfern
My Lords, I declare an interest as an honorary fellow of the Royal College of Obstetricians and Gynaecologists and as the person who had the privilege of introducing to this House the Bill that ultimately became the Act which has been referred to more than once. As a parent of such a body, it would be strange if I wanted to see it dissolved altogether. On the other hand, a parent who is interested in his child is glad to see him or her develop and possibly make unions with others who seem to be suitable for them. I had the honour of serving on the Joint Committee looking at the recent Bill in this area under the distinguished chairmanship of the noble Lord, Lord Willis of Knaresborough. I strongly supported the decision taken by that committee to recommend against the proposed union between the Human Fertilisation and Embryology Authority and the Human Tissue Authority. I think I am right in saying that the noble Lord, Lord Willis, may have done a slight injustice to the noble Lord, Lord Warner, because I think the noble Lord, Lord Warner, said that he had recommended against it to the Minister. I do not know whether the Minister accepted it immediately, but eventually it was accepted by the corresponding Minister.
The matters that were the subject of the Bill which I had the privilege of introducing are certainly among the most important areas of modern scientific and medical work. But science and medicine have moved on very fast and far since that Bill was introduced and the developments dealt with in the most recent Act show that. That Act moves out of pure human embryology to the transition towards hybrids and, at the extreme end, towards the animal end of embryology. It shows that science has developed in such a way that the distinct field carved out in the original Bill has been altered by progress, if you like to think of it in that way, and I hope that that is what it is. There is a great deal to be said for the view that modern scientific and medical research is very difficult to split up. The embryo is important, but there are other important aspects of that research. I can therefore see a very strong argument for having a research body which has overall responsibility in this area.
There are of course other functions in HFEA which are important, particularly the control of IVF. When the body was originally set up, the practice of IVF was exceptional and a complete novelty, but a lot of water has gone under the bridge since then and it has become much more of a standard clinical procedure. It is true that developments have taken place there, but they have taken place also in other branches of medicine. It is not only embryology or IVF that have moved forward; fortunately, a great number of developments have taken place in the practice and application of medicine and surgery. It strikes me as extremely logical to have a body that would have overall responsibility for that.
If that be right, there is a good deal to be said for the view that the time has come to review the position in regard to the two health bodies that we are discussing and see whether a more integrated approach to research on the one hand and clinical practice on the other could be furthered by having bodies responsible for the whole of the first and the whole of the second. I agree that a good deal of detail needs to be filled in, but I remind myself that we are not deciding today whether this should happen. We are talking about a power for a Minister to decide what to do in the light of the further consultation provided for in the amendments moved by the Government since the Bill has been in Committee. It is a valuable opportunity for these matters to be considered. I can understand a lot of what has been said on the other side of this argument, but I should like to see retained in the Bill the power to deal with these issues in a way that reflects the developments that have taken place in the research and practice of medicine since the original Act came into force.
Lord Winston
My Lords, my noble friend Lord Warner has declared support for the Minister sitting on the Front Bench; I suspect that I might in the next few minutes give him even greater support.
We have to understand that research in these areas has now gone way beyond embryology. There was a time when people were very concerned about the status of the embryo, when embryo research was relatively novel. I should like to correct a remark made by the noble Lord, Lord Walton, who very kindly referred to work on pre-implantation diagnosis. That work produced pregnancies before the establishment of the Human Fertilisation and Embryology Authority, and people like me were greatly exercised to establish regulation. In spite of what has been said in this Chamber, we were very much in favour of regulation. Since there was no government regulation, we started a voluntary licensing authority which became a model in time—obviously, a very imperfect model—for the body set up under the splendid Bill introduced by the noble and learned Lord, Lord Mackay of Clashfern.
Stem cell biology covers every aspect of human disease, from cancer to brain research, from human consciousness to the replacement of organs and transplantation, and a whole range of other areas. It is really—forgive the pun—inconceivable that this could be dealt with by the Human Fertilisation and Embryology Authority properly under its present form or any future form. I would argue that with the advent of epigenetics, the recognition that now the environment in which cells are placed in culture and elsewhere is such a universal issue in medicine there has to be a much more global look at this kind of research. I feel that there is a strong case for suggesting that we have to accept that research ethics are universal and that they tend to have the same sorts of problems, whether it is patient consent, the end or beginning of life, or a whole range of other issues. In fact, the end and beginning of life have some very similar moral issues which need to be debated by ethics committees. The noble and learned Lord was right to point out that trying to look at these issues in a new form would be absolutely apposite. I for one am certainly not in favour of a free-for-all. I am not quite certain who in the medical profession is. I do not think that that is true.
The regulation of clinical treatment has been in many examples woefully inadequate. The noble and learned Baroness, Lady Butler-Sloss, pointed out that while she was sitting on the Bench she had the most terrible case of a woman who had the wrong embryo transferred. That was done, of course, under the auspices of the Human Fertilisation and Embryology Authority. No regulatory authority, no matter how perfect or how good, can regulate against every human error. We should have a set of principles in laboratories which keep those mistakes to a minimum, and the regulation of medical practice must also enforce that.
I do not think that there is any evidence from what has happened that the HFEA has done a particularly good job or a particularly bad job. In some areas it has not been very powerful. For example, many things are forbidden under regulation in this country. Patients actively seek fertility tourism in other countries where they can get, for example, donor eggs and perhaps come back pregnant. Very often clinics in this country, although it may be against regulations, refer these patients outside. Of course the HFEA, not unreasonably, is powerless to deal with that sort of problem.
It is also true that the fees charged to patients are often extremely exploitative. I have no doubt that we will come back to this when we come to the pending health Bill, because this is a much bigger issue in terms of how we finance the health service. At the moment, IVF, whether it is done in the private sector or in my view in the National Health Service, is charged on the basis not of what it costs but rather of what the market will bear. That is a very big issue which we will need to discuss, because I suspect that that may apply to a lot of medical practice. It is an issue to which I am sure this House will want to return. Costing the procedure is very important.
Someone mentioned follow-up: one sad thing about the opportunity in 1990 was that we did not—even though we had records of IVF pregnancies, and IVF successes and failures—make any attempt to follow up babies after this procedure for the long term. There have been many reasons why that was difficult, such as data protection. But this lost opportunity means that some of the procedures often in routine use may have unforeseen consequences in children when they are adults. We now know from David Barker’s work, for example, that babies who are born underweight and premature are much more likely at the age of 50 or 60, as the Minister knows, to suffer from heart disease, stroke, hypertension and possibly osteoporosis as well as diabetes and one or two other diseases as well. Of course, we may see more diseases which are likely to be epigenetic due to those early influences.
I have to say that, although it is claimed that the HFEA gives out information to patients, six years after I retired from clinical practice running a very large IVF service, I am bombarded daily with e-mails—I have had several today—from patients who want information about IVF and do not feel that they are getting the information they should from the statutory authority. That remains a problem.
The clinical regulation of non-evidence-based practices has been poor. For example, there is no evidence that the preimplantation and genetic screening of embryos designed “to improve pregnancy rate” works. Yet several clinics charge large fees for doing this under regulation even though there is not a base for justifying its use. That also applies to costly immune therapy, which is highly controversial. Again, this is used in women who sometimes fail to get pregnant, under licence from the HFEA. This is an example of how in fact regulation is really quite limited in clinical practice.
Lord Patel
Briefly, I find myself in support of what was said by the noble and learned Lord, Lord Mackay of Clashfern, and also by my friend in the professional sense, the noble Lord, Lord Winston. I was involved as an officer when the Royal College of Obstetricians and Gynaecologists, together with the Medical Research Council, set up the voluntary licensing authority because it was felt that there was a need to reassure the public that the new science of in vitro fertilisation was not going to lead, as the newspapers then had it, to creating monsters in a Petri dish. Fortunately, two years after that, the noble and learned Lord, Lord Mackay of Clashfern, led the Bill that became the Act that established the Human Fertilisation and Embryology Authority. For the reason already rehearsed, it was necessary to make sure that the public could be reassured. More importantly, it was set up to make sure that clinical practice followed strict rules about what should be good practice and about people engaged in in vitro fertilisation and fertility.
I was not a specialist in in vitro fertilisation, but as an obstetrician I saw the results of the initial practices of multiple pregnancies, to which the noble Lord, Lord Winston, just referred. Every obstetrician in the land was crying out that there should be some kind of advice or regulation from the HFEA that would control the number of embryos that were inserted. The evidence existed that putting more and more embryos in might result in more pregnancies but also in multiple births that resulted in handicapped babies.
We have two issues here. First was the responsibility of the HFEA in making sure that clinical practices were improved to improve the outcome for both the parents and the babies. Second is the regulation related to research practices, especially in embryo research. I have no doubt whatever that the research regulation aspect of the HFEA needs to be maintained.
I go further in saying that there is a great need to bring some co-ordination in the whole area of the medical research regulatory framework; it is very fragmented. In my previous role as a National Patient Safety Agency chairman, while I was responsible for running the National Research Ethics Service for England and Wales, I found that there were issues relating to ethics for some of the medical research that, because it was fragmented, we had to address, as it was not being addressed by any of the existing regulatory authorities. The report from the Academy of Medical Sciences gives us an opportunity, which I hope the Government will grasp soon, to produce a national medical research regulatory authority that brings in all the regulation that is required. As the noble Lord, Lord Warner, said, the report did not say that it should include the HFEA and the Human Tissue Authority. In his consultation, he also said that they were not addressing the issue of the HFEA and the HTA because they were awaiting the results of the debate that we are now having, and the Bill that we will have relating to National Health Service reform and social care.
I accept that we need a research regulatory authority. Now the issue is whether we need, particularly with the HFEA, to regulate clinical practice related to in vitro fertilisation. If NICE is going to have the new role of setting standards in all areas of clinical practice that will deliver better outcomes, and if we have a regulatory authority—the CQC, which may need to improve its performance and may need resources to be able to do so—we have to ask why we would have a regulation confined to one area, sensitive though it might be. Given the performance of the authority hitherto, we have to ask whether we are going to throw out something so precious; I accept that some of the aspects that the HFEA has been awarded are very precious. I accept that we were the first country in the world to bring about regulation for in vitro fertilisation, which others followed, because it was then necessary. It laid down the template of how clinical practice in a sensitive area such as in vitro fertilisation should be handled. However, as the noble and learned Lord, Lord Mackay of Clashfern, said, we have moved on. I think we might be at a stage where we need a more overarching regulation that promotes good clinical practices and therefore good clinical outcomes.
Baroness Deech
My Lords, on a factual point, may I correct the impression—it may have been a mistake— that the previous speakers have given that any number of embryos can be implanted in a patient? The HFEA brought down the number of embryos from three to two and is working towards one. That was in the face of relentless resistance from patients, who wanted the best chance of becoming pregnant, and indeed many—but not all—of the clinicians and embryologists, who said, “We know what’s best for our patients”. The impression should not be given that an unlimited number of embryos are implanted. The number is two and they are working towards one.
Lord Winston
Forgive me for correcting that impression. Many units limited the number of embryos well before the HFEA did. At Hammersmith Hospital, we limited the number of embryos two years before the HFEA did. We were not alone; a number of units did that because we were very concerned. The idea that medical practitioners do not feel responsible for the pregnancy that is induced is, I think, a dangerous precedent. It is just not true. Of course there is a problem when patients put you under pressure, and it is a very difficult ethical issue that needs to be resolved.
Lord Patel
My Lords, I think I have lost my thread, but I have said what I wanted to say.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I begin by expressing my thanks to all noble Lords for the opportunity to debate these amendments. As the noble Baroness, Lady Thornton, pointed out at the beginning of her remarks, following the Government’s concession in withdrawing Schedule 7 in its entirety, these amendments would have the effect of putting the Human Tissue Authority and Human Fertilisation and Embryology Authority out of scope of the Bill.
Our starting point in approaching these issues is a clear objective to streamline the process of regulation and, consequently, reduce costs and the administrative burden on establishments while continuing to offer the necessary protection for the public. The Bill presents us with an opportunity to achieve that. Our aim is to streamline healthcare and medical research regulation and so reduce bureaucracy. That approach is supported by leading assisted reproduction clinicians and their professional bodies and by the Academy of Medical Sciences.
The scope for streamlining is clear. We estimate that around 80 per cent of the centres currently licensed by the HFEA are also either regulated by the Care Quality Commission or are in premises that the commission regulates. Some 60 per cent of the centres licensed by the HTA are similarly covered by the CQC. It therefore seems unsustainable to continue to have these regulatory systems running in parallel. The question posed by my noble friend Lord Newton of Braintree as to whether the CQC wants to take on this work can best be answered by reference to the regulatory activity that it already performs. In any event, as regards the pace at which we take this, we intend to develop arrangements for the transfer of functions in consultation with the CQC over the next few years, and no transfer of functions will take place until that process is complete. However, the Government recognise that there are number of noble Lords with concerns about the proposal to transfer the functions of these two bodies, and not for a minute would I wish to minimise the nature of those concerns.
Let me be clear—both the HFEA and the HTA are models of regulatory authority that were right for the times in which they were created and which have done an admirable job in meeting the demands placed on them. However, as my noble and learned friend Lord Mackay of Clashfern pointed out, times change, and most pertinently so has the way in which we regulate the delivery of healthcare. With the establishment of the CQC along with the possibility—and I put it no stronger than that at the moment—of the creation of a new regulatory body for medical research, alternative structures are becoming available to ensure a more joined-up system. This provides, as I have said, the opportunity to streamline the process of regulation and reduce costs.
The powers in Clause 5 would allow us to achieve that without disturbing the underlying legislation, which captures the ethical safeguards that Parliament has so carefully set in place. Any future proposals to abolish these two bodies will be provided for in future primary legislation. I am happy to reiterate my assurance that there is no intention to revisit the provisions in either the Human Tissue Act or the Human Fertilisation and Embryology Act that provide the important ethical safeguards necessary to maintain public confidence in these sensitive areas. I would say to my noble friend Lord Willis and to the noble and learned Baroness, Lady Butler-Sloss, and the noble Baroness, Lady Deech, that means that future arrangements to regulate tissue and embryos must adhere strictly to the provisions of the two relevant Acts.
Noble Lords have raised particular concerns about the need to preserve the expertise these bodies have built up in the ethically sensitive subjects they deal with and the need to preserve the confidence of both professionals and the public in the way that these regulatory functions are carried out. The Government recognise the genuine nature of these concerns and we are determined that changes will not be at the expense of regulatory rigour or expertise.
I say to my noble friend Lord Willis that expertise will not be lost. It is envisaged that expertise will follow functions; for instance, through staff transfers and expert reference groups. Noble Lords have questioned the capacity of the CQC to assume these responsibilities. It will be given the capacity and the resources to carry out any widened functions. The CQC already has a proven track record of taking on the oversight of a specialist area. It took on the Mental Health Act Commission functions and I believe has successfully maintained oversight and focus on that area.
The noble Baroness, Lady Thornton, expressed concern that our whole approach in this area seemed unnecessarily complex. The powers that we are debating today will enable us to transfer some of the functions of the HFEA and HTA to other bodies but they do not enable us to do everything that we have set out in the ALB review. In order to abolish the HFEA and HTA or to transfer their research-related functions to any new research agency we will require powers under future primary legislation.
It may help if I try to provide a rough outline as to how and when we expect things to happen. We intend publically to consult on proposals to transfer all of the HFEA and HTA functions to other bodies in the late summer of 2011. Then during 2012-13 we would prepare draft orders for formal consultation under the provisions of this Bill dealing with the transfer of functions other than research functions. If appropriate we would then be able to lay the orders before Parliament. The process would enable noble Lords and other interested parties to see, comment on and debate the proposals as they progress. In order to avoid the piecemeal transfer of functions we would intend to ensure that the timetables for necessary future primary legislation and the commencement date of orders made under this Bill are aligned so that they come into force at the same time.
Without the inclusion of these bodies in Schedule 5 to the Public Bodies Bill we would have to provide for the transfer of their functions entirely within future primary legislation and this would significantly increase the risk that the underlying ethical provisions of the Human Fertilisation and Embryology Act and the Human Tissue Act could be reopened for debate and would afford less time for consideration and comment than the progressive approach which I have just outlined. I seek to impress upon noble Lords that that is a very powerful reason for wishing to grant the Government the powers we are seeking as regards these two bodies.
The noble Lord, Lord Warner, indicated that, in his view, the report by the Academy of Medical Sciences does not give sufficient backing to the idea that embryo research should be covered by the new research regulator. I would simply point him, if I may, towards paragraph 9.5.1 of the report which explicitly refers to the new body, if it is set up, having responsibility,
“for ‘specialist’ approvals and licences within the HRA around data, tissue and embryos, gene therapy and exposure to radiation”.
I think, as I read that, it was very much in the minds of the authors of the report that the research functions of the HFEA should be brought within the scope of a health research regulatory agency.
The noble and learned Baroness, Lady Butler-Sloss, expressed her worries about the information functions of the HFEA and the absence of a clear plan by the Government for what should happen to those functions. She is right, we have not fully made up our minds about where those functions should best sit, but that is one of the main reasons why we wish to consult on this. We need to ask the public and interested parties where these functions should sit, and there will be an impact assessment with the consultation.
My noble friend Lord Willis asked about the possibility of setting up a single research agency without primary legislation. He is technically right; we could do that. I should emphasise that we have not decided whether to accept the AMS recommendation to establish a single research agency—we think that there are merits in the proposal and we will be making an announcement shortly—but if we were to propose setting up such an agency we could do so initially by creating a special health authority. However, we could not legally transfer the research-related functions of either the HTA or the HFEA to that body. We could not make a transfer of functions to a special health authority without amending the 2006 Act.
The case was simply put by my noble and learned friend Lord Mackay of Clashfern. Essentially, we are asking the Committee to agree to grant the Government permission to consult on these matters. I hope that the noble Baroness will not seek to press her amendment today but instead will consider that a good purpose will be served by reflecting on the comments that I have made in response. In view of our concessions—
Lord Warner
I am sorry to interrupt the Minister. I have been listening intently to what he has said. I am extremely confused about the order in which things are going to be done. As I understood what he was saying, we are going to get a series of orders that transfer functions through a process of consultation, which I welcome, but we may or may not know at that point what the Government are going to do about setting up a health research agency, either by statute or otherwise. As I understood him, we could be in the position of being asked to agree those orders before we know what the final endgame is. It would be helpful if, before the next stage of the Bill, the Minister could set this out more clearly for us in writing so that we can understand the sequence. I found it rather difficult to understand.
Earl Howe
I must apologise to the Committee if I was not sufficiently clear and I will be happy to write to those who have participated in this debate to make the position clearer. I was seeking to say that we do not wish to take a disjointed, piecemeal approach. There is a natural flow of process that, if Parliament agrees, can lead us to a position where we are able in one move, so to speak, to transfer the various functions more or less simultaneously—although I would not wish to undertake that the whole thing would be done on the same day—so as to arrive at that point.
In our view it is desirable to consult during the late summer of this year. We will then set about the process of designing statutory instruments based on that consultation and go out to consultation on them. All being well, we will then introduce a second-Session health Bill that will have within it the provisions to establish a single research regulator, assuming that that is what we decide to do. Therefore, the whole process should work in a seamless way. However, I shall be very happy to write to noble Lords setting that out.
I return to the point at which I left off, which is to express the hope that the noble Baroness will not press her amendment this evening. I hope that she will accept our assurance that we have a clear intention to consult on the proposed transfers of functions and that she will be willing to withdraw the amendment.
Baroness Thornton
My Lords, I thank everybody who has contributed to this debate. I knew that it would be an interesting debate and a long one. I have been told by my noble friend that I have to be brief, as the Committee still has a lot of things to get through and the rest of us can go home when we have finished this. As I say, I thank all those who have taken part in this debate. The remarks of the noble and learned Baroness, Lady Butler-Sloss, were forensic and, as usual, very helpful. The noble Lord, Lord Walton of Detchant, spoke with great wisdom and knowledge about both the HFEA and the HTA. The noble Lord, Lord Newton, spoke wisely about the CQC. Having been one of the architects of the CQC in the previous Government, I wish to put on record that I very much admire the work that it does. However, it is being asked to do a great deal more, which worries me.
I am pleased that the noble Baroness, Lady Deech, continues to support us as we work towards resolving this matter. The noble and learned Lord, Lord Mackay of Clashfern, my noble friend Lord Winston and the noble Lord, Lord Patel—a trio of very distinguished professionals in their respective ways—said that, although progress has been made, the most important thing is to make more progress. I am not a scientist but in a way the scientists and the experts got us into trouble on both these issues and that led to the creation of the HFEA and the HTA, as imperfect as they might be. Those bodies were established to tackle the need to regulate and to restore public confidence. That is where we came in, as it were. It seems to me that challenges and problems still exist in terms of public confidence, to which I will return in a moment.
I accept that if we need to move to a more overarching medical research body, we need to go through a proper process. I am not convinced that the powers granted to the Government in this Bill are the way to do that or that what looks like a rather complex and very piecemeal process is the right way forward. However, I am grateful to the Minister for explaining this in great detail.
I am worried. A floating ethical framework sprang into my mind because I could not see where the ethical framework of what is being proposed will sit. If we cannot see where it will sit, what hope is there for the public? It seems to me that that is where the Government need to start. It is not a question of having a mechanical process and saying, “We will put this bit here and that bit somewhere else and have a regulation that will make sure that the research goes somewhere else”, because if we cannot understand where the ethics sit we are in very serious trouble.
The Minister has given us a great deal to think about and I am grateful to him for his detailed answer. I will read the record and I look forward to receiving his letter. We will need to think about what he had to say and discuss it further before Report. I will not press the amendment now, so I beg leave to withdraw it.
Lord Taylor of Holbeach
Lord Taylor of Holbeach
Lord Hunt of Kings Heath
Lord Hunt of Kings Heath
My Lords, I will move the amendment in the name of my noble friend Lord Whitty. Passenger Focus plays an important role in protecting the interests of Britain’s rail passengers, England’s bus passengers outside London, coach passengers on scheduled domestic services and tram passengers. It is important that this function is not undermined and it is not appropriate that Passenger Focus is included in the Bill. I am very happy that the noble Lord, Lord Taylor, is joining me in support of this important amendment. I beg to move.
Lord Whitty
My Lords, my noble friend did not realise that I had arrived from the airport to move the amendment. I, too, am grateful to the Minister and I congratulate him. This is the first time that a Minister in this Government has added their name to an amendment of mine on any piece of legislation. What I am about to say should not undermine my gratitude. However, I have to ask two questions.
First, where does this leave Passenger Focus, because it achieved the distinction of appearing under three different schedules to the Bill and it remains in Schedule 3, which we agreed at an earlier stage? The piece of paper given to us for our debate on Monday, had we reached the amendment then, indicated that a much reduced role is envisaged for Passenger Focus. The document states that it would concentrate on its,
“core role of protecting consumers”,
that there was “scope for significant savings”, and that the body would be working under a “significantly reduced budget”. The reference to the core role is slightly sinister, because it implies that the organisation will focus on the complaints function and therefore act in processing and improving that function, but that it will not be allowed to be more critical of the train or bus companies and, more particularly, the department’s overall transport policy as regards the rail or bus network. If that is the intention, it will neuter Passenger Focus considerably. I should like the noble Earl, Lord Attlee, who I assume will reply, to provide reassurance on that front.
My second question is on a wider front. The various existing consumer bodies are being dealt with differentially under this legislation. Some are to be abolished, some are to be merged, some are to have their functions transferred and some, given the abolition of Schedule 7, will be retained—presumably in their present form. Passenger Focus will be retained in a modified form. The Government’s original intent, for which I had some regard, was to rationalise the whole structure of consumer representation. Instead of that, the danger is that they will leave a bigger hotchpotch than the aggregate of previous legislation on consumer matters and weaken the statutory base of a number of consumer bodies.
As the Committee knows, I have an interest as a past chair of Consumer Focus. On the one hand, it appears that that body will be abolished, while on the other hand the Government say that they will transfer the functions to Citizens Advice. It was BIS’s original view that other bodies, including Passenger Focus and the Consumer Council for Water, should also be transferred to Citizens Advice. Whether or not that was a good idea, at least it was coherent. It seems now that we will end up on the consumer front with greater incoherence than the Government inherited and were determined to do something about. Not only is regulation likely to be more incoherent, but it is also likely to be substantially weaker, with fewer resources. Therefore, although I very much appreciate the Government’s support for the amendment, I have serious misgivings about their specific and general intentions as regards consumer protection.
Lord Bradshaw
My Lords, I support what the noble Lord, Lord Whitty, said. There is certainly scope for economy. I did not agree with the previous Government’s decision to transfer protection of bus and coach passengers to the Rail Passengers’ Council. However, the work of the council is concentrated mainly on issues such as punctuality. It has produced extremely good reports on things that irritate users such as huge queues at booking offices and the way in which ticket machines baffle many users and often do not work. These issues are important to people and I cannot think who will regulate them for less money. Transferring the functions to the Office of Rail Regulation, which is full of lawyers, will raise the cost of doing this work.
I will say one further thing in defence of Passenger Focus. It has developed a system of statistical analysis by which it can take very little in the way of raw information and turn it into statistically robust results. I am all in favour of economy, but I am also in favour of having a body to look after the interests of passengers that is functional and that rests on a secure base. I and most passengers would regret anything that abolished this body.
Earl Attlee
My Lords, I was surprised when the noble Lord, Lord Whitty, did not move his amendment, so it is a great pleasure for me to respond to him. He and I have debated together over many years. He has accepted some of my amendments and taken others away. It is a great pleasure to continue our debate, albeit with our roles reversed.
The noble Lord’s amendment seeks to remove Passenger Focus from Schedule 5 to the Bill. The appearance in the Bill of Passenger Focus does not reflect the view that the interests of passengers are unimportant. We are clear that passengers are the only reason why we run a public transport system. This was reflected in the public bodies review, which concluded that Passenger Focus should be retained but substantially reformed to focus on the core role of protecting passengers, thereby allowing a reduction in the cost to the taxpayer.
Noble Lords may see this as a first step towards cutting the budget of Passenger Focus to the point where it is no longer capable of being an effective voice for passengers. I reassure them that this is not the case. We fully accept the need for a powerful and effective passenger advocate. This is reinforced by EU provisions that require us to have a properly independent complaints body to which rail passengers can turn. Passenger Focus plays that role.
The noble Lord, Lord Whitty, asked whether this was not simply an opportunity to weaken and abolish a body that has been critical of the Government in the past. The answer is no. We want to maintain an effective passenger advocate because that is the best way of ensuring that transport operators are held properly to account. This is an effective opportunity to ensure that that role is performed in a robust and cost-effective way.
The Government had originally listed Passenger Focus in Schedule 5 to enable possible changes to its functions. Further work and our discussions with Passenger Focus have clarified that we can significantly reduce the cost to the taxpayer without recourse to legislative change through Schedule 5. For example, efficiencies can be derived by reducing the scope of Passenger Focus’s research and survey work. My noble friend Lord Taylor has added his name to Amendment 98 on that basis to support the removal of Passenger Focus from Schedule 5, which we hope will be welcomed by the Committee. However, the governance changes that we intend require its inclusion in Schedule 3, so we cannot support Amendment 75, which the noble Lord, Lord Whitty, was unable to move on Monday. Amendment 160A, which would remove Passenger Focus from Schedule 7, is effectively redundant in the light of the Government’s decision to remove Schedule 7 from the Bill.
I hope that I have been able to reassure the Committee and the noble Lord that we are not planning to leave passengers without proper protection and I hope that the Committee will accept Amendment 98.
Lord Whitty
I am not sure that it is in order for me to reply, given that my noble friend moved the amendment. However, I am grateful for some of those reassurances about the future of Passenger Focus. It would be helpful if we could be told the nature of the changes in governance that the Government propose, but perhaps that is for another day. However, I think that the body’s removal from this schedule is important. The noble Earl was probably not in a position to reply to my other points, which concerned the broader landscape of consumer representation.
Earl Attlee
The noble Lord asked what reforms we plan under Schedule 3. That schedule can be used to implement changes to the make-up and composition of the Passenger Focus board. Although the details are still to be finalised, the intention is to streamline the board’s operation significantly, which will also result in significant cost reductions.
Lord Whitty
I thank the noble Earl. Of course, some of the make-up of the board reflects the structure of the railway industry and the structure of the company. I hope that we will not lose that geographical dimension in changing its composition. I accept what the noble Earl says in relation to Passenger Focus. Clearly, I am grateful for his support for the amendment, although I think that we will have to return to the wider issue of the consumer landscape as a whole either in this Bill or in some other context in this House.
Lord Taylor of Holbeach
“NOTE
1 Section 21(2)(a) does not apply to an order under section 5 which provides for—
(a) functions of the British Waterways Board falling within section 21(3)(b) to (e) to be transferred to another person;(b) functions of the Environment Agency falling within section 21(3)(b) to (e) to be transferred to a person to whom functions of the British Waterways Board are transferred by virtue of paragraph (a).”
Lord Hunt of Kings Heath
Lord Taylor of Holbeach
Lord Whitty
“( ) In relation to a transfer of functions, duties or powers under section 1 or 5, or to mergers under section 2, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (S.I.2006/246) apply to a transfer which relates to rights or liabilities under a contract of employment whether or not the transfer would, apart from this subsection, be a relevant transfer for the purposes of those regulations.
( ) In the case of an employee of any body whose functions, duties or powers are transferred or merged under section 1, 2 or 5—
(a) a period of employment with the transferor is to be treated as a period of employment with the recipient organisation;(b) the transfer to the recipient organisation is not to be treated as a break in service.”
Lord Whitty
In this amendment, I move away from the detailed consideration of individual bodies and their future to a more general principle. This relates to what happens to the staff of those bodies whose functions are transferred or merged. There is a clear-cut situation where, if bodies are abolished, although some of the bodies are Schedule 1, there has also been commitment by the Government to transfer the functions, duties or powers elsewhere and, therefore, the question of what happens to the staff who are carrying out those functions under the current arrangements does arise.
This amendment would make it clear that, in normal circumstances, the TUPE arrangements would apply as they would apply to mergers in both the private and the public sector, and across the private and the public sector where functions and duties are transferred. Under normal procedure concerning people’s entitlement to terms and conditions, including redundancy terms, pensions and other aspects of their employment, if the functions are moved into a receiving body, it would be for that receiving body to maintain both the continuity of service and the terms and conditions unless and until, either by collective agreement or by individual contract agreement, those terms are changed.
Because of the complexity of the bodies involved and the contractual terms which appear and have grown up in many of these bodies over time, it may not be all that clear, even to eminent employment lawyers, whether a TUPE applies or not. Even in the more simple past, when we were only dealing with one or two mergers of bodies or transfers of functions, it sometimes was not at all clear. The form of words here is almost exactly that which was included in the legislation in 2006 which set up the present Consumer Focus body—the National Consumer Council in legal terms—when we had the merger of the old National Consumer Council, Energywatch and Postwatch. The terms and conditions were preserved, albeit in some situations it was not entirely clear whether TUPE would apply or not.
In 2006 the regulations on TUPE came in. When Consumer Focus was created they were quite new, but similar forms of words have appeared in other legislation where there has been a merger or transfer of functions from one state body—NDPB or equivalent—to another. This Bill has a wholesale raft of such transfers. It does not have quite as many as it started out with but there are still quite a few left, and a few where it is not quite clear whether the transfer is occurring or not, and whether it is a function which normally comes under the TUPE regulations.
This amendment would make it clear, however, that if the function transfers or the duty and power transfers, the staff would go with them unless and until the receiving body decided it might wish to dispense with their services as the new employer. It is not up to the previous employer to declare them redundant until such a rationalisation has taken place by the receiving employer, which can happen more or less instantaneously in certain circumstances. The important point is that up until that point, the terms and conditions of the staff employed under the pre-existing bodies would be preserved.
This important point relates to quite a lot of staff, and there is quite a lot of uncertainty among the trade unions and staff bodies representing them. We need clarity on this and if the Government are unable to accept this form of words then, clearly, I am happy to discuss it with them. The principle needs to be established for all the bodies which remain within this Bill. I beg to move.
Lord Hunt of Kings Heath
My Lords, I would very much like to support my noble friend on this. It is timely to remember that thousands of people who work for the public bodies listed in this Bill are likely to be affected by its provisions. Many will lose their livelihoods; some will find their careers seriously damaged; some, as my noble friend Lord Whitty has said, will find themselves transferred to other employers. It is important that we recognise and acknowledge that those people have given dedicated service, in some cases for many years. Where they are transferring to another body, we must make the transition process as smooth as possible. That is clearly the intent behind my noble friend's amendment. It would ensure that, where a person is transferred to another body, TUPE will apply, with the implications and protections as described by my noble friend. I hope that the Minister will be able to provide the necessary assurances on that. The Government also need to take on board the point that my noble friend made about the complexity of the issue and the need for clarity, which is why his amendment deserves serious consideration.
Lord Taylor of Holbeach
I, too, am grateful to the noble Lord, Lord Whitty, for tabling the amendment, because it raises an important aspect of the reforms and allows the Committee to consider the impact of the Government's reform programme on the staff of the bodies affected. I take this opportunity to pay tribute to the work of the thousands of hard-working staff of public bodies across the country. Specifically, I put on record that our proposed reforms to public bodies are no reflection on the work of the staff.
I assure the Committee that the Government are working with the chairs and chief executives of public bodies and trade union representatives to ensure that necessary change is carried out as smoothly and fairly as possible. As the noble Lord said, that must be an important aspect of this operation. The Government have been diligent in acknowledging the needs of staff during the public bodies review programme, and we will continue to be so—for example, by exploring opportunities for redeployment where possible.
The Cabinet Office has been working closely with other departments since 2010 to ensure that the needs of staff are fully factored into the public bodies programme of work, particularly on the need to provide staff with clarity following reform decisions and the milestones along the route. The Cabinet Secretary has sent a message to departments on that very point. The Cabinet Office has also provided a checklist of considerations for departments which takes the needs of staff and stakeholders into account.
Those arrangements reflect a flexible approach that ensures that government departments can respond in the context of individual changes—based, of course, on the proper protections that are already enshrined in UK employment law. That is the right approach to support our public bodies’ staff. It also reflects the Cabinet Office statement of practice on staff transfers in the public sector. The guiding principles, as set out in the document state:
“The Government is committed to ensuring that the public sector is a good employer and a model contractor and client”.
The principles recognise that the:
“involvement, commitment and motivation of staff are vital for achieving smooth and seamless transition during such organisational change”.
On the specifics of the amendment, I should like to inform the Committee why the Government believe that the blanket application of TUPE is not appropriate. TUPE, and the European law which underpins it, was designed to protect staff where the business for which they worked, or the services to which they were assigned, would be carried out by a different organisation. Staff retain their jobs and conditions, and the new employer steps into the shoes of the old one. The definition of relevant transfer under TUPE is broad and will cover most transfer situations.
However, Clause 23 already provides the mechanism for equivalent protection to be confirmed in non-TUPE situations where that is appropriate. That is underpinned by the Cabinet Office statement of practice on staff transfers, to which I have already referred, which provides that the TUPE principles should generally be followed through a transfer scheme which addresses the imperatives of the particular transfer.
The blanket application of TUPE to all transfers conducted pursuant to this Bill seems likely to lead to inefficiencies and unintended consequences. For example, there may be circumstances where a body following an order made under this Bill is carrying out functions which have significantly altered and which require different skills and resources, with the result that there is no relevant transfer for TUPE purposes. If TUPE were nevertheless to be applied, staff would be transferred to the new body by operation of law, only to be potentially made redundant by the transferee. This would involve extra work and unnecessary expense and delay with no benefit to anyone, increasing uncertainty for staff and possibly disruptive relocation.
I appreciate the concern of the noble Lord, Lord Whitty, and I can assure him that the Government will continue to have a positive approach to TUPE regulations where they properly apply, and seek to make appropriate provision where this is not the case. I hope that, in the light of the assurances I have given, he will feel free to withdraw his amendment.
Lord Whitty
My Lords, I appreciate much of what the Minister has said about the approach of the Cabinet Office advice and what is going on in anticipation of various changes. Of course, we are not at a point, in most cases, where the exact format of the change is clear because we have to go through a period of consultation in association with the secondary legislation. However, I am slightly disappointed that he is not prepared to accept this amendment, because I had seen Clause 23(5), which referred to this, and my amendment was intended to be a rather clearer exposition of that principle and is the formulation that has been used on past occasions. It is true that people will find themselves employed by a new body and that there could be a redundancy very rapidly, but that has been the situation in both the private and the public sector, and is what is laid down in the TUPE regulations for a lot of situations and has happened in past public sector mergers.
The difficulty for me being able to be sufficiently reassured by the Minister’s words and by Clause 23(5)(f) is the question why, if on previous occasions, legislation has provided for a pretty unambiguous form of wording that I have outlined in this amendment, we could not use a similar form of words in here. I think that would be greater reassurance to the staff and trade unions that are having to deal with potential changes of employer. I do, however, accept the good intentions of the Government, and the Minister in particular, and will not press this amendment. I will consider his words carefully to see whether I need to bring it back at a later stage. I beg leave to withdraw the amendment.
Lord Newton of Braintree
“( ) fairness, openness, transparency and justice;”
Lord Newton of Braintree
I wish to move this amendment briefly. I have ended up a bit confused on one point. Until the latest selection of amendments, my little amendment was sailing on its own and I might have regarded it as a sort of beacon of light—a light ship. Somehow, in the course of the past couple of days, it has acquired nine barnacles, and I am not quite sure whether they are benign barnacles or hostile barnacles. I have not studied them sufficiently to know whether I have a view on all of them. I think I am agnostic about some, hostile to some, and supportive of others, but I will sort that out when I have heard what noble Lords have to say.
What I do know is that since there are those who appear to think that I have been a bit troublesome on this Bill, I want to make the point that this is the first amendment I have actually moved, so all the trouble has been made by other noble Lords. My amendment is entirely benign. The only thing I have done that is unkind is to write my notes on the back of an envelope to match the Bill, but perhaps that was unkind. My speech will be short. I trailed it on Monday when something similar cropped up in a speech made by the noble Baroness, Lady Hayter. I gave my main thinking at col. 1409 of the Official Report.
The background is that I looked at Clause 8 and wondered what it is that Ministers have to take into account in making orders under these sections—efficiency, effectiveness, economy and securing appropriate accountability. I indicated on Monday that the accountability argument is pretty fair nonsense. Ministers are accountable for all this, so the issue is about how that accountability is exercised. Leaving that aside, all the other criteria strike me as utilitarian. I would claim as a mere humble former practising Member of Parliament to be interested in values. All I have done is put down an amendment that says they have also got to take account of,
“fairness, openness, transparency and justice”.
That is pretty close to asking the Government to accept motherhood, and if they doubt it, let me say that during some train travelling today—I should say that I used four trains, three of which were at least 15 minutes late—I had plenty of idle moments. What I do in my idle moments is study the document that I carry close to my heart. It is the coalition’s programme for Government. I am a faithful supporter. Its subtitle is, “Freedom, Fairness, Responsibility”. The foreword on pages 7 and 8 was written by my right honourable friends the Prime Minister and the Deputy Prime Minister. It says that,
“we will ensure that fairness is at the heart of those decisions … we will extend transparency to every area of public life”.
In respect of consumer protection the document states:
“We need to promote more responsible corporate and consumer behaviour through greater transparency”.
I think that that should apply to the Government as well. The document goes on to make reference to,
“changes to our political system to make it far more transparent and accountable”.
The only thing I cannot find a reference to is openness.
If Ministers do not like all these words or if the draftsmen say that they are not the sort of thing you put in Bills, I can live with that, but I do think that something along these lines ought to be incorporated. On the basis of the evidence I have just quoted, I claim to be the true believer, and if the Minister resists me, I think that he declares himself a heretic, so I look forward to hearing what he has to say. I beg to move.
Lord Maclennan of Rogart
My Lords, I rise simply to make it clear to the House that, at this hour of the night, my noble friend is not alone. His concern for promoting values in this Bill has been manifest from the beginning, and he enjoys considerable support from his coalition colleagues.
Lord Goodhart
My Lords, I have Amendment 125A in this group. I originally planned to de-group it, because it is different in its purpose from the others. However, in view of the lateness of the hour, and if the Minister agrees, I shall deal with it now and get it over with.
It is clear that this Bill is meant for use in the near future and not in the longer term. It cannot be right for it to create powers which might be exercised several years from now in circumstances which are entirely different from those of the present. This makes it desirable that a time limit be put on the operation of the Bill in the nature of a sunset clause. There should be a reasonable time for the Government to enact their legislation under this Bill. I have suggested in my amendment that the sun should set on the Bill when the present Parliament is dissolved; that is, in a little over four years if we adopt the Fixed-term Parliaments Bill.
That seems to be a reasonable time in which to do everything that is needed here. There is absolutely no need for the provisions of the Public Bodies Act, as it will then be, to continue after the duration of the present Parliament.
Lord Hunt of Kings Heath
My Lords, I shall speak to a number of the amendments in this group. The amendment of the noble Lord, Lord Newton, has indeed acted as a beacon, such a beacon that we all want to join in and follow him. I very much support the intent behind it.
In many ways, this is a very important group of amendments, because they go back to the question of the architecture, as we have come to call it, of the Bill. I repeat that the Opposition are not opposed to a regular review of public bodies—it is right that they should be subject to review. Our concern all along has been that the Bill should not give such overweening power to Ministers without sufficient parliamentary scrutiny.
We have had a number of debates about the architecture of the Bill during our days in Committee. I acknowledge the progress that has been made through amendments and responses from the Government. The removal of Clause 11, Schedule 7 and those clauses relating to forestry are particularly welcome. We have also discussed Clause 8, concerning the matters to be considered by Ministers. The Minister has already said that this is a matter in progress and that he cannot give a commitment, but it is none the less encouraging that he and his officials are discussing the wording of Clause 8. I hope that he will be able to bring some comfort to us when we come back on Report.
Nevertheless, the Bill could still be further improved, first, by enhancing the consultation procedures and then by making order-making procedures in Parliament subject to extra scrutiny. My Amendment 114A to the Minister’s Amendment 114 seeks to ensure that the public would always be consulted if the Minister proposed to make an order under Clauses 1 to 6. I accept that the Minister’s amendment is welcome and extensive. I also accept that in new subsection (1)(g) of the proposed new clause the Minister is given power to consult the public, since it states,
“such other persons as the Minister considers appropriate”.
That is a phrase beloved of parliamentary counsel and officials. I should like to encourage him to go a little further. In the context of this Bill, the provision gives a little too much discretion to Ministers to decide who else they want to consult. The bodies in this Bill are all important and deal with important functions. I believe that there should be no question that if an order is made under this Bill there should automatically be public consultation.
I also believe—this relates to my Amendments 118A and 118B—that the order-making procedure to be used in Parliament should be thorough. I welcome Amendment 118 in the name of the noble Lord, Lord Taylor. The question is whether it is sufficient. On this we have the advice of the Delegated Powers and Regulatory Reform Committee, which certainly did not think so in its report in November 2010 when the Bill was originally published. On 7 March, we had a further report from the committee. It welcomed the noble Lord’s amendment, which it sees as a further enhancement, but it reminds us that there are still two key differences between the Government’s proposed enhanced procedure and what was in the Legislative and Regulatory Reform Act 2006, which introduced the super-affirmative procedure. The committee says that, under the 2006 Act,
“if a committee of either House recommends that no further proceedings be taken on a draft order, then any further proceedings are automatically stopped unless and until the recommendation is rejected by that House itself (commonly called the ‘veto’)”.
The committee reminds us that, under the 2006 Act,
“a Minister wishing to proceed with an order unaltered after having been required to have regard to representations must lay a statement before Parliament giving details of any representations received”.
The committee points out that such a statement is not required under this Bill or under the amendment in the name of the noble Lord, Lord Taylor. I say to the noble Lord that I welcome the enhanced scrutiny that he is proposing but I do not think that it goes far enough given the order of power that is given to Ministers.
I, of course, listened with great interest to the argument from the noble Lord, Lord Goodhart, for his sunset clause amendment. We support the principle of the sunset clause. The only question that I would put to him—it would be interesting to have further discussions between now and Report—is whether there is not an argument for keeping the Act, which would allow the Government perhaps at the start of every parliamentary term to undertake a further review, but for time-limiting the provisions in relation to an organisation named.
My main concern about the construct of this Bill is the chilling factor on any organisation so named. I think that it would be possible to have a recasting of the noble Lord’s amendment to make it clear to an individual organisation that, unless a Government deal with a matter within a certain time, it falls. However, there is a case for the Government being able to undertake a regular review. It might be that we should keep the provisions of this Bill but limit the time under which an individual organisation can be covered by it.
Lord Goodhart
I am certainly interested in what the noble Lord, Lord Hunt, has said. It is something that I would obviously consider and I would be happy to discuss it with him or the Minister at some time between now and Report.
Lord Hunt of Kings Heath
My Lords, I am most grateful to the noble Lord, Lord Goodhart, and I very much look forward to doing that.
My Amendment 176A deals with omnibus orders. The concern here is that a whole group of bodies could be dealt with under one order, which could mean that much less scrutiny would take place. It is interesting that the Government had an amendment—Amendment 126—to prevent omnibus orders in relation to the bodies listed in Schedule 7. Clearly, that falls, because we are no longer to have Schedule 7. However, if the Government thought that it was reasonable not to use omnibus orders in relation to that schedule, does not the principle arise with the bodies listed in Schedules 1 to 6?
Finally, Amendment 177 is a probing amendment. It relates to hybridity and to Clause 27(4), which states:
“If the draft of an instrument containing an order under this Act … would, apart from this section, be a hybrid instrument for the purposes of the standing orders of either House of Parliament, it is to proceed in that House as if it were not such an instrument”.
Can the Minister give an explanation of that? Perhaps, if it is extensive, he might care to write to me.
Lord Newton of Braintree
Perhaps I may just indicate briefly that, although I said slightly flippantly that I had not had a chance to look at all the other amendments, I had a glance through them. I had some of the same reservations about the amendment in the name of the noble Lord, Lord Goodhart, as the noble Lord, Lord Hunt of Kings Heath, has just adumbrated. The two that I found myself most drawn to were that you cannot have an omnibus order but must deal with things one by one, which seems well worth considering, and this business about hybridity. If there was manifestly something that picked out an individual interest and treated it differently from other interests—if I might do my non-lawyer’s translation of the hybridity problem—that would be a real question to be considered in certain circumstances. I hope that my noble friend will at least be able to reflect on these points.
Lord Mackay of Clashfern
On the amendment in the name of the noble Lord, Lord Goodhart, as the noble Lord, Lord Hunt, said, there is a question of a chilling factor in relation to bodies or organisations once they are named in a Bill. There is something to be said for having a closure in respect of bodies named now but also, if we get the Bill through in a satisfactory way, for it being a model for future reviews of these public bodies. One difficulty has been to provide a definition of what is meant by a public body. If the Bill passes into law as a sound piece of review legislation then, after, for example, the end of this Parliament and the beginning of the next one, there is a good deal to be said for the next Government coming forward with a list of bodies that would be suggested as amendments to this Bill, which would then possibly be subject to review under the powers that we have stipulated in the Bill.
Lord Taylor of Holbeach
I do not suppose that the Committee would have chosen to debate this important group of amendments at this time of night. I do not really want to rush but I am mindful of the time. It is interesting that the amendments contain the workplace of me and the Bill team. This is certainly an area in which we are and have been much engaged. I hope that all noble Lords will understand that it is rarely possible to deliver everything. There are some areas where the Government have to draw a line but there are others—I think that I can indicate these in the debate this evening—where further consideration is justified and where I would hope to come back with amendments before Report, after discussions with noble Lords. I say that by way of preface.
The whole group of amendments relates to the procedures that Ministers must follow. These issues have had substantial discussion in Committee. I thank noble Lords across the Committee for their contributions. As I seek to respond to each amendment, I ask noble Lords to contextualise the debate against the changes that we have already announced in the Bill, notably the removal of Schedule 7 and our ongoing commitment to work with noble Lords on a variety of related issues.
I begin with Amendment 106A in the name of my noble friend Lord Newton of Braintree. This amendment would add the objectives of,
“fairness, openness, transparency and justice”,
to the list to which the Minister must have regard when considering making an order under Sections 1 to 6. I thank him for his amendment and reassure the Committee that these objectives underpin the Government’s rationale for reforming public bodies and, of course, the Government’s programme as a whole. It is good that my noble friend carries the coalition agreement in his inside pocket, close to his heart. I am reassured by that and always value his contributions, even when they are not necessarily supportive of everything that I am seeking to do with this Bill. The only points where I fear we disagree concern whether this amendment would work in practice and whether such wording is necessary on the face of the Bill. The Government believe that such a requirement in legislative terms would be ambiguous and could, as drafted, be quite difficult to measure or assess. However, it is an area in Clause 8 that we have committed to look at.
Amendment 114A returns us to the question of consultation, which was originally debated on our first day in Committee on this Bill. It would amend government Amendment 114 by introducing a specific requirement to consult the public before laying an order using the main powers in the Bill. The Government have accepted the principle that Ministers should be required to consult on their proposals to reform public bodies before using these powers. The Government also accept that in some cases it is completely appropriate to consult the public in relation to such proposals. For example, I can confirm to the Committee that the Department for Business, Innovation and Skills intends to consult this year on its proposed changes to competition bodies. We discussed that earlier this evening. It will be a public consultation. The Government Equalities Office will soon publish its consultation document on reform of the Equality and Human Rights Commission. Later this year, Defra will issue a public consultation on its plans to replace British Waterways with a charitable body.
However, I take issue with the amendment in the name of the noble Lord, Lord Hunt, as it would apply without due regard to proportionality to any proposed reform. Such an approach runs contrary not only to the policy of this Government but also to the existing code of practice on consultation, which was issued in June 2008 by the Government of whom the noble Lord, Lord Hunt, was a part. The introduction to the code of practice is clear:
“Ministers retain their existing discretion not to conduct formal consultation exercises under the terms of the Code. At times, a formal, written, public consultation will not be the most effective or proportionate way of seeking input from interested parties”.
I do not quote from this document to seek to absolve Ministers of responsibility. Subsection (1)(b) in Amendment 114 specifically requires a Minister to consult persons whom he or she considers,
“to be representative of interests substantially affected by the proposal”.
This provision clearly could include the public. The Minister must therefore expect to be held accountable for his or her decisions in relation to this provision. However, the proper requirement that Ministers should consider whether to consult the public does not lead to the conclusion that it will prove necessary or proportionate in all cases. For example, is it proportionate to require a full public consultation on the statutory abolition of Food From Britain, a body that, to all intents, has been defunct since 2009, or on the proposal to use Schedule 2 to merge the Pensions Ombudsman with the ombudsman for the board of the Pension Protection Fund? These two bodies already share services to a great extent and those functions will not change.
As with other cases in the Bill where the public will rightfully expect to be consulted, undoubtedly they will, but the Bill as drafted allows for that possibility and the Government accept their responsibility to ensure that that occurs when necessary. By contrast, the amendment proposed by the noble Lord, Lord Hunt, will remove the ability of Ministers to conduct a more targeted consultation when that is appropriate. While I have sympathy with the sentiment behind Amendment 114A, the Government do not believe that the public will welcome a proposal that would add unnecessary bureaucracy to the order-making process and with it, in effect, the process of reform.
The question of proportionality is also pertinent to Amendments 118A and 118B in the name of the noble Lord, Lord Hunt, which concern the parliamentary procedure that should apply to orders made under this Bill. In responding to these amendments, I should clarify for your Lordships’ House that we have substituted government Amendment 118 with a new version that makes it explicit that the enhanced procedure can be activated by a recommendation of a committee of either House. This clarification responds to paragraph 24(a) of the sixth report of the Delegated Powers Committee—that is, the committee’s second report on this Bill. I am happy to clarify the Government’s intentions in response.
Amendment 118A seeks to make it explicit that a Minister wishing to make an order following a period of consultation must lay before Parliament a draft order and explanatory document. I agree with the spirit of the noble Lord’s amendment, but I do not consider it necessary. While the current drafting of subsection (1) in government Amendment 118 states that a Minister,
“may lay … a draft order, and … an explanatory document”,
it would in practice not be possible to make an order without following this procedure. Our current drafting simply reflects the fact that, following a period of consultation under Amendment 114, the Minister is not obliged to proceed with the proposal.
Amendment 118B would introduce a wholly new parliamentary procedure for these orders, giving a committee of either House the opportunity not only to reject but also to amend an order, or to recommend that the proposals be taken forward only through primary legislation. As I argued when we debated this issue on the first day in Committee, the Government cannot support that proposal for a number of reasons. First, I maintain my position that the noble Lord’s amendment goes beyond the scope of the Bill in seeking to effect a fundamental shift in how this House deals with secondary legislation. Secondly, I do not accept that the powers of the Bill, especially in the light of the removal of Schedule 7 and the additional safeguards that the Government are now proposing, justify the use of such a restrictive parliamentary procedure. It is now the case that no body can be subject to the powers of the Bill unless Parliament has consented through primary legislation to its inclusion in the Bill’s schedules. The waiting room of Schedule 7 has gone. Therefore, the scope of the powers in this Bill has been significantly narrowed. On this basis, to continue to suggest that the Bill requires a more restrictive scrutiny procedure than, for example, the Legislative and Regulatory Reform Act appears a disproportionate response, particularly in the light of the additional safeguards that we have introduced and continued to work towards and the fact that the proposed procedure would apply to each and every order made under this Bill.
I do not intend to quote a list of examples of such reforms. Suffice it to say that I do not consider that the opposition amendment represents a proportionate procedure for an order to abolish a body that is already defunct. Our approach, by contrast, gives Parliament the flexibility to select and enhance procedure while maintaining for the Government the reasonable ability to act to implement their programme. It is for this reason that I cannot accept Amendment 118B or Amendment 117.
Lord Hunt of Kings Heath
My Lords, I am most grateful to the noble Lord for giving way. I will not detain the Committee very long. I want to make two points. First, presumably in the case of defunct bodies, the Select Committee appointed by the House could deal with this matter in very short order. The Merits Committee, for instance, deals with a huge number of statutory instruments every week. It will list a huge number to which it does not draw the special attention of the House and it focuses on the orders it considers to be most important. Secondly, the noble Lord has been pretty forthright in rejecting my amendment. Between now and Report will the Government at least give careful consideration to the report of the Delegated Powers and Regulatory Reform Committee? It has reported only in the past few days and it covers this issue.
Lord Taylor of Holbeach
Of course and I would like to feel that the noble Lord would know that I wish to continue the very useful dialogue we have had on this Bill. I felt it would help the noble Lord if I defined the areas where I feel there is going to be more scope for improving the Bill—as we would both describe it—and areas where I think it is not going to be possible. I thought it was better to be upfront and frank about it and I hope that the noble Lord will understand that. We want to maintain our dialogue because, despite the difficulties the Bill had in its early days, I believe this could be a very useful piece of legislation and one which suits both Government and Parliament in its operation provided we put the proper work into the foundations. We will have a chance to talk about that when we come to other amendments in this now slightly enhanced grouping.
As I said, this is why I cannot accept Amendment 118B or Amendment 176 in the name of the noble Lord, Lord Dubs, which makes provision regarding the commencement date of amending orders using wording which appears to be drawn from the Civil Contingencies Act. That Act was designed to create a framework for dealing with emergency regulations, which, by their extreme nature, circumvent the usual channels of parliamentary scrutiny. I do not accept that there is a parallel between such orders and those which would be made under this Bill.
Originally my speaking note at this point mentioned sunsetting; then my speaking note did not mention sunsetting because the amendment of the noble Lord, Lord Goodhart, was going to be taken separately. If the noble Lord does not mind I will put it at the end because I think it is quite important that I can say a few words on it.
Amendment 176 would prevent an order being made under this Act from applying to more than one body or office. I understand the thinking behind the amendment which seeks to ensure proper parliamentary scrutiny of these important orders. However, I am also anxious that the Bill is not amended in such a way that will restrict the sensible decision-making of departments or overburden Parliament with a requirement to consider separately multiple orders of a similar class. I am thinking, for example, of the multiplicity of drainage boards which might have similar requirements for secondary legislation. I hope that any wording covering this would not exclude that because it would not be in the interests of efficient use of parliamentary time, particularly given that the changes to be taken forward by the said orders will in most cases have been debated thoroughly in primary legislation.
We do not accept the argument that in all cases the use of omnibus orders would necessarily reduce the level of parliamentary scrutiny. I should also say to the noble Lord that the particular amendments under discussion would have what I believe are unintended consequences by preventing any orders to merge bodies using the power in Clause 2 as such orders would by their nature apply to more than one body or office. However, I am willing to consider again whether some form of restriction on the use of omnibus orders might be appropriate. I would be happy to discuss that with the noble Lord prior to Report stage. So that is another item for our agenda.
Amendment 177 would remove the provision in Clause 27 that aims to give certainty to the order-making procedure and to avoid lengthy debates on hybridity that could unnecessarily delay reforms from being taken forward by Ministers. This sort of provision is not without precedent; nor does it broaden the powers of Ministers in any significant way. Indeed, similar provisions form parts of a number of Acts passed by the previous Administration, including the Regional Development Agencies Act 1998, the Freedom of Information Act 2000, the Charities Act 2006, the Climate Change Act 2008 and the Equality Act 2010. In addition, I am happy to assure the Committee that the Government’s initial assessment was that none of the proposed orders to take forward the reform of bodies listed in Schedules 1 to 6 could be considered hybrid.
Amendment 178 would require an annual report from a Minister regarding the use of order-making powers. I understand that the intention of this amendment is to ensure that the Government are properly held to account for their use of these powers, which is of course right and proper. However, the exercise of the powers will be a matter of public record, as is the case in the exercise of any powers made by statutory instrument. In addition, parliamentarians have a variety of means by which to question the Government on all aspects of policy relating to public bodies via Parliamentary Questions and the Select Committee process. I am unclear what is expected to be gained by the creation of a new reporting burden.
It is also the case that these powers will not be exercised centrally via the Cabinet Office but elsewhere by individual Ministers in departments, who will each have set out their own approach to public body reform in their departmental business plans. It is by reference to those documents that the Government have committed to be held to account and departments will report quarterly on them as a matter of course.
I turn to my noble friend Lord Goodhart’s amendments, which seek to sunset the order-making powers contained in Clauses 1 to 6, 13, 17 and 18 so that they could no longer be used after the dissolution of the present Parliament. As noble Lords will know, perhaps all too well, this is not the first time that we have debated this issue. Since our first day in Committee, the architecture of the Bill has changed as the Government have listened and responded to concerns raised by noble Lords. Most recently, that has resulted in the removal of Clause 11 and Schedule 7. For that reason, this is a timely debate as it allows the Committee to consider the issue in the new context in which we find ourselves.
The issue of sunsetting all the parts of the Bill is a complex one. I can see logic in not leaving bodies in schedules in perpetuity; I think that the noble Lord, Lord Hunt, and my noble and learned friend Lord Mackay made a similar point. Although this is something that the Government are still considering, there is perhaps more merit in the option proposed recently by the noble Baroness, Lady Royall, of sunsetting the contents of the schedules to the Bill rather than the powers themselves. That is all the more persuasive in the light of the removal of Schedule 7, which has drastically limited the scope of these powers, something that had not happened when my noble friend Lord Goodhart tabled his amendment.
Inserting a sunset clause that would limit the period in which powers could be used could now be counterproductive and potentially leave us in the same position as we are in today—that is, without a mechanism to take forward reforms following the regular review of public bodies that the Government will take forward, which I hope will continue in future. By contrast, leaving the powers on the statute book would leave open the possibility for Parliament to debate and consent to the repopulation of the Bill’s schedules through later primary legislation, without having to cover what would be well trodden ground. However, as I made clear to the noble Lord, the Government have already committed to consider this issue further prior to Report stage. I do not intend to renege on that agreement. I am happy to engage on this issue with my noble friend Lord Goodhart and other noble Lords. In that spirit, I hope that he will not press his amendment.
I thank all noble Lords who have contributed to this debate and who have engaged in discussions at earlier stages as this is a culmination of other debates on mechanisms in this Bill. I have made it clear that we continue to look at Clause 8. I hope that my responses today and the amendments and the commitments that the Government have already made reassure the Committee that this Government will ensure that the procedure applicable to orders made under this Bill is proportionate and sensible and allows for proper parliamentary scrutiny of Ministers’ actions. In light of those assurances, I invite my noble friend Lord Newton of Braintree to withdraw his amendment.
Lord Newton of Braintree
My Lords, I need hardly say that I intend to withdraw the amendment. However, I wish to make a few observations. If I understood my noble friend aright, he said that there was no possibility that any order made in relation to any of these bodies could be hybrid.
Lord Newton of Braintree
In that case, why does subsection (4) of Clause 27 need to be in the Bill? I do not expect an answer to that now but given that a large part of my noble friend’s argument was about whether or not things needed to be in the Bill, to put in the Bill something against a risk that does not exist—or is said not to exist—seems to me superfluous. My other point is more friendly. I rather agree: I cannot see much point in the annual reporting requirement.
Beyond that I will not comment except on my own amendment. As I have already said, I could have predicted the “don’t think it ought to be in the Bill” stuff. I could have predicted the line of argument that all these values are so engraved on the hearts and minds—and no doubt other parts of the anatomy—of Ministers that there is no need to engrave them in the legislation, which gives them the powers to do what they can. However, given that they should be committed to the declarations in the coalition’s programme, they should be bound to observe those declarations in the legislation which the coalition passes. I cannot think that that is unreasonable.
My next observation increases my puzzlement. As I said on Monday, when I raised somewhat comparable points with the noble Baroness, Lady Ashton of Upholland, in relation to the terms of reference of a justice council in the Tribunals, Courts and Enforcement Bill, she went away and produced an amendment which wrote in some of these values. I have not been able to consult the noble Baroness as she has rather different responsibilities on her plate in other climes, but my guess is—I hope that I do not upset my noble friend by saying this—that she took my amendment away from a Committee in the Moses Room and went back to the department and it said, “We don’t think this needs to be in the Bill”, and then she said words to the effect of, “Get stuffed. I think this is reasonable and I think Lord Newton is a decent bloke. Let’s put it in the Bill”. I hope that something similar will happen between now and Report. But for the moment, such is my docility and my dedication to the coalition that I beg leave to withdraw my amendment.
Lord Taylor of Holbeach
Lord Taylor of Holbeach
My Lords, government Amendments 113ZA to 113E would change the circumstance in which consent is required from the devolved Administrations for orders brought forward under Clauses 1 to 6. Clause 9 stipulates the circumstances in which the consent of the devolved Administrations should be sought. At present, consent is required from the Scottish or Welsh Ministers or the appropriate Northern Ireland department. The Constitution Committee’s report recommended that consent should more appropriately be obtained from the Scottish Parliament, the Welsh Assembly or the Northern Ireland Assembly.
Following that report, and in consultation with the devolved Administrations, the Government have tabled amendments to change the current reference to Ministers to reference to the legislatures, in order to reflect the views of the Constitution Committee and the devolved Administrations, which are content with these proposals and have agreed to legislative consent Motions based on this provision.
The remaining government amendments are in response to further consultation with the devolved Administrations. They widen the circumstances in which consent from the Scottish Parliament and the Northern Ireland Assembly would be required in order properly to reflect the relevant devolution settlements, and have been reached in agreement with those Administrations and, again, the devolved Administrations have agreed to legislative consent Motions based on this provision.
Amendment 113AA extends the need for consent from the Scottish Parliament to take into account situations that may arise where functions of Scottish Ministers are altered by changes made by the Bill, but where those changes are not already covered by Clause 9(1) as it stands. The amendment excludes the need for consent to some changes under Clauses 1 and 2, because it would not be appropriate to require consent from devolved Ministers where a body’s functions are in a reserved area and the body is being abolished, or abolished by way of merger. Without this exception, consent of devolved Ministers would be required in areas that are primarily reserved under the Scotland Act 1998.
The drafting reflects agreement reached with the Scottish Government, and we believe that it is a sensible and pragmatic solution that will allow us to implement orders under this Bill effectively. The amendments also ensure that the Bill is consistent with the legislative consent motion currently lodged in the Scottish Parliament, following discussions between my department and the Scottish Government. I beg to move.
Lord Rowlands
I warmly welcome the amendments introduced by the Minister, because the Constitution Committee made a sensible proposal. It was obviously clear that it should apply to not only Welsh Ministers but the Welsh Assembly.
Lord Taylor of Holbeach
(b) which modifies the functions of the Scottish Ministers.(1A) Consent is not required under subsection (1)(b) in relation to provision abolishing a function of the Scottish Ministers which relates to a body abolished under section 1 or 2.”
“(2) An order under sections 1 to 6 requires the consent of the Northern Ireland Assembly to make provision—
(a) which would be within the legislative competence of the Northern Ireland Assembly if it were contained in an Act of the Assembly, or(b) which modifies the functions of a person within subsection (2A).(2A) The persons referred to in subsection (2)(b) are—
(a) the First Minister and deputy First Minister of Northern Ireland;(b) a Northern Ireland Minister;(c) the Attorney General for Northern Ireland;(d) a Northern Ireland department;(e) a person exercising public functions in relation to a transferred matter (within the meaning of the Northern Ireland Act 1998).”
Lord Taylor of Holbeach
“(4) An order under sections 1 to 6 requires the consent of the National Assembly for Wales to make provision which would be within the legislative competence of the Assembly if it were contained in a Measure of the Assembly (or, if the order is made after the Assembly Act provisions come into force, an Act of the Assembly).
(4A) An order under sections 1 to 6 requires the consent of the Welsh Ministers to make provision not falling within subsection (4)—
(a) which modifies the functions of the Welsh Ministers, the First Minister for Wales or the Counsel General to the Welsh Assembly Government, or(b) which could be made by any of those persons.”
Lord Taylor of Holbeach
Lord Taylor of Holbeach
“Consultation
(1) A Minister proposing to make an order under sections 1 to 6 must consult—
(a) the body or the holder of the office to which the proposal relates,(b) such other persons as appear to the Minister to be representative of interests substantially affected by the proposal,(c) the Scottish Ministers, if the proposal relates to any matter, so far as applying in or as regards Scotland, in relation to which the Scottish Ministers exercise functions (and where the consent of the Scottish Parliament is not required under section 9),(d) a Northern Ireland department, if the proposal relates to any matter, so far as applying in or as regards Northern Ireland, in relation to which the department exercises functions (and where the consent of the Northern Ireland Assembly is not required under section 9),(e) the Welsh Ministers, if the proposal relates to any matter, so far as applying in or as regards Wales, in relation to which the Welsh Ministers exercise functions (and where the consent of the National Assembly for Wales is not required under section 9),(f) where the functions affected by the proposal relate to the administration of justice, the Lord Chief Justice, and(g) such other persons as the Minister considers appropriate.(2) If, as a result of consultation under subsection (1), it appears to the Minister appropriate to change the whole or part of the proposal, the Minister must carry out such further consultation with respect to the changes as seems appropriate.
(3) It is immaterial for the purposes of this section whether consultation is carried out before or after the commencement of this section.”
Lord Taylor of Holbeach
“Procedure
(1) If after consultation under section (Consultation) the Minister considers it appropriate to proceed with the making of an order under sections 1 to 6, the Minister may lay before Parliament—
(a) a draft order, and(b) an explanatory document. (2) The explanatory document must—
(a) introduce and give reasons for the order (including reasons relating to the objectives in section 8(1)),(b) explain why the Minister considers that the conditions in section 8(2)(a) and (b) are satisfied, and(c) contain a summary of representations received in the consultation.(3) The Minister may not act under subsection (1) before the end of the period of twelve weeks beginning with the day on which the consultation began.
(4) Subject as follows, if after the expiry of the 40-day period the draft order laid under subsection (1) is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the draft order.
(5) The procedure in subsections (6) to (9) shall apply to the draft order instead of the procedure in subsection (4) if—
(a) either House of Parliament so resolves within the 30-day period, or(b) a committee of either House charged with reporting on the draft order so recommends within the 30-day period and the House to which the recommendation is made does not by resolution reject it within that period.(6) The Minister must have regard to—
(a) any representations,(b) any resolution of either House of Parliament, and(c) any recommendations of a committee of either House of Parliament charged with reporting on the draft order,made during the 60-day period with regard to the draft order.(7) If after the expiry of the 60-day period the draft order is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the draft order.
(8) If after the expiry of the 60-day period the Minister wishes to proceed with the draft order but with material changes, the Minister may lay before Parliament—
(a) a revised draft order, and(b) a statement giving a summary of the changes proposed.(9) If the revised draft order is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the revised draft order.
(10) For the purposes of this section an order is made in the terms of a draft order or revised draft order if it contains no material changes to its provisions.”
Lord Norton of Louth
My Lords, I rise briefly to welcome the decision of the Government not to proceed with Clause 11 and Schedule 7 to the Bill. As I said on Second Reading, the prime mischief of the Bill is to be found in Clause 11 and Schedule 7. It is not the only mischief—hence several of the other amendments under discussion—but it is the prime mischief. As the Constitution Committee emphasised, the provision was objectionable on constitutional grounds. The concerns expressed in the report recurred on Second Reading and have been pursued since. There were problems with the inclusion of quasi-judicial bodies, as explained in a powerful speech by the noble and learned Lord, Lord Woolf, and the Government came to recognise the force of that argument.
However, even with the removal of the bodies with a quasi-judicial role, the basic objection to the provision remained. I saw no clear rationale for placing statutory public bodies in a living uncertainty. As I said in November, this was a lazy way of legislating: effectively parking certain bodies in Schedule 7 until such time as the Government decided what to do with them, whereupon they would place them by order in another schedule. I am very pleased that the Government have now recognised the force of the argument against Clause 11. That argument has been widely accepted in the House.
As I said on Second Reading, there is an alternative to the clause. The Government plan a triennial review of non-departmental public bodies. Why should we not have a public bodies Bill in each Parliament, thereby enabling concrete proposals to be put before Parliament and given proper scrutiny by both Houses? That is the way forward. I am delighted that my noble friend Lord Taylor of Holbeach has added his name to oppose the Motion that Clause 11 stand part of the Bill, and I pay tribute to the way in which he has listened to Members in all parts of the House and taken on board the points made.
Lord Goodhart
My Lords, I support what my noble friend Lord Norton said. The independence of the judiciary is a central and essential part of the constitution. In particular, the provision that would have enabled the Government to get rid of the Judicial Appointments Commission was plainly unconstitutional and could only have been dealt with by primary legislation.
Baroness Hayter of Kentish Town
My Lords, first, I declare an interest as chair of the Legal Services Consumer Panel, which is part of the Legal Services Board and thus funded indirectly by lawyers, although technically appointed by the Secretary of State. Although we are about to see the LSB dropped from the Bill, I will raise some issues. It will become clear as I speak why I need to do that.
The UK has a long and proud record of an independent Bar, and of independent solicitors. This is important for its own sake, but also because the Bar is the pool from which our judiciary is drawn. They are thus already known for their robustness and independence from political influence by the time they don their judicial wigs. Even before that, lawyers can freely represent clients who are prosecuted by the state or even represent clients taking action against the state safe in the knowledge that their licence and freedom to practise cannot be removed by the state, as it was given by the Bar Council or the Law Society, over which the state has no control.
It is that security that enables lawyers to feel quite free to represent clients without looking over their shoulder to see whether they will be jeopardising their future livelihood. It is very hard to emphasise how important this tradition has been both here and abroad. There were therefore concerns when it was decided that the role of the Bar Council and the Law Society in authorising and disciplining lawyers was to be overseen, and indeed authorised, by the Legal Services Board, which was set up by statute with its members appointed by an elected politician, or at least a member of the legislature—the Secretary of State.
Although they accepted that the era of full self-regulation was past and that some independent membership of relevant boards was required, lawyers here and abroad were wary of the Government taking over ultimate responsibility for effectively granting or removing the licence to practise, with the implication of the regulation of lawyers coming under government control. Nevertheless, when the LSB was set up, albeit funded by lawyers, there were many—I am sure sincere—assurances as to the independence of the Legal Services Board from political interference. Lawyers both here and abroad—because of course many are trained here—were assured that government Ministers would not remove a lawyer who could upset or challenge them. It is very much for that reason that I am delighted about the loss of Clause 11 and Schedule 7, which of course list the LSB. However, in the mean time, another part of government has taken a quite serious swipe at the LSB, as well as my own Legal Services Consumer Panel, and at the new Legal Services Ombudsman set up under the same 2007 Act.
On 8 October last year, just days before the 14 October announcement of the bodies to be abolished or amended by this Bill, all three bodies received letters from the Ministry of Justice saying that the Secretary of State had received a letter from Francis Maude, the Minister for the Cabinet Office, telling us that our three independent, stand-alone websites “will have to be closed” and that we would need to use “an approved government website”—in other words, a .gov.uk domain. It will not come as any surprise that all three bodies protested most strongly that, being independent of government, we would not be treated in that way. Elizabeth France, the chair of the Legal Ombudsman, wrote to the Minister of Justice on 25 October saying that there was no justification for an ombudsman, set up to demonstrate independence from government regulation and the profession and spending no government money, having a .gov address. As she stressed, other ombudsmen, whether it be the Local Government Ombudsman, the Pensions Ombudsman or the Financial Ombudsman, all have .org.uk URLs, signifying their independence from the sectors on which they adjudicate and their independence from government. Our three websites cost nothing to the public purse as they are funded by lawyers, so there is no public expenditure rationale for this. However, it raises serious constitutional issues about the independence of the governance of those bodies—something to which the Government seem a little deaf.
On 28 February, we had confirmation of the very welcome decision to drop Clause 11 and Schedule 7, as reported at col. 799 of Hansard, and indeed had the Minister’s declaration that:
“The Government absolutely recognise that some public functions need to be carried out independently of Ministers”.—[Official Report, 28/2/11; col. 798.]
Just days after that, on 2 March, guess what? We received another e-mail from the Ministry of Justice telling us, “You will need to close your website by 31 March 2011”. To my knowledge there is no legal basis for such diktat from the Cabinet Office and there is, of course, no saving of public money.
Lord Rowlands
My Lords, I had tabled two amendments in this group, Amendment 131, to leave out the Advisory Council on Public Records, and Amendment 161, to leave out the Public Records Office. While I, like everyone else, welcome immensely the fact that Clause 11 and Schedule 7 have gone, I am dying to know what would have happened to these two bodies had the schedule remained.
What would have happened, for example, to the Advisory Council on Public Records? I had the pleasure of serving on this council for a number of years; I thought we were rather a useful body. Most Lord Chancellors seemed to think we were helpful, giving independent advice on whether sensitive records should be released or not. We were a kind of independent buffer, and assisted the Lord Chancellor in that respect. I hope this does not sound boastful but we were quite a well qualified group on the council, and very cheap. It was chaired by the Master of the Rolls, and the last time I saw it was costing about £2,500 a year in expenses to run.
I would be fascinated to know what the intention of including the Advisory Council on Public Records in Schedule 7 was. What was the alternative? I would love to know whether former Lord Chancellors thought a change was necessary.
On a much larger count, what were the Government going to do about the Public Records Office, which was included in this Bill? At various times in my life I have almost become a resident of the Public Records Office and an ex officio member. I have admired and benefited enormously from the fantastic research facilities at Kew and the quality and the dedication of the staff there.
I am happy to tell you that, thankfully, these bodies are now outside the scope of the Bill, but can the Minister tell us what they would have done with them had they left Schedule 7 in? I would very much welcome my curiosity being satisfied in this respect.
Baroness Royall of Blaisdon
I, too, am delighted that the Minister has added his name to the Clause 11 and Schedule 7 stand part debate, and pay tribute to him for listening so attentively to everyone around the Chamber.
I feel sure that I know exactly how it will have happened. He will have been in the Cabinet Office, or wherever, and the Secretary of State will be saying, “Don’t be silly. Of course you can get it through the Lords”. He will be saying, “No, I’m listening. I can't. It’s too difficult”. Eventually, the noble Lord’s arguments will have prevailed, and I am delighted about that.
In moving that the Bill be read a second time, the noble Lord said:
“The fact that a body is named in Schedule 7 to the Bill should not be misconstrued as constituting an intent to abolish or otherwise reform”.—[Official Report, 9/11/10; col. 67.]
He said that in good faith, but it is understandable that any body mentioned in Schedule 7 was immediately worried. Its current operations and future prospects were thrown into doubt and confusion. I recognise that that cannot have been the Government’s intent—that simply does not make economic sense or for good governance—but it was the reality. Each organisation believed itself to be just two orders away from modification, merger or, even worse, abolition. The chilling factor already mentioned was mighty.
If the Minister had not indicated that the Government were minded to delete Clause 11 and Schedule 7, I can assure him that Committee stage would have lasted for even longer, because it would have been our duty to table an amendment on each of the bodies to tease out from the Government their intentions for the body in question. Thankfully, such scrutiny was not needed but, more importantly, the clause and schedule are being deleted, so the axe has been lifted and the bodies mentioned can get on with their work.
I do not want to detain noble Lords at this hour, but I must say that Clause 11 and Schedule 7 were very unwise. They are a testament to rushed drafting and a woeful lack of consultation between the Cabinet Office and other departments. The Government have seen sense; and I am glad. I have a question for the Minister. I presume that some of the bodies mentioned in the schedule might be moved at some stage in the legislative process. Can he say which or how many bodies will be moved, where they will be moved to and when that will be? I would naturally also be grateful for confirmation that the necessary consultation is taking place at this moment with any bodies likely to be moved from Schedule 7 into another schedule.
I have great sympathy with the noble Lord, Lord Norton of Louth, when he says that there should be a Public Bodies Bill at the beginning of each Parliament but, in essence, if we are all content with the framework of this Bill and the schedules are sunsetted, that is what we will have.
Lord Taylor of Holbeach
I am very grateful for those contributions. If there were any doubt why we were wise not to keep Schedule 7 in the Bill, the answer lies in the comments of the noble Lord, Lord Rowlands. As like as not, nothing would have happened to those bodies. They would have been subject to a review in another three years under a periodic review of public bodies, which is an ongoing commitment of the Government. As the noble Baroness pointed out, it was very difficult for any representative of the Government to convince public bodies that that was the case. We may now have a much more satisfactory solution—from both a parliamentary and a practical point of view—to how the review of public bodies can be an ongoing process.
I thank my noble friend Lord Norton of Louth. He and I have known each other longer, I guess, than any other people in this House. We were youngsters together. Indeed, my noble friend was the William Hague of his day at Conservative Party conferences, but he will probably not thank me very much for revealing that to the House. I thank him for his comments. We have taken the committee’s reports seriously and sought to address them, because I have taken the view that the guidance of this House has been positive rather than destructive.
I turn specifically to a comment of the noble Baroness, Lady Royall, that there was a lack of discussion between the departments. I do not think there has been any Bill in which there has been so much discussion across government departments. It is one of the complexities of this Bill that it involves every department, so all departments have been involved in the preparation and structure of the Bill.
As for the detailed question which the noble Baroness asked me about any movement of bodies into schedules during various stages of the Bill, I am not in a position to give an answer on that at this stage, but I will keep the House informed. We are determined that nothing should be introduced to the Bill that cannot be justified by a strong sense of purpose and suitability, and it is not a large number of bodies involved. Consultations are going on, but there will be a number of bodies where proposals exist to come into the Bill that will not be introduced into the Bill because we do not consider that they are in a suitable state of preparation. We feel that we have to justify the admission of any body that we bring into the Bill at this stage. I think that is a reasonable position, and I hope all Members of the Committee will agree with that.
The noble Baroness, Lady Hayter, and I have talked about the problem that she has. When she talked about the Government being deaf, I hope she was not referring to me. I hope she would acknowledge that I responded immediately to the point she made; I got a response and I showed it to her this evening before we came in here in the hope that we would not have to debate it. That is because it is not really a matter for this Bill; it is a matter of the relationship between public bodies—and particularly those in the legal sector—and Government. I will, of course, write to her on the situation as it is, and I note her interest in the matter. I hope that we can keep in touch.
I should just say a few words on these parts of the Bill. As set out in the House on 28 February, these parts of the Bill were designed to facilitate the Government’s stated commitment to the regular review of all public bodies by creating a means by which changes to such bodies could be made following future reviews without recourse to further primary legislation. It was not, as some have suggested, intended to threaten the status of public bodies that the Government had decided needed to be retained. In particular, the Government recognise that some public functions need to be carried out independently of Ministers. Schedule 7 was never intended to hinder or threaten their independence. However, following representations from noble Lords across the House, including Members of the Delegated Powers and Regulatory Reform Committee, the Government have acknowledged the significant concern within the House that these parts of the Bill represented a significant delegation of powers to Ministers and had the potential to constitute a threat to the necessary independence of some public functions.
Accordingly, I have added my name to those of other noble Lords opposing the question that Clause 11 and Schedule 7 should stand part of the Bill. The consequences of removing these parts from the Bill will be that the powers in the Public Bodies Bill cannot apply to any body or office without the express approval of Parliament through primary legislation for that body or office to be listed in one of the Bill’s schedules. Accordingly, any changes to public bodies following the Government’s planned future reviews which necessitate legislation will require a primary legislative vehicle. I hope that this change provides a significant assurance to the Committee both as regards the status of bodies and the Government’s commitment to the appropriate parliamentary scrutiny of government policy.
As I set out on 28 February, it will also be necessary, as a result of the removal of Schedule 7, to introduce a small number of amendments to move bodies currently in that schedule to one or more of the other schedules. These changes will ensure that all the reforms announced in last year’s review can be implemented. These amendments will be made at a later stage of the Bill.
I thank noble Lords for their contributions to the debate and for their positive and helpful engagement on the question of the proper scope and mechanism of this Bill. Throughout its passage to date I hope that, in agreeing to oppose the question that Clause 11 and Schedule 7 should stand part, I have been able to demonstrate the Government’s commitment to engage with and respond to the concerns of noble Lords.
Viscount Eccles
This clause covers the procedure for orders made under Clause 11, so I imagine that it must go. It is about orders made under Clause 11(1). If Clause 11 has gone, Clause 12 must go, too.
Lord Taylor of Holbeach
Having just been speaking, it was quite difficult to get order into my papers, but I am there now.
Lord Wigley
“Welsh language requirements
(1) An eligible person to whom functions are transferred by an order made under section 1 or 5 shall be subject in relation to the exercise of those functions to any Welsh language requirements applicable to the body or office from which functions are transferred.
(2) A new or existing body, office or eligible person to which or to whom functions are transferred by an order made under section 2 shall be subject in relation to the exercise of those functions to any Welsh language requirements applicable to the body or office from which functions are transferred.
(3) A new body, the Welsh Ministers, the Environment Agency, the Forestry Commissioners, the Countryside Council for Wales (“CCW”), or any other person exercising public functions in relation to Wales, to whom any function is transferred by an order made under section 13 shall be subject in relation to the exercise of that function to any Welsh language requirements applicable to the CCW, the Environment Agency, the Forestry Commission, the Welsh Ministers or any person exercising any Welsh devolved function relating to the environment.
(4) A body specified in section 15(2) or section 15(3) which makes arrangements under section 15(1)(a) to exercise a function of another such body shall be subject in relation to the exercise of that function to any Welsh language requirements applicable to that other body.
(5) This section does not prevent the amendment of Welsh language requirements by a further language scheme, Welsh language scheme or standards.
(6) In this section—
“language scheme” means a language scheme prepared in accordance with section 5 of the Welsh Language Act 1993;
“standards” means standards specified by regulations made by the Ministers or the Welsh Ministers under section 26(1) of the Welsh Language (Wales) Measure 2010;
“Welsh language requirements” means requirements arising under any language scheme, Welsh language scheme or standards which is or are in force on the coming into force of any order or arrangements to which this section applies; and
“Welsh language scheme” means a Welsh language scheme adopted under section 21 of the Welsh Language Act 1993.”
Lord Wigley
My Lords, in moving this amendment I shall speak also to Amendment 166BZB. I certainly shall not unduly detain the Committee at this late hour, and we touched on certain aspects relating to Welsh speakers in the context of S4C earlier today—it seems very much earlier by now. Ministers will be aware that public bodies in Wales have Welsh language responsibilities under the Welsh Language Act 1993. This is now in the process of being replaced by new legislation passed by the National Assembly for Wales last year. The question that arises in the context of the Public Bodies Bill is that of ensuring continuity, clarity, consistency and the safeguarding of Welsh language rights when bodies operating in Wales may be merged with other bodies which do not necessarily currently have either a statutory or possibly a voluntary language plan.
These new clauses address two aspects of this. Amendment 166BZA provides for the continuity of language requirement when functions transfer from one body to another under this Act. Amendment 166BZB places a responsibility on relevant Ministers, before making an order under this legislation in relation to a public body that provides services to the public in Wales, to undertake an assessment of the implications of change on the use of the Welsh language in the provision of those services. Consultation for such assessment could be done either by the Minister here or by Ministers of the Welsh Government, as might be appropriate.
I would therefore ask the Minister either to accept these new clauses, to consider before the Report stage how to deal with the issue, or to give me an assurance that somehow these matters have already been looked after in a way that neither I nor the Welsh Language Board, which helped me with these amendments, are aware of so far. I beg to move.
Baroness Royall of Blaisdon
My Lords, we support the amendments because they would safeguard and promote the Welsh language. They are fundamental to the protection of the Welsh language in Wales and to good governance there. We hope that the Minister will be able to take them away and consider them before Report.
Baroness Rawlings
My Lords, we return to Wales. At this late hour, I am sure that noble Lords will appreciate my being brief, but this does not imply that we do not take the two amendments seriously.
The Government sympathise with the desire of the noble Lord, Lord Wigley, to make certain that support for the Welsh language, which is undertaken by many bodies providing public services in Wales, is not lost when roles are transferred from one person to another. This is not our desire and we are committed to making certain that this work is not undermined. However, where we differ with the noble Lord is on whether the amendments represent the best means of achieving this aim.
I shall first consider the noble Lord’s Amendment 166BZB, on Welsh language assessments. I understand that there are 18 bodies whose roles could be transferred under the Bill which currently have Welsh language schemes and services. If the roles of those bodies are transferred elsewhere, the Government will consider the options for maintaining these services. Ministers will conduct impact assessments when proposing to make orders under the Bill. The Bill will require them to consult a wide range of interested parties.
I turn to Amendment 166BZA, on the application of Welsh language requirements. Welsh Ministers already have the power to bring bodies within the scope of the Welsh language legislation. The precise duties which are imposed are then a matter for negotiation with the Welsh Language Board. In the Government’s view, these powers provide a more appropriate way of addressing this issue than the noble Lord’s amendment. Indeed, the amendment could even reduce Welsh language provision. We consider it more appropriate to assess what requirements are needed in the context of each specific transfer, using the powers available in Welsh language legislation and in the Bill.
I thank the noble Lord for bringing up this matter. Consultation is going on. I hope, therefore, that he will not wish to press his amendments.
Lord Wigley
I am very grateful for that response. On the second of the two proposed new clauses, that an assurance has been given that assessments of the impact of any changes on the Welsh language will be possible in many ways meets the point that I make in that clause.
On the first of the proposed new clauses, the Minister’s comments with regard to the powers of Ministers in the National Assembly for Wales reassure me that those powers can be used fully to ensure that there is no loss of Welsh language requirements. That was my interpretation of what the Minister said. If there are any aspects of the ongoing discussions to which she referred that bring out questions that have not been covered, perhaps there will be an opportunity to tie up those matters fully on Report. On the basis of the assurances that have been given tonight, I beg leave to withdraw the amendment.
Lord Lester of Herne Hill
“Restrictions on Ministerial powers
(1) The modification or transfer of a function by an order under the preceding provisions of this Act must not prevent it (to the extent that it continues to be exercisable) from being exercised independently of Ministers in any of the following cases.
(2) Those cases are—
(a) where the function is a judicial function (whether or not exercised by a court or tribunal); (b) where the function’s exercise involves enforcement activities in relation to obligations imposed on a Minister;(c) where the function’s exercise otherwise constitutes the exercise of oversight or scrutiny of the actions of a Minister.(3) Provision made by an order under the preceding provisions of this Act must be proportionate to the reasons for the order.
(4) In this section “enforcement activities” means—
(a) the bringing of legal proceedings or the provision of assistance with the bringing of legal proceedings;(b) the carrying out of an investigation with a view to bringing legal proceedings or to providing such assistance; or(c) the taking of steps preparatory to any of those things.”
Lord Lester of Herne Hill
I believe that Charles James Fox became known as the dinner bell because when he got up to speak everyone had dinner. This is the second time this week that the House has had the misfortune to hear me after midnight, so I hope that I do not become known as the nightcap as a result. However, it reminds me of the barrister who once asked an Irish judge for time and the judge replied, “Thou hast exhausted time and trespass now upon eternity”.
This amendment is tabled in substitution for Amendment 175. It has support from all sides of the House. I am extremely grateful to the Bill team, the Government’s senior legal advisers and my noble and learned friend Lord Mackay of Clashfern, who have enabled an amendment to be produced to give effect in clear terms to Amendment 175. I am also grateful to the noble Lord, Lord Pannick, who managed a successful revolt on the first day in Committee to obtain the House’s approval of our paving amendment. I express thanks to the noble Lord, Lord Hunt of Kings Heath, and the Minister, without whom what is now proposed would not have come to pass before the Bill left the Committee. Three scrutiny committees have also played a vital role: the Constitution Committee, the Delegated Powers and Regulatory Reform Committee and the Joint Committee on Human Rights, of which I am a member. Ministerial clearance of the amendment came too late to be able to advise those committees before the amendment was tabled yesterday late afternoon.
Lord Mackay of Clashfern
I have been privileged to put my name to the amendment and of course I support it wholeheartedly. It makes clear the legal framework within which the ministerial powers under the Bill may be exercised. I thank my right honourable friend Francis Maude for seeing me on this matter and I assure the noble Baroness, Lady Royall, that the consultation right across Whitehall was necessary. That is perhaps one of the reasons why we were not quite as early with this as some of us might have liked. I thank members of the Bill team very much for the patience that they exhibited in listening to me preaching to them about this, in a manner to which your Lordships are accustomed.
Lord Hunt of Kings Heath
My Lords, I say to the noble Lord, Lord Lester, that if he continues to table amendments of this quality he will be very welcome to move them after midnight, day after day. I, too, thank him, as this is an important amendment. It provides considerable reassurance to noble Lords about how the Bill will operate when enacted. I am grateful to him; it goes right back to that first vote on day one in Committee, which seems a little time ago. I also thank the noble and learned Lord, Lord Mackay, for his great assistance, and the Bill team and the Minister. This is a very positive outcome.
Lord Norton of Louth
I add my thanks to the noble Lord, Lord Lester, and all those involved in generating the amendment. I have previously made the point that, in terms of parliamentary scrutiny, the work on the Bill has been an example of best practice. The amendment is a particularly fine example of that in terms of the consultation that has taken place to produce an amendment for which there is agreement throughout the House. It is an excellent addition to the Bill.
Lord Taylor of Holbeach
My Lords, I am delighted that the amendment has received such a welcome. As noble Lords will know, my name is on it, too. I have a note here that thanks an awful lot of people, quite correctly, including my noble friend Lord Lester of Herne Hill, for his persistence and commitment to get this right, and my noble and learned friend Lord Mackay of Clashfern, whose advice has been invaluable to us all. I am grateful for the support that the noble Lord, Lord Pannick, has also given to this and to noble Lords opposite for their support. We have all wanted to see the amendment included. My speaking note contains no mention at all of the people who probably had to work hardest of all on the amendment—the Bill team—in trying to get the wording right. I am grateful to the noble Lord, Lord Hunt, for mentioning that and I thank members of the team for their commitment to get this right.
As noble Lords have said, the amendment will, I hope, provide substantial reassurance to the Committee and the wider public that the Bill will be used to bring forward only necessary and proportionate reforms that will maintain the independence of those public functions that clearly need to operate at arm’s length from government. I am delighted that it has been added to the Bill and I trust that it will secure the support of all sides of the House.
Lord Henley
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)
My Lords, it is with some delight and some relief that I move Amendment 175C and in doing so speak to Amendments 175D, 175E and 182. The relief for all those in the Committee at this stage is because this is the last substantive group in the entire stage.
Before I finish, I offer an apology to the noble Lord, Lord Wigley, in that I promised him that we would end with a Welsh amendment. I am afraid that we are not doing that—it was going to come earlier but it was not moved.
I informed the Committee last week that the Government had decided to remove the forestry clauses from the Bill, and this we have now done. This set of amendments would remove a series of references to the Forestry Commission from Clauses 23 and 24. It is a tidying up exercise. I beg to move.
Baroness Royall of Blaisdon
My Lords, I warmly welcome these amendments and the removal of the final references to the Forestry Commission. We have been told on numerous occasions that the campaign against the sale of our forests and woodlands was inflammatory and misguided, but the forestry clauses were, I believe, a testament to the fact that the Government wished to enable the sale of our woodlands and forests. The Minister responsible made that clear on a number of occasions. I am glad that the Bill is now being amended. I know that hundreds of people up and down the country will feel mightily relieved—the very people who welcomed the independent panel looking into the future of forestry. We look forward to their deliberations in due course.
Lord Taylor of Holbeach
Lord Taylor of Holbeach
Lord Taylor of Holbeach
“(2) In this Act, references to the “30-day”, “40-day” and “60-day” periods in relation to any draft order are to the periods of 30, 40 and 60 days beginning with the day on which the draft order was laid before Parliament.
(3) For the purposes of subsection (2) no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days.”
Lord Taylor of Holbeach