Westminster Hall

Wednesday 9th March 2011 Westminster Hall

Wednesday 9 March 2011

[Philip Davies in the Chair]

Disability Living Allowance

Wednesday 9th March 2011 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Bill Wiggin.)

09:30

[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.

09:53

[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.

[David Simpson]

Will the hon. Gentleman give way?

[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.

10:03

[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.

10:08

[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?

[Hywel Williams]

No.

[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.

10:17

[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.

10:25

[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.

10:33

[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.

10:39

[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.

[Jim Shannon]

The hon. Lady is always polite.

[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.

10:49

[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?

[Maria Miller]

In terms of the entitlement.

[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.

[Margaret Curran]

Will the Minister give way?

[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—

[Philip Davies (in the Chair)]

Order. We must move on to the next debate.

East London Tech City

Wednesday 9th March 2011 Westminster Hall

11:00

[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.

11:10

[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.

[Ms Abbott]

Does the Minister have an opening date for the Google innovation space? How many staff members will there be, and what sort of investment will be made in that space?

[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.

[Ms Abbott]

Will the Minister give way?

[Mr Willetts]

Yes, especially as she asks so plaintively.

[Ms Abbott]

I am touched by the Minister’s confidence in these declarations by the big moguls. However, we in the east end know that talk is cheap. The sooner that Ministers can come to us with dates, facts and figures, the happier we will be.

[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.

11:24

Sitting suspended.

Water and Sewerage Charges (South West Water)

Wednesday 9th March 2011 Westminster Hall

[Mr David Amess in the Chair]

14:30

[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.

14:48

[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.

14:52

[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.

[Alison Seabeck]

Not in sewage.

[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.

15:10

[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.

15:16

[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.

15:27

[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.

15:50

Sitting suspended.

Animal Welfare

Wednesday 9th March 2011 Westminster Hall

15:57

[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.

16:14

[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)

Wednesday 9th March 2011 Westminster Hall

16:29

[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.

16:48

[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—

[Ian Lavery]

Will the Minister give way?

[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.

[Mr Andrew Smith]

Will the Minister give way?

[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.

[Jim Sheridan]

indicated assent.

[Steve Webb]

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.

[Jim Sheridan]

rose—

[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.

16:59

Sitting adjourned without Question put (Standing Order No. 10(11)).