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Stuart Andrew (Pudsey) (Con)
1. What recent discussions she has had with (a) ministerial colleagues and (b) the Welsh Assembly Government on big society initiatives in Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend the Secretary of State for Wales and I have discussed a wide range of issues concerning the big society in relation to Wales with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), who has responsibility for civil society, and Carl Sargeant, the Minister for Social Justice and Local Government in the Welsh Assembly Government.
Stuart Andrew
I am grateful to the Minister for that reply. Will he comment on the important role that local authorities in Wales can play in encouraging the big society?
Mr Jones
Local authorities can do much to help roll out the big society. Smart and intelligent councils are already doing so by recognising that big society initiatives can complement services that they provide and vice versa. I recently visited Pembrokeshire, where many good neighbour schemes have been set up to provide help and support for individuals who would otherwise be isolated. Pembrokeshire county council has appointed a scheme co-ordinator who offers advice to groups that want to establish such schemes.
Albert Owen (Ynys Môn) (Lab)
On Saturday, I saw the big society in all its glory in Anglesey with the opening of the scouts and guides hall. That project brought together the public and private sectors and volunteers, but public funding was key. Will the Minister ensure that funding is given to the Welsh Assembly so that such schemes can carry on? Next Tuesday, he will be able to see the big society in all its glory on Anglesey day here in the House of Commons.
Mr Jones
As I said, I have held discussions with Carl Sargeant, who is the Minister responsible for such matters in the Welsh Assembly Government. We are taking that work forward. I am sure that the hon. Gentleman will be pleased to hear that the big society bank will be available for the whole of the United Kingdom. There is no reason why Welsh groups should not apply to it for funding.
Jonathan Evans (Cardiff North) (Con)
My hon. Friend will be aware that many people in Wales want to take advantage of the opportunities that the Government are offering, but that they may need mentoring. Will he appoint somebody in his Department, perhaps by seconding a civil servant, to assist people who have ideas to take forward the big society?
Hywel Williams (Arfon) (PC)
The WCVA has reported that half the 750 charities in Wales state that they will see a drop in their income next year. Is not investment from the big society bank just a matter of jam tomorrow?
Mr Jones
There is no doubt that we are going through difficult economic times, as the hon. Gentleman knows. Unfortunately, third sector organisations are affected by that. I believe that the £200 million that will be available through the big society bank will be of immense benefit to third sector organisations in Wales.
Owen Smith (Pontypridd) (Lab)
The Welsh people are a shrewd lot, and they have quickly seen through the big society scam. Since £1.8 billion was cut from the Welsh Assembly budget, leaving councils with a shortfall of many millions of pounds, charities such as People First, which works with people with learning disabilities in the Rhondda Cynon Taff area, have been on the verge of closure. That is throwing more people on to the record unemployment numbers in Wales. As Dawn Price of People First put it to me:
“How can we take part in a Big Society when our funding is being so cruelly cut?”
Mr Jones
I realise that some Opposition Members have huge difficulty with the proposition that people should be allowed to organise their own lives in the way that best suits them, rather than such matters being delivered top-down by big Government. However, there are signs that it is slowly dawning on the Leader of the Opposition at least that the big society may be rather a good idea. When he launched Labour’s policy review recently, in which I think the right hon. Member for Neath (Mr Hain) played a part, he said:
“We have got to take that term ‘big society’ back off David Cameron”.
Jonathan Lord (Woking) (Con)
2. What assessment she has made of the outcome of the referendum on devolving primary law-making powers to the National Assembly for Wales.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
4. What assessment she has made of the outcome of the referendum on devolving primary law-making powers to the National Assembly for Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
I welcome the clear yes result announced on 4 March. The vote in favour of primary law-making powers for the Assembly will enable the Welsh Assembly Government to get on with the job of delivering better public services in Wales.
Jonathan Lord
I thank the Secretary of State. I note that there are now 20 devolved areas of policy for the Welsh Assembly and that Scotland has had similar powers for many years. Has she had conversations with other Ministers about the commission that we have been promised, or preferably legislation, so that only English MPs can vote on English laws that affect English residents, and thereby maintain the parity—
Mr Speaker
Order. We are grateful to the hon. Gentleman, but we must move on.
Mrs Gillan
I think my hon. Friend is referring to what is known as the West Lothian question, or as we sometimes call it in Wales, the West Clwydian question. I have had words with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), and as he informed the House on 15 December, the Government will make an announcement this year on plans to establish a commission to consider the West Lothian question.
Simon Hart
Can the Secretary of State provide a timetable for the introduction of a Calman-style inquiry, as per the coalition agreement, and will she undertake a full consultation on the matter?
Mrs Gillan
I am grateful to my hon. Friend. When we established the coalition Government, we committed in the coalition agreement to establishing a Calman-like process for the Assembly. I will announce further details on that in the coming months.
Paul Murphy (Torfaen) (Lab)
The Secretary of State has just said that there will be a commission on the so-called West Lothian question. Does she personally believe that Welsh Members of Parliament should have fewer voting rights in this place, particularly bearing in mind that her Government have cut the number of Welsh MPs by 25%?
Mrs Gillan
As the right hon. Gentleman knows, it is important that every vote is of an equal weight in this country. I am sure he would not want me to revisit arguments that have been well made and exhausted in the House.
When the commission is established, it will need to take into account the Government’s proposals for House of Lords reform, the changes to the way in which this House does business and the changes to the devolution settlement in considering potential solutions to the West Lothian question.
Mr Peter Hain (Neath) (Lab)
Will the Secretary of State join me in welcoming the resounding yes vote in the referendum on 3 March? As she knows, I legislated on behalf of a Labour Government for primary powers for the Assembly in 2006, and we are delighted at this historic day for Wales. I hope she is too.
Mrs Gillan
The shadow Secretary of State must have been asleep when I answered the question in the first place and said that I welcomed the yes vote. I said that specifically during the passage of the Government of Wales Act 2006, when I sat in his position. I am also delighted that, despite prevarication, it was a Conservative-led coalition Government who delivered that referendum for the people of Wales.
David T. C. Davies (Monmouth) (Con)
Does the Secretary of State accept that given the nature of the yes campaign, it is clear that the vast majority of people in Wales wish to remain part of the Union? As a proud Welshman and a proud Unionist, I believe as strongly as other Members that something must be done about the West Lothian question, to stop Welsh MPs voting on matters for which they have no responsibility.
Mrs Gillan
I, too, am a devoted Unionist, but I recognise that the yes vote does not mean that the Welsh devolution settlement will stand still. It is a living object, which is why we are establishing a Calman-like process to examine the future of the Welsh Assembly and how we are governed across the UK, specifically in Wales.
Andrew Stephenson (Pendle) (Con)
3. What recent discussions she has had with ministerial colleagues on expenditure on broadband projects in Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend the Secretary of State and I have regular meetings with ministerial colleagues on issues that affect Wales, including broadband projects. I am sure my hon. Friend will welcome, as I do, the announcement by my right hon. Friend the Chancellor of the Exchequer on 10 February that we are providing £10 million of funding to support the extension of superfast broadband to Pwllheli and the surrounding areas.
Andrew Stephenson
I thank my right hon. Friend. Does she agree that due to the remote and rural nature of many parts of Wales—like many parts of my constituency—it is vital for businesses in rural communities to have effective broadband?
Mr Jones
Yes, I agree that broadband is extremely important for rural communities. Indeed, it is arguably more important in the countryside than in our towns and cities. It enables people to run businesses from rural locations with no competitive disadvantage, and farmers in particular urgently need broadband to file their returns.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
Although I appreciate and welcome the announcement of the broadband pilot, bizarrely made at Wrexham and not in the House, I represent the Pwllheli area among other parts of west Wales and I have no doubt that it was to due to pressure from the Deputy First Minister. Can the Minister tell me precisely which areas of my constituency will be included in the pilot and which will not?
Mr Jones
The right hon. Gentleman gives the pilot a rather strange welcome—a rather curmudgeonly one, I would suggest. As he knows, the rural area around Pwllheli is intended to be included in the pilot, from which we hope to gain important knowledge on the further roll-out of broadband across Wales.
Mr Llwyd
The economic renewal plan in Wales set out to provide high-speed links to all businesses by 2015 and all houses by 2020, and as the Minister knows, under the “Wi-fi Wales” initiative, there are plans to enable free wireless connection to all publicly owned buildings in Wales. What support will the Minister and the Secretary of State give to those plans? There is currently huge criticism of the Wales Office, but if they get stuck in on that, they might silence some of their critics.
Mr Jones
It is fairly clear that the right hon. Gentleman does not keep in touch with his colleagues in the Assembly, because very recently, my right hon. Friend the Secretary of State and I hosted a trilateral meeting between the Deputy First Minister and the Minister with responsibility for broadband via video link from the Wales Office in Gwydyr house. We are fully engaged in this process, and it is quite wrong for the right hon. Gentleman to suggest that we are not.
Roger Williams (Brecon and Radnorshire) (LD)
The Welsh Assembly Government have offered a grant to people in not-spots throughout Wales. Can communities get together to use such facilities to provide a community solution, rather than individuals finding their own solutions?
Karen Lumley (Redditch) (Con)
5. What recent discussions she has had with ministerial colleagues on measures to attract inward investment to Wales.
John Howell (Henley) (Con)
7. What recent discussions she has had with ministerial colleagues on measures to attract inward investment to Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
Clearly, with so many of our companies in Wales having strong links with Japan, and given that some of our inward investment comes from there, I am sure the whole House would like to join me on behalf of Wales in sending our deepest condolences for the appalling tragedy.
I have regular discussions with ministerial colleagues on measures to attract inward investment to Wales. Last month I hosted a trilateral meeting between the First Minister, the Deputy First Minister and the UK Minister responsible for trade and investment to discuss how we can work together to bring much-needed investment to Wales. We will be meeting again shortly.
Karen Lumley
Does the Secretary of State agree that Wales has much to offer business, as the Welsh Affairs Committee heard yesterday from Sir Terry Matthews? Can she also tell us what she is doing to work with the Welsh Assembly to bring inward investment to Wales?
Mrs Gillan
Although it is too early to prejudge the outcome of the Committee’s inquiry on inward investment, a clear message on skills emerged in oral evidence last week. That message was consistent with the conclusions of the earlier cities report. Certainly, I will see how the UK Government can work with the Welsh Assembly Government to encourage more inward investment, because Wales is a great place to do business.
John Howell
In the last couple of weeks, a number of strong foreign trade and investment visits have been made to Wales, particularly from India and the US. Does the Secretary of State agree that those are vital for Wales, and that we should maximise the opportunities that they present?
Mrs Gillan
It is very easy to agree with my hon. Friend on that, because we need to maximise the opportunities that such visits present. Wales’s share of UK inward investment projects halved in the past decade from 6% to 3% and we need to act quickly to reverse that. It is therefore important to work across Government Departments in Whitehall, together with the Welsh Assembly Government, so that we have a cohesive programme for attracting inward investment.
Kevin Brennan (Cardiff West) (Lab)
With unemployment reaching a 17-year high this morning—up to 8.7% in Wales—where is the Secretary of State’s plan for growth?
Mrs Gillan
I am tired of Members talking Wales down. The message that has just gone out from the hon. Gentleman is not a positive one. The unemployment figures were announced this morning. Although I have given them a cautious welcome because the economic inactivity rate continues to fall, I want people to know that we have a willing and able work force and that Wales is open for business. It is about time the hon. Gentleman joined me in talking Wales up.
Geraint Davies (Swansea West) (Lab/Co-op)
It emerged in the Welsh Affairs Committee’s visit to Germany that vital inward investment opportunities were not being taken up by UK Trade & Investment because of the abolition of regional development agencies in England. Does the Secretary of State accept that this may represent a major opportunity for Wales and if so, what is she doing about it?
Mrs Gillan
I had a particularly good meeting with the First Minister, the Deputy First Minister and the Minister responsible for trade. I am keen that we should have some joined-up government, because we have not been taking advantage of all the opportunities that exist. After the Assembly elections we shall have to take that forward with the new Welsh Assembly Government, and I know the current Welsh Assembly Government have been looking at rationalising their offices abroad and having a more comprehensive programme—one that is engaged with UKTI, the Department for Business, Innovation and Skills, the Foreign Office, and the Wales Office. Together, we will have a stronger presence.
David Mowat (Warrington South) (Con)
6. What recent representations she has received on the mechanism for calculating the block grant settlement for the Welsh Assembly.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend and I receive regular representations in relation to the block grant settlement for the Welsh Assembly.
David Mowat
I thank the Minister for that reply. In 2009, the Holtham commission concluded that the Barnett formula was no longer fit for purpose and was in need of urgent reform. Does the Minister agree that the Barnett formula should be replaced with a mechanism based on need?
Mr Jones
It is fair to say that everyone recognises that the Barnett formula is nearing the end of its life. However, it is necessary to stabilise the public finances before we consider the formula. In the wake of the vote in the Welsh referendum, the coalition will establish a Calman-like process for the funding of the Welsh Assembly.
Ian Lucas (Wrexham) (Lab)
Earlier the Secretary of State said that the devolution settlement was a moving object. Will the commission to which the hon. Gentleman has just referred consider whether the Welsh Assembly should be given tax-varying powers?
Mr Speaker
Order. There are far too many private conversations taking place in the Chamber and they are very noisy. It is most discourteous. Let us have a bit of order.
Mr Mark Williams (Ceredigion) (LD)
8. What assessment she has made of the effect on the Welsh economy of recent trends in the cost of fuel.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
Over the last few months I have made an assessment of the impact of the recession on rural areas, including the effects of rising fuel prices on businesses and families in Wales. We recognise that businesses, individuals and families are struggling with the rising cost of fuel, and we are looking at how we can help.
Mr Williams
Following on from the Minister’s assessment, what representations has he made on extending the Government’s fuel duty rebate for the islands of Scotland and Cornwall to large tracts of rural Wales, where sparsity, economic dependence and inadequate public transport make this a pressing issue?
Mr David Hanson (Delyn) (Lab)
In April last year the price of a litre of petrol in Flintshire was 116p. Can the Minister tell me what it is today and how much of the increase is due to the VAT that he imposed?
Mr Peter Hain (Neath) (Lab)
But is the Minister aware that the dramatic rise in petrol and diesel prices is crippling motorists in Wales, especially those on low or middle incomes? In many Welsh communities people have absolutely no choice but to drive, and with wages frozen or falling, inflation high and today unemployment in Wales surging up, they are getting desperate. Will the Government reverse the VAT rise on fuel? It is what business wants, what motorists are crying out for, and what Wales and the whole of Britain needs.
Mr Jones
Given that I come from a rural constituency, I am acutely aware of the points that the right hon. Gentleman makes. I would remind him that the escalator that is due to kick in next month is Labour’s escalator, and this is a matter that my right hon. Friend the Chancellor will be looking at.
Neil Carmichael (Stroud) (Con)
9. What recent discussions she has had with the Welsh Assembly Government on upland farming in Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
I have regular discussions with the Welsh Assembly Government on a range of issues affecting Wales, including the farming industry. My right hon. Friend the Secretary of State and I recognise how important the rural economy is to Wales and take a close interest in matters affecting it, including farming on the Welsh uplands.
Neil Carmichael
Does the Minister agree that the Welsh Assembly should work well with the Government to ensure that we have a clear strategy for upland and dairy farming, and that that objective would be more easily met through the introduction of an adjudicator to examine abuses of power in the retail sector?
Mr Jones
Yes, indeed; I agree that the Welsh Assembly Government should work closely with the Government here in Westminster. My hon. Friend will be aware that it is the Government’s intention to establish a groceries code adjudicator to oversee disputes between retailers and suppliers.
Nick Smith (Blaenau Gwent) (Lab)
Getting animals to market is important for upland farmers in Blaenau Gwent. Does the Minister agree that east-west road improvements are vital for boosting the heads of the valleys economy? Will he update us on the road improvements between Brynmawr and Abergavenny, and tell us when they will start?
Graham Evans (Weaver Vale) (Con)
10. What recent discussions she has had with ministerial colleagues and Ministers in the Welsh Assembly Government on energy policy in Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
The Under-Secretary of State for Wales and I have regular discussions with ministerial colleagues and Welsh Assembly Government Ministers on a range of issues, including energy policy. Last week, I was pleased to call the first Welsh Grand Committee debate on energy since 2008, which gave right hon. and hon. Members a chance to debate in detail that issue, which is of vital importance to Wales.
Graham Evans
As a result of the last Government’s policy of burying their head in the sand when it came to energy, we are facing the real prospect of power cuts. Does the Secretary of State agree that building new power plants in Wales is essential for energy security, industry and job creation?
Mrs Gillan
Energy is certainly a key priority of this Government and we are working hard to ensure that the UK, including Wales, has an energy infrastructure that is fit for the 21st century.
Paul Flynn (Newport West) (Lab)
Does the Secretary of State agree that the exciting plans of the Welsh Assembly Government to generate enough electricity for every home in Wales from non-barrage marine sources offers Wales an energy future, like that of Ireland and Scotland, that will be nuclear free and renewables rich?
Mrs Gillan
I am not sure that I caught the drift of the hon. Gentleman’s question, but I have always welcomed the work that is being done to enable Wylfa A to continue to generate low-carbon electricity for a further two years until 2012. I was also delighted that Wylfa was chosen as the site for a potential new station in the future.
Jenny Willott (Cardiff Central) (LD)
This Government have put the environment at the heart of their energy policy. Last week, I attended the launch of Norman Electrical Ltd, a small business in my constituency that is working with households and businesses to invest in renewable technologies. Will the Secretary of State join me in welcoming such start-ups and do what she can, with colleagues, to help Wales to become central to the renewable technology sector in the UK?
Mrs Gillan
Yes, I join my hon. Friend in congratulating the company in her constituency. If all 26 million households in the United Kingdom take up our green deal over the next 20 years, employment in that sector could rise from its present level of 27,000 to something approaching 250,000, working all around the UK to make our housing stock fit for a low-carbon world.
Jessica Morden (Newport East) (Lab)
11. What recent estimate she has made of the number of jobs to be lost in the public sector in Wales as a result of the reductions in public expenditure in 2011-12.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
A forecast of public sector job losses was published last year by the Office for Budgetary Responsibility. This was based on UK-wide macro-economic data, and no regional breakdown is available. My right hon. Friend the Secretary of State and I remain committed to working with ministerial colleagues to minimise the impact of the reductions in public expenditure that we are having to make on Welsh workers and their families.
Jessica Morden
The Government’s impact assessment relating to the closure of Newport passport office includes the statement that
“we will also pay £3m redundancy…which may create a short term boost in trade for the local economy.”
Is this the Government’s new alternative growth strategy?
Mr Philip Hollobone (Kettering) (Con)
12. What recent discussions she has had with the Secretary of State for Transport on electrification of the rail network in south Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
The statement made on St David’s Day by my right hon. Friend the Secretary of State for Transport was excellent news for all parts of south and west Wales. This £1 billion investment will deliver all the benefits and improvements of an electrified railway to Wales, with faster acceleration, greater comfort and cleaner and greener travel. The decision to extend electrification to south Wales recognises that improved rail infrastructure and lower journey times are vital components for delivering a successful economic recovery in Wales.
Mr Hollobone
What estimate has the Secretary of State made of the number of new jobs that will be created in Wales as a result of the electrification programme?
Mrs Gillan
I hope that the electrification of the rail line, which was launched and announced with full funding by this Government, will bring the much-needed inward investment into Wales, resulting in the many jobs that we need.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
Q1. If he will list his official engagements for Wednesday 16 March.
The Prime Minister (Mr David Cameron)
I am sure the whole House will wish to join me in paying tribute to Lance Corporal Stephen McKee, 1st Battalion the Royal Irish Regiment, who died last Wednesday. He was a highly respected, selfless and committed soldier who will be sorely missed by all those who served with him. Our deepest sympathy is with his family and friends.
From September, military repatriations will no longer pass through the town of Wootton Bassett. I know the whole House will wish to join me in paying tribute to the people of Wootton Bassett. Their deeply moving and dignified demonstrations of respect and mourning have shown the deep bond between the public and our armed forces. It is more than 100 years since the title “royal” was conferred on a town. I can today confirm that Her Majesty the Queen has agreed to confer the title “royal” on the town of Wootton Bassett as an enduring symbol of the nation’s admiration and gratitude to the people of that town. The town will become Royal Wootton Bassett later this year, in a move that I believe will be welcomed right across our country.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Gregg McClymont
May I associate Labour Members, and those of all parties, with the Prime Minister’s condolences to the family and all who knew that brave serviceman?
The previous Government put in place the overseas victims terrorism compensation scheme. When will British victims of overseas terrorism receive compensation?
The Prime Minister
The hon. Gentleman makes an important point. This is something that we are looking at, reviewing and want to get right. I remember the debates that took place at the time of the Bali bomb and recall that hon. Members on all sides of the House spoke about it. We will bring forward our proposals shortly.
Sir Malcolm Rifkind (Kensington) (Con)
The Prime Minister is to be commended for his leadership in trying to achieve a no-fly zone but, sadly, it is unlikely that it can be implemented in time to prevent a final onslaught in Libya. Does the Prime Minister agree that the best response to this urgent crisis would be for the international community, with the support of the Arab League, to urge the Egyptian Government to send a brigade of its army as a peacekeeping force into eastern Libya—to protect their own citizens, to stop Gaddafi in his tracks and to prevent a humanitarian disaster in Benghazi?
The Prime Minister
I have great respect for my right hon. and learned Friend, who speaks with great expertise on these issues. The points he made on Monday about the arms embargo were extremely important. We will, of course, look at any suggestion, but the problem at the moment is that there is no peace to keep. What I can report is that yesterday evening, after extensive discussion with Lebanon, France, the US and others, the UK tabled a new draft Security Council resolution in the UN. It includes a no-fly zone, banning all flights except humanitarian ones, an extension of the travel ban and the asset freeze and tougher enforcement of the arms embargo, particularly on the Libyan Government. Of course there are a wide range of views in the UN; I urge all to take the right steps so that we show some leadership on this issue and make sure that we can get rid of this regime.
Edward Miliband (Doncaster North) (Lab)
Let me begin by echoing the Prime Minister’s tribute to Lance Corporal Stephen McKee of 1st Battalion The Royal Irish Regiment. He showed exceptional courage and bravery, and our thoughts are with his family and friends. Let me also echo the Prime Minister’s remarks about the community of Wootton Bassett, and the very fitting award of the “royal” designation. It is a tribute, and a sign of the way in which that community has responded to our armed forces.
Following the Liberal Democrat conference at the weekend, is the Prime Minister planning any new amendments to his Health and Social Care Bill?
The Prime Minister
First of all, let us be clear about the fact that the reforms are about cutting bureaucracy and improving patient care. They were drawn up by us as a coalition to improve the NHS. Let me answer the right hon. Gentleman’s question very directly. We have already made some real strengthenings to the Bill. First, we have ruled out price competition in the NHS. Secondly, there is the issue raised by the Liberal Democrats, with which I completely agree: we must avoid cherry-picking by the private sector in the NHS. The right hon. Gentleman might care to reflect that under the Labour Government, the private sector was given £250 million for operations that were never carried out. Perhaps he would like to apologise for that cherry-picking, and support our anti-cherry-picking amendment.
Edward Miliband
Let us give the Prime Minister another go at answering the question that I asked. The question that I asked was this. Following the Liberal Democrat conference at the weekend, are any further amendments to be tabled to the Health and Social Care Bill—yes or no?
The Prime Minister
The problem with pre-scripted questions is that they do not give you the opportunity to respond to the first answer. I gave a very clear answer about price competition and about cherry-picking.
What I would say to the right hon. Gentleman is that he should not set his face against reform in the NHS. The fact is that we support extra money going into the NHS—money that the right hon. Gentleman does not support—but we recognise that with an ageing population, more expensive treatment and new drugs coming on stream, we need to reform the NHS, and that reform must accompany the extra money that is being provided. Why is the right hon. Gentleman setting his face against that?
Edward Miliband
The Prime Minister really must get away from these pre-scripted answers. [Laughter.] I will tell him why no one trusts what he says about the NHS. What used he to say about NHS reorganisations?
“There will be no more of those pointless re-organisations that aim for change but instead bring chaos…it’s profoundly disruptive and demoralising.”
I agree with what the Prime Minister used to say. Why doesn’t he?
The Prime Minister
We are not reorganising the bureaucracy of the NHS. [Interruption.] We are abolishing the bureaucracy of the NHS. Perhaps the right hon. Gentleman would like to listen to what the adviser to the Labour Government said about our NHS reforms. He said:
“most of these reforms are very much where”
the last Government
“and indeed I, would like to have gone if we had not encountered some of the road blocks that one did.”
We know that the roadblock was the last leader of the Labour party. What a pity it is that the current leader of the Labour party is “son of roadblock”.
Edward Miliband
I am proud of our record on the NHS. We have 100 new hospitals, more doctors and nurses than ever before, the shortest waiting times in history, and the highest level of patient satisfaction ever. But the Prime Minister is wrecking our record on the NHS, and what is his answer? The Bill creates a free-market free-for-all and threatens existing NHS services. Let me ask the Prime Minister a very specific question. Will he confirm that this Bill makes health care subject to European Union competition law, for the first time in history?
The Prime Minister
I have to say that the right hon. Gentleman is beginning to sound like the last leader of the Labour party. If he will not listen to the adviser to the Labour Government, perhaps he will listen to his own health spokesman, who said this:
“"No-one in the House of Commons knows more about”—[Interruption.]
Mr Speaker
Order. I apologise for interrupting the Prime Minister, but the answers from the Prime Minister must be heard, and that is all there is to it.
The Prime Minister
Thank you, Mr Speaker. If I can take the trouble to read out the Opposition health spokesman’s speeches, the Opposition should at least have the decency to listen to them.
The Opposition health spokesman said this:
“No-one in the House of Commons knows more about the NHS than Andrew Lansley—except perhaps Stephen Dorrell. But Andrew Lansley spent six years in Opposition as shadow health secretary. No-one has visited more of the NHS. No-one has talked to more people…in the NHS.”
He went on to say:
“these plans are consistent, coherent and comprehensive. I would expect nothing less from Andrew Lansley.”
Edward Miliband
Talk about pre-scripted answers again! Why does the Prime Minister not answer the question? Does he even know whether the health service will now be subject to EU competition law? It will be. Let us look at the Health and Social Care Bill: chapter 2, “Competition”; clause 60, “Functions under the Competition Act 1998”; clause 66, “Reviews by the Competition Commission”; clause 68, “Co-operation with the Office of Fair Trading”. Can the Prime Minister explain to the British people what that has got to do with health care?
The Prime Minister
The Opposition are the party that rigged the system so there was cherry-picking by the NHS. The point I would make is this: at the last election Opposition Members all stood on a manifesto that said—[Interruption.] I am answering the question. This is what the Opposition said in their manifesto:
“Patients requiring elective care will have the right, in law, to choose from any provider who meets NHS standards of quality”.
They were in favour of competition in their manifesto. All that has changed is that they are just jumping on every bandwagon, supporting every union, blocking every reform and opposing the extra money being put into the NHS.
Edward Miliband
He just does not get it: he is threatening the fabric of the NHS. This Bill shows everything that people do not like about this Government: broken promises, arrogance, incompetence, and ignoring people who know something about the health service. Does this not show once again that, as the British Medical Association said yesterday and as the Liberal Democrats said on Saturday, you can’t trust the Tories on the NHS?
The Prime Minister
The right hon. Gentleman should remember that the BMA opposed foundation hospitals, GP fundholding and longer opening hours for GPs’ surgeries. Is it not typical that, just as he has to back every other trade union, and just as he has no ideas of his own, he just comes here and reads a BMA press release? How utterly feeble.
Mr Speaker
I call Gavin Williamson. [Interruption.] Order. Be quiet, Mr Simpson; such behaviour is bad for your health.
Gavin Williamson (South Staffordshire) (Con)
Q2. Thank you, Mr Speaker. Has the Prime Minister seen the recent comments of the Labour Chairman of the Public Accounts Committee? She said that over the last 10 years productivity in NHS hospitals had been in continuous decline, and that the taxpayer was getting less for each pound spent. Will the Prime Minister assure the House that that trend will be reversed?
The Prime Minister
My hon. Friend makes an excellent point. I would have thought Opposition Members would listen to the Labour-dominated Public Accounts Committee and its Labour leader, who said this:
“Over the last ten years, the productivity of NHS hospitals has been in almost continuous decline”
and
“the health service has improved as a result of this increase in spending. But the taxpayer has been getting less for each pound spent.”
That is what we have to look at, and the fact that we are not getting even the European average on cancer outcomes, and that people here are twice as likely to die from a heart attack as people in France. We have an ageing population and more expensive treatments, and the Opposition’s answer is to do absolutely nothing. How utterly, utterly feeble.
Angus Robertson (Moray) (SNP)
Today’s statistics show that unemployment has gone down in Scotland but has gone up in the rest of the UK. Will the Prime Minister ensure that the trend of lower unemployment in Scotland is not endangered by ridiculously high fuel prices and fuel duty, in what is still the largest oil-producing nation in the European Union?
The Prime Minister
I thank the hon. Gentleman for what he says. Clearly, today’s figures are a very mixed picture. The youth unemployment figures are disappointing, once again, but overall what is interesting is that employment is up and the number of claimants nationwide is actually down: the number of claimants has fallen by 32,000 since last year.
On fuel duty, the hon. Gentleman knows that we have a Budget coming up. I do not want to speculate as to what will be in it, but I know the pain that families and small businesses are feeling from the huge number of fuel duty increases put through by the previous Government. In their last Budget they put through seven fuel duty increases—one for before the election and six for afterwards. What a surprise that Labour did not even have the brass neck to raise that one today.
Nigel Adams (Selby and Ainsty) (Con)
Q3. Hundreds of residents across the Selby district are up in arms at the prospect of having a Traveller site imposed on their villages. Can the Prime Minister tell me what can be done—and when—to remove the top-down Traveller site targets currently imposed on local authorities?
The Prime Minister
I can tell my hon. Friend that we are abolishing the top-down Traveller pitch targets that were imposed on local authorities, and instead local councils will determine the right level of site provision in consultation with their local communities. It is also important that we recognise that one law should apply to everyone in terms of planning policy in this country, Travellers included.
Mr Gordon Marsden (Blackpool South) (Lab)
Q4. Blackpool has an above average number of residential homes for disabled people, including for hundreds of my constituents. May I therefore ask the Prime Minister why he still plans to scrap the disability living allowance mobility component in his Welfare Reform Bill, thus potentially marooning people in those homes? In his reply, will he not compare these people to patients in hospitals? They are in their homes, and they are not ill.
The Prime Minister
I would urge the hon. Gentleman to look very carefully at the Bill and at our plans, because what he will see is that we are putting the question of mobility into the reform of DLA, as we change that benefit and improve it. What we will do is avoid the double counting that has happened in the past, and sort out this issue, as I have said.
Stephen Phillips (Sleaford and North Hykeham) (Con)
Earlier in the week, my right hon. Friend the Prime Minister received representations on the Government’s deficit reduction plans from, on the one hand, the credit rating agencies, and on the other hand, the Leader of the Opposition and others from the previous Administration who got us into this mess. Whose advice is the Prime Minister going to follow?
The Prime Minister
We should listen to the advice of Fitch, the credit rating agency, which this week reconfirmed our triple A credit rating status. I also think we should listen to the OECD, which is here today giving a presentation on the British economy and which strongly supports our deficit reduction plans. The point I would make is this: those people who think that there is some difference between deficit reduction and getting growth at the same time should look at the current interest rates in Ireland, in Greece and in Portugal. In Portugal, market interest rates are 7.5%. What is the genius plan of the Opposition? It is to halve the deficit in four years, which would get us in four years to where Portugal is today. What a brilliant plan!
Mr Jim Cunningham (Coventry South) (Lab)
Q5. Is the Prime Minister aware that Southern Cross, which runs 750 old people’s homes up and down the country, nine of which are in Coventry and Warwickshire, is in great difficulties? Some 31,000 old people could be affected by this, so will he talk to the Qatari parent company to see whether a solution can be found? This is a very serious situation.
The Prime Minister
I thank the hon. Gentleman for raising this point, and I will ask the Health Secretary or one of his Ministers to contact him urgently to discuss this. It is vital that we have good residential care provision in our country and that there is competition and choice in that residential care provision; many private providers provide an excellent service. I shall make sure that one of my Ministers gets in touch with the hon. Gentleman straight away.
Jo Swinson (East Dunbartonshire) (LD)
I welcome the UK’s strong leadership at the UN on Libya. Can the Prime Minister tell me what message he thinks it will send to every tyrannical dictator if, against the urgent desire of the Libyan people, against the wishes of the Arab League and against the UN principle of the responsibility to protect, the international community fails to stop Gaddafi crushing the spirit, the hopes and the lives of the Libyan people?
The Prime Minister
The hon. Lady makes a very important point. Every world leader has said that Gaddafi should go and that his regime is illegitimate. If at the end of this he is left in place, that will send a terrible message—not only to people in Libya, but, as she says, to others across the region who want to see greater democracy and greater openness in their societies. That is why it is right for Britain to play this leading role at the UN and elsewhere. I am not arguing that a no-fly zone is a simple solution to this problem—of course it is not—but I do think that it is one of the steps we need to take to isolate and pressurise that regime, and to say that we stand with people in Libya, who want to have greater democracy and greater freedom, such as we take for granted in this country.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Q6. Does the Prime Minister have any sense of the current mood of bewilderment and betrayal felt by rank and file police officers?
The Prime Minister
I strongly support the British police. They are the finest force in the world. What the police and other public servants know is that we were left a deep Budget deficit that we have to deal with. If we want to keep police officers on the streets, it is necessary to have the pay freeze that we are talking about. It is necessary to look, as Tom Winsor has done, at the allowances that they receive and to work out how we can make sure that we have well-paid, well-motivated police officers doing a great job in our country. Again, if the Labour party is just going to stand against every reform, every change and every improvement and say there is nothing we can do about any one of these problems, not only will it be irrelevant, but the British public will work out that it is irrelevant.
Matthew Hancock (West Suffolk) (Con)
Last night there was a violent double murder in Beck Row in Suffolk, which was the most serious in a series of incidents in the area. Will the Prime Minister assure me, and the residents of west Suffolk, that these crimes will be fully investigated, that their perpetrators will face justice and that everywhere in this country must be subject to the rule of law?
The Prime Minister
I can certainly give my hon. Friend that assurance. This is a very disturbing case, and I am sure that hon. Members will all have heard about it this morning on the news. I think the police will want to do everything they can to get to the bottom of this dreadful crime and to bring the perpetrators to justice.
Lindsay Roy (Glenrothes) (Lab)
Q7. People in all parts of the House appreciate that there is a mammoth crisis in Japan. Our hearts go out to the people there and we all want to do everything we can to help, including the UK. I appreciated the Prime Minister’s comments on Monday, but will he investigate reports that a British rescue team has recently been turned away from Japan?
The Prime Minister
I am grateful for the hon. Gentleman’s question, and I have asked for a briefing about this, so I can tell the House what happened. The official rescue team that was sent from the UK, in good time, arrived in good time and has already started work. There was also an extra, independent rescue team that did not have the correct documentation and encountered some problems, but we are doing everything we can to make sure it can get access.
Stuart Andrew (Pudsey) (Con)
Q8. This week tickets for the London Olympics went on sale. Does my right hon. Friend agree that if the people buying tickets saw an athlete cross the finishing line in first place only to end up on the bronze medal podium, they would demand a refund? Does he agree that that example highlights the absurdity of the alternative vote, and the reason why we need a no vote?
The Prime Minister
That was an ingenious way of weaving the alternative vote into a question in this House. Clearly there is support for the no campaign on both sides of the House, and I am sure that there are also those who support the yes campaign, so we should have this argument out in the country and make arguments like that. My hon. Friend mentioned the Olympics, and I hope that as many people as possible will be able to get to see the Olympics, which will be a fantastic festival of sport in our country.
Nick Smith (Blaenau Gwent) (Lab)
Q9. The Prime Minister stood on Ark Royal last year and said that he wanted a new military covenant written into the law of the land. The Royal British Legion has said that the proposals made by Defence Ministers in the Armed Forces Bill do not honour that pledge. Will the Prime Minister follow the legion’s advice, define the covenant in law and keep the promise he made to our brave armed forces?
The Prime Minister
I am having discussions with the Royal British Legion about this. It seems to me that the right thing to do is to reference the covenant clearly in law, but to have a debate in the House every year about the covenant and make sure we can update and improve it, because it is not a static document. It needs to take into account changing health and education needs, and to make sure that it is the very best it can be for our armed service personnel.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Q15. Does my right hon. Friend support the following statement:“The reason I've never supported AV is that it would have given”—Labour—“an even bigger majority in 1997, and it would have given the Tories an even bigger majority in 1983, and…1987 as well…If…we want reform…to rebuild public trust and confidence in politics…AV doesn’t deliver that.”Is he as surprised as I was to learn that those are the words of the right hon. Member for Exeter (Mr Bradshaw), who is the director of Labour’s Yes to AV campaign?
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Q10. I draw the attention of the House to the interest that I have previously declared. There are very few people outside the House—or, I suspect, inside it—who think that Northern Rock would have got into as much trouble if it had still been a mutual building society. Given the considerable scepticism about whether the coalition really wants to change the culture in the banking industry, will the Prime Minister now insist that his City Minister requests a serious and detailed assessment of the case for remutualisation of Northern Rock?
The Prime Minister
We are prepared to consider all options, and the City Minister will do that. I would make two points. First, we think that mutualisation should go much further than just the banking industry, and are considering options for mutualisation within the public sector to give members of staff in public sector organisations far more control over the organisations that they are in. On banking, it is about looking at not just mutualisation but the whole issue of responsibility and trying to link in again the idea of taking deposits and making loans, as building societies used to.
Robert Halfon (Harlow) (Con)
Q11. Given the Lockerbie bomb and Gaddafi’s continuing murder of his own people, does the Prime Minister think it was wrong for British universities to sign deals with Libya, and wrong for the previous Government to help facilitate some of those contracts? Will he take steps to learn the lessons and ensure that that never happens again?
The Prime Minister
I think that there are lessons to be learned. As I have said, I think that it was right to respond to what Libya did in terms of weapons of mass destruction, but I do not think that the way in which that response was handled was right. Too much credulity was shown, particularly over issues such as that of Abdelbaset al-Megrahi, the man who was convicted of the biggest mass murder in British history. Universities will also want to ask themselves, as they are doing, some pretty searching questions about what they did.
Kelvin Hopkins (Luton North) (Lab)
Q12. The Nobel prize-winning economist Paul Krugman has said that the Government’s economic policy is going in precisely the wrong direction. Does the Prime Minister really wish to be remembered as a reincarnation of President Herbert Hoover, whose policies led directly to the great depression of the 1930s, and to leave the future open to our leader to be a new Roosevelt and lead us away from that?
The Prime Minister
As a job application, that was at the greasy end of the spectrum, I think. I prefer to listen to the head of the OECD, who is in London today, and who has said:
“I think dealing with the deficit is the best way to prepare the ground for growth in the future.”
When it comes to the question of who supports this Government’s policy, we have the OECD, the International Monetary Fund, the Federation of Small Businesses, the CBI and the Bank of England. When the shadow Chancellor was asked recently, “Who supports your economic policy?”, there was a long pause and he finally replied, “The Guardian.” I will keep my supporters, and you can keep yours.
Mr James Gray (North Wiltshire) (Con)
The people of Wootton Bassett have sought neither thanks nor praise for what they have done on so many hundreds of occasions over the years, but they will be deeply honoured and very pleased by the great honour that Her Majesty has shown them. Will the Prime Minister now lead the people of Carterton, in his constituency, in filling their place?
The Prime Minister
First, may I say to my hon. Friend what an honour it is for me to be able to make the announcement about Royal Wootton Bassett, and how I enjoyed meeting him, the mayor of Wootton Bassett and others connected with the town? Let me make it absolutely clear: they did not ask for any recognition or any form of preferment. They believed that they were honourably and honestly doing a job that the whole country wanted to see done. Now that the route will be different, we need to consider the issues raised by my hon. Friend. Already, quite a demonstration of solidarity and support takes place outside the John Radcliffe hospital, but I will certainly bear in mind what he says.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Q13. Following the emphatic yes vote in the referendum on law-making powers, a series of UK Government Ministers have proposed a Calman-like process for Wales. Will the Prime Minister confirm that reform of the Barnett formula, as advocated by the independent Holtham commission, will be a cornerstone of any wider changes to how the Welsh Government are funded?
The Prime Minister
We are looking at a Calman-like process for Wales; we think that is right, and we will make some announcements and proposals. Let me just say that because the spending reductions in Wales are less than the spending reductions in England, we will find at the end of this Parliament that the difference in spending per head in Wales will be even greater than it is today, so I do not accept the contention that somehow people in Wales are being unfairly targeted with cuts; they are not. They are getting a better deal than some other parts of the United Kingdom.
Simon Wright (Norwich South) (LD)
Q14. A report published today by the End Child Poverty campaign shows that when Labour left office, it left 30% of Norwich’s children living in poverty—the worst figure in the east of England. Does the Prime Minister agree that such a complex problem demands a cross-Government response to tackle the causes of poverty and deliver greater social mobility?
The Prime Minister
The hon. Gentleman is entirely right, and if we think of combating child poverty simply in terms of moving people a little bit above or below the line we will never deal with the underlying causes of child poverty, which are worklessness, family breakdown, and other problems linked to it. I am determined that we will try our hardest, with expertise from across the House of Commons—the hon. Member for Nottingham North (Mr Allen) is involved in this work, as is the right hon. Member for Birkenhead (Mr Field)—making sure that we really look at life chances, as well as poverty itself.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Earlier this month I joined my constituents and many others from across the east end in commemorating the 68th anniversary of the 1943 Bethnal Green tube disaster. It was one of the worst civilian disasters of the second world war: 173 people were killed and 90 injured, while seeking shelter. Does the Prime Minister agree that there should be a fitting permanent memorial to those who perished, and will he lend his support to the Stairway to Heaven memorial campaign?
The Prime Minister
I will certainly look very carefully at what the hon. Lady says. She speaks very powerfully on behalf of her constituents about something that, yes, happened many years ago, but people will still have strong family memories of what happened at that time. I will look carefully at what she says and see what support my office and I can give.
Damian Collins (Folkestone and Hythe) (Con)
Does the Prime Minister agree that nuclear power stations in the UK, such as Dungeness in my constituency, have an excellent safety record, and that new nuclear power will be an important part of our energy needs in future?
The Prime Minister
I do think that nuclear power should be part of the mix in future, as it is part of the mix right now. Obviously, I am sure that everyone watching the dreadful events in Japan will want to make sure that we learn any lessons. Of course there are big differences: we do not have those reactor designs in the UK, nor do we plan to, and we are not in a similar seismically important and significant area. Nevertheless, I am sure that there will be lessons to learn, and that is why my right hon. Friend the Secretary of State for Energy and Climate Change has asked the head of nuclear inspections and safety to learn the lessons, and to make sure that we do so in our country.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
This week marks the 70th anniversary of the Clydebank blitz, in which 528 people lost their lives. Hundreds more were seriously injured, and 35,000 people were made homeless. Clydebank suffered the worst devastation and loss of life in Scotland during the second world war. Will the Prime Minister join me in paying tribute to all those who lost their lives, all those who still carry their injuries with them today and, crucially, the people who rebuilt Clydebank after those terrible events 70 years ago?
The Prime Minister
I will certainly join the hon. Lady in paying tribute to those people. It is important, as we reach the 60th and 70th anniversaries of these events, that we recognise that many people who lived through them are coming to the end of their lives. It may well be our last opportunity to commemorate what happened and to remember those who died. It is particularly important, as we come up to these anniversaries, that we get that right.
bill presented
London Olympic Games and Paralympic Games (Amendment) Bill
Presentation and First Reading (Standing Order No. 57)
Mr Secretary Hunt, supported by the Prime Minister, the Deputy Prime Minister, Mrs Secretary May, Mr Secretary Pickles, Mr Secretary Hammond, Mrs Theresa Villiers, Hugh Robertson and Norman Baker, presented a Bill to amend the London Olympic Games and Paralympic Games Act 2006.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 165) with explanatory notes (Bill 165-EN).
Mr Speaker
I ask Members who are leaving the Chamber to do so quickly and quietly, so that I can hear and respond to points of order.
Police Station (Wombourne, South Staffordshire)
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Gavin Williamson (South Staffordshire) (Con)
It is a pleasure to present this petition, which has been signed by 1,256 people who support my campaign to keep a police station in Wombourne.
The petition states:
The Petition of residents of the South Staffordshire constituency, and others,
Declares that the police station in Wombourne is being considered for closure; and further declares that Wombourne has a population of 14,000 who depend upon the service that it provides.
The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that the police station or a new alternative station is opened in the village of Wombourne to serve its residents and those in the local area.
And your Petitioners, as in duty bound, will ever pray.
[P000902]
Points of Order
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Ian Mearns (Gateshead) (Lab)
Following the point of order made by my hon. Friend the Member for Hartlepool (Mr Wright) yesterday, and the response from the Deputy Leader of the House later in the day, I received a letter from the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb) outlining the reasons for the delay in answering questions. However, I find it a little incredible that a whole Department and its IT tracking device should find it more difficult to track the 563 unanswered questions than I do as an individual Member of Parliament. That seems to contradict somewhat the evidence given to the Education Committee a number of weeks ago by Lord Hill, who said that the Department was aware of delays in answering questions.
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. I would say two things. First, it would be unwise for me to speculate on the technology of the matter and what has or has not happened, for the simple reason that I am in no position at this stage to know. Secondly, notwithstanding the hon. Gentleman’s understandable frustration, which he has put on the record and which he might wish to share with his constituents, I think it fair to record that the Deputy Leader of the House looked into the matter extremely expeditiously yesterday and offered a gracious apology to right hon. and hon. Members. I will leave it there for today.
Mr John Leech (Manchester, Withington) (LD)
On a point of order, Mr Speaker. During questions last week to the Secretary of State for Health, the hon. Member for Manchester Central (Tony Lloyd) attacked the Government’s health policy and the role of private provision by claiming
“that at the Christie hospital in Manchester 150 jobs have been transferred from the NHS to the private contractor on that site.—[Official Report, 8 March 2011; Vol. 524, c. 757.]
That is simply not true. I have had written confirmation from the Christie that it is untrue. There has been no transfer of staff from the NHS to the new private partnership. I made the hon. Gentleman aware that I intended to raise the matter as a point of order. May I seek your guidance on whether it would be appropriate for him to apologise to the House for misleading Parliament, and to the Christie for making a false statement about its commitment and outstanding contribution to the NHS?
Mr Speaker
I am grateful to the hon. Gentleman for his attempted point of order. If an hon. Member makes a mistake, it is for the hon. Member concerned to decide whether it is necessary to correct what he or she has said and, if so, to decide how and when to do so. Meanwhile, the hon. Gentleman, who is quite an experienced hand, has offered his verdict clearly. It is on the record and I suspect that he may choose to share it with others. It is open to him to do so, but I cannot get involved beyond that.
Tony Lloyd (Manchester Central) (Lab)
Further to that point of order, Mr Speaker.
Mr Speaker
It is very proper that the hon. Gentleman accused should have a chance to respond.
Tony Lloyd
Let me say to the House and far wider that if, inadvertently, I misled the House or anybody else on the issue, of course I unreservedly withdraw that claim. Let me make it clear that I would never claim something dishonest about the Christie hospital—not that it was going to close when it was not, and not that staff were being transferred when they were not. If I was wrong, I withdraw those remarks.
Mr Speaker
I am grateful to the hon. Gentleman. As far as I am concerned, certainly for today, that concludes that matter.
Paul Flynn (Newport West) (Lab)
On a point of order, Mr Speaker. As confidence in the safety of nuclear power has been shaken worldwide, and as no nuclear power station has ever been built on time or on budget, should not the House have an opportunity of considering the nature of the review, so that we can include costs and timetable in the likelihood of building new nuclear power stations in this country?
Mr Speaker
First, the hon. Gentleman may well choose to approach the Backbench Business Committee in pursuit of time to debate the issue. Secondly, I am reminded again by the efforts of the hon. Gentleman why he is the author of that well-thumbed tome, “How to be a Backbencher”. We will leave it there for today.
Special Urban Development Zones
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Steve Rotheram (Liverpool, Walton) (Lab)
I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to create Special Urban Development Zones; to set out the criteria on which such Zones must be designated, including criteria relating to Housing Market Renewal Initiative status and areas of multiple deprivation; and for connected purposes.
My aim in introducing the Bill is simple—to see areas blighted by entrenched multiple deprivation given the targeted attention they so desperately and urgently need, and to try to give Members on the Government Benches—the few who are here—some comfort or reassurance. I am not talking about yet another bureaucratic layer for its own sake, or about a new network of talking shops. The public do not set much store by what we in Liverpool would call Mickey Mouse gimmicks. I am talking about intensive intervention capable of delivering meaningful, measurable and tangible results that link in with and complement the soon to be introduced enterprise zones, local enterprise partnerships and other such Government initiatives. For some of our more blighted areas, this is long overdue. For those who live their daily lives in such conditions, the proposals are a matter of the utmost urgency. I propose the introduction of specified development zones and their roll-out out across the whole country. I will use the example of north Liverpool, for purely illustrative purposes, to explain my motivation and serve as justification for the Bill.
I should first explain that my interest in the north of the city is not purely political, although my constituency covers a large portion of it—or at least, it will until it is realigned by the Deputy Prime Minister’s spurious measure of an arbitrary, arithmetical norm. For me, the Bill’s proposals are personal, as they will be to other representatives of disadvantaged constituencies. I have lived in Walton all my married life and witnessed with anguish and frustration the social and economic stagnation in certain wards. I am determined to see something done about it.
Let me start by reminding right hon. and hon. Members of the bigger picture. In recent months, I have had cause on several occasions to recite some of the grim statistics that place Liverpool in the top five or so places nationally of every possible index of deprivation, and the city is at the very top of that unenviable league table when the indices are combined. On those occasions, I have been disappointed by the indifferent, even mocking, responses from some Members on the Government Benches. Some of that I attribute simply to ignorant or baseless prejudice, but some of it has to do with people becoming immune and insensitive when repeatedly exposed to hard-grained, albeit abstract, facts. To borrow from an infamous aphorism, the poverty of one is a tragedy; the poverty of many a mere statistic.
Whatever the case, Liverpool’s socio-economic problems are common knowledge, but what many outsiders will not know is that in north Liverpool they are disproportionately concentrated and the consequences correspondingly magnified. A complex and historical mix of issues, such as low educational attainment, a low skills base, high welfare dependency, poor housing, low or unskilled employment, which is often casual, and poverty of aspiration have made for a potent, self-perpetuating, cyclical cocktail of disadvantage and marginalisation.
In recent times, against the odds, Liverpool has come on in leaps and bounds, which is to be commended and celebrated. Many Members, even on the Labour Benches, will be astonished at our city’s transformation and urban renaissance when the party has its conference there later in the year, just as the Lib Dems were when they visited.
It remains, however, a tale of two cities in one, a sub sub-regional north-south divide. The wealth, opportunity and aspiration so evident in the centre and elsewhere have not filtered through to north Liverpool. That has long been the case. In the 19th century, well-healed visitors to the city wrote with pity and horror about its poor, most of whom were clustered, even then, in the inner north. The Victorian street urchins and the notorious back-to-back dwellings are long gone, but the causes and effects of poverty that characterised large swathes of the city’s underclass in those northern suburbs persist today. That is unconscionable.
I blame no particular Administration or party. Over the years various well-intentioned local, regional and national initiatives have aimed at reviving the area, but they foundered, overwhelmed by the scale of the difficulties they face or bogged down by conflicting or competing priorities. The soon-to-be defunct housing market renewal initiative essentially recognised what we need to do and made some progress, but ultimately it was neither sufficiently focused nor sufficiently geographically specific to meet north Liverpool’s needs. In any case, it tackled only one of a plethora of problems.
It is time to get to grips with the situation once and for all. The difficulties in the north of the city might have become entrenched, but I refuse to accept that they are insurmountable. As my predecessor, Peter Kilfoyle, argued consistently in this place and in Liverpool, the plight of north Liverpool powerfully demonstrates why we need a fresh, full-spectrum approach to deprivation hot spots, both to tackle the root causes and to address the effects.
Through this Bill, I envisage the creation of designated special urban development zones, intelligently configured according to multiple deprivation indices and housing market renewal intervention status. Each SUDZ would comprise an operational framework consisting of three elements: first, a clear and holistic strategy with realistic and measurable objectives: a focused strategy, unashamedly biased in favour of the interests of the zone; and a strategy devised, developed and monitored with a single purpose in mind—the whole-scale and sustainable regeneration of the area in question.
Secondly, there would be funding—yes, funding—or at least additional resources and/or tax incentives. It is all very well banging on about austerity measures, but, as I have pointed out repeatedly in this place, any economy that grows while concentrations of deprivation throughout the country are simply left to fester and rot is an utterly false, foolish and precarious economy. It is also morally reprehensible.
Thirdly, there would be a dedicated delivery vehicle: an independent, stand-alone authority that was suitably equipped and sufficiently robust to work with partners on an equal footing, and with the ways and means—in other words, the clout—to get things done.
I have used north Liverpool as a case in point. It is what I know best; it is my priority; and in my view its regeneration ought to be high on the to-do list of any competent, right-minded Government. But there are many north Liverpools, dotted throughout the country, facing equal hardship and equally deserving of the action I suggest. I propose this Bill on their behalf, too.
Were the Bill to be enacted, it would signal a clear commitment by this allegedly progressive Government to tackling poverty and inequality. Inaction borne of apathy, indifference or something more cynical is no longer an option, and I therefore beg leave to bring in the Bill.
Mr Speaker
The question is that the hon. Member have leave to bring in his Bill.
Mr Speaker
Order. I am grateful to the hon. Gentleman for his courtesy, but he cannot make a comment on the Bill. He is either opposing it or not.
Question put and agreed to.
Ordered,
That Steve Rotheram, Mrs Louise Ellman, Stephen Twigg, Luciana Berger, Graham Jones, Bill Esterson, Catherine McKinnell, Mr Joe Benton, Mr Dave Watts, Ian Murray, Thomas Docherty and Tom Greatrex present the Bill.
Steve Rotheram accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 17 June and to be printed (Bill 163).
Opposition Day
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Fuel Prices and the Cost of Living
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
The first of the two debates is on fuel prices and the cost of living. I inform the House that, in the first debate, I have selected the amendment in the name of the Prime Minister.
As colleagues will be aware, in the light of the level of interest in participating in the two debates, I have imposed a six-minute limit on Back Benchers’ speeches in each of the two debates. There is, of course, no formal time limit on Front Benchers’ speeches, but in view of the interest I appeal to Front Benchers to exercise a certain self-denying ordinance.
Ms Angela Eagle (Wallasey) (Lab)
I beg to move,
That this House recognises that rising world oil, food and commodity prices are increasing the cost of living and adding to the squeeze on families on low and middle incomes across Britain; believes this has been compounded by the Government’s decision to increase VAT to 20 per cent., which will cost a family with children an annual average of £450, has helped to push up the consumer prices index annual inflation to 4 per cent. and, according to the House of Commons Library, is adding £1.35 to the cost of filling up a vehicle with a 50 litre tank; notes that the AA announced last week that the cost of unleaded petrol has now reached an average of £6 a gallon and that the fuel duty stabiliser promised in the 2010 Conservative Party manifesto has not yet been announced or implemented; further notes that the previous administration regularly postponed planned fuel duty rises when world oil prices were increasing sharply, as they are now; and demands that the Government takes immediate steps to reverse January’s VAT rise on road fuels, using the extra £800 million from the bank levy and securing the appropriate EU derogation, in order to provide relief to hard-pressed motorists and, at the time of the Budget, looks again at the annual duty rise due in April.
It is a great pleasure to follow my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), whose ten-minute rule Bill seeks to address an issue that is close to the hearts of all of us from Merseyside.
Times are increasingly tough for millions of ordinary hard-working people and families in our country. Since May last year, we have seen this Government embark on a reckless gamble with our future prosperity. Public expenditure is being cut too deep and too fast, and up and down the country millions of people are really beginning to feel the pinch. Families are facing the biggest squeeze in their living standards for 80 years, and some economists are warning that it could get still worse. Real wages are static, even falling. With recruitment freezes, job losses and rising unemployment, people are right to be worried about the future.
Mr Greg Knight (East Yorkshire) (Con)
Will the hon. Lady help the House? Over the past 13 years, in every aspect of Government policy, the Labour Government were deliberately and decisively anti-motorist. Does the motion before the House today represent a seismic shift in policy, or is it, as we suspect, a transient spat of opportunism?
Ms Eagle
I am rather sorry that I gave way so early in my remarks to that kind of comment. I do not recognise the right hon. Gentleman’s caricature of our policies for motorists. Perhaps he has been reading too much of the Daily Express. [Interruption.] Well, I am a motorist as well. He should realise that motorists are not confined to the Conservative Benches.
Robert Halfon
I find the Labour motion astonishing, because over the past few years the hon. Lady’s party crucified Harlow’s motorists by putting up fuel duty by 6% a year and increasing it more than 12 times—and it was going to introduce another tax.
Ms Eagle
I will come to the details of the motion later. Perhaps the hon. Gentleman will do us the honour of staying in the Chamber and listening to that.
Taxes such as VAT are rising, and the Chancellor’s huge cuts in benefits and services are only just starting to bite. The Government are doing all this while the world economy is still very fragile after the international banking crisis. Global commodity prices are soaring, and these price increases are hitting people and businesses in Britain hard.
Mark Tami (Alyn and Deeside) (Lab)
Does my hon. Friend agree that this problem tends to have a worse effect in rural areas than in some towns? A lot of people in rural areas rely on oil as a fuel, so they are being hit by a double whammy.
Ms Eagle
I am pleased that the competition authorities have launched an investigation into what has been going on with heating oil. My hon. Friend is right to point out that transport in rural areas is a particular issue.
People who are already financially stretched by this Government’s slash-and-burn approach now find themselves trying to cope with sudden sharp increases in the price of essentials such as food, energy and fuel. Recent OECD figures put UK food inflation at 6.3%. That is higher than the consumer prices index, higher than the retail prices index, and higher than in most of the rest of Europe. In my constituency, parents are now worried about the rising cost of providing balanced meals for their children.
Caroline Lucas (Brighton, Pavilion) (Green)
Does the hon. Lady agree that the fuel duty escalator is an important tool to send a clear message that oil prices are going to have to continue to rise, not only for geopolitical reasons but because of peak oil and climate change, and that a way of ensuring that the poorest are not hardest hit would be to scrap the recent VAT increase in totality and replace it with a crackdown on things such as tax evasion and tax avoidance?
Ms Eagle
The hon. Lady is right that there has to be a balance between the environmental aspects of taxes on fuel and living standards. However, I find, all too often, that on the green side of the argument the social justice aspects of imposing environmental tax rises are not thought about enough, and such measures tend to hit hardest people whom we are least able to help. She needs to help all of us, when we are thinking about this, by bearing in mind the effects on poverty of environmental taxes.
Mr Dennis Skinner (Bolsover) (Lab)
The fuel duty escalator was introduced by the former Tory Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr Clarke). One of the first things that the Labour Government did on assuming office was to make sure that we did not pursue that policy. [Interruption.] Oh, yes. That is why, on several occasions in our 13 years, the Labour Chancellor of the Exchequer got rid of the fuel duty increase. That is the truth.
Charlie Elphicke
I thank the hon. Lady for her kindness and generosity in allowing me to intervene. To clear up the addling of some minds in the House regarding the history of this matter, will she confirm that in 1997 duty was 36.86p and today it is 57.19p?
Brandon Lewis
I thank the hon. Lady for being so generous in giving way. Will she confirm that, despite what has been said, my hon. Friend the Member for Dover (Charlie Elphicke) is right: there were 12 fuel duty rises under the Labour Government, and six more were set to come into force before they left office and would have done in the next few years?
Ms Eagle
As I said, we had six years when we did not even increase the price of fuel by inflation, so there were real-terms price falls. The number of increases in all sorts of duties tends to expand the more one is in government. We will see what this Government do in the Budget next week.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
The difference in our approach is that we are looking to help people across all parts of the economy. Surely the people at the Freight Transport Association who have been campaigning solely for a fuel duty rise not to be imposed, which would benefit them, should realise that they must build an alliance with other people by campaigning for the striking down of the increase in VAT to 20%, which is hurting everyone, including not only themselves as the people who deliver goods, but the people who have to purchase those goods.
Ms Eagle
No. I have given way a few times, and I am going to get on with my remarks.
It is absolutely clear that increased fuel duty costs are eating further and further into already stretched household budgets, making the squeeze on living standards even worse. Businesses are suffering from problems caused by inflating commodity costs, tighter margins and restricted access to credit from the banks. Many are anxious about how they will get by in the next few years, and the continuing rise in the price of fuel is adding to that worry.
Ms Eagle
I will get on with my remarks and give way to the hon. Lady shortly.
The cost of oil has been rising on world markets as a result of underlying increases in demand from Asia and uncertainty because of the unrest in the middle east. Just a week ago, petrol prices hit a new high at the pumps. The average price for unleaded fuel is, a week later, still £1.32 a litre. That means that the cost of fuel has risen 7p a litre since the beginning of the year. The AA pointed out that the £6 gallon has arrived for the first time, and that prices for diesel have soared even higher, currently averaging £1.38 a litre.
Gordon Birtwistle (Burnley) (LD)
I am grateful to the hon. Lady for giving way—[Interruption.] May I refer to an e-mail that I received—[Interruption.]
Mr Speaker
Order. That is not an orderly way in which to conduct the debate. An hon. Member should not stand up in the Chamber with an electronic device and read from an e-mail as a means of debating. That is the current position—such matters are always subject to review, but I assure the hon. Gentleman that that is the position at the moment, and we will leave it there.
Ms Eagle
I am not willing to give way to the hon. Gentleman. [Interruption.] He can show me the e-mail afterwards.
The Conservative-led Government’s decisions to raise VAT to 20% may have been expertly disguised before the election so that the voters were kept in the dark about it, but we all know about it now. Increased VAT has added an average of £450 a year in extra cost to a family with children and has pushed the headline CPI figure to 4%, which is double the Bank of England’s target.
Ms Eagle
I will not give way to the hon. Gentleman.
As we all know, VAT applies to petrol. The Library calculated that the Conservative Government’s 2.5% increase in VAT has added nearly 3p to the cost of a litre of petrol when people are least able to absorb that extra cost.
The Economic Secretary to the Treasury (Justine Greening)
Perhaps the hon. Lady will confirm and clarify her party’s position on—I think—fuel duty. I am not sure because on ITV’s “Daybreak” the shadow Chancellor said: “We’re saying today, as well as the duty thing, which I’ll think you’ll freeze”—I presume that he was not saying that explicitly to Christine Bleakley—“I think you should reverse the VAT rise.” Specifically on the “duty thing”, is the shadow Chancellor talking about freezing the 1p rise, the RIP rise—[Hon. Members: “RIP?”] Sorry, I mean the RPI plus one rise. Which is it? [Interruption.] I might have made a slip, but I was thinking about the Opposition and their policy.
Mr Speaker
Order. Before we continue, may I appeal to Members, including Ministers and other Front Benchers who are intervening, to do that economically? I remind the House that the Chair’s responsibility is to seek to protect the rights of Back-Bench Members who wish to speak. I put it to Front Benchers that Back Benchers will be not inconsiderably irritated if long speeches from the Front Bench stop them getting in.
Ms Eagle
I was trying to help hon. Members by giving way. Obviously, that extends the time that one’s remarks take, but I think that some exchange helps the debate.
I hoped that the Chief Secretary would be here today, but we have the Economic Secretary instead. Why will the Chief Secretary not turn up to one of his own debates? Where is he? Why has he not come to tell us about what he has been doing on all those issues?
Mr Alan Reid (Argyll and Bute) (LD)
The hon. Lady will recall that when she was a Treasury Minister, she received a delegation of highlands and islands Members of Parliament, including the Chief Secretary, and that we asked for a fuel duty derogation for remote rural areas. We had tea and sympathy, but no action. The Chief Secretary is now implementing that policy. Does the Labour party now support reduced fuel duty for the islands?
Ms Eagle
We want to do something that helps everyone in the country, not one third of 1%.
As we all know, VAT applies to petrol. As I said , the Library has calculated that the 2.5% increase in VAT has added nearly 3p to the cost of a litre of petrol when people are least able to absorb that extra cost. We all know that an extra fuel duty increase of 1p above inflation is factored into the Chancellor’s Budget arithmetic and due to be implemented next month. Taken with rising inflation, those changes could put 5p a litre on to fuel duty rates. The combination of sharp rises in world oil prices, ongoing uncertainty in the middle east and the self-inflicted rise in VAT is creating real hardship for many people. It causes higher inflation, lowers consumer spending power, which is already weak, and reduces both consumer and business confidence, thereby putting any prospect of growth at risk. The economy shrank by a shock 0.6% in the last quarter of 2010. People are getting increasingly desperate for some relief from the Conservative Government, but there is precious little sign of it.
Ms Eagle
I am trying to get on with my remarks, as the Speaker wishes me to do.
What help has been put in place to tackle rising fuel prices since the Government took power last May? The Business Secretary was reported as telling the Press Gallery over lunch recently:
“It’s quite likely that we are going to get a nasty period of high fuel prices”.
Top marks for observation, but most people would think that, at an average of £1.32 a litre, we already have a nasty period of high fuel prices. However, the Minister of State for International Development does not seem to think that they are high. As a former oil trader, he was unable to resist the urge to speculate. His irresponsible guesswork succeeded in generating front-page headlines in The Sunday Times on 6 March, when he announced that he thought that the record price of $147 a barrel for oil reached at the height of the oil price spike in 2008 would be smashed. He said:
“I’ve been saying in Government for two months that if this does go wrong, £1.30 at the pump could look like a luxury, $200 a barrel is on the cards”.
His words of wisdom, which were hardly calculated to bring calm to the international oil markets, were reported around the globe. His headline-grabbing antics succeeded only in making a bad situation worse, and, I would imagine, swift removal from No. 11 Downing street’s Christmas card list.
Meanwhile, total incoherence was breaking out in the oddly named “quad”, which, for those who do not know, consists of the Prime Minister, the Deputy Prime Minister, the Chancellor of the Exchequer and the Chief Secretary. Apparently, they are meant to be the ones who actually run the Government, and it seems that they are falling out over the Conservative manifesto promise to introduce a so-called fuel duty stabiliser, which would cut duty when prices were high but raise the tax when prices fall.
Ms Eagle
I will not give way. I am trying to get on. [Interruption.] I hope that the hon. Member for Devizes (Claire Perry) will stay in order. I have said that I want to get on with my remarks because the Speaker is trying to protect Back-Bench business, and I have given way a lot. She should now be patient if she wishes to contribute to the debate.
The fuel duty stabiliser relies on the view that increasing oil prices provide the Treasury with a windfall from North sea oil revenues that can be distributed to hard-hit fuel users. Where is the fuel duty stabiliser? In April last year—conveniently before the general election—the Prime Minister, after a huge song and dance on the issue, which we saw on the front pages, suggested that a Conservative Government would cut the cost of petrol by 10p a litre if oil prices remained high. At that time, petrol cost 12p a litre less than it does now. The Daily Telegraph reported that the Tory fuel duty stabiliser
“is expected to be launched within months if Mr Cameron is successful.”
As oil prices soar, voters who remember that promise are still waiting.
Since then, the Prime Minister has dropped lots of little hints about his pet policy, without actually doing anything about it. Every time he mentions it, he is quickly slapped down by the Chief Secretary. That happened in January just after a prime ministerial fuel price hint. Speaking on the BBC’s “Politics Show”, the Chief Secretary said of the stabiliser mechanism:
“It’s a complicated idea and it’s difficult to see precisely how we achieve it”.
Of course, that did not stop the Conservatives dangling the idea cynically before the electorate last April. In the same BBC interview, the Chief Secretary rejected calls to scrap the 1p rise in fuel duty that is due to be introduced this April, saying—
Ms Eagle
No, let me finish. The Chief Secretary rejected calls to scrap the 1p increase, saying that he was not prepared to “sacrifice income willy-nilly” to help motorists. That is the Chief Secretary who is not at this debate. Perhaps Conservative Members should be asking him their questions. He proceeded to champion the fuel derogation for remote islands, which will help just a third of 1% of Great Britain’s almost 34 million registered vehicles and 60 million people. To be fair to him, he has battled for 10 months to get that policy up and running and, showing the energy and drive for which he is famous, he has managed to get around to asking the EU for permission to think about doing it. That is a perfect example of a policy from this Government: it generates a satisfyingly large amount of headlines, helps virtually nobody and costs almost nothing.
Meanwhile, the Chancellor asked the Office for Budget Responsibility to undertake an assessment of the effect of oil price fluctuations on the public finances, in order to design a stabiliser mechanism. It produced that assessment last September.
Ms Eagle
I have given way to the hon. Member for Great Yarmouth (Brandon Lewis) already.
The Office for Budget Responsibility produced the assessment last September, and it failed to make the numbers stack up for the policy. It calculated that the overall effect on the public finances of a temporary oil price rise would be close to zero, and that a permanent rise would create a loss to the public finances. In other words, there is no windfall for the Treasury to redistribute using a so-called fuel duty stabiliser mechanism.
No one appears to have told the Prime Minister about that and he clearly has not bothered to read the OBR report, because at Prime Minister’s questions a couple of weeks ago, he promised a fuel duty stabiliser in the Budget:
“we will look at the fact that extra revenue comes to the Treasury when there is a higher oil price, and see if we can share some of the benefit of that with the motorist.”—[Official Report, 2 March 2011; Vol. 524, c. 300.]
The Daily Telegraph called that statement “misleading and economically illiterate”. I could not have put it better myself.
Ms Eagle
I have given way to the hon. Member for Great Yarmouth.
That statement shows that this Government are run by a Prime Minister who does not do detail and who appears to be at odds with his own Chief Secretary. The OBR has shown that a temporary rise in oil prices generates a £100 million surplus in the first year for the Treasury, but that that turns rapidly to a net revenue loss of £700 million the year after. What the Government gain from higher oil tax revenues, they lose from the effects of higher prices on consumption and the requirement to spend more on indexing pensions and benefits. A permanent rise causes permanent losses to the public finances. The Prime Minister has to stop pretending that there is a windfall in rising oil prices that he can share out, because it simply does not exist. [Interruption.]
Mr Speaker
Order. I apologise for interrupting the hon. Lady. I say to the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) that loud conversations in the middle of a speech are discourteous and must not happen. That is not a proper way to conduct debate. I am not having it, and that is the end of it.
Ms Eagle
I was saying that the Office for Budget Responsibility has given the lie to the view that a fuel duty stabiliser mechanism can be financed by the windfall that rising oil prices give the Government by revealing that that surplus does not exist.
The Secretary of State for Business, Innovation and Skills was caught recently saying that the Liberal Democrats are in a “constant battle” inside the Government, especially over tax proposals. They are obviously in a battle over the fuel duty stabiliser. In debates on the 2008 Finance Bill, he said that fuel duty stabilisers were “unbelievably complicated and unpredictable”. He also said:
“May I suggest that there might not be any net windfall at all?”—[Official Report, 16 July 2008; Vol. 479, c. 339.]
The OBR has since confirmed that there is not. The Liberal Democrat bit of the Government is saying one thing and its Tory masters another. Together, there is total inaction on fuel prices.
The Institute for Fiscal Studies has concluded that introducing a fuel duty stabiliser would inject more uncertainty into the public finances rather than less. Analysis by the Policy Studies Institute found that if a stabiliser had existed for the 12 months to last December, when the price of petrol rose by 13p a litre, it would have cost the Exchequer a staggering £6 billion. The Government’s flagship policy on fuel, which they used cynically before the election to generate so many favourable headlines and to gather votes, is not only late in arriving, but looks shambolic and incoherent.
Andrew Bridgen
The Labour party’s apparent damascene conversion on fuel taxes will amaze and intrigue the bulk of the electorate. Will the hon. Lady confirm whether she supported the crafty action of the previous Chancellor of the Exchequer, who effectively excluded fuel from a VAT reduction in 2008 by raising duty, and then put the VAT on fuel back up to 17.5% in January 2010?
Ms Eagle
One minute Government Members say that we have no plan to deal with the deficit, and the next minute they complain that we had a plan that would have raised money. They really do try to have it both ways and are not remotely coherent.
The time for action is now. The Chancellor should take immediate action on fuel prices to ease the cost of living crisis in Britain. He does not even have to wait until the Budget. We are calling on him to reverse immediately the 2.5 percentage point increase in VAT on petrol that he imposed in January.
Jacob Rees-Mogg
The hon. Lady is always enormously gracious and generous in giving way. The Labour party is now proposing tax cuts, and has not proposed any serious spending cuts. Does it just want the country to go bankrupt?
Ms Eagle
The hon. Gentleman should not believe the propaganda from Tory central office. Of course we do not want the country to go bankrupt. We had a plan that would have halved the deficit, rather than dealing with it in four years. If I were in the Conservative party, I would not be quite so proud of producing the third largest fiscal consolidation—public spending cuts in ordinary language—of the top 29 industrialised countries, beaten only by Iceland and Ireland. As the hardship and the squeeze on living standards in this country become clearer in the coming year, the Government will come to rue their decision to cut too far and too fast. People will suffer day in and day out as a result of that decision.
Mr MacNeil
I am not sure what the hon. Lady thought about living standards in the Outer Hebrides when, time after time, she stood at the Dispatch Box as a Minister and said what she could not do and why she could not do it. Does she, in her quieter moments, regret not approaching the European Commission for a rural fuel derogation for the Hebrides and other islands in Scotland?
Ms Eagle
I must continue.
The Chancellor should use the Budget to look again at the annual fuel duty rise due in April, because of the price of fuel in world markets. At this time of instability and change in the middle east and north Africa, the Chancellor has to work with other Finance Ministers to try to keep oil supplies flowing and get world oil prices down.
At the weekend, the Deputy Prime Minister claimed that the Liberal Democrats were
“in the middle, for the middle”.
I say to them this afternoon: prove it. If they really cared about the struggles facing hard-pressed families in Britain, they would join us in the Lobby and vote for our motion. I for one look forward to seeing them.
Mr Russell Brown (Dumfries and Galloway) (Lab)
My hon. Friend has laid out clearly why a fuel duty stabiliser or regulator would not work in fiscal terms. The tragedy is that the wider UK public, on the back of the Fair Fuel UK campaign, have been sold the idea of a stabiliser while at the same time talking about a reasonable price. Does she have any idea what would be a reasonable price with which people would be satisfied? It would be quite unsustainable, I think.
Ms Eagle
I thank my hon. Friend for his observations, and he is quite right. The stabiliser mechanism relies on our having some idea of the price at which petrol ought to be stabilised, which means guessing right. A wrong guess could lose the Exchequer a lot of money. The question is, when is a rise in fuel prices a blip and when is it a trend? A stabiliser would require a judgment call on that point, too, and if the Government got it wrong it could cost a lot of money.
We have had nothing but delay and dithering on the issue from the coalition parties, despite their electoral promises, which were lavish in the extreme. The Government should be taking action now. Instead, just 10 months in, what do we have? A Foreign Secretary who is looking for his mojo, a Deputy Prime Minister publicly denying being taken hostage by the Prime Minister from inside his £2 million ring of Sheffield steel, and a Business Secretary who is so full of self-importance that he claimed he could bring the Government down single-handed if he was pushed too far. Millions of Britons struggling in the middle of the largest squeeze in living standards for 80 years are hoping and praying that somebody will push him, and push him fast.
Families are crying out for help now, but the Government are cutting too far, too fast and pursuing a dangerous and extreme experiment on the UK economy. Since they came to power, growth has stalled. Today’s unemployment figures are the worst since 1994, and inflation is double the Bank of England’s target. They need to recognise that families need help now, and they need to forget the dogma and join us in the Lobby to vote for this cut.
The Economic Secretary to the Treasury (Justine Greening)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“notes that the Government inherited the largest deficit in UK peacetime history and that the previous Government and current Opposition has no credible plan to deal with the deficit; further notes that this Government has already taken steps to support families and that those on low and middle incomes will benefit from April 2011 from a £1,000 increase in the income tax personal allowance, above-indexation increases in Child Tax Credit and that pensioners will receive new ‘triple-lock’ increases in the basic State Pension; further notes the significant impact on fuel prices in the UK of the dramatic increase in the world oil price to over $100 per barrel and the impact on households and business; notes that the previous Government increased fuel duty no less than four times between December 2008 and April 2010, proposed introducing a fuel escalator from 2011 and planned for a further series of six consecutive fuel duty rises up to 2014; nonetheless recognises the significant impact of high fuel prices on motorists, hauliers and businesses and that the Government is considering a fair fuel stabiliser that could support motorists and businesses when oil prices are high; and in addition notes that a reduction in VAT on fuel would be deemed illegal under EU law and that the Chancellor will update the House on this issue at the time of the Budget.”.
There we have it, from the party that came into government with fuel duty at 36.86p a litre and left it at 57.19p a litre—a whole load of moaning and insubstantial comments about what it cannot do to help motorists. The Government, unlike the Opposition, understand the seriousness of the issues that we are debating today. We know that the increase in the world’s oil price, as it feeds though to all other goods, is leaving many people out of pocket, and that families up and down the country are finding it hard to make ends meet. The Opposition clearly have no grasp of the issues at hand, as we have just heard; to them, it is just politics. They are simply not interested in how people on the ground actually feel about things, and they have no credible policies to back up their claims.
Andrew George
The Labour motion mentions
“securing the appropriate EU derogation”.
I hoped that the shadow Minister would give way to me, so that I could ask her what European derogation that is, and how many times in the past 13 years Labour attempted to seek it. Has the Economic Secretary seen anything in the records of the Treasury suggesting an answer to those questions?
Justine Greening
Officials are not aware that the last Government sought any derogation in relation to VAT on fuel at any point in the past 13 years. In fact, if the shadow Chancellor had gone off to Europe with his influencing strategy, which was clearly so unsuccessful when he was running for the leadership, I doubt that there would have been any prospect whatever of his making any progress. The Labour party seems to have about as much understanding today of the economic situation that it has left our country in as it did of the situation two years ago, when it ran this country into the deepest and longest recession in living memory.
Rehman Chishti
Will my hon. Friend confirm that the shadow Chancellor was wrong in law when he said that there should a reversal of the VAT rise on fuel? Under EU directive 112 of 2006, that cannot legally be done.
Justine Greening
My hon. Friend is absolutely right. In fact, the EU directive on VAT states:
“Member States may apply either one or two reduced rates…The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III.”
That annex does not include road fuel, and other amending articles do not permit a reduced rate or exemption to be applied to transport fuel. That in is European Council directive 2006/112/EC of 28 November 2006 on the common system of value added tax, at article 98 and annex III.
Charlie Elphicke
In the light of what my hon. Friend has just said, is not the motion before the House a shamelessly opportunistic preying on the justly held fears of the British people about the cost of fuel?
Justine Greening
That is absolutely what it is, and it is something else as well—it is a smokescreen. The Labour party has no plan whatever to tackle the deficit, and this Opposition day debate is all about trying to divert attention from that. It had no plans when it was in government, and it has no plans now it is in opposition.
Sajid Javid
One of the most important components of the cost of living is the interest rate, which in turn determines mortgage rates. Does my hon. Friend agree that, because of the action this Government have taken, Britain today has a lower interest rate than countries in Europe that have far higher deficits? That is the very action that the shadow Minister sought to criticise.
Justine Greening
One of the problems is that the Labour party and the shadow Chancellor do not even accept that there is a structural deficit. My hon. Friend is absolutely right to point out that the steps we are taking to tackle the deficit and bring our public finances back under control and into a sustainable shape, so that we can fund public services affordably for the long term, will give us a much better chance of keeping interest rates and inflation low. That is critical to ensuring that we can support our economy more broadly.
John Mann (Bassetlaw) (Lab)
It would help the debate and the Economic Secretary’s own Back Benchers if she could tell us which party is responsible for the majority of the taxation on fuel today.
Justine Greening
I am sure the hon. Gentleman was quite happy trotting through the Aye Lobby when his party brought forward its 12 fuel duty rises and the Budget in which it announced a further six. His question is particularly disingenuous because at that time the Conservative party was campaigning against unreasonable and unfair rises in such things as road tax. The Labour party paid no attention and continued to hammer motorists again and again.
Justine Greening
Perhaps I will make a bit of progress, because I know that many Members want to take part in the debate.
Justine Greening
I shall answer the hon. Gentleman, who is hectoring from a sedentary position. When his party was in government, it knew all about raising taxes. In fact, it formed the ultimate tax-and-spend Government, who got us into such a situation that their final Chief Secretary wrote a note saying that there was no money left. I really do think that if the Labour party wants to be taken seriously on the economy, it must start living in the real world instead of the fantasy world that it currently finds itself in, particularly in relation to EU VAT directives.
Mr Speaker
Order. I apologise for interrupting the Minister. I said to the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) a few minutes ago that he was making an excessive noise—[Interruption.] That was my best effort at the pronunciation of his important constituency. However, my remonstrance extends more widely. The debate has been notably scratchy, and it needs to calm down a bit from now on.
Justine Greening
Thank you, Mr Speaker.
The Government are taking steps to help the poorest and most vulnerable in our society. From April this year, we are raising the income tax personal threshold by £1,000, taking nearly 900,000 of the lowest-income workers in our country out of tax altogether.
Justine Greening
I shall make a bit more progress, because I want to talk about the Labour party’s so-called fuel duty proposals, which are of course VAT proposals.
We are increasing child tax credits above the rate of inflation, giving lower-earning families an extra £210 over the next two years. Of course, poorer families will still receive more in child credits than they received under the previous Government, and, as I said, lower earners will be better off as a result of this Government’s changes to the personal allowance.
Caroline Lucas
Will the Minister explain how it is compatible for a Government who claim to be the greenest ever to duck this opportunity to introduce a shift to green taxation—in other words, to keep the fuel duty escalator but to reduce other taxes accordingly?
Justine Greening
The hon. Lady’s point is about how to strike the balance between achieving environmental change and managing to raise revenues for the Exchequer to fund public services, which I am sure she agrees need the right level of funding. I think we have got the balance right in our approach to fuel duty and VAT on fuel. The challenge is that if we do not go ahead with the previous Government’s increases, we could fundamentally damage our ability to tackle the deficit. This Government are constrained purely because of the terrible financial situation that the previous Labour Government handed over to us.
Justine Greening
If I may I shall make a little progress, mindful of what Mr Speaker said about ensuring that hon. Members get a chance to have their say after the opening speeches.
One of the many things that this Government are doing to help people in Britain—it is the last one I will mention—is changing the state pension. The shadow Chancellor knows all about that, because he was chief economic adviser to the Chancellor who later became Prime Minister in the previous Government when he proposed increasing pensions by 75p. Many thought at the time that that was a real slap in the face for pensioners.
This Government have gone further than the previous one ever did. We have already introduced proposals to re-establish the earnings link, and introduced the triple-lock guarantee, so that each and every year the basic state pension will increase by the greater: earnings, prices or 2.5%. Of course, when things improve—when inflation comes back down below 2%, which is the Bank of England’s aim, and when the economy recovers from the years of Labour’s irresponsibility—those in retirement will still have higher pensions, poorer families will still receive more in tax credits, and lower earners will still be better off as a result of our changes to personal allowances. Those are real, credible, long-term policies that will stand the test of time, not half-baked initiatives conjured up over a weekend that do not last even the course of a single debate.
That brings me on quite nicely to the impact of the rising cost of fuels. Opposition Members know all about that, because as we have heard, the previous Government increased fuel duty four times in their last 16 months in office.
Robert Halfon
Is my hon. Friend aware that the previous Government planned six future fuel price increases, even though they knew the state of the economy?
Justine Greening
Absolutely. They left many tax bombshells, but perhaps that pre-planned tax increase was the tax road mine. There was a pre-planned additional per pence increase on fuel and a pre-planned year-on-year RPI increase—the so-called escalator. Ironically and utterly bizarrely, we are today debating a Labour motion that goes against the policy introduced by the previous Labour Government.
Richard Graham (Gloucester) (Con)
Given that I and several Conservative Members were not in the House for Labour’s last Budget, will the Minister confirm whether the hon. Member for Wallasey (Ms Eagle) and her colleagues on the Opposition Front Bench voted for the seven increases in fuel duty proposed by the Chancellor at that time?
Justine Greening
I do not know exactly how they voted, but the previous Labour Government consistently increased fuel duty on motorists, taking no account of whether that was affordable.
Mr Russell Brown
I thank the hon. Lady for giving way—at the end of the day, she is a fair person. She talks about the increases imposed by the previous Labour Government, but she must also recognise that on 11 occasions over a nine-year period, they saw fit to suspend or abandon any proposed increases simply because of the rising price of fuel. I sincerely hope that she and her colleagues remember that in the light of the motion.
Justine Greening
The hon. Gentleman is talking about postponements, because those fuel duty increases eventually came through. That is one reason why in their final months in office—from December 2008 to April 2010—the previous Government increased fuel duty no fewer than four times.
Over the weekend, the shadow Chancellor confidently proposed cutting VAT on fuel.
Sammy Wilson (East Antrim) (DUP)
The Minister quite rightly highlights in her amendment the previous Government’s fuel duty increases, but the motion recognises that people are feeling pain now, and holds out the hope that the Government will do something about fuel duty. Rather than talk about what the previous Government did, will she tell us what she intends to do to alleviate the hardship for people in places such as Northern Ireland?
Justine Greening
I shall not pre-empt next week’s Budget, but the hon. Gentleman knows that both parties in the coalition Government spoke in opposition about the effect of fuel duty on motorists. Conservatives spoke in opposition about how the oil price fed through into fuel prices at the pump, and Liberal Democrats talked about the impact of fuel prices on people living in remote rural areas. The coalition Government are now looking at how to tackle both those problems, but I cannot pre-empt the Budget.
Ms Angela Eagle
Will the Minister now admit that although before the election the Conservatives said they would reduce fuel by 10p a litre if petrol prices were high, they have actually increased fuel duty twice—once in October and once in January—since getting into power?
Justine Greening
Listening to the Opposition is stunning. The outgoing Chief Secretary’s message to the incoming Government was that there was no money left. Worse than that, the previous Government had pre-planned increases, which were due to come in now, as the hon. Lady just pointed out. The bottom line is that it is outrageous for the Labour party to cry crocodile tears about tax increases that it had planned—it is disingenuous in the extreme, and shows that it has no credibility and no leadership on the issues that matter to people, such as motoring, which we are debating today. The audacity of the motion is stunning.
Let me turn—as I was about to—to the Opposition’s proposal to cut VAT on fuel. [Interruption.] The shadow Chancellor is hectoring from a sedentary position, and I think the reason is that he is worried that we are about to talk about his policy—a policy that unravelled within hours of his announcing it. He has come late to the debate on motoring. Obviously he spent many years being driven around in a Government car that the taxpayer paid for. I understand that it was reported in the papers that he used to use it for journeys of just 100 yards. Perhaps he was not aware at that point of how much it cost people to fill up their cars, but perhaps he knows now, and perhaps that is why he has suddenly realised that this is an issue, as we did in opposition. He has come to this debate late, but his policy-making suggestions are, to put it bluntly, illegal under EU law.
It is quite an achievement to make a proposal along those lines. As I said to my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) , the shadow Chancellor is quite wrong to say that we can reverse the VAT rise on fuel, because doing so would be illegal under the EU VAT directive. However, if the right hon. Gentleman thinks that the UK operates under a different VAT directive, perhaps he would like to intervene on me right now. [Interruption.] I think we have established that there is only one EU VAT directive, and his proposal is illegal under that directive. The other big flaw in his argument—[Interruption.] Does he want to intervene?
Ed Balls
When we have only one reduced rate, but Italy, France and Poland have three reduced rates, and when the French President secured a VAT rate cut for French restaurants, is the hon. Lady really saying that she is going to hide behind European law and fail to stand up for the British motorist? Is that really what she is saying?
Justine Greening
There is only one party failing to stand up for the British motorist, and it is the Labour party. Let me outline precisely why France was able to get a reduced VAT rate on—
Justine Greening
There is no point the right hon. Gentleman asking a question and then getting excited about the fact that I might answer it.
Justine Greening
If the right hon. Gentleman just calms down for a second, I will answer him; if he then wants to intervene on me, he can do so. However, if he is that desperate to get in on this debate, perhaps he should have opened it instead of his hon. Friend the Member for Wallasey (Ms Eagle).
The right hon. Gentleman is right to point out that across Europe different products have different VAT rates. Some are exempt from VAT, some have a zero rate, some have a reduced rate and some have a standard rate. Indeed, he should be well aware of that because he was an economic adviser at the Treasury the last time the negotiations that he referred to started. In fact, they took six years. He mentioned President Sarkozy’s determination to secure a reduced VAT rate for restaurants, which is indeed what he did. However, in that renegotiation of the rules governing which products would be in which categories and which would no longer have standard VAT rates, I am not aware of the UK Government at any stage pressing for anything other than the standard rate to apply to road fuel. Perhaps the right hon. Gentleman can confirm that: yes or no?
Ed Balls
At no point did we apply for a special reduced VAT rate for road fuel, and the reason was that we never raised VAT on fuel. The people who have raised VAT are this Government. Can the Minister confirm that it is entirely in her gift and that of the Chancellor, who is not here, and the Chief Secretary, who has not turned up either, to apply for a derogation to reverse their mistaken increase in VAT? They have not done so and will not, but they could if they wanted to stand up for the British motorist.
Justine Greening
I do not think the right hon. Gentleman even believes that himself. The bottom line is that he wants—[Interruption.] The shadow Chief Secretary says that we need to take action now, but he wants us to embark on a process that took six to seven years the last time it happened. How is that taking action now?
Let me tell the House on which items the rate was changed. Here are a few of the products and services to which a reduced VAT rate is now applied in other countries:
“minor repairing of bicycles, shoes and leather goods, clothing and household linen”.
Window cleaning was also one, and hairdressing was another. The Government at that time—a Government of whom the right hon. Member for Morley and Outwood (Ed Balls) was part—did not seek to add road fuel to that list. He says that that was because the previous Government never raised VAT on fuel. That is not strictly true, of course: they reduced it, but then put it back up again, as we have heard. The other reason was that, year on year—and, in the final stages, month on month—they were consistently raising fuel duty, so they had no need to use VAT as a tool. They were getting plenty of additional tax from the motorist.
Mr Aidan Burley (Cannock Chase) (Con)
The last Government might not have increased VAT, but they certainly increased fuel duty. When Labour came to power in ’97, duty on unleaded petrol was 36p a litre; when the last Government left office in 2010, it had risen to 57.9p a litre. Does my hon. Friend think that Labour Members should take some responsibility for increasing fuel duty by more than 20%?
Justine Greening
Of course they should, but as so often they never do, unfortunately.
Justine Greening
I will give way one more time, but then I really must make some progress so that other Members can have their say.
Justine Greening
And a huge fiscal deficit and debt to boot, so we will take no lectures from the Labour party. Perhaps the hon. Gentleman can discuss with the shadow Chancellor how he thinks the huge deficit that his party left our country—it costs us £120 million a day to service our debt interest—should be addressed. The elephant in the room, which we have not talked about so far today because it is not in the Opposition’s motion, is how they would tackle the deficit. The answer is that they would not tackle it, which is why it is so lucky that Labour is not in government at the moment.
Justine Greening
I will not give way to any more Opposition Members, and I will tell the House exactly why. This is not the first time that there has been an opportunity to debate fuel duty rises: last month a Conservative MP had a debate in Westminster Hall. The reason the Opposition have now gone quiet is that they probably did not know that that debate was due to take place, but if they did, it is even more disgraceful. How many Opposition Members turned up to participate in that debate and represent their constituents?
Justine Greening
Absolutely none, so all this is nothing more than political opportunism in advance of the Budget, and it is incredibly poor quality opportunism too, because the Opposition have made a proposal that is impossible to implement and is utterly flawed in every respect.
Justine Greening
No, sorry.
The other reason why the Opposition’s proposal is flawed is that they say in their motion that they would pay for the proposal with receipts from the bank levy. The first thing to say about that is that we introduced a bank levy—something that Labour never managed to do—but, secondly, we brought forward the rate at which it would fully kick in early, because the banks were doing better and therefore could afford it. The money is a one-off additional revenue stream that we are getting a year earlier, but the Opposition are so economically illiterate that they want to use it to fund a long-term, permanent tax reduction on fuel. Looking at their faces, I do not think they necessarily realise that yet, so as well as their proposal being illegal, their figures do not add up.
To finalise my comments, it is only this Government who are serious about helping British motorists. We tasked the Office for Budget Responsibility with investigating the impact of oil price fluctuations on the economy and we are actively considering proposals for a fair fuel stabiliser.
Justine Greening
No, I will not.
Motorists deserve better than a VAT proposal on fuel that everyone knows is completely unrealistic and unworkable. It is disingenuous of the Opposition to suggest it, and it is unaffordable, given the economic mess that we inherited. They want a derogation that would be unsuccessful and take six to seven years to implement. We are talking about taking action to tackle the cost of living now. That is the choice facing the House today. At the end of the day, we all know that this motion is just a smokescreen, and that the Opposition have no plans whatever to tackle the deficit. Yet again, they have missed a chance to be credible on the economy. Yet again, they have failed to show any leadership on their solutions to the big problems facing Britain today. I sincerely hope that the House will vote against their motion, because it is one of the lowest-quality and most disingenuous motions that we have debated on the Floor of the House recently.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Members will see that this is a popular debate, and there is a six-minute limit on Back-Bench speeches, with the usual injury time for two interventions.
Fiona O’Donnell (East Lothian) (Lab)
I am genuinely grateful for the opportunity to speak in this debate. The increase in VAT has been a matter of great concern to my constituents and I am unashamedly going to concentrate on how it is affecting them.
Barbara Keeley (Worsley and Eccles South) (Lab)
I thank my hon. Friend for giving way, as the Minister did not. The Minister talked about living in the real world, but I am sure that we on the Opposition Benches know more about that than she does. I am sure that my hon. Friend’s constituents will be struggling with the £450 a year increase—
Justine Greening
On a point of order, Mr Deputy Speaker. The hon. Lady has just made an accusation about what I do or do not know about living in the real world. That goes beyond what I think is a personal comment. She has no understanding of what I do or do not understand. I can assure her that I get on the District line every day to come into work and I know exactly what is going on in the real world. I only wish that the Opposition did.
Mr Deputy Speaker (Mr Nigel Evans)
That is a point for the debate, not a point for the Chair.
Fiona O’Donnell
Thank you, Mr Deputy Speaker. I am obviously going to have to treat the Minister with kid gloves as she is so sensitive.
East Lothian is a largely rural constituency made up of small gatherings of communities that rely heavily on the use of their cars. I suspect that the hundreds of e-mails that I have received over the past few weeks will now be followed by hundreds more, as my constituents will be bitterly disappointed by the Minister’s utterly sterile contribution to the debate.
Fiona O’Donnell
Not at this stage.
The e-mails that I have received have not been the standard campaign e-mails that many of us find in our inboxes every day. I have been genuinely moved and angered by the stories that they have told. They have been from motorists, some of them older people living on pensions, people surviving on disability living allowance—Lord knows, they have enough to worry about under this Government—or people stuck on fixed incomes. This rise in the cost of fuel is hitting them hard.
I have also had e-mails from employers in my constituency. East Lothian relies heavily on small employers, but they are struggling. Two have already told me that their businesses will close this month, and that is bad news for East Lothian and for my constituents. We are promised that we will have a Budget for growth next week, but in East Lothian, the Government’s policy is not working; it is going in the opposite direction.
Fiona O’Donnell
I am sure that all my constituents will feel so much better after hearing that intervention. They do not want to hear the hon. Gentleman’s political point scoring and opportunism; they want to hear what the Government are going to do for hard-working families, for pensioners and for those with disabilities in my constituency.
I have had e-mails from people who have lost their jobs. People living in East Lothian need to be able to keep their cars on the road in order to access the services that will help them get back into work, to turn up for job interviews and to get out there to find and keep a job. I have also had e-mails from people who have been struggling throughout the past few years. I am going to admit that, for those on fixed incomes, times have been difficult, but the message is now clear that, under this Government, they are getting tougher.
I am also going to be unusually generous and congratulate the Tory party on a splendid result in the general election in East Lothian, where it moved up to second place. The Scottish National party—I see that its Members have now deserted us—moved down to fourth. Before the Tories get too excited, however, I should point out that that result involved a 0% swing from Labour. Many of the people who have contacted me voted for the Tories at the election, and I am representing them today without fear or favour. They want to know when the Government are going to deliver for them. If the Government will not listen to me or to those on our Front Bench, I urge them to listen to my constituents.
I know that the first questions that my constituents would want me to ask today are, “Where is the Chief Secretary to the Treasury?” and “Where is the Chancellor of the Exchequer?” They will be insulted that the Chancellor and the Chief Secretary have not had the guts to turn up and take part in this debate and to answer my constituents’ questions. I have something of interest to tell the House. I went to the same school as the Chief Secretary to the Treasury. The right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) also went to that school, and he has remarked to me, “That’s now one of us from each of the political parties.” I am particularly disappointed that the Chief Secretary to the Treasury, who represents a rural constituency, does not see the impact that the increase in fuel prices is having.
I try hard not to be judgmental about the Conservatives, and I try hard not to make the kind of comments that the Minister finds so harsh. But when they talk about the tough choices that they face in government, I have no sympathy for them. I am sick and tired of hearing them talk about that. Being in government and having a chance to reach out to families in East Lothian is not what is tough in life; what is tough for people is working out how they are going to fill up their car at the Co-op in Tranent next weekend in order to keep their family on the road. That is what is tough.
Mr Speaker rightly criticised the hon. Member for Burnley (Gordon Birtwistle) for bringing an electronic device into the Chamber. I presume that the hon. Gentleman has been running around for the past half hour trying to find a printer somewhere on the estate. I have gone to the trouble of printing off a couple of the representations that I have received from my constituents, and I should like to read them out to the House. One comes from Alec Flynn in Tranent, who says of the fuel price rise:
“We are a small family road haulage business…and we would like your support to fight the price the government plan to put on in the budget”.
I want the Minister to address Alec Flynn’s concerns, and to stop moaning about tough choices.
Justine Greening
Many hauliers can recover VAT, and I do not think that the Opposition’s proposal on VAT would provide the help that she is seeking to provide for them.
Fiona O'Donnell
Perhaps I have some responsibility here. I have not formally congratulated the Government on winning the general election, so perhaps it is my fault that they have not grasped the fact that they are now in government. They are in a position to change their minds, to lower the VAT rate on fuel and to make a difference to Mr Flynn and to ensure that the people he employs continue to have jobs. I suspect that Mr Flynn will remain disappointed, however. We were certainly not planning to increase VAT or to make life even more difficult for people.
Fiona O'Donnell
No thank you.
Then there is the case of Mary Johnston from Haddington, who said:
“My husband and I are senior citizens. We live in a farm cottage 2.5 miles outside Haddington”.
Let me summarise by saying that the rising costs of motoring are making it virtually impossible for them to leave their house. I hope that at some point during this debate we will hear some words of comfort from a Government who have let down my constituency.
Mr Robin Walker (Worcester) (Con)
I will be brief, as I know many other Members want to speak in this short debate.
I am glad that the Opposition have chosen the subject of fuel prices, as it is an issue that affects all our constituents and MPs of all parties have already urged the Government to take action. I have signed cross-party early-day motions 1252 and 1241, which call for progress on a fair fuel stabiliser. Along with colleagues of all parties, I have also supported the Federation of Small Businesses in its campaigns. There is a great deal of ground for cross-party consensus on this issue. We all recognise that the cost of living is rising and that fuel prices play an important part in it. We all recognise that the soaring costs of petrol and diesel have knock-on effects on the price of everything—from food and clothing and the cost of getting to work to the cost of educating children.
Mr Chuka Umunna (Streatham) (Lab)
The hon. Gentleman is right to refer to the rising cost of living. The big difference between now and a few months ago is, in many ways, the rate of inflation. The Governor of the Bank of England has been clear that he has no way of further loosening monetary policy right now. The talk before Christmas was about such further loosening, perhaps with a further round of quantitative easing. That is clearly no longer an option, which means that the only option is to alter fiscal policy, yet we have heard not a single word from the Minister to suggest that there will be any change in fiscal policy. Does the hon. Gentleman believe that the Government are right to sit on their hands when they are in a position to act to relieve the burden on people like my constituents?
Mr Walker
I thank the hon. Gentleman for that long intervention, but we are likely to hear what action the Government are planning in the Budget next week, which I would not want to pre-empt at this stage, so I shall continue with my argument.
There would be no disagreement about the underlying premise of today’s motion—that fuel prices drive up the cost of living. We can legitimately debate the action that Governments are able to take. Like many other Members, I believe the Government should take action on fuel prices by introducing a fair fuel stabiliser and by looking at whether they can put off any increase in fuel duty suggested under the last Government’s escalator policy. It is vital to take into account the real impact on the cost of living but, perhaps even more importantly, the cost to the economy of the rising price of petrol at the pumps.
In fact, having read the detailed response of the Office for Budget Responsibility to the Government’s initial suggestion of a fair fuel stabiliser, I believe that it strongly makes the case for intervention in the fuel price. What the OBR showed was that, contrary to the belief that Government revenues rise as a result of higher fuel prices, the depressing effect on the economy, output and therefore tax receipts, along with the impact on inflation, mean that in the long term, Government net revenues are hurt by higher prices. While that might make more challenging the worthy aim of coming up with a revenue-neutral stabiliser, it clearly shows that success in limiting fuel price rises will bring long-term dividends to Government in terms of tax receipts and lower inflation. The real lesson of the OBR’s report is that the Government need to act on fuel prices, through the fuel duty, to avoid a substantial loss of revenue through economic growth. I am confident that that lesson will be taken into account when we receive next week’s Budget—a Budget for growth in the UK.
I know that the Government have already promised action in remote and rural areas, which I welcome, but I represent an urban constituency that has also been badly affected by rising prices, so I want to remind the Government of the need for action everywhere. As a county town, Worcester’s economy is affected by high fuel prices in rural areas, but our city suffers from higher prices than many other urban areas around it.
My constituents have often pointed out that there is a substantial differential of around 5p a litre between prices in Worcester and prices in Gloucester or Birmingham, just a short drive away. Driving as regularly as I do between Westminster and Worcester in my small diesel car, I feel this price differential very directly and often find it is as cheap to fill up at a motorway service station as it would be in my own constituency. The website petrolprices.com quotes prices as high as £1.45 a litre of diesel in Worcester today compared with an average of £1.39 in Gloucester just 28 miles away or £1.38 in Birmingham. I therefore urge Ministers to look into the differential pricing around the country, whereby some areas, whether urban or rural, pay much more for their fuel, and to assess what can be done to address the problem.
I certainly accept that people in rural areas have greater need for their cars, but I urge Ministers to accept that action on fuel prices across the board will benefit the whole economy. We have seen in previous fuel crises that when fuel prices spike, economic growth slows down, both globally and domestically.
I therefore support taking action on the cost of fuel, but I do not support this Opposition motion, which I believe is poorly targeted and opportunistic. It hits the wrong target in focusing on the impact of VAT and only touching lightly on the far more significant issue of fuel duty. Perhaps that is because the Labour party did so much to encourage the escalation of fuel duty when it was in power. As the Government amendment points out, the Labour Government planned for six consecutive fuel duty rises up to 2014 on top of the 12 increases they made when they were in power. It is fair to say that those increases, like the introduction of the fuel duty escalator under the Conservatives, were made in a different environment from today’s, when the uncertainty in the middle east is adding to the upward pressure on prices. There has been no indication, however, that Labour has shifted from its ideological attachment to ever-higher duties on fuel, which rose from 36p to nearly 58p when they were in government, with Labour Members boasting that they left the duty intact at 65% of the cost of fuel at the end of their term.
It is cynical and opportunistic for a party whose last Chancellor laid the groundwork for the increase in VAT to be lashing out at its implementation, and it is beyond the bounds of belief that Labour Members should want to earmark all the proceeds of a bank levy they failed to make on to a rebate they know they could not have given—even if they had been in power. It is even more astonishing, when they have already suggested other plans to spend this levy many times over through opposing changes to child benefit, that they suggest funding more capital spending and reversing changes to tax credits. The Opposition motion has no credibility on this very important issue.
I urge the Government to act on fuel prices, but I urge them to do so through a fair fuel stabiliser on which there is a broad political consensus, and through looking at the broader case for changes in fuel duty to reflect the economic circumstances of today.
Ian Murray (Edinburgh South) (Lab)
It is a pleasure to follow the hon. Member for Worcester (Mr Walker), who talked about disingenuous and spurious policies. I am sure it was disingenuous to promise not to increase VAT before the general election and then to increase it immediately after it. There is nothing more disingenuous than lying to the electorate.
I would like to follow my hon. Friend the Member for East Lothian (Fiona O'Donnell) in talking about some of the personal stories that have been brought to my attention and which relate to the Opposition motion.
Ian Murray
I would like to make some progress.
My constituents wrote to ask me to bring their stories to the House and put them directly to the Chancellor and the Chief Secretary to the Treasury, so I am disappointed that neither of them is in their place. It shows a real disregard for this place when those two senior Ministers are not present to debate such an important issue. Of course the two Ministers on the Treasury Bench are among my favourites, but it would have been nice for my constituents to have had a response directly from the horse’s mouth.
Let us examine what fuel price rises are doing to the cost of living. I shall start with the case of a constituent in Edinburgh South who runs a small business. Let us look at what these particular fuel increases are doing to growth in the economy; in so doing, I shall echo some of the points made by the hon. Member for Worcester. My constituent runs a business in the service sector, so she uses a lot of suppliers. However, suppliers’ price increases are going through the roof, mainly because of additional fuel costs. She told me that some of her suppliers were charging as much as an additional £5 per delivery to cover their own increased fuel charges. My constituent faces a dilemma of what to do about that £5 increase. Should she pass it on to her customers? She finds doing so difficult. Why? Her problem is compounded by the fact that VAT has increased from 17.5% to 20%, which has also impacted directly on prices to her customers.
Barbara Keeley
My hon. Friend makes the important point that this debate is about the cost of living, as well as about fuel prices. He also rightly raises the problem faced by businesses in deciding whether to pass the increases on to their customers. My constituents live in one of the 15 most deprived areas in the country. They have an appalling bus service after the network was privatised by the Conservatives. People in that situation, like my hon. Friend’s constituents, will suffer both from increased costs from fuel charges and from having to pay £450 a year in increased VAT. Does he agree that our constituents are suffering heinously from that?
Ian Murray
Of course. The poorest suffer disproportionately because they have to use public transport and face the increased costs, while also having to pay more in VAT for all the supplies they buy. Prices are going up because small business issues, such as the one I am highlighting from my constituency, further compound the problem. I noticed that the Economic Secretary was upset when my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) suggested that she did not live in the real world, but we are talking about what is happening in the real world and I do not think that the Minister’s 40-minute contribution dealt with any of the real issues for our constituents that are happening at the coal face.
The owner of the small business that I mentioned is faced with a dilemma, but it seems that she must increase prices at a time when consumer confidence is at its lowest. People are worried about their jobs, they are worried about prices going through the roof, they are worried about commodity prices, and they are worried about how they are to fill up the family car. It is a quadruple whammy for businesses, which, as I have explained, face increased core costs as well as increased supplier costs, increased prices owing to the VAT rise, and increased borrowing costs. All that is creating unstable consumer demand, which, I am told by small firms in my constituency, is depressing their businesses.
On Friday I was visited by someone who works as a middle manager at Her Majesty’s Revenue and Customs. He has two small children, he is not a high earner by any means, and he and his wife live in my constituency. He described to me plainly how he has been affected by what the Government have done in the past 10 months. It is clear that he is being squeezed from all angles because of this Government, and fuel and the cost of living are part of that. Let me go through the list. He faces increased national insurance contributions, the increase in VAT to 20%, and the fact that his pension will be linked to the consumer prices index rather than the retail prices index, along with the additional pension contributions that he must make. He faces tuition fees for his children, he has lost his child benefit because he is the sole earner in the relevant bracket, and he faces record commodity prices.
Mr Graham Stuart (Beverley and Holderness) (Con)
The hon. Gentleman is making a powerful speech about the impact of high fuel prices on his constituents and mine. Like him, I should like to see action from the Government, but will he tell us what he would do to secure the reduction in the deficit to which all the tax rises are contributing? I understand that, because of the legacy of the last Government, the present Government’s net debt will rise in every year of the current Parliament—that, in the final year of this Parliament, we shall still be borrowing more money because of the deficit left to us by the last Government. We should love to be given some idea of how, in the real world, we could both make the savings and deliver the benefit.
Ian Murray
I am delighted that the hon. Gentleman has managed to ingrain himself with the propaganda being put out by the Conservative and Liberal Democrat parties about the deficit. He has given me a wonderful opportunity to go back to the start of that list so that he can take it all in.
There is no doubt that the Government’s cuts in public services are going too far, too fast and too deep. Everyone knows that the deficit must be reduced, but reducing it over time would protect my constituents from the ideological cuts that the Government are introducing under the veil of the deficit.
Let me return to what is happening to that squeezed middle manager at HMRC. He faces increased national insurance contributions and an increase in VAT to 20%. His pension will be cut because it will be linked to CPI instead of RPI. He faces tuition fees for his two children. He has lost his child benefit because he is a higher-rate taxpayer, and record commodity prices are pushing up food prices. He faces a high inflation rate, partly owing to the increase in VAT to 20%. His salary has been frozen. He has job insecurity. He faces increased energy prices, increased borrowing costs and lower interest on his savings, all because of this Government. Moreover—this brings us back to the motion—the price of fuel means that the cost of filling up the family car has gone through the roof. The Chancellor of the Exchequer is taking an extra £59 million from the Scottish people because of the increase in VAT, which is directly related to the cost of the fuel that they put in their cars.
Ian Murray
I will not, if the hon. Gentleman does not mind.
Each time people drive down the street, they see the large neon sign at every petrol station, and that is having yet another damaging effect on consumer confidence.
What are we left with? We are left with a broken promise from the Government on VAT, and a broken promise on the fuel duty stabiliser. Many people in East Lothian and Edinburgh South voted for the Conservatives because they had made that promise before the election. Time after time, promises made to ordinary people in my constituency and throughout the country are broken, and it is about time that Ministers did something about it.
Nigel Mills (Amber Valley) (Con)
It is a pleasure to be invited to speak in the debate, and a pleasure to follow the hon. Member for Edinburgh South (Ian Murray), who made a passionate if somewhat partisan speech. The Opposition’s problem is that out there in the country no one believes a word that they say about this topic. We all know of their record during 13 years of government, but, just in case a reminder is needed, let me point out that when they took office in 1997 the price of a litre of unleaded petrol was about 56p, which included 43p of duty and VAT. When they left office nearly a year ago, the price was about £1.20 a litre, including tax amounting to about 75p. We hear talk of fuel duty rising “ahead of inflation” or “in real terms”, but if the price of petrol had risen in line with RPI throughout Labour’s term of office, it would have been 80p a litre at the last election rather than £1.20. That is the hike that we have all had to suffer.
As the contents of my inbox make very plain, fuel price rises are a real problem for people and businesses throughout my constituency. In many areas people have no alternative to driving a car if they want to go to work, but the fuel price rises are preventing them from being able to afford to go to work—let alone the damage that they are doing to all manner of small businesses all over the constituency. The Government must take action in next week’s Budget.
Andrew Bingham
As a fellow Derbyshire Member, I agree with everything that my hon. Friend is saying. Does not the rural character of both his constituency and mine, High Peak, exacerbate the pressures and difficulties experienced by small businesses, in particular?
Nigel Mills
I am grateful for that intervention from a fellow Derbyshire Member, and I entirely agree with him.
The hon. Member for Bassetlaw (John Mann), who is no longer in the Chamber, said that all Governments had chosen to increase fuel duty over the years. We must accept that it was our Government who, nearly 20 years ago, introduced the fuel duty escalator, but the aim then was to encourage people to improve their behaviour by driving smaller and more fuel-efficient cars and considering alternative means of transport. I think we can tell the Government that we have all got that message. Many of us have started using diesel and have bought cars with smaller engines in an attempt to cut our spending on fuel. I know that many of my constituents have done that. However, the scope for such measures is limited, as many people still cannot afford to drive a car. If the nudge is the order of the day, I think that we have got the message and do not need any more nudging.
Fiona O'Donnell
I can tell the hon. Gentleman that we too have got the message from the Government, who claim that they want to make work pay. Does the hon. Gentleman accept that for many working people, fuel price increases mean that work is not paying?
Nigel Mills
I am grateful for that intervention—I think. The cost incurred in driving to and from work is clearly a factor when people are deciding whether work pays, which is why the increase planned for 1 April really should not go ahead.
Let me return to the topic of nudging. I think we all accept that tax can influence behaviour, and that if we further increase the tax on driving we will see the changes in behaviour that we would expect. People will drive to work less, and businesses will not be able to survive, prosper and grow because they will not be able to cope with the increased cost base. We can all cite small haulage businesses in our constituencies that are struggling to deal with the duty rise. As has been pointed out, reversing the VAT rise will not help those businesses at all; it is the level of duty that we need to consider. If the Government want to find another way of raising some revenue from the haulage industry to help compensate for the loss of fuel duty, I urge them to accelerate their plan to charge foreign road hauliers for using our roads.
Nigel Mills
I am afraid that I have already given way twice.
There is anecdotal evidence that foreign hauliers drive into our country with full tanks of petrol, which in many instances means that they can do all their work here without paying any fuel duty. We are making our haulage industry uncompetitive through the prices that we are charging hauliers to buy diesel in this country and the road taxes that they have to pay. Meanwhile, we are not charging foreign hauliers anything to use our roads. Let us collect that revenue as soon as possible, and use it to help support our own small businesses.
We have heard that, according to the review by the Office for Budget Responsibility, rising prices do not necessarily generate rising tax revenues. As was demonstrated by my hon. Friend the Member for Worcester (Mr Walker), that is because of the damage that increasing fuel prices do to the overall health of the economy, which depresses tax revenues. The Government are looking for tax cuts to try to enhance growth. We have plans to reduce corporation tax, but we should consider the damage that fuel tax rises do to growth. There must be some scope for a reduction in fuel tax. Even if it were not revenue-neutral, it might make a positive contribution to the growth that we need if we are to tackle the deficit.
I cannot support this Labour motion. The fact is that we could not reverse the impact of the VAT rise, because that would be illegal. Even if we could try, it might take six years. I urge the Front-Bench team, and the Chancellor when he delivers his Budget next week, not to go ahead with that planned fuel rise. We need some sort of fuel duty balance, to try to ensure that the shock of oil price rises does not do the real, serious and predictable damage to our economy that it could, and we must also bear in mind that if the middle east situation worsens, the shock could become much more severe than at present. We could be faced with the real damage to jobs that those significant price hikes could do.
Alex Cunningham (Stockton North) (Lab)
Many Members have concentrated on prices at the pump, but there are much wider issues to do with fuel in general and the cost of living, and I want to focus on fuel poverty, which has an immense impact on family life. It is an issue that is close to my heart.
According to the House of Commons Library, between 1996 and 2004 the number of households in fuel poverty fell from 6.5 million to less than 2 million, largely due to the measures put in place by successive Labour Governments. Now, in the face of massive increases in energy prices, the number of households in fuel poverty is estimated to be 5.5 million, or more than one in five households
Petrol price rises add to poverty. That is a new type of fuel poverty—if any fuel-poor households can actually afford a car. Domestic fuel prices fell by 17% in real terms between 1996 and 2003, but then increased by a massive 74% in the following six years. Those dependent on oil have suffered particularly badly, especially those who need oil to heat their homes. Our motorists have also suffered as prices have increased. The average standard credit gas bill for a typical consumer in 2010 was £683, which is 80% above the 2001 low in real terms. In 2009 the electricity bill for a typical consumer was £440, almost 50% above the 2003 price.
I know that energy companies do much to promote energy efficiency—mostly financed through a levy on their customers’ bills, I believe—but they, and the Government for that matter, need to do much more. There are several good reasons to do so. More than three out of four of the poorest 10% of households in England were in fuel poverty in 2008; I do not think they can afford a car, in fact. That means that the poor are getting poorer as prices increase way beyond the inflation rate, and inflation is already far too high under this Tory-led Government.
In 2008 more than half a million households needed to spend more than 20% of their income on energy to maintain a satisfactory heating regime. They are those in so-called extreme fuel poverty. Under Labour’s decent homes programme, 750,000 social homes had insulation works and 900,000 had new central heating systems. Warm Front assisted vulnerable people in more than 1.7 million homes, and large numbers of rented homes were improved under Warm Zones, Warm Wales and other initiatives. Now we need to see clear, comprehensive and well-funded initiatives from the Tory-led Government to deal with fuel poverty, because as they squeeze wages, raise taxes—such as those on fuel—cut benefits and hit our people’s pockets in so many other ways, more people will fall back into the group who will see 10% or more of their money disappear on just buying fuel.
This month the Government have announced that they have appointed a fuel poverty tsar, Professor John Hills. I hope that is not just a publicity stunt, as much more needs to be done to address this issue. His independent review will redefine and measure fuel poverty. I hope that does not mean we just change the numbers, and lift many out of fuel poverty by simply changing the way the numbers are added up. It does not matter what the numbers say: if people cannot afford to heat their home or put fuel in their car tank because they have not got enough money, they are still cold and still poor. I hope there will be no dragging of feet on that.
One area in which we may see some recommendations is the need to ensure that privately rented accommodation is properly insulated—and again, we can do that without waiting. Some of our poorest people live in privately rented property, where many landlords are happy just to pick up the rent without investing as they ought to. I hope the Minister will do a bit of cross-Government thinking today, and tell us how this issue will be dealt with under their new plan to tackle fuel poverty.
There are other solutions, and the Energy Bill, which is currently in the other place and is due to come to the House of Commons, may help if sufficient capacity is built in to make things happen on a similar, or greater, scale than in recent years. It allows for the implementation of a green deal scheme from 2012, which will allow householders to install energy efficiency improvements without having to meet any of the up-front costs. Those will be met by energy companies and will be paid back over a period of up to 25 years—but is that really the good news it is made out to be? We need to ensure that the financial environment in which such schemes are taken forward is the right one. Will potential changes to the feed-in tariff in respect of the installation of photovoltaic panels, for example, provide the right financial incentive to deliver that day-time free electricity for householders? We will need to wait and see, but the Government will miss a major opportunity if they mess about with the tariff and negate the incentive that investors and householders need.
I have concentrated on fuel poverty in terms of the household budget. This Tory-led Government are helping to create a new type of fuel poverty. Many people cannot afford to buy petrol or diesel, and that particularly affects the rural communities in my constituency, such as Stillington.
James Wharton (Stockton South) (Con)
The hon. Gentleman speaks passionately on a subject about which I know he cares a great deal. He and I represent different halves of the same town, and we often disagree on political matters, but I suspect we share some common ground on this issue, in wanting to see the costs to our constituents brought down at every possible opportunity. Does he agree that if the Government could introduce a fair fuels stabiliser, that would be useful in allowing people who particularly need to be able to do so to plan their budgets and manage their money better, so that they could help themselves by planning their finances and avoiding the problems of poverty that, sadly, we so often see in the north-east?
Alex Cunningham
This is amazing, but I find myself in agreement with my colleague who represents the opposite side of the Stockton borough. Any measure that reduces costs for the people whom he and I represent has got to be important. That is particularly the case in places such as Stillington in my constituency, where people need to commute, often to low-paid jobs, and have limited public transport services. They are hit the hardest by the current economic policies.
I hope that the Government will see sense. I hope that they will avoid a fudge on the need for a comprehensive programme to tackle fuel poverty, and I hope that they will reverse the VAT increase at the pump, and introduce the fuel duty stabiliser—and maybe even keep a couple of the promises they made to our people during the election campaign.
Stephen Williams (Bristol West) (LD)
First, I want to strike a note of empathy with people both in my constituency and around the country who are struggling with the spike in prices that we have all witnessed in recent months—and, indeed, the last couple of years. This morning, I asked those in my office to check the petrol prices at the garage nearest to my home in St Andrews in Bristol: the Texaco garage on Gloucester road. For the first time, prices in Bristol have risen above 140p. One of the most popular places to fill up in the city is Tesco in Eastville; my constituency neighbour, the hon. Member for Bristol East (Kerry McCarthy), will be familiar with it. Prices there are now 136.9p. Everywhere in the city of Bristol, prices are now above 130p, yet only a couple of years ago I remember being surprised when prices went through the £1 barrier.
In cities, there is competition: there is competition on the forecourts, and there are also alternatives on public transport. Many rural constituencies, such as those in the south-west, mid-Wales or, indeed, Scotland, cannot benefit from that price competition, however. My hon. Friend the Member for Argyll and Bute (Mr Reid) was present for the earlier part of the debate, but has had to leave to attend a Scottish Affairs Committee meeting. He told me that on the island of Colonsay in his constituency, the price of diesel is 163.3p, a full 23p higher than the price in my constituency.
We face a fourfold political challenge. We have to decide how to respond to the pressure on household budgets, how to make that response against a background of having to maintain the taxes and duties necessary to tackle the appalling fiscal legacy left us by the last Government, and how to continue to incentivise a switch to a lower-emissions and lower-carbon economy. Finally, we must consider the background of international factors, such as movements in the oil price and in exchange rates, which are effectively beyond our control. We have to respond to those factors and political challenges responsibly, not in the blatantly opportunist way set out in this motion.
Mr Graham Stuart
My constituents, like those in many rural areas, are not just suffering from the price of fuel at the pump. As they do not have gas at home but oil-fired central heating, the price of which has increased too, there is a double whammy of cost. There is therefore a strong moral case for making sure that the Government find ways to help the most vulnerable people in rural areas, despite the appalling legacy left, as my hon. Friend rightly says, by the Labour party.
Stephen Williams
My hon. Friend makes a powerful point about the price of heating oil, which many households in rural communities have no choice but to use.
The first challenge is how to respond to the pressures on household budgets that I was describing. The coalition Government have said that their priority is to ensure that as we make difficult decisions, the poorest and most vulnerable households are protected. We have already made progress on reducing income tax for the lowest-paid, and I look forward to further progress being made in the Budget. We have a triple lock in place for pensioner households and we are going to introduce work incentives in order to tackle worklessness, which is the major cause of poverty in our country.
However, we also have to tackle the deficit. We have been waiting 10 months for a specific proposal from the Labour Opposition on tax, and this motion is the first detailed one that we have received. The critique that we have heard repeatedly from them is that they want fewer cuts in public expenditure and more emphasis on raising tax, yet their first detailed proposal is for a reduction in tax. In effect, this is another uncosted spending pledge. The hon. Member for Wallasey (Ms Eagle), who led for the Opposition, rightly said that the increase in VAT represents about 3p on the pump price that we all have to pay. We know that each penny of that pump price raises about £500 million for the Exchequer, so the motion is proposing a £1.5 billion spending pledge. However, the Opposition cannot tell us, other than in an allusion in the motion to the banking levy, how on earth they are going to find that £1.5 billion. As has been said, they are in effect proposing a new VAT rate of 17.5%, but they know that under international law, they cannot do that.
This duty as a whole raises about £30 billion as a contribution to reducing the deficit, and it makes up about 62% of the pump price. That is a considerably lower proportion than a decade ago, when the share of the pump price represented by taxes was in excess of 80%. I well remember, when I was on the Opposition Benches and the Labour party was in government, that the person who is now leading the Labour party had much promise when he became Energy Secretary. He certainly talked a good talk in that post, although he was perhaps making up for the rather “brown” years of the Labour Government. Now that he is in opposition, we find that his words were hollow and he has moved on to opportunist ground.
We need to move to a transport system that is more sustainable, with more efficient engines, a different mix of fuels, and electric cars, as proposed in the coalition agreement. As our dependency on hydrocarbons declines, we also need to move to a completely new fiscal model for taxing the use of road space, because road fuel duty and vehicle excise duty are a blunt fiscal instrument.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I have listened carefully to what the hon. Gentleman has been saying, and I was very interested in some of his points. What would he say to the family in the rural part of my constituency who live a mile and a half up a farm track, who have no access to public transport and who cannot wait for the kind of interventions that he is talking about to come along somewhere down the line? Does he support the Government reconsidering in the Budget the fuel duty rise that is due?
Stephen Williams
I do not know whether the hon. Lady was listening at the time, but I acknowledged right at the start of my speech that the pressures in rural constituencies are much harder than those in my urban constituency; I have been made fully aware of that by my colleagues. I do not know the details about her constituency, but I certainly empathise with the situation and I am sure that the Government will respond to what she says.
As I was saying, I wish to see a move towards a more sustainable model for taxing motoring and haulage in our country—road pricing, which would make us better able to respond to changed circumstances. But that is the future, and what we have to do now is respond to the genuine concerns of our constituents and motorists up and down the country. It is only a week before the Budget, and although the Chancellor is not in his place I am sure that he is carefully listening to and being informed by his colleagues about what is being said in this debate. I am sure that when he does respond to those pressures and demands from around the country, he will do so in a way that is not fiscally reckless, is environmentally sustainable, and certainly does not follow the opportunistic advice in the motion.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I am grateful for the opportunity to speak in this debate and convey the feelings of my constituents about fuel prices. In Na h-Eileanan an Iar—as the good Speaker himself would say and, of course, did say—we are paying the highest tax per litre in the UK; we are doing so consistently, at a range of fuel stations throughout the entire constituency. That has been the situation throughout the life of this Government and indeed the previous one. The last lot—the Labour Government—made excuses; this lot—the Tory and Liberal Government—are making promises. The upshot at the pumps in Ness, in Uig, in Back, in Stornoway, in Lochs, in Tarbert, Harris, in Lochmaddy, in Balivanich, in Creagorry, in Daliburgh and in Castlebay is the same; excuses and promises equal exactly the same.
The rural fuel derogation has been announced twice at Liberal Democrat conferences that have been six months apart, but there has still been no formal approach to the EU Commission. Can we be given an indication of how long it typically takes to get such a measure approved by the EU Commission, especially as it has given approvals in respect of far less rural areas in other places in Europe than the Hebrides and other Scottish islands?
Mr Andrew Turner (Isle of Wight) (Con)
I hope that the hon. Gentleman is not speaking only of Scottish islands, because the Isles of Scilly are included in this and I hope that the Isle of Wight will be too.
Mr MacNeil
As the hon. Gentleman knows, and as I have demonstrated in the past, I have great sympathy for the Isle of Wight and indeed for the Cornish Isles of Scilly, so I hope that this will extend to them as well.
May I suggest that the Government put in place a maximum percentage that can be taken at the pumps in taxation, or at the very least a desired percentage to be taken in taxation, just as the inflation rate seems to be a desired rate and a target for the country? I say that because in the UK 62% of the price of petrol is duty, which is the highest level in Europe—the lowest level in Europe is 46%. May I also ask the Government to examine the fuel distribution network, because many people have long had deep concerns about profiteering between refineries and retailers in what seems to be a very opaque business model? We have to ensure that any gains we make in the—so far promised—rural fuel derogation are felt at island pumps and are not snaffled away elsewhere.
We know what fuel tax is doing to people’s pockets on a daily basis up and down the land: it is affecting the poorest more, as this is a highly regressive tax. In areas such as mine, where wages are below the national average, the cost of living is higher and fuel poverty is high—my constituency has the highest in the land—the regressive nature of this tax is really felt. The tax pulls money out of the economy from families, businesses and individuals, and from local authority budgets and health board budgets. Clearly we need help and I ask the Government to provide it in tackling fuel tax and in taking the foot of high fuel tax off the neck of the islands’ economy.
When I last spoke in the House on this matter, on 7 February, I said—I have checked the Hansard record—that fuel was £1.44 a litre. My office in Stornoway tells me that it is now £1.48 a litre, and I shudder to think what it might be the next time I speak on this issue in the House, because the cost seems to be going in one direction. Before the staff at Benbecula airport correct me, yet again, on the price, I point out that the price in Uist will inevitably be higher. I understand that the price in Uist and Benbecula is more than £1.50 a litre. Consistently, throughout the length of my constituency, we are paying the highest fuel tax in the UK. The simple re-announcements of the intention to have a rural fuel derogation without any change coming at the island pumps are greeted with nausea by my constituents, who are tired of hearing pious words and are instead looking for pious actions.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
Can the hon. Gentleman explain to my constituents why his party is interested in giving help only to Scots in rural areas and not to people in my constituency?
Mr MacNeil
I will indeed. I imagine that in West Dunbartonshire the price of fuel is 15p to 20p a litre lower. How I wish we could enjoy the prices of West Dunbartonshire. I also wish that the hon. Lady could express some sympathy for the voters, constituents and people of the Western Isles who have suffered higher fuel prices than many other areas in the UK as a result of the policies of successive Governments.
Gemma Doyle
For the purposes of clarification, let me assure the hon. Gentleman that fuel in West Dunbartonshire is currently £1.36 a litre for unleaded and £1.43 for diesel—not far behind the prices he quoted for his area.
Mr MacNeil
I have every sympathy for the people of West Dunbartonshire—those are high prices—but with our prices of £1.48 and £1.50 a litre, I wish that we could enjoy prices such as £1.36 a litre. If I went back to the Outer Hebrides tomorrow and announced a price of £1.36, I would be regarded as some sort of hero, but unfortunately I cannot do that. I have sympathy with the hon. Lady but I am afraid that she must reciprocate and understand the problems that come when fuel poverty is higher, the cost of living is higher and wages are lower. The pilot project in the Outer Hebrides and other islands in Scotland is the right way to go. If it is a success, I hope we can extend it. I find the lack of sympathy from Labour Members about the problems in the Outer Hebrides somewhat distressing.
Cathy Jamieson
Having visited the hon. Gentleman’s constituency in the past, I understand some of the difficulties his constituents face, but does he agree that although we are talking about derogations, stabilisers and all sorts of things people want action now and that there is an opportunity for the Government to act next week? Will he support the Labour motion today to ensure that the maximum pressure is piled on the Government?
Mr MacNeil
I probably will support the Labour amendment, but at my own risk. I am grateful for the hon. Lady’s words. She is very welcome back in Na h-Eileanan an Iar at any time of her choosing. I would be more than pleased to show her around the islands or to entertain her in Stornoway—at my expense.
I must wind up, because I have to speak at a meeting at 3 o’clock about coastguards, which are a very important issue in my constituency. The last time I spoke about this issue I said that the rural fuel derogation was not like Christmas because Christmas had been and gone. It seems to me that it will not be like Easter either, because it looks like Easter will also come and go while we are still waiting.
Claire Perry (Devizes) (Con)
It is always a pleasure to follow the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). I represent a large, rural constituency in Wiltshire, and when I filled up my car on Monday morning, I found that we, too, are paying £1.40 for diesel and £1.35 for unleaded fuel. The point was very well made by the hon. Member for Bristol West (Stephen Williams) that once one gets out of London and the major metropolitan areas there is a real problem with competition. That problem is shared by many constituencies across the UK.
I am afraid that the Labour motion is breathtakingly cynical. Not one Labour Member bothered to show up at the recent debate on this issue in Westminster Hall, and the Labour Government consistently penalised motorists across the country for 13 years, with unused bus lanes, underinvestment in rural transport and 12 rises in fuel duty over 13 years, of which four were in the last 16 months of their term of office. They also planned, as part of their scorched earth economic policy before the election, six further rises to come into effect over four years, so their cynicism in presenting this motion is breathtaking.
Julie Hilling
The hon. Lady is very keen to talk about what the previous Labour Government did, but does she want to think a little about what is happening now? The Road Haulage Association says that in the last week alone £850 was added to the cost per year of running an average-sized lorry—that was under her Government’s watch.
Claire Perry
I am grateful for the hon. Lady’s intervention and I will come to my “demand” for something to be done about this problem. I think we both have in our constituencies small haulage businesses that are really suffering from the increases in fuel prices.
I find the motion muddled and inaccurate. This is yet another unfunded spending commitment from the shadow Chancellor and the Opposition. We cannot use a one-off levy of £800 million to fund a permanent reduction in VAT costing several times that amount. The maths just does not add up. I had always thought that the shadow Chancellor, who is not in his place, was a fairly financially literate fellow.
Andrew Bingham
Is my hon. Friend aware that this is the 10th spending pledge that Labour has made from this banking levy? It has spent that money 10 times—is that not typical of the overspending and double-counting of its years in government, which got us into this mess in the first place?
Claire Perry
My hon. Friend makes an excellent point. The shadow Chancellor’s predecessor referred to a financial primer that he felt he should read. Might I suggest that the current shadow Chancellor should borrow a copy? I would be delighted to lend him my calculator because I think that a financially literate Opposition would be a quality Opposition and one that the country would welcome.
I find this muddled and inaccurate motion extremely worrying because it is illegal. The EU directive on VAT states:
“Member States may apply either one or two reduced rates…The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III”,
but annex III does not list road fuel and other amending articles do not permit a reduced rate or an exemption to be applied to transport fuel. Even if we wanted to do this—if the motion were passed—it would be impossible. This is yet another inaccurate attempt to create a political narrative that joins words such as “bankers”, “tax” and “too far too fast”, but does nothing to address the fundamental problem that the Labour Government left, which we are having to clear up. I do not know about you, Mr Deputy Speaker, but people in my constituency are sick to death of this political posturing and narrative.
Claire Perry
I am afraid that I will not at the moment.
The motion is a sham attempt to create dividing lines when we should be working together to get the country growing and out of this mess. It is cynical, muddled and inaccurate, but, as in all our debates on this issue, I welcome the chance to speak about these matters. Outside London, in many parts of rural Britain, people use their cars. Some 43% of households in London do not own or have access to a car, whereas the figure for my constituency is only 15%. That is not because it is a wealthy constituency—the average income in Devizes is well below the national average—but because in large parts of rural Britain people must have a car to go about their everyday business, to get to their job, to take their children to school and to carry out normal day-to-day activities. It is a necessity.
Sarah Newton (Truro and Falmouth) (Con)
A car is also a necessity for families in Cornwall. Does my hon. Friend agree that the prices are much higher in such areas? In my constituency, the cost of diesel is almost 6p a litre higher than here in London.
Claire Perry
My hon. Friend makes a very good point, which many Members across the House who represent rural constituencies will recognise. Devizes has one of the lowest population densities per hectare of all English constituencies. We have real problems with our road services and thanks to the very misguided policies of the Labour party our rural services were hollowed out. We lost a third of our post offices and, shockingly, all the minor injuries units in the constituency, so people have to use their car to access even the most basic services.
Like many Opposition Members, I am calling on the Chancellor to bring to fruition some of the plans that we all talked about before the election. I do not underestimate the difficulty of introducing a unilateral fair fuel stabiliser, which would be a tricky thing to do. Unlike the Opposition’s proposals, however, it would be legal, and it would be extremely welcome to many Members on both sides of the House and their constituents.
Nic Dakin (Scunthorpe) (Lab)
It is a pleasure to follow the hon. Member for Devizes (Claire Perry), who spoke with her usual panache, confidence and strength of purpose—rather like the Economic Secretary to the Treasury did in setting out the agenda from the Government’s point of view, which she set out very well. I do not agree with that agenda at all, but at least she was here to set it out, unlike the Chief Secretary to the Treasury. Like my hon. Friends who have made this point, I wonder where he is. I am rather reminded of a children’s book that was very popular with my children and I wonder, where’s Wally?
Mr Graham Stuart
It is admirable that Labour Members should be so disciplined in following the line they have been given, but does the hon. Gentleman agree that those on the Front Bench should spend as much time crafting their message so as not to table a motion that is illegal, impractical and careless? They should pay more attention to that rather than just drilling their Members to keep asking where’s Wally, which perhaps sums up the state of their politics today.
Nic Dakin
I think I was the first person to ask that in this debate. Of course, we have a clear economic message that runs counter to the posturing successfully used by the parties in government to suggest that there is a need to cut fast and deeply. Our message is that there is no need for such cuts. Three tools are at our disposal to manage our way out of the economic challenge: growth, taxes and service reductions. The Government are using only taxes and service reductions, at a heinous rate, when we should have a policy for growth. Their policy is for the opposite of growth.
Let me draw attention to the headlines sought by the Conservative party as long ago as 2008: “Tories vow to slash fuel duty”, from the Press Association on 6 July 2008; and “Tory tax cut to beat hike in fuel” from The Sun on 7 July 2008. In a sense, since 2008 the Conservative party has made promises to the British people on fuel duties that it has singularly failed to meet in government.
Lilian Greenwood (Nottingham South) (Lab)
Does my hon. Friend recall a promise being made before the election to increase VAT to 20%?
Nic Dakin
I recall one of the parties in government saying to the other party that it was telling an untruth when it said that it would not put up VAT. It turns out that both parties were planning to put up VAT all the while.
People face real difficulties because of the situation in the middle east, the fuel duty rises that the Government have already imposed and the burden of putting VAT up, totally unacceptably, to an all-time high. That favourite Tory tax is now at 20% and that is causing real difficulties for people—we need to listen to them.
Neil Carmichael (Stroud) (Con)
May I clarify that it was the Labour Government who introduced most of the VAT increases, which needs to be discussed? Does the hon. Gentleman agree that it is wise for the Chancellor to be considering a fuel stabilisation change?
Nic Dakin
When there were huge economic challenges caused by the great global banking crisis, the Labour Government reduced VAT on fuel and on everything else—they did not put it up and worsen the situation, which is the policy of the parties on the Government Benches.
Let us look at the impact of this tax on growth on people and businesses. Alongside the tax on growth, we have cuts in public services, rising prices, inflation wobbling out of control, cuts to the education maintenance allowance—given to the poorest of our young people so that they can continue and aspire in education—and tuition fees being set at record levels. Unemployment among young people is, on this Prime Minister’s watch, the highest it has been for almost 30 years. That is the Government’s disgraceful economic record.
People on fixed incomes—including pensioners and those on disability living allowance—are hugely worried about the mobility effect of the hike in fuel prices and the difficulties it will make to their lives. Only today, a witness appeared before the Select Committee on Education—David Lawrence, the principal of Easton college in Norfolk—who said, “Higher fuel costs are a disincentive to participation.” That is what is happening in the real world.
Let me quote one letter that I have received this week, which illustrates the sort of correspondence that we all receive from our constituents. It reads:
“I am thirty eight years old, married with a family of six running two small cars to keep the cost down on tax and running costs. The biggest cost that we are finding hard to cover is fuel, since the beginning of last year, average petrol pump prices have risen from just under 111p/litre to almost 128p/litre. Diesel now costs more than 132p/litre, compared to 112.5p a year ago. I would like to explain to you what impact this is having on my ability to drive and go about my everyday life. The price of fuel not only affects work but personally the cost of running my car has significantly increased so that I only can afford to travel to work, any family trips to visit other areas of the region/country I simply just can not afford.
I am employed as a Transport Manager for a local business that relies heavily on local haulage transport companies and also sub-contractors that travel to our region making deliveries. To keep cost down along with trying to keep our CO2 emissions down we use these sub-contractors as back hauliers as a reduced rate. Over the past few months we have seen transport companies we use either going to administration or just closing the business whilst they can pay back the creditors. This has a big impact on the business I work for as we can not be competitive in a tight margin industry we work in.”
That illustrates the difficulties caused in people’s private and working lives by fuel prices getting out of control and their impact on the economy.
In my area, as Government Members who represent Humberside constituencies know, we also have the spectre of the Humber bridge board threatening to put up the cost of Humber bridge tolls—an outrageous suggestion of yet another tax on local people and a tax on local businesses.
Let us look forward at what we can do. There are things we can do and messages about what we can look forward to. I agree with the hon. Member for Devizes that we should be careful not to engage in political posturing. We all, on both sides of the House, do that from time to time—I think she did a little bit, and I probably have, too—but there are practical things we can do. There is no need for the planned fuel duty increase. It should be postponed or stopped completely because of the circumstances that we are in. We can also consider what can be done about VAT. It did not need to go up on everything and there ought to be imagination and resolution in the EU to ensure that VAT is treated properly for people who drive vehicles in this country.
There are things we can do and it is time to do them. It is time to stop talking and time for action.
Royal Assent
Mr Deputy Speaker (Mr Nigel Evans)
I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Act:
Appropriation Act 2011.
Fuel Prices and the Cost of Living
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:00 - The House divided: - Ayes: 236 / Noes: 301 - Question accordingly negatived.
16:13 - The House divided: - Ayes: 307 / Noes: 239 - Question accordingly agreed to.
Mark Pawsey (Rugby) (Con)
It is a pleasure to follow the hon. Member for Scunthorpe (Nic Dakin), but I am disappointed that he chose to repeat the remarks of Opposition Members on the attendance of Front Benchers in this debate. It is pretty reasonable for us to expect that they would be working hard on a most important Budget, which will be delivered in this Chamber in only a week’s time.
I want to concentrate on the effects of fuel costs on small businesses. The success of our small businesses will be crucial to our work in rebalancing our economy, achieving economic growth and clearing up the economic mess left behind by the Labour party. Certainty and stability in the price of fuel are critical for small businesses—in some cases, they are more important than the price itself, although small businesses suffered massively as a result of rising fuel prices implemented by the previous Government over the past few years. In 13 years, the duty increased from 36p to 57p a litre.
Let me give the example of a medium-sized business in my constituency, Rugby. It is a business that I know well, because I owned and ran it for 25 years before arriving in this place. With 10 vehicles—five delivery vans and five cars for representatives—we served customers around the midlands, and the cost of fuel was a major budget consideration for us. In November each year, I would set my budgets for the following year, and try to estimate the price of fuel over the coming year. In recent years, that became almost impossible. In just the past two years—between January 2009 and January 2011—fuel costs have increased by £1,000 a month. The price per litre went up from 98p to £1.29 in that period; it is now closer to £1.40. The business is now spending £3,000 a month on fuel instead of £2,000. That is £12,000 in additional annual costs attributable to fuel alone. That comes directly from the bottom line; it is a reduction in the profitability of the business, which means that there is less available to reinvest in the business.
As was alluded to earlier, there is evidence from the business community that some suppliers are using the increase in the cost of delivering goods as a reason for price increases to small businesses. That is detrimental to small business profits and is inflationary. When fuel costs change, there are significant implications for distribution costs. Small businesses suffer disproportionately, because they are often in a weaker negotiating position and are thus unable to recoup the shortfall from their customers.
Certainty of price is what small businesses need, so that they can plan. That is often more important to them than price in isolation. I am therefore very sympathetic to the fuel duty campaigns calling on the Government either to freeze fuel duty or to implement the fuel stabiliser. To me, the fuel stabiliser seems a responsible decision, and although I recognise the complexity involved, I support any measure that will decrease the burden on small business.
The motion calls for a reduction in VAT on road fuel to take it back to 17.5%. As the Economic Secretary to the Treasury reminded us, a separate rate of VAT, as well as being illegal under EU law, will have no impact whatever on small businesses, because most of them simply reclaim VAT. If the motion were accepted, it would, of course, lead to additional tax complication for small businesses and make it more difficult for them to prepare their paperwork.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The hon. Gentleman makes an excellent case on small business and its financial concerns, but how does he think the price of fuel will affect the cost of running vehicles in the Home Office, the Royal Mail fleet, and the Department of Health?
Mark Pawsey
The point that I am making is that the most important thing in any organisation is the ability to budget accurately across the business. The stabiliser proposal will deal with that; a reduction in VAT simply will not have any effect on that at all.
It is my contention that Labour Members are to blame for the situation that we are in, because this January, the Government implemented a rise in fuel duty for which the previous Government had legislated; the previous Government raised fuel duty 12 times when in office, and they planned for six further rises to take place after the general election. Businesses are looking forward to seeing what measures the Chancellor will bring forward in the Budget in a week’s time to ease the burden on the important small business sector.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
I am delighted to speak in this debate, which is an important opportunity to highlight the real difficulties faced by people the length and breadth of the country as a consequence of the record price of fuel at the pumps and the squeeze that is being forced on people’s incomes by the Government. Those issues, along with the reckless pace of public spending cuts, are the concerns most widely raised by people in my constituency, and it is easy to understand why. The area has significant economic challenges, which are being made much greater in the current climate by the Government’s approach to the cost of living.
Unemployment in West Dunbartonshire is higher than across the rest of Scotland and the UK. According to the latest figures, published today, the local claimant count has risen to 6.5%, compared with 4.3% for Scotland and 3.8% for the UK as a whole. Recent analysis of pay across Scotland has highlighted that wages in West Dunbartonshire are 11% below the Scottish average, and of course unemployment and low pay have a clear relationship with poverty. West Dunbartonshire has a disproportionately high number of people living in deprivation, and people living there have a disproportionately low life expectancy. I say that not with pride, but to try to communicate to the Government the challenges found in areas such as mine—challenges to which they have seemed impervious, particularly in this debate.
West Dunbartonshire has a high percentage of people employed in the public sector. Of course, the Government are slashing jobs in the public sector; they seem to believe that the private sector will magically rush in to fill the gaps in employment. The last thing any business needs to contend with at the moment is record fuel prices. Far from growing the private sector, they may mean that even more people lose their jobs. Just this afternoon, the owner of a delivery business in my constituency contacted my office to outline the impact of record fuel prices on his business.
Given all those factors, it is clear to see why people in West Dunbartonshire are struggling to afford the squeeze on their family budgets and businesses as a result of record fuel prices, rising inflation, and cuts to the help for families on low and middle incomes.
Justin Tomlinson (North Swindon) (Con)
I agree with the hon. Lady’s comments on the effects of high fuel costs. Does she agree that there should be some regret for the Labour Government’s 12 fuel duty increases?
Gemma Doyle
There should be regret that this Government have raised VAT to 20% with no regard for people in my constituency. Never before have people in West Dunbartonshire been forced to pay £1.36 for a litre of unleaded or £1.43 for diesel, as they do now at some local forecourts. Every time they make a trip to the filling station, they find that it costs them a bigger share of their income to fill up their car.
As we know, the recent spike in the price of fuel has been driven in part by rising world oil costs, especially as a consequence of the crisis in the middle east, but the Government have heaped unnecessary extra pain on people by hiking VAT to 20%, adding 3p to a litre of fuel. It is astonishing that the Government have acted so callously in driving up the cost of fuel, given the pre-election promises made by both the Conservatives and the Liberal Democrats last year. I am sure that I am not the only Member who saw leaflets promising action to keep fuel prices down circulated at the last election by one or both parties, although to the best of my knowledge, the Lib Dems did not even bother using their Royal Mail freepost in my constituency in the election last year.
That the price of fuel at the pumps is now at a record level as a consequence of the Government’s actions is an unforgivable betrayal, but that is of course something that we are getting used to from the Government. The attack on ordinary families’ standard of living goes much further than rising fuel prices driven by the actions of this Government. The VAT hike will cost families with children around £450 a year. Unfair cuts to tax credits, child benefit and housing benefit will further erode the incomes of families who rely on that support.
Pamela Nash (Airdrie and Shotts) (Lab)
Does my hon. Friend agree that the Government have failed to recognise the impact that the VAT rise on fuel will have even on products that are protected from VAT, such as food and children’s clothing?
Gemma Doyle
My hon. Friend makes a significant point. I was about to say that a number of factors are adding up to put intense pressure on family incomes. For example, 1,000 families in my constituency will lose a further £400 a year as a result of the Government’s cuts to the child care element of the working tax credit. What makes that all so much worse is that while the Government are choking off help for hard-working families and recklessly cutting jobs and services, they have given the banks a huge tax cut this year. I know my constituents find it hard to understand how that can be squared with the Prime Minister’s claim that we are all in it together—a frankly laughable claim from a Cabinet of millionaires. [Interruption.] I am sorry if Government Members do not like to be reminded of how many millionaires are in the Cabinet, but I am afraid that that is a matter of fact.
The Government have heaped pain on families, but they could have made a different choice and relieved some of that pain. As my hon. Friend the Member for Wallasey (Ms Eagle) said, the Government could use the £800 million raised from the bank levy immediately to reverse the VAT rise on fuel. Just as the previous Government often postponed fuel duty rises when oil prices were rising, as they are now, the Chancellor should look again at the Budget—that is why he should be here today, listening to the arguments—ahead of the planned 1% rise in April.
Charlie Elphicke
Has the hon. Lady considered that the reason the Chancellor is not here today is that he is busy trying to sort out the Budget to undo the massive financial mess left by the Labour Government and deal with their economic incompetence?
Gemma Doyle
It is the duty of the Chancellor to listen to Members as he is putting together his Budget. Both he and the Chief Secretary to the Treasury should be present, listening to Members as we debate this important subject.
I have outlined a different approach, which would be the right approach. I notice that none of the Scottish National party MPs is present. Their proposal for a fuel duty cut in remote areas would do nothing to help my constituents in West Dunbartonshire. The name of the constituency may include the word “shire”, but on the whole it is not a rural area, although a small number of my constituents would consider themselves to be in a remote area. The majority of my constituents live in an urban or a suburban area and they are struggling with the record price of fuel. We need to go much further and bring down fuel costs for everyone in urban and rural areas.
I will of course support the motion in the name of the Leader of the Opposition. The Government can and must take action to provide some relief to people in my constituency and across the country. They can do this in the ways outlined today. Like numerous other Members, I urge the Chancellor to take that action and go some small way towards showing that he has not completely lost touch with the pain that British motorists are suffering.
Andrew Percy (Brigg and Goole) (Con)
I can assure the hon. Member for West Dunbartonshire (Gemma Doyle) that I am not a millionaire. I would, in the words of Travie McCoy, quite like to be a billionaire, but I do not expect that will happen. There are plenty of rich people on the Opposition Benches—people in glass houses and all that.
We should begin by recognising that over the past couple of decades, Governments of all shades have hiked up fuel duty and, broadly, people have been in general agreement with that because it has been seen as a green tax. That is why it was created. An injection of honesty is needed to counteract the feigned anger that has suddenly appeared and the damascene conversion that has taken place among Opposition Members. Everybody supported fuel duty rises over the year, and their position lacks credibility.
I agree with much that is in the Opposition motion. We all have concerns about fuel costs. Obviously I do not agree with the part that asks us to do something that is illegal under EU law. My radical solution to that would be to leave the European Union, but that is a debate for another day. Before we accuse the Opposition of cynicism, it is incumbent on those of us on the Government Benches to prove that the pledges we made at the general election were not cynical. That is why I look forward to the Budget, on which the Chancellor and Chief Secretary are working so hard, and I look forward to the answers on fuel duty. I hope they include a fair fuel duty stabiliser.
I dished out leaflets to the good voters of Brigg and Goole—hounded them with leaflets, one might say—on the fuel duty stabiliser. I supported it, knowing of the work that had gone into that policy at Conservative central office. I look forward to the Budget next week, when I hope we will hear more details about stabiliser. The price of fuel is having a massive impact on my constituents across north Lincolnshire and east Yorkshire. I note the proposals in relation to the islands and I heard the comments from the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). He has been a passionate advocate on behalf of his constituents. I would say to him if he were here—I know that he is off trying to save coastguards, and I wish him the best of luck on that too—that the effect of fuel prices is not limited to the islands.
Constituents such as mine have to travel an awful long way to their places of work. I represent a largely rural constituency, and most of my constituents travel considerable distances, whether to Lincoln, Leeds, Hull, York or Doncaster. Much of the time they sit in traffic, which is not good for fuel consumption, I am told. The pressures that affect the islands of Scotland and the Scilly Isles affect our constituents too.
Justin Tomlinson
I echo the comments of my hon. Friend. My constituency, North Swindon, has a considerable number of commuters who have no choice but to travel by car. The increased fuel costs impact on them as well.
Andrew Percy
I thank my hon. Friend for that intervention. What we are both saying is that if any solution is applied to one part of the United Kingdom, it must be applied to other parts of it as well. If we are all about fairness, as I am sure we are, it must be a solution that is fair to everybody in the United Kingdom.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
Does my hon. Friend share my concern for 1,000 dairy farmers in west Wales, who cannot pass on the additional fuel duty to their customers because their milk price is fixed by supermarkets?
Andrew Percy
Absolutely. I share that concern for dairy farmers throughout the United Kingdom. I am sure the Minister heard that and I hope he will respond.
My constituency is a logistics hub. We have many transportation firms. A business owner, Paul Emms, came to see me at my surgery in Epworth this weekend. He said that because of fuel prices, he now faces the possibility of laying people off. Rather than contributing tax to the economy, not only has he been stung by tax rises on fuel, but he is putting people out of work whose payroll taxes will be lost and who will have to be funded by the taxpayer through their benefits.
Andrew Percy
No, I will not. I have taken a couple of interventions already.
Fuel prices are a particular issue to my constituents and to businesses in our area. In our patch we also suffer the problems of rural transport. We have very little rural transport. My local Labour council—this is my dig at it—is proposing to scrap the Axholme shopper bus service, which costs only £13,000 a year to run. A political assistant at the council is still being paid several thousand pounds, but we are losing many of our rural bus subsidies. My constituents are not even in the privileged position of being able to rely on public transport as an alternative.
My plea to the Government is to listen to the genuine concerns that have been expressed. I greatly respect the Economic Secretary. She is one of the Ministers who accepts my invitations to visit Brigg and Goole. I heard what she said, and there seemed to be the possibility of some positive messages coming out of the Budget. My constituents cannot bear the prices as they are.
Figures out today show that the average wage in northern Lincolnshire is much lower than in the rest of the country. We pay a lot for our petrol and we have to drive a long way to get to a petrol station these days. This is a massive problem for my constituents, and I urge the Government to pay heed to the promises that we made at the general election—promises on which I was elected—which included doing something about fuel duty and introducing a fuel duty stabiliser. As I said, I am sure that was a well thought out policy before the election and will be implemented shortly.
Sammy Wilson (East Antrim) (DUP)
I welcome the opportunity to bring a Northern Ireland perspective to the debate, although I expect that it will not be all that different from what we have heard from all round Great Britain. There are a number of particular problems which the escalation of fuel prices brings to a place that is on the periphery of Europe and on the edge of the United Kingdom, with all the attendant costs for industry, whether for the transport of raw materials in or for the transport of goods out.
At a time when the Northern Ireland Executive are trying to rebalance the economy and promote the private sector, such increases in costs present particular difficulties. They also present a difficulty when the fuel duty in Northern Ireland is much higher than in other parts of the island. For example, on diesel there is a 60% tax take, whereas across the border in the Republic it is 55%. That distorts competition in industry. Northern Ireland also has a large and dispersed rural community with high levels of rural poverty, so escalating costs will hit people who can ill afford them, as many Members have highlighted for their constituencies.
Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)
Does my hon. Friend agree that an added problem in Northern Ireland is that it is the only part of the UK that has a land border with another state and that fuel smuggling has been endemic for many years? Would the Government not be better served by putting more resources into HMRC’s capacity to tackle fuel smuggling and apprehend those engaged in that unlawful activity, as that could bring in a lot more revenue to the Exchequer?
Sammy Wilson
I accept my right hon. Friend’s point: with a 20% price differential, fuel smuggling of course becomes a lucrative trade.
Although there are differences in approach, there seems to be a fair degree of unanimity that this issue needs to be dealt with. In fact, the only dissenting voice I have heard is that of the member of the Green party who sits in front of me, the hon. Member for Brighton, Pavilion (Caroline Lucas), who seems to think that it is a good idea that fuel prices go up. I think she is more interested in influencing temperatures in the world in 100 years’ time than dealing with the poverty people face in the present day—it is a quirky party, so of course it has quirky ideas.
A number of criticisms have been made of the motion before us, and I must say that I have some sympathy with them. I know that getting a derogation from Europe will not be easy. Indeed, after this debate I will be speaking with the Minister about the aggregates levy and derogations for it, and even for something that simple we are looking at more than a year for Europe to agree a variation on something that it has already accepted. One must bear it in mind that that is not a quick remedy. However, the motion at least highlights the issue, which is one reason I support it, and it does so in stark terms, setting out the impact that fuel price rises have on people.
The Economic Secretary’s response has been threefold. First, she spent quite a lot of her speech looking back. I suppose it is difficult for someone from Northern Ireland to criticise another for looking back, so you will have to allow me to overcome that irony, Madam Deputy Speaker. I admire the way the Economic Secretary made her argument. In fact, I like her style—head-butt the opponent, get them on the ground and kick them when they’re down. She should be an honorary Ulsterwoman. I appreciate her approach, but although the previous Government have a case to answer, I think that people outside are interested not so much in who did what in the past, but in what will happen in future. Although it was good to hear her robust response, it has to go further.
Secondly, the Economic Secretary gave a number of reasons why things could not be done. She talked about deficit reduction and the fact that there would be a cost attached to any action on fuel prices, but one point that has escaped mention in the debate is that we are talking about a windfall for the Government. The increase in money that has resulted from the price rises was not anticipated in the deficit reduction plan in the first place—at least I do not think that the Government anticipated there would be a war in Libya and that that would put up fuel prices and built that into their Budget. If they did, God help us, because if that kind of planning goes into a long-term Budget we should be very worried. It is a windfall tax, so the Government have an opportunity to give it back to the people; it does not impact on the deficit reduction plan and it alleviates a problem that they have identified.
Thirdly, the Economic Secretary said that she cannot pre-empt the Budget, and I suppose we must have some sympathy with that. I do not think that anyone would want her to do so, but if there is to be some good news in the Budget, I would have liked her to have at least softened us all up by giving some hope that that will happen.
Robert Flello (Stoke-on-Trent South) (Lab)
I am thoroughly enjoying the hon. Gentleman’s speech, but, to pick up on that point, Government Front Benchers could pre-empt the Budget by announcing now, as Labour did in the past, that the proposed increase will not happen. They do not have to wait until the Budget.
Sammy Wilson
I was just coming to that point. Government Front Benchers could today at least have offered us some softening up, some promise or some hope held out, but that was not apparent in the speech we heard. Perhaps in the winding-up speech there will be such an opportunity. The one thing we do know is that in opposition and faced with increasing fuel prices and protests about them, the current Chancellor said that when prices and the tax take go up, taxes should go down, and that when prices go down, taxes should go up. That was the policy enunciated when Government Members were in opposition. I look forward to next Wednesday to see whether that promise and policy will be given some effect in the Budget. If that happens, this motion and this debate will have been worth while and there will be at least some alleviation of the hardship that fuel price increases have brought.
Charlie Elphicke (Dover) (Con)
It is a privilege and honour to follow the hon. Member for East Antrim (Sammy Wilson), who made an entertaining, engaging and thoughtful speech on this issue, which we all feel strongly about. It has been an emotional debate on both sides of the House. Constituents write to me daily expressing concern about the cost of living and how they will manage, given the way the cost of fuel has risen in recent times. It is a just concern that is understood on both sides of the House. Hauliers in my constituency write to me expressing grave concern about the situation they find themselves in and their ability to compete with operators on the continent who undercut them.
However, I must say that for the Opposition to bring forward such a motion is the most extraordinary and shameless opportunism I can recall seeing in this House. It is shameful because we know that the Labour party increased duty 12 times in its period in office. We know that it took away the 10p tax rate. We know that tax discs went through the roof, and we know that the haulage industry was decimated in the last decade because the Labour Government had no interest or desire to ensure that that industry was safeguarded.
Chris Evans (Islwyn) (Lab/Co-op)
Does the hon. Gentleman agree that the most damning verdict on the coalition’s first year in government was when someone wrote to me and said, “Mr Evans, thanks to the increase in VAT on fuel duty, I’m worse off than I was a year ago”? Does the hon. Gentleman agree that most people in this country are worse off than they were a year ago?
Charlie Elphicke
Measures taken by this Government will take 800,000 of the poorest people in the land out of tax. The Chancellor is not in his place today; I hope very much that he is working out how he can look after the least well-off people in this country in his Budget. I hope that he will be listening and thinking carefully about how he can engage with people’s understandable concern about the cost of fuel and how the country can be put right after 10 years of being driven into the international sidings.
Elizabeth Truss (South West Norfolk) (Con)
Does my hon. Friend agree that in his Budget the Chancellor should be looking at areas such as South West Norfolk, where people have little alternative but to use their cars both for business and domestic purposes? In particular, does he agree that the rural fuel reduction should be extended to areas such as Norfolk, where there is very little public transport?
Charlie Elphicke
My hon. Friend makes a powerful point on behalf of her constituents, for whom she is such a brilliant advocate. As she and I know, the difficulty is the amount of money in the kitty, which is massively in the red. We have a structural deficit of £109 billion and borrowings this year of more than £150 billion. That is the poisoned economic inheritance that the previous Government left, having maxed out the nation’s credit card and brought this country to the brink of bankruptcy. What do they urge us to do? Opportunistically, they urge us to cut taxes. How would they do that? They would borrow more money, as we know from the shadow Chancellor’s Bloomberg speech, and raise interest rates on mortgages for the average householder, who struggles to get by as it is.
Sheila Gilmore
Did the hon. Gentleman actually listen to what his hon. Friend the Economic Secretary to the Treasury said earlier about the impact of VAT rises and fuel cost rises on businesses? They mean that businesses go under, people are put out of work and they then buy less? Is that not the crux of the issue? If we want growth, we need to give people income with which to purchase things.
Charlie Elphicke
The crux of the issue is that we have to stop the draining of money from the public finances, right the nation’s finances and get this country growing with a pro-business agenda. That is what the Government are looking at, and I hope that in the Budget next week we will see a pro-growth, pro-business, pro-jobs and pro-money economic policy, which we have not had for the past decade. We have been brought to the brink of ruin by the amount of debt that the previous Government encouraged ordinary people to get into and, indeed, managed to get the public finances into. This Government are about putting those things right: ensuring that our housekeeping personally and as a nation is put back on the level. That is really important.
Fiona O'Donnell
Among all those tough choices, which does the hon. Gentleman think his Chancellor found tougher: taking money from his friends in the City and in the banks, or taking money from hard-working families in my constituency?
Charlie Elphicke
I gently encourage the hon. Lady to be cautious when making remarks about rich people. The other day her right hon. Friend the Leader of the Opposition talked about how his house is worth millions and millions, so we should be careful before we start trading such ludicrous insults. This is a serious debate; we have people in our constituencies living in deprivation, and all she can do is trade political barbs. I encourage her to consider how we can create more jobs and money, and how we can grow the private sector, so that it includes real jobs and real money that will take this country forward and grow our economy. The priority has to be to ensure that this country gets back into the fast lane of economic growth in the international arena. We have been slipping down the global competitiveness league over the past 10 years, and we need to ensure that this country goes back to the head of the economic river.
Pamela Nash
Does the hon. Gentleman not agree that rapidly rising fuel prices are doing exactly the opposite of what he says his Government are trying to achieve, with economic growth and the number of jobs throughout the country decreasing?
Charlie Elphicke
I cannot control the weather; God controls that. Nor can I control world oil prices; they are controlled by the global markets. Would that we could just magic away the fact that global oil prices have risen, but we cannot, and global oil prices have been rising and creating the problem felt deeply by many of our constituents. The situation has not been helped by the past decade’s 12 rises in fuel duty, which saw it go up from 36p to 57p. That is a massive, 20p increase, and on top of that there is VAT. But, to come to this House and say, “Well, why don’t we just chop the VAT by 2.5%,” knowing that is illegal and unlawful, and that it would take six years to secure such a derogation, is a shameless and craven exercise in opportunism.
Tom Blenkinsop
The Government are proposing enterprise action zones, so if I were to set up a petrol station in one of them, would I be able to sell petrol exempt of all taxes? That would present a problem for the hon. Gentleman’s argument that, under EU law, we are not able to roll back VAT.
Charlie Elphicke
I do not think the Chancellor would introduce any such enterprise zone on that basis, and nor should he; that would be a ridiculous thing to do.
Just as ridiculous is the fact that the previous Government did so little about smuggling across the border. We see it daily in Dover, where local hauliers complain to me bitterly about the people who fill up in Luxembourg but not in the United Kingdom. They bring goods in, pick up another load, leave and then fill up again in Luxembourg. They contribute nothing to duty, road funds or vehicle excise duty in this country; they come on a free pass, and the previous Government did nothing about it.
Dr William McCrea (South Antrim) (DUP)
Does the hon. Gentleman understand the anger felt by law-abiding people in these days of great financial constraint about the fact that on Tuesday the UK’s biggest fuel laundering plant was found in Crossmaglen in Northern Ireland? That industrial-scale plant was capable of producing more than 30 million litres of illicit fuel a year, representing the equivalent of £20 million in lost revenue. Surely it is about time that such despicable action was stamped out.
Charlie Elphicke
I completely agree with the hon. Gentleman, who makes a very fair point. We need to be firmer and tougher on smuggling and ensure that everyone pays their fair share. Two hauliers in my constituency, Martin Husk, and Tony Thompson of Comfret, stopped me the other day in Dover, complaining bitterly about the way they are hobbled by international competition, and I said that we should look carefully at daily road-user pricing. That would need a European derogation, but all other countries seem able to do it. We should look at introducing that as a longer-term, well thought-out, non-opportunistic measure.
We need measures on fuel which are lawful and affordable. We cannot just prey on people’s fears and be cravenly opportunistic; we have to be considered and careful. We need the Government to continue carefully considering the policy for the Budget next week, and to bring forward something that is affordable, credible, sensible and well thought-out, not the sort of ludicrous opportunism that we have seen from the Opposition.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
Time is running away from me, so I will keep my contribution short. The Opposition have called the debate today because we have certain questions about the Government’s attitude to fuel, to living standards and to the economy more widely.
First, do the Government understand the squeeze on working families? Secondly, do the Government understand the need for a political economy that puts growth and jobs at the heart of everything government do? Thirdly, are they a Government who put the interests of the many above those of the few? [Hon. Members: “Yes.”] Well, I have to say—
Gregg McClymont
No, I will not give way, I am afraid. I have only three minutes. I am sure the hon. Lady will understand.
Government Members say “Yes”, but nothing I have heard so far in this debate leads me to believe that they have an affirmative answer to those questions. Reversing the VAT rise on fuel would be a statement—a declaration—of faith in working families in this country.
Gregg McClymont
I will not, I am sorry. I have only two and a half minutes now, and the hon. Gentleman will understand, I am sure, that there is no time to give way.
Reversing the VAT rise in fuel would be a small concession in the context of a cocktail of economic policies that amount to a sustained assault on the living standards of ordinary families in this country. The Chancellor, the Chief Secretary to the Treasury and other Front Benchers will claim that the squeeze in living standards is beyond their control, but the Deputy Prime Minister admitted at the weekend that this Government’s policies are their choices. They have chosen to make ordinary families pay the price for their chosen economic policy. Regressive indirect taxes are going up; taxes on bankers and financial services are falling. A return of the bonus tax on bankers would be strongly welcomed by Labour Members. Support for families and for children has been cut aggressively this year. The cut to the child care element in working tax credit will hit hard families up and down this country from April.
Ministers talk of rebalancing the economy, but over the next five years the Office for Budget Responsibility has predicted falling savings rates and a lower share of GDP going into the wages of ordinary families. We already know that lower wages, squeezed living standards and lower savings rates lead to higher personal debt, higher financial stress and more personal bankruptcy. Is this the rebalancing of the economy that we really want, where debt is shifted from Government to families? I, for one, do not think so.
Today we are calling for a reversal of the VAT rise on fuel. This would be a declaration of faith in ordinary families up and down the country, and I hope that the Government will look on it kindly.
Kerry McCarthy (Bristol East) (Lab)
We have heard today from Members on both sides of the Chamber about how ordinary working families and people are feeling the squeeze in these tough economic times.
My hon. Friend the Member for East Lothian (Fiona O’Donnell) made an excellent speech in which she spoke up for the constituents who have contacted her by e-mail telling stories of how they are being hit by the fuel price rises. My hon. Friends the Members for West Dunbartonshire (Gemma Doyle) and for Scunthorpe (Nic Dakin) added their tales of woe from constituents who are finding times difficult. My hon. Friend the Member for Edinburgh South (Ian Murray) mentioned a constituent who wrote to him about being hit from all sides by a litany of blows rained down on him by this Government. My hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) referred to a cocktail of economic policies that amount to an assault on the living standards of ordinary working families.
My hon. Friend the Member for Edinburgh South talked about the impact on small businesses, as did the hon. Member for Rugby (Mark Pawsey), who spoke from first-hand experience as someone who used to run his own business. He said that the cost of fuel had gone up from £2,000 per month to £3,000 per month, which was obviously having a major impact on the ability to run a profitable business.
Robert Flello
Is my hon. Friend aware that organisations such as the Road Rescue Recovery Association, the Freight Transport Association, the Road Haulage Association and the Scottish Vehicle Recovery Association are asking, “When are the party in government going to honour their pledge about the stabiliser?” They are desperate for that to happen.
Kerry McCarthy
I will turn in a moment to the pledge about the stabiliser. The hon. Member for Worcester (Mr Walker) called for it to be implemented very soon, as did the hon. Member for Devizes (Claire Perry), who is no longer in her place.
Tessa Munt
Does the hon. Lady agree that the Minister will be very generous in seeing representatives of the FairFuelUK campaign, who have 140,000 signatures on their petition as of today? That is organised by Peter Carroll. The chief executives of the Road Haulage Association and the Freight Transport Association and the operations director of the RAC, together with Quentin Willson, the motor journalist, and I, coming from a hard-hit rural constituency, will discuss this tomorrow. We are suffering the double whammy of domestic oil and fuel oil—
Madam Deputy Speaker (Dawn Primarolo)
Order. This is supposed to be an intervention, not an opportunity to make another speech or to put out an advert.
Kerry McCarthy
I would not expect any less of the Minister, as she certainly should be meeting the organisations. It is a shame that the Chancellor and the Chief Secretary to the Treasury were not also here today to listen to people.
The hon. Member for Brigg and Goole (Andrew Percy) talked about his election leaflets hounding his constituents about the fuel duty stabiliser. He referred to the work that Conservative central office had put into the policy, which he described as a well-thought-out policy from before the election that will be implemented shortly. I may disabuse him of that delusion a bit later in my speech.
The hon. Member for Amber Valley (Nigel Mills) talked about the impact in rural areas and the fact that people could not afford to go to work, and he urged the Chancellor not to go ahead with the fuel duty escalator. My hon. Friend the Member for Stockton North (Alex Cunningham) ventured further afield and discussed the impact of fuel poverty on people who were having to spend more than 10% of their income on heating their homes, saying that what the Government are doing across the board is likely to push more people into fuel poverty. It was a very thoughtful speech.
The hon. Member for Bristol West (Stephen Williams) talked about petrol prices in Bristol. I am sure that one of the few things on which we can agree is that Bristol desperately needs to sort out its transport issues and develop a better public transport system. It has the worst congestion of any city in the country, and we need to address that. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil)—did I pronounce that correctly?
Kerry McCarthy
Almost. The hon. Gentleman talked about the rural fuel derogation, but I do not think that he got an answer from the Economic Secretary. He asked when the pilot in the Outer Hebrides would happen and whether he could have more details.
The hon. Member for East Antrim (Sammy Wilson) went on a bit of a flight of fancy about the Economic Secretary engaging people in head-locks and bare-knuckle fighting, which, I am afraid, she missed. He then expressed disappointment that we had had no softening up from her—I am not sure where he was going with that. However, he also spoke evocatively about the impact of the fuel price rise on his Northern Ireland constituents.
The hon. Member for Dover (Charlie Elphicke) accused the Labour party of shameless opportunism in speaking up for constituents and trying to address the impact on hard-hit motorists. What I would describe as shameless is the Conservative party’s leading people to believe before the election that it could cut 10p off the price of petrol and then doing nothing about it.
Kerry McCarthy
I am sorry, but I have no time to allow any more interventions.
We heard today that unemployment has now risen to more than 2.5 million. Another 27,000 people have been added to the dole queue in the past three months. Those who are in work find their income squeezed by the rising cost of living, with inflation surging over 5%, but average wages growing by just 2.3% and many in the public sector facing a cut in real terms. People are struggling to make ends meet.
This month, the Office for National Statistics added iPhone apps and online dating fees to its RPI shopping basket—I am not sure what was in its RIP shopping basket. The ONS believes that essentials such as food and fuel now make up an increasing proportion of the average family spend. Of course, we have heard today that the price of fuel is rising fast. A litre of fuel is now £1.32, which is up 7p from the beginning of the year. That is an extra £80 for the average driver.
We accept that the Government cannot control the price of oil. We understand that the turmoil in the middle east and north Africa is having an impact on global prices. However, the Government are not powerless. They have a choice. They could choose to help working families get through the tough times, or to carry on regardless down their reckless path of cuts, which are too fast and too deep, slashing support for families and putting the recovery at risk.
The Government have made the wrong choice. The Chancellor chose to raise VAT to 20%, which hits low and middle-income families hardest and has pushed up the prices of fuel, energy and food and, as we have heard, has hurt businesses, too.
Kerry McCarthy
I am afraid that I do not have time.
Before the election, when a litre of petrol was 12p cheaper than it is now, the Conservative party said that it would consult on the fair fuel stabiliser. It said that it would ensure that families, businesses and the whole British economy were less exposed to volatile oil markets. The Prime Minister said that he would help with the cost of living by trying to give a flatter, more constant rate for filling up the car. The Chancellor said that that would be delivered in the Government’s first Budget. It was not. Conservatives led voters to believe that they could and would act. However, we now face the exact problem that the policy was designed to prevent. Rising oil prices have pushed up fuel prices at the pump beyond £6 a gallon, yet there is no sign of the fair fuel stabiliser. Not only that, but the Government have added nearly 3p to the price of a litre of petrol with their VAT rise this year.
The Government need to come clean about whether they will move ahead with the stabiliser and answer the criticisms of a host of commentators, who said that the idea would never work because rising oil prices do not necessarily lead to higher tax revenues. They include the Office for Budget Responsibility, the new head of which said that its analysis suggested that a fair fuel stabiliser was likely to make the public finances less rather than more stable, and the Institute for Fiscal Studies, which said that the claim that the Treasury receives a windfall gain that it can share with motorists when oil prices rise is incorrect. Even the Secretary of State for Business, Innovation and Skills said before the election that the fair fuel stabiliser would be “unbelievably complicated and unpredictable”.
The Government are no closer to introducing the fuel duty stabiliser now than they were a year ago. Rather than teasing the public and dangling the prospect before them, the Government need to nail their colours to the mast and tell us what they intend to do. Labour believes that the Government should reverse their VAT rise on fuels and reconsider the fuel duty escalator rise, which is due in April. In government, Labour often postponed fuel duty increases when oil prices were rising and families felt the pinch. It was clearly the right thing to do then and we urge the Government to reconsider now.
Obviously, there is a balance to be struck between raising revenue and ensuring that ordinary people who are trying to get on with their lives—earn a living, get the kids to school, get to work on time—are not unfairly penalised. For some, driving is a choice and they can cut down on their journeys when petrol prices increase, but what about those who rely on their cars every day and do not have the option of using public transport because the bus and rail services simply are not there, or those who run small businesses, or the self-employed who need to run vehicles as part of their work?
Ordinary working people did not create the global economic crisis; it began in the financial sector. However, under this Government, it is ordinary working people who are paying the price. The Government are taking away more money from families with children than they are asking for from the banks that caused the problem in the first place. The bank levy is expected to raise £2.5 billion, but the last Budget and the spending review took nearly £5 billion from families with children through cuts to child benefit, child tax credits and other measures. The Government have refused to repeat the bank bonus tax that Labour introduced last year, which raised £3.5 billion and could be expected to raise another £2 billion this year.
We believe that the bank levy, which is expected to raise £800 million more this year than was originally predicted, could be used to pay for a reversal of the VAT rise on fuel. That would be the right thing to do: helping people when times are hard, getting the economy moving again and asking the financial sector to pay its fair share. Asking ordinary people to pay and hitting them where it hurts most is the wrong choice. Government Members can try to pass the buck and blame the EU for their failure to act, but the fact is that they have a choice. They could choose to help ordinary working people in the Budget next week. I urge Members to support the motion.
The Exchequer Secretary to the Treasury (Mr David Gauke)
This has been a helpful debate. There is little doubt that the cost of living and the rising price of fuel are difficult issues that affect all our constituents. I thank my hon. Friends who raised issues from their constituencies, in particular my hon. Friends the Members for Worcester (Mr Walker), for Amber Valley (Nigel Mills), for Bristol West (Stephen Williams), for Devizes (Claire Perry), for Rugby (Mark Pawsey), for Brigg and Goole (Andrew Percy) and for Dover (Charlie Elphicke).
When times are hard, things are clearly very difficult, and we understand that people want us to do something. We have to address the deficit. The plans that we inherited were not credible. One plan announced by the previous Government was to increase fuel duty six times over the course of the next few years. The Chancellor will, of course, update the House next week on our plans on all tax matters. I am sure that the points that have been raised today will be fully taken into account.
I will focus on one particular Opposition proposal: the suggested cut in VAT on road fuel. In advance of a Budget, the Opposition seek to find a popular and eye-catching policy to get some headlines and broadcast time. One can imagine the enthusiasm of the shadow Chancellor when he told the Leader of the Opposition of his cunning plan. He wanted to use the money from a tax on unpopular people—our bank levy—to reduce costs for motorists. However, rather than the obvious proposal of reversing fuel duty increases, which might have been a little awkward for the Labour party, he proposed to focus on VAT on fuel, and in so doing to distract attention from the fact that Labour is dropping its opposition to other parts of the VAT increase.
Mr MacNeil
I am grateful to the Minister. I did try to intervene on the Opposition spokesman. I wonder whether the Minister is aware that 37 days ago, on 7 February, there was a debate in this House calling for action on fuel prices, and Labour MPs abstained.
Mr Gauke
I am grateful to the hon. Gentleman for raising that point.
With the new policy prepared, how could the shadow Chancellor’s plan possibly fail? An interview round was done on Sunday, a press conference was booked for Monday, and an Opposition day was planned for today—I believe by moving aside other plans. However, let us consider what happened. So quickly did the flagship policy of a cut to VAT on fuel unravel that the shadow Chief Secretary, in her 32-minute speech, completely skipped over it. She did not want to discuss it for a moment. What went wrong? The starting point, of course, is that the funds identified by the shadow Chancellor are a one-off amount of £800 million that is available this year from the bank levy. There are no funding plans for future years. Of course, the bank levy should be spent in myriad ways, according to the Labour party—I think it has committed it 10 times over.
Let us turn to how a VAT reduction on fuel duty would be achieved. As has been pointed out, the operation of VAT by EU member states has always been restricted by EU-wide rules. Of particular relevance is the fact that reduced rates may apply to certain specified items, but road fuel is not among them. Under the current rules in the relevant EU directive, we simply cannot do it.
Today’s motion states that we should seek a derogation, and the shadow Chancellor has said that France has obtained a derogation with regard to restaurants. That is correct, and it is perhaps worth describing the process required to obtain a derogation—unless, of course, Labour Members wish to leave the EU. That would liven up the debate, but I do not think that that is their position. If they wanted a derogation, there would have to be discussions with the European Commission, which would have to be persuaded to make a proposal. Each and every member state would have to agree to that proposal, and there would also have to be consultation with the European Parliament.
It is true that a new agreement was reached in 2009 on the list of excepted activities, but that agreement took nearly seven years from start to finish. There is no guarantee of success, either. Opposition Members dismiss the European situation, but they sought derogations to achieve lower rates of VAT for listed places of worship and green energy-saving materials. They were unsuccessful, and they abided by the decision. The VAT directive currently allows derogations only on the grounds of simplification or the prevention of avoidance or abuse, so the chances of success are slim. The shadow Chancellor’s position today is that we should begin a lengthy, and almost certainly unsuccessful, attempt to obtain a derogation that may result in our being able to reduce VAT on fuel in six or seven years.
That is not quite what the shadow Chancellor has been saying recently. On 27 February, on the “Politics Show”, he said in respect of additional VAT on road fuel that the Chancellor
“should say I will reverse that now.”
In The Sun on 28 February, he stated that the Chancellor should “act now”. Again on the “Politics Show”, on 13 March, he said:
“The VAT rise he could reverse immediately and I think he should.”
The same morning, on Sky News, he called on the Chancellor to
“act immediately on VAT…on Wednesday we’ll be urging Conservative and Liberal Democrat MPs to join with us in voting in parliament to urge the Chancellor, cut VAT on fuel now and give immediate relief to hauliers and motorists across the country.”
When he says “immediate relief” and that we should not wait until the Budget and that we should “act now”, what he really means is that we should start a lengthy process that just might, possibly, with a bit of luck and with the consent of 26 other member states, mean that we could take some action in about 2018. As an example of immediate action to help hard-pressed British motorists, that is somewhat lacking in effectiveness.
The cynical view is that the shadow Chancellor knew that that policy would not work, but it was enough for him to have something to say to get in the media. The cynics will point out his vast experience in the Treasury—he is, after all, a man with a past. How, they will ask, could he possibly be so incompetent? I think those cynics are being unfair to him. He could be that incompetent. After all, he has told us that he wants to cut VAT to help hauliers, but hauliers can reclaim VAT. He has talked about the cutting of VAT on fuel in the 1990s, but in fact that was domestic fuel. He has talked about asking for a VAT cut on fuel in rural areas, but now asks for a derogation on fuel duty.
If the Labour party is to have a shadow Chancellor who does not understand the tax system and who makes embarrassing mistakes, they would do a lot better with the previous one, who at least did that with a certain amount of charm. Only at the weekend, the current shadow Chancellor told The Guardian:
“My task is to rebuild Labour’s economic credibility, but that won’t happen in a week”.
That will certainly not happen this week. In a desperate attempt to have something to say on a matter of genuine concern, he has come up with a risible policy that is unfunded from next year and that cannot be implemented for years, if at all.
Once again the Labour party has demonstrated that on economic matters, it lacks credibility and competence, and I urge the House to oppose the motion.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Madam Deputy Speaker (Dawn Primarolo)
I now have to announce the result of a Division deferred from a previous day. On the question relating to environmental protection, the Ayes were 282 and the Noes were 20, so the Ayes have it.
[The Division list is published at the end of today’s debates.]
NHS Reorganisation
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:55 - The House divided: - Ayes: 224 / Noes: 305 - Question accordingly negatived.
Madam Deputy Speaker (Dawn Primarolo)
I advise the House that neither of the amendments has been selected by Mr Speaker. I remind Members that there is a six-minute limit on Back-Bench contributions, and I am sure that when making their opening speeches, both Front-Bench speakers will be conscious of the number of Back Benchers who want to speak in the debate.
John Healey (Wentworth and Dearne) (Lab)
I beg to move,
That this House supports the founding principles of the National Health Service (NHS); therefore welcomes the improvements patients have seen in the NHS and supports steps further to ensure the NHS is genuinely centred on patients and carers, achieves quality and outcomes that are among the best in the world, refuses to tolerate unsafe care, involves clinicians in decision-making and enables healthcare providers to innovate, improves transparency and accountability, is more efficient and gives citizens greater say; recognises however that all of those policies and aspirations can be achieved without adopting the damaging and unjustified market-based reorganisation that is proposed, and already being implemented, by the Government; notes the strength of concerns being raised by independent experts, patient groups and professional bodies about the Government’s NHS reorganisation; further notes the similar concerns expressed by the Liberal Democrat Party spring conference; and therefore urges the Government to halt the implementation of the reorganisation and pause the progress of the legislation in order to re-think their plans and honour the Prime Minister’s promise to protect the NHS.
We have called this debate because of the growing crisis of confidence in the Government’s handling of the health service and the Conservatives’ NHS reorganisation, and a growing lack of confidence among independent experts, professional bodies and patients groups. Only one in four of the public back giving profit-making companies free access to the NHS, two thirds of doctors think the reorganisation will lead to worse, not better, patient services, and nearly nine in 10 believe it will lead to the fragmentation of services. When the Prime Minister misquotes me at Prime Minister’s Question Time in support of his plans, we know he is desperate and increasingly isolated.
John Healey
I will give way shortly.
Yesterday the British Medical Association delivered a comprehensive vote of no confidence in the Government’s plans. Dr Hamish Meldrum, the BMA chair, said they were
“driven by ideology rather than evidence, enshrined in ill-thought-through legislation and implemented in a rush during a major economic downturn.”
On Saturday the Lib Dems did the same. Baroness Williams called the plans “lousy” and a “stealth privatisation”. I heard that very good speech for myself at the conference in Sheffield, and I hope that today the House will hear speeches by the hon. Members for Southport (John Pugh) and for St Ives (Andrew George) similar to those that they made to their party conference on Saturday. I must also say to the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow), that I hope that when he winds up this debate we do not hear the same flat and feeble apology that he gave for the Government’s plans when he opened the conference debate. He was totally rejected by his party, which told him and his parliamentary colleagues that the Health and Social Care Bill must be amended.
John Healey
I will give way in a moment.
The test for the Prime Minister is whether the Government’s proposals are always under review, as the Health Secretary said on Sunday, or whether this is not about significant changes to the policy, but about reassuring people as the Bill goes through the House, as people in the Department said on behalf of the Health Secretary on Monday.
Mark Pritchard (The Wrekin) (Con)
Does the right hon. Gentleman not accept that with an annual budget of £100 billion and rising, there is room for efficiency savings and reform? Why has he set his face against fundamental reform, which even the public accept needs to take place?
John Healey
Nobody can doubt our commitment to the NHS, and to both investment and reform, during our 13 years in office—often in the face of opposition from trade unions. Of course there is room for efficiencies, and there are ways to get much better value for money out of the NHS but, as the Select Committee on Health has said, the reforms will make it harder, not easier, to meet that challenge.
Rehman Chishti (Gillingham and Rainham) (Con)
Has the shadow Health Secretary seen the consultation responses to the White Paper, which show widespread support for the reforms?
John Healey
The hon. Gentleman needs to read some of the material for himself, rather than just reading the briefings provided by his Whips and his Front-Bench team. Some of the 52 organisations that this Government and the Health Secretary claim supported the Bill have written to me saying that far from supporting the principles of the Bill, they have “grave concerns” about the White Paper; that was said by the Patients Association. The Chartered Society of Physiotherapy has said:
“We have been very clear that we have grave concerns about the scope and speed of the structural changes proposed”.
Diabetes UK, Cancer Research UK, the Royal College of Speech and Language Therapists and others do not take kindly to being misrepresented by Ministers as supporting this Bill when they have such grave concerns.
Mr David Evennett (Bexleyheath and Crayford) (Con)
I always thought that the right hon. Gentleman was a reformer at heart, but he obviously is not, given what he is saying today. Why did productivity in our hospitals decline by 15% during the 13 years of the Labour Government, while bureaucracy increased?
John Healey
One of the problems—we all know this, and the new Government will be faced with it in exactly the same way—is exactly how to measure productivity in the NHS. Given the complexity of what is provided for patients—and the requirement to put together packages of care to help people recover from serious illness and live independently is so complex—it is hard to do that. The NHS just is not like a commercial business, which is what this Government want to turn it into.
Henry Smith (Crawley) (Con)
Let us consider something more quantifiable. Is the right hon. Gentleman in favour of more or less bureaucracy in the NHS?
John Healey
Let me send the hon. Gentleman a copy of the Labour manifesto, because we set out exactly how we could make significant savings from the bureaucracy.
John Healey
I am just responding to the hon. Gentleman’s colleague, so I ask him to be patient. We set out exactly how we could reduce the costs and some of the bureaucracy. Perhaps the hon. Member for Crawley (Henry Smith) could ask his Front-Bench colleagues how bureaucracy will be cut when the function currently carried out by 150 primary care trusts in England will be carried out instead by more than double that number of general practitioner consortia.
Grahame M. Morris (Easington) (Lab)
Perhaps the Secretary of State, too, would share his thoughts about how money will be saved on bureaucracy when expenditure on Monitor, which will take on a new economic regulator role under clause 52 of the Health and Social Care Bill, will increase from £21 million a year under Labour to as much as £140 million a year—£500 million over the course of a Parliament. How is that saving money on bureaucracy?
John Healey
My hon. Friend does a great job in ensuring that this Government are held to account on the NHS through the Health Committee. He rightly says that Monitor’s budget is currently about £20 million and the impact assessment calculates that that could increase to as much as nearly £140 million—although Monitor’s core operating costs are not that entire total, the figure will be at least three times as high as it is now. That is not a decrease in bureaucracy and operating costs, it is an increase. Hon. Members would do well to read some of the documents, rather than the briefings they have been given by their Front Benchers.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
My hon. Friend the Member for Easington (Grahame M. Morris) has told us that Monitor’s budget will increase by the amount that he said, but does my right hon. Friend agree that it will continue to increase exponentially, because the Government are opening up the NHS to European competition law, and that competition will grow exponentially year on year?
John Healey
This is such a big and fundamental change to the NHS that £140 million is the best guess. Clearly, as the competition role of Monitor increases and the competition legislation it has to deal with becomes stronger, those costs could increase. We simply do not know, because this is a leap in the dark for the NHS.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Having listened to the debate at our party conference on Saturday, the right hon. Gentleman will know that there were strong views that the Bill needed to be further improved and strengthened, but he will also know that there was no call for it to be pulled or paused. He will also remember that when his party and my party joined together to form the NHS, the doctors were not always on the side of the enlightened.
John Healey
The Liberal Democrats are quick to try to claim credit for other people’s successes, and quick to try to duck responsibility for some of the difficult challenges they face. However, the right hon. Gentleman is right—it was the BMA that called yesterday for the Bill to be withdrawn. Our motion calls not for it to be withdrawn but for a pause in its passage through Parliament to give the Government a chance to rethink, exactly as was requested by speaker after speaker at his conference in Sheffield on Saturday, and all but a handful of the members who voted at it.
John Healey
I am going to make some progress. We are all conscious of your encouragement to do that, Madam Deputy Speaker.
Some say that the Prime Minister and the Health Secretary are failing to get the message across, but from the start they have told only half the story. The Tories did not tell people about their plans for reorganisation and market competition at the heart of the NHS before the election, and they did not tell the Lib Dems about them before they signed the coalition agreement pledging that there would be no NHS reorganisation. There is no mandate from the election or the coalition agreement for this fundamental reorganisation and far-reaching legislation. They will not be straight with people about their plans. This is not just about communication; it is about judgment. In the face of widespread warnings, they are forcing through at breakneck speed the biggest reorganisation in the NHS’s history.
Nadhim Zahawi (Stratford-on-Avon) (Con)
The right hon. Gentleman wisely started by saying that there is room for reform. The right hon. Member for Edinburgh South West (Mr Darling) had plans in his Budget for a 20% cut in the NHS. Will the shadow Secretary tell us which bit of the NHS he would cut to deliver that 20%?
John Healey
There is someone else who needs a copy of the Labour manifesto. He almost used his six minutes’ allocation to make that intervention.
John Healey
I am going to move on. If that is the best the Conservatives can do, I am going to move on.
The truth is that the more people see of the plans, the less they like them. The closer they look the more concerned they become, because they start to see far-reaching changes at the very heart of this reorganisation and legislation. These are the wrong reforms for the wrong reasons at the wrong time. As our motion says, and as the Lib Dem conference motion said, most people would agree on the declared and desirable objectives—indeed, that is the direction in which the Labour Government were heading—but those aims could be better achieved without this huge internal reorganisation and, as the Lib Dem conference motion stated,
“without adopting the damaging and unjustified market-based approach that is proposed.”
Steve McCabe (Birmingham, Selly Oak) (Lab)
Does my right hon. Friend agree that there is room for reform, but not room to risk the GP-patient relationship? Dr Gerada and the Manchester business school have both highlighted that there is a risk that bonuses and profits could be put above diagnoses and treatment.
John Healey
My hon. Friend is right: this reorganisation and legislation leave no part of the NHS untouched. One big concern is that when GPs are making both rationing and referral decisions at the same time, patients will start to ask whether their GP is making a judgment about their treatment in their best interests or in the best interests of his or her budget and consortia business. That can hit at the trust at the heart of the patient-doctor relationship.
Sajid Javid (Bromsgrove) (Con)
I thank the right hon. Gentleman for giving way so generously. He has mentioned the Labour manifesto twice, and I just happen to have a copy of it. It says that Labour will support a
“role for the independent sector”,
encourage any willing provider, make all hospitals foundation trusts and give them the
“freedom to…increase their private services”.
On that basis, will he explain why he and the leader of the Labour party, who I believe to have been the author of that manifesto, are reneging on that position?
John Healey
We were doing what the manifesto said before the election. [Interruption.] We were doing it where the private sector and competition could add capacity to clear waiting lists, or do something new that the NHS was not doing. We did it in circumstances that were carefully planned, properly managed and always publicly accountable. If the hon. Gentleman is going to swallow the guff from those on his Front Bench that this is somehow an evolution of Labour’s policy, he will have to ask the Health Secretary why he needs legislation that is more than three times longer than the Act that set up the NHS in the first place.
Why do we say what we do in the motion before the House? In truth, this is a Tory reorganisation, and the legislation has been mis-sold. It is not just about getting GPs to lead commissioning or looking to cut layers of management; it is setting up the NHS as a full-scale market driven by the power of the competition regulator and the force of competition law. The reorganisation and legislation is designed to break up the NHS, open up all areas of the NHS to private health companies, remove requirements for proper openness, scrutiny and accountability to the public and to Parliament, and make the NHS subject to both UK and European competition law. The Tories are driving the free market political ideology through the heart of the NHS.
The Secretary of State for Health (Mr Andrew Lansley)
On precisely that point about scrutiny and accountability, we have been talking about independent sector providers. Under Labour, if scrutiny committees in local authorities wanted to investigate the activities of independent sector providers they could not do so. Under our legislation, they will be allowed to do so. Wherever NHS money—the public pound—goes, scrutiny will be able to follow. That is a change for the better.
John Healey
That is simply not true. The people who will make the big decisions about £80 billion of spending—the GP consortia—will not need to meet in public or to publish minutes of their meetings. They will not be subject to scrutiny by this House or proper public accountability.
Let me turn now to the question of subjecting the NHS to UK and European competition law. The Prime Minister clearly did not know about that at Prime Minister’s questions today—he clearly did not know that a third of his legislation sets up this new free market NHS. Perhaps the Health Secretary has only told him half the story about the legislation—
John Healey
Shall I finish what I have to say? Then I will give way. If the Health Secretary has not told the Prime Minister, he certainly has not told the public or this House, so let me spell it out—[Interruption.] The Health Secretary says that I have made it up, but why not wait for me to explain to the House, and then he can say whether what I am about to explain to the House is in my words or his?
Clause 52 of the Health and Social Care Bill, entitled “General duties”, sets up the new competition regulator, Monitor, and says:
“The main duty of Monitor in exercising its functions is to protect and promote the interests of people who use health care services—
(a) by promoting competition where appropriate, and
(b) through regulation where necessary.”
The new regulator is given legal competition powers, as well as functions under the Competition Act 1998 and the Enterprise Act 2002, and there are provisions on reviews by the Competition Commission and co-operation with the Office of Fair Trading.
John Healey
The Secretary of State can speak in a minute; I will finish this point. The regulator can investigate complaints about competition, force services to be put out to competitive tender, remove licences and fine the commissioner or provider up to 10% of their turnover. Helpfully, the Government’s new chair of Monitor confirms that. In The Times last month, he said:
“We did it in gas, we did it in power, we did it in telecoms, we’ve done it in rail, we’ve done it in water, so there’s actually 20 years of experience in taking monopolistic, monolithic markets and providers and exposing them to economic regulation”.
Mr Lansley
It is dead simple: the Health and Social Care Bill does not extend the application of EU competition law, or the application of domestic competition law. The powers given to Monitor as a sector regulator are the same as those now available to the Office of Fair Trading. The Bill does not change the scope of competition law at all.
John Healey
The right hon. Gentleman was involved, so he knows better than anyone else that the Tories are now setting out to do to the public services, including the NHS, what they did to the public utilities in the 1980s.
John Healey
Let me finish. The Government’s explanatory memorandum is helpful on the issue of EU law. It says, about chapters 1 and 2 of the Bill—the one third of the legislation that sets up the new competition system—that
“The Chapter 1 and Chapter 2 prohibitions are modelled on Articles 101 and 102 of the Treaty on the Functioning of the European Union which prohibit agreements that prevent, restrict or distort competition, and abuse of a dominant market position.
Monitor would have concurrent powers with the OFT to conduct investigations where it had reasonable grounds for suspecting that either of these two prohibitions—under either UK or EU law—had been infringed in the provision of health services in England.”
That means that a competition challenge in the NHS can be taken all the way to the European Court.
Helpfully, under pressure in Committee yesterday, the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), confirmed that
“As NHS providers develop and begin to compete actively with other NHS providers and with private and voluntary providers, UK and EU competition laws will increasingly become applicable.”––[Official Report, Health and Social Care Public Bill Committee, 15 March 2011; c. 718.]
As GP consortia will be corporate bodies, not public sector bodies, and as hospitals will be competing with each other, will have no limit on treating private patients, and will have no support from the wider NHS if they run into financial problems, they will be bodies to which the EU competition rules and legislation apply. That means that the NHS will be tied up in the red tape of market regulation and competition law, and we risk decisions about who provides our health care services being taken not in England by GPs or Ministers, but in Brussels by the European Commission, and in Luxembourg by the European Court.
Margot James (Stourbridge) (Con)
The right hon. Gentleman has already acknowledged that competition and markets were a hallmark of the Labour Government; they took them far further than the previous Conservative Government ever did. Of 475 acute care sites providing elective care, 175 are independent sector providers. The Bill proposes making the competition fair and putting it on a level playing field. No longer will we allow the private sector to be as favoured as it was under the Labour Government.
John Healey
This is a debate. People in the country and in the NHS are worried not about what we did in government—they saw the massive improvements under Labour—but about the application of competition law, domestic and European, in full force to the NHS for the first time. The hon. Lady is serving on the Public Bill Committee. She will have the chance to get her head around that, as she clearly has not done so yet.
Owen Smith (Pontypridd) (Lab)
My right hon. Friend has anticipated the point that I was going to make. As we heard clearly in Committee yesterday—the Secretary of State ought to read the Official Report—his Minister, the right hon. Member for Chelmsford (Mr Burns), let the cat out of the bag. Hitherto the NHS has been insulated from European competition law. As there are more entrants to the market, competition law will have to apply—competition red in tooth and claw—followed by the break-up of the NHS.
John Healey
My hon. Friend is right. We have misinformation and confusion. If the Health Secretary disagrees with his Health Minister, I suggest that they have a word about it after the debate.
In the end, perhaps Nye Bevan was right. When Clement Attlee suggested that the NHS opening should be celebrated as a national institution supported by the whole nation, he said, “The Conservatives voted against the National Health Act, not only on second but the third reading. . . I don’t see why we should forget this.”
It is time for the Health Secretary to tell us why he is spending £2 billion on an NHS reorganisation when front-line staff and services are being cut. How many hospitals will be forced to close because of these reforms? Why is he handing such powers over our NHS to new national quangos, competition lawyers and the EU? Why is there no democratic voice in commissioning? Why is he allowing profit to be made in commissioning essential health services? Why is he removing any limit on private patients paying to jump the queue for treatment in NHS hospitals?
John Healey
It is time the Health Secretary told us who is fully in support of the NHS reorganisation and the legislation. NHS staff, dedicated to the part that they play in our NHS, will strive to keep things going whatever the pressures, but patients are starting to see operations cancelled, waiting times rise, hospital services at risk, front-line staff jobs cut and services cut. This is not what people expected when the Prime Minister said that he would “protect the NHS”. Instead, they are seeing the Prime Minister’s NHS promises to “protect front-line services”, to “give the NHS a real rise in funding”, and to “stop top-down reorganisations that get in the way of patient care” all broken. The NHS was the Prime Minister’s most personal pledge. It is now becoming his biggest broken promise.
Now is the time to listen to the chorus of criticism and concern, and to recognise the growing crisis of confidence in the Government’s handling of the health service. Now is the time to call a time out, pause the passage of the Bill in Parliament, and think again. I commend the motion to the House.
The Secretary of State for Health (Mr Andrew Lansley)
The Labour motion is interesting. I will ask the House to reject it, but it is an interesting motion. The first half of it accepts the principles of our reforms—it even does so in the same terms in which we have expressed them—but in the second half it goes on to say, “Not yet. Don’t make us do it yet.” Labour Members are turning their backs on the change that we need in the national health service and even on the policies they pursued in government.
But it is time for change. The public agree—65% of adults in England think that fundamental changes are needed in the national health service. The need to improve results for patients demands it. The need to empower clinical leadership demands it. The need to cut bureaucracy and invest in front-line care for patients demands it. As a coalition Government, we do not shirk our responsibilities. We have been absolutely clear that the NHS will remain free at the point of need, paid for from general taxation and based entirely on need and not on the ability to pay.
Those values are not, and never will be, threatened by this Government. The Health and Social Care Bill will not undermine any of the rights in the NHS constitution. It is for those same reasons that we, in a coalition Government, are protecting the NHS in the life of this Parliament by increasing NHS funding by £10.7 billion.
Clive Efford (Eltham) (Lab)
Will the Secretary of State distance himself from the comments of Dr Charles Alessi, a GP alleged to have been one of the architects of GP commissioning in this Bill and one of the people invited to No. 10, who is of the opinion that too many people in his area are receiving treatment for macular degeneration? Is that not rationing services and nothing whatsoever to do with providing them on the basis of clinical need?
Mr Lansley
All GPs and their colleagues who were part of the first wave of pathfinders were invited to No. 10—there were far more than we ever expected—and Charles Alessi was one of them. It is a complete illustration. I do not know what Charles said or why he said it, but he is the doctor, not me. Frankly, I think that it is clinical leaders in the NHS who are responsible for what they say, not me.
Nadhim Zahawi
Does my right hon. Friend agree that the way in which the Opposition are conducting themselves, when they proposed a 20% cut to the NHS, is scaremongering among our constituents and entirely irresponsible?
Mr Lansley
My hon. Friend makes an extremely good point, and he made it to the shadow Secretary of State, who did not answer it.
Mr Lansley
No.
The fact is terribly clear that before the election the Labour Government said that in three years the NHS would have to save between £15 billion and £20 billion. The Labour party never said in government that that money, if saved in the NHS, would be reinvested in the NHS. The other point is that when we came to the spending review, in which we agreed £10.7 billion extra for the NHS over the life of this Parliament, the shadow Secretary of State’s friends, who were then responsible, said that we should cut the NHS. We do not need to speculate about what they said they would do, because we can look at the example of Wales. The Labour-led Welsh Assembly Government are proposing to cut the NHS budget in Wales by 5%, while we are increasing it. We know exactly what Labour would do if they were in charge of the NHS: they would cut it. We have not cut it and are going to protect it.
Simon Hughes
I share absolutely my right hon. Friend’s view that the protection of the budget and the commitment to the principles of the NHS, which he has just enunciated, are really valuable and that Labour’s record in forcing privatisation undermines its whole argument. He knows that there are concerns. Having come back from the debate in my party, I ask him straightforwardly whether he will take on board the concerns expressed and look at ways to strengthen and further improve the Bill as it passes though this House and the House of Lords.
Mr Lansley
My right hon. Friend was busy in Sheffield over the weekend, but he might have heard me say on Sunday that where there are legitimate concerns, founded in reality rather than myth, about how we will secure the NHS and its modernisation for the future, we will listen. We have listened and changed the policy before the Bill was introduced. We have already amended the Bill during the course of its passage so far and will always look to clarify and improve it as it proceeds.
Mr Lansley
I will give way to the hon. Gentleman, and perhaps he can explain why the Labour party leading the Welsh Assembly Government will cut the NHS by 5% while we are going to increase the budget by £10.7 billion.
Michael Dugher
I might be new to Parliament, but we ask the questions and he is supposed to answer them. The Secretary of State knows full well that patient groups, health charities, doctors and nurses oppose the Bill—even that shower opposite opposed it at their conference. Is it not just arrogance on the part of the Government—
Madam Deputy Speaker (Dawn Primarolo)
Order. The hon. Gentleman needs to moderate his language. I would grateful if he withdrew the word “shower” and thought of another way to make his point that uses parliamentary language.
Michael Dugher
I withdraw “shower”.
Is it not just arrogant for the Government to think that everybody else is wrong and they are right—
Madam Deputy Speaker
Order. It was not an opportunity to ask another question, either.
Mr Lansley
The hon. Gentleman has now learned that, if one is trying to pray somebody in aid, it is best not to insult them at the same time.
We have made it clear that we need to protect the NHS now and for future generations through modernisation. Under the Labour party—
Mr Lansley
Ah! Now we really do have somebody who can explain why in Wales the Labour party is cutting the NHS budget while we are increasing it. Come on!
Owen Smith
That is happening as a result of the very difficult decisions being taken in Wales, having seen the Welsh Assembly budget cut by £1.8 billion by the right hon. Gentleman’s Government. What we are not doing in Wales, however, is effectively privatising the NHS, exposing it to competition law or stuffing the mouths of private companies with public gold.
Mr Lansley
Let us remember that, when we decided to support the NHS here, through the Barnett formula by extension, money was provided to the devolved Administrations, but the hon. Gentleman confirms that a Labour-led Welsh Assembly Government chose not to invest in the NHS, while we in England chose to do so. I urge Welsh voters to remember that when they come to the elections in May.
Under the trade union thumb, Labour is turning its back on modernisation in the NHS, but the NHS cannot be preserved for the future and protected by neglect; it is not something that sits in a static format. It has to change to improve. When the number of managers in the NHS doubled under Labour, when results for patients in many conditions remain way below those achieved in other countries, and when the number of patients placed in mixed-sex accommodation runs into the thousands every month, the NHS needs to change.
Brandon Lewis (Great Yarmouth) (Con)
Does my right hon. Friend agree that some GPs are seeing the potential benefits to their local areas of improving the service for patients, and will he join me in congratulating GPs, such as those in Great Yarmouth, who are moving forward, several years ahead of schedule, with the pathfinder projects?
Mr Lansley
Yes. My hon. Friend will know that we have already arrived at the point where 177 GP groups, representing 35 million patients all over England, have volunteered as pathfinders to show how they can demonstrate such work. [Interruption.] Labour MPs who are insulting general practitioners might like just to remember—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Come on; we want to see the debate continue. A lot of Members want to speak and to intervene, but we cannot have so many of them on their feet at once.
Mr Lansley
I remember that if we ask the public whom they trust in public service, we find that general practitioners are at the top of the list. Members of Parliament and politicians are pretty near to the bottom of the list, so the public might take it pretty amiss that Labour politicians are insulting general practitioners by thinking that they are in it for the money. They are not; they are in it for the patients.
Kate Green (Stretford and Urmston) (Lab)
Will the right hon. Gentleman give way?
Joan Ruddock (Lewisham, Deptford) (Lab)
Will the right hon. Gentleman give way?
Mr Lansley
In a moment.
Only yesterday, the Public Accounts Committee said that over the past 10 years the productivity of NHS hospitals had been in almost continuous decline, and that taxpayers were getting less for every pound invested in the NHS: Labour, leaving us to sort out the mess. The truth of the matter is that the NHS needs to change to meet the rising demand for and cost of health care.
The changes that the NHS needs are simple: more investment, less waste, power to front-line doctors, nurses and health professionals, and to put patients first.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
Will the right hon. Gentleman give way?
Mr Lansley
No. I will give way to the right hon. Member for Lewisham, Deptford (Joan Ruddock) first.
Joan Ruddock
The right hon. Gentleman speaks of the respect that patients have for their GPs, and that is certainly the case in my area, where GPs do an incredibly difficult and demanding job. How does he think, therefore, patients and the doctors themselves regard the pressure being put on them to become managers, to adopt skills that they do not have, and being forced to do it, when they say to me that the plans are untested, potentially divisive and will take them away from their patients? Those things are actually happening. Does he think that it is ethical to pay GPs £300,000 to cut services to patients?
Mr Lansley
The Royal College of General Practitioners has said that it believes that there should be more clinician-led commissioning, and yesterday the British Medical Association reasserted its view that general practice-led commissioning is the right way forward. The Labour Government set up practice-based commissioning but, as the shadow Health Minister, the hon. Member for Leicester West (Liz Kendall), said, GPs were not given the power, responsibility and opportunity to do it. I am afraid that the right hon. Member for Lewisham, Deptford is speaking against the evidence and the experience of GPs all over the country.
Andrew Bridgen (North West Leicestershire) (Con)
Does my right hon. Friend agree that the words of the shadow Secretary of State in this debate seem to contrast somewhat with his words back in January, when he said that
“the general aims of reform are sound—greater role for clinicians in commissioning care, more involvement of patients, less bureaucracy and greater priority on improving health outcomes”?
Why does my right hon. Friend think he has changed his mind?
Mr Lansley
Yes, that is one possibility. Another is that Labour Members are paid for by the trade unions.
Our changes are driving real improvement. Our investment means that more than 1,300 patients are now getting the life-extending cancer drugs they need; that is investment in cancer drugs that the Labour party opposed.
Mr John Baron (Basildon and Billericay) (Con)
My right hon. Friend is absolutely right to make no apology about the need for reform when cancer outcomes in this country remain well below the European average. The all-party group on cancer and, most recently, the Public Accounts Committee have made the case for recording staging data, which provide an insight into early diagnosis. Will he assure the House that, under these reforms, the importance of this issue will be pursued by the Government?
Mr Lansley
Yes. I am grateful to my hon. Friend and pay tribute to his work in this area, which is much respected. He is absolutely right—we will be doing that. Indeed, we can see the benefit already. A few weeks ago, I launched the bowel cancer awareness campaign in the east of England. The reason we were able to start that awareness campaign in that region is that we had good staging data arising out of the cancer networks in the area, which means that we will be able to make valid comparisons between the past and the future in terms of the stage at which patients are presenting for diagnosis of cancer.
Mr Lansley
No, I have given way to the hon. Gentleman before. [Interruption.] He only gets one shot.
Let me make it very clear. Our cuts in bureaucracy—
Mr Lansley
No, I will not give way—Labour Members might like to hear this.
Our cuts in bureaucracy have led to 2,000 fewer managers since the general election and 2,500 more doctors. We are already shifting resources to the front line. More than 5,000 surgeries across the country are now part of the pathfinder groups taking responsibility for front-line services. Some 25,000 front-line NHS staff are taking the opportunity to come together in social enterprises. All this is the modernisation that Labour now opposes. It is the modernisation that is delivering the results that matter, and will matter in future even more as we get to the outcomes that people really care about—whether they live, whether they recover, whether their treatment is successful, whether they have successful lives at home with long-term conditions.
At the same time, waiting times are stable and hospital infections are down, with C. diff down by a fifth and MRSA down by more than a quarter. The number of patients who are in mixed-sex accommodation when they should not be has also come down.
Mrs Anne Main (St Albans) (Con)
Does my right hon. Friend agree that we should totally dissociate ourselves from the disgraceful remarks implying that our reforms will somehow encourage GPs to make choices that are not best for their patients?
Mr Lansley
My hon. Friend makes a very important point. I caution Labour Members not to put political opportunism in place of the relationships that they should have in future with GPs, doctors and nurses and local foundation trusts in their constituencies. They are not speaking for their constituencies—they are just speaking for the trade unions.
The coalition Government are listening to patient groups, professional bodies and independent experts. We have had eight separate substantial consultations on our proposals, and we have changed policy as a result. For example, we have amended the Health and Social Care Bill on an important point, which greatly concerned the BMA, and clarified that the measure supports competition on quality, not price. At the point when a patient exercises choice or a GP undertakes a referral, the price of providers will be the same. By extension, competition must be on the basis of quality. That is important.
Malcolm Wicks (Croydon North) (Lab)
Given the removal of the limit on private patients who can go to an NHS hospital, my constituents will be concerned that, in conditions of scarcity, clinical need for a bed will be trumped by the weight of a wallet. Will the Secretary of State reassure my constituents that money will not trump the needs of patients?
Mr Lansley
Yes. I can entirely reassure the right hon. Gentleman’s constituents because the Bill makes it clear that even if private patient income is available to foundation trusts, it must support the principal purpose, which is provision of services to patients through the NHS. If the right hon. Gentleman wants an example, he might like to go along the road into the constituency of the Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow), and meet people from the Royal Marsden, which is a foundation trust that attracts, from memory—I may not be entirely up to date—approximately 25% of income from private patients. It has consistently recorded the highest scores of excellence for its quality of service to patients.
Mr Lansley
I want to make progress. I have given way several times.
The right hon. Member for Wentworth and Dearne (John Healey) said that we planned to get rid of regional system management in the NHS, but that was Labour’s policy when it introduced NHS foundation trusts. Through introducing health and well-being boards in local authorities, we will have a genuine, system-wide view that looks at the NHS, public health and social care. He complains about the commercial insolvency regime, but Labour introduced that under the legislation that set up the foundation trusts eight years ago. He said that our plans introduce EU competition law. No. EU competition law already exists and the Bill does nothing to change that—it does not extend the application of competition law. [Interruption.] No, it does not. In Committee, the Minister of State, my right hon. Friend the Member for Chelmsford (Mr Burns), explained the current position, which the Bill does not change.
The right hon. Member for Wentworth and Dearne and other Labour Members talk about price competition. We have clarified the Bill to ensure that the competition is on quality. What happened under Labour? The private sector was paid 11% more than the NHS. Under Labour, private sector providers were paid £250 million for operations that they did not perform. Under Labour, NHS hospitals were barred from tendering to provide the capacity that Labour offered to the independent sector. Labour Members favoured the private sector. A Liberal Democrat manifesto commitment stated that we would not in future allow the private sector to be given advantages and the NHS to be shut out. We will implement that.
I want to know a bit, because although the right hon. Member for Wentworth and Dearne said that it was the Opposition’s job to ask questions today, I have done many Opposition day debates on health when I was asked many times what our policy was, and I answered those questions. Is it Labour’s policy to extend the use of voluntary sector providers in the NHS? That was in the Labour party’s manifesto. Indeed, Labour said that it wanted to use the independent private sector, too. Is it still the policy? No answer. We do not know. Is it Labour’s policy to make every trust an NHS foundation trust? Again, it was in the Labour party manifesto. Is it still the Labour party’s policy—yes or no? No answer. Again, we do not know. Is it Labour’s policy to promote competition in the NHS, as quoted from the Labour party manifesto in the debate? The right hon. Gentleman has just made a speech opposing that. Does he wish to intervene?
John Healey
I am grateful to the Secretary of State for giving way. We had the NHS as the preferred provider and were ready to use other providers when they could help, and we did so. The great improvements in the NHS happened because we were prepared to put in the investment and to make the reforms. The Secretary of State talks about policies. The problem with what he is doing to the NHS—the reorganisation, the legislation and the ideological change at the heart of it—is that he did not tell the people about it before the election and he did not tell the Lib Dems about it before they signed the coalition agreement. This top-down reorganisation is exactly what he promised not to do.
Mr Lansley
The right hon. Gentleman was not satisfied with his first speech, so he had to have a go at a second one. He did not answer any of my questions. The Labour party said in its manifesto that it would use the private and voluntary sectors alongside NHS providers. The reason for that was simple: having the NHS as the preferred provider meant that the patient could be let down time after time before another quality provider could be permitted. We are going to allow competition on quality, but the quality has to be there. Patients will get the best possible service from whoever is best placed to provide that care.
Our changes are being seen across the country already.
Mr Edward Leigh (Gainsborough) (Con)
This party political ding-dong is great fun, but what worries me is that we have an ageing population, there are rightly more and more expensive techniques, and the taxpayer cannot put any more money in. Who is going to save the NHS if there is no co-operation with the private sector?
Mr Lansley
Over many years as Chair of the Public Accounts Committee, my hon. Friend challenged the failure of the previous Government to secure the improvement and value for money that is necessary patients. I make no bones about it: I think that if we give NHS organisations freedom and opportunity through foundation trust status, they will be competitive. I do not think that we will see a big expansion in the number of private sector providers, because the NHS has the enterprise and innovation to succeed. However, we have to make sure that they are open to that test. We test whether voluntary and independent sector providers meet the right quality, and we must expose the NHS to that test.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The Secretary of State has decided that he is not going to give way. That is his decision. He has given way already. We need to have a little less noise so that we can hear the Secretary of State.
Mr Lansley
Thank you, Mr Deputy Speaker. I have to conclude to ensure that we do not trample on Members’ time.
We will hold the NHS to account for what it achieves, but not tell it how to achieve it. We want continuous improvements in outcomes and more personalised care. We are going to change accountability in the NHS. In the past, the only question in accident and emergency was whether people were seen within four hours. We will ask whether a patient was seen by the right person, whether the quality of care they received was appropriate, and whether they recovered. From April, we will know those things for the first time. On mental health, we will ask whether we are helping people with serious mental health problems to live longer, and whether we are helping them to get a job. We will ensure that we find out those things and that we know which services provide the right care.
Beyond the NHS, we will make changes that increase accountability. As of today, 134 local authorities with social care responsibilities—almost 90% of such local authorities in England—have signed up to be early implementers of health and well-being boards. Those are the bodies that will finally tear down the walls between the NHS, public health and social care; and they will strengthen local accountability to the public and patients. Local authorities will finally have the powers that they need to scrutinise all NHS-funded providers of care, be they public, voluntary or private sector providers.
The coalition Government were elected to protect the NHS and that is what we are doing. We are protecting the NHS in this Parliament through increased investment, and protecting it for future generations through modernisation. We need an NHS in which every system, process and incentive encourages excellence in health care and weeds out poor performance. Labour now opposes that. It has turned its back on the NHS. It wants to drag the NHS back into politics; I want the NHS to be freed from political interference so that it can deliver the best possible care and results for patients. This Government will always support the NHS. We have a simple aim: to create an NHS that is up there with the best in the world. Our modernisation plans will do just that.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I remind Members that there is a six-minute limit.
Rosie Cooper (West Lancashire) (Lab)
I have spoken in this place on several occasions about the deeply disturbing reforms that the Government are proposing to our national health service. On those occasions I have accused the Secretary of State of glibness and hubris, and as each day passes, as each new piece of information comes to light and as we scrutinise the detail of the Health and Social Care Bill, he proves my assertions right. He currently presides over what I can only describe as an unholy mess that will have huge negative consequences for the NHS and the people who love it and depend on it.
I tell the Secretary of State that the Opposition have seen through his plans, and the Liberal Democrats, who are on his side of the Chamber, see through them as well. Many of his colleagues are very nervous about them, and yesterday the British Medical Association and medical professionals made a clear and unequivocal statement that they, too, see through them. As the plans unfold further, I can tell hon. Members that patients and the British public see through them as well.
Despite the broken promises, the Secretary of State and the Prime Minister seem to think that their NHS reforms are a good idea. I am not sure that they are 100% convinced, though, given that they did not seem confident enough to share the details of their plans with the British public before the general election. In fact, the Prime Minister was very clear in his promise to the British people:
“no more pointless top-down reorganisations”
of the NHS. He even said:
“When your family relies on the NHS all of the time—day after day, night after night—you know how precious it is.”
How quickly forgotten those words were.
Some people felt reassured that, whatever else might happen if the Tories were elected, the NHS would be left untouched. How wrong they were. Today we find the NHS in a state of turmoil and facing massive reorganisation, with hundreds of health workers laid off and its very future threatened by a desire to set up a commercially driven market in health care. This very lunchtime, the Prime Minister said, “We are not reorganising the bureaucracy of the NHS. We are abolishing the bureaucracy of the NHS.” The bit he left off was that private providers would be doing that work. Who is he kidding?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Lady will have to sit down during the hon. Gentleman’s intervention.
Graham Evans
I am new to the House, but I seem to recall the right hon. Member for Leigh (Andy Burnham), who was then the Secretary of State for Health, saying that we should
“celebrate the role of the private sector in the NHS.”
What has changed for Labour Members? [Interruption.]
Graham Evans
When he was Secretary of State, the right hon. Member for Leigh said that we should be celebrating
“the role of the private sector in the NHS”.
What has changed since he made that comment?
Rosie Cooper
The health service was not an issue at the general election, and why? Because people broadly supported it and were not worried about the state that it was in. Government Members must listen to the furore that will happen and prepare to defend their seats in light of the decisions that they take now.
Rosie Cooper
No, I have very little time now.
I believe that what Michael Portillo said on the BBC’s “This Week” programme was an accurate reflection of how the Government have sought to mislead the people of this country. When asked by Andrew Neil why the Government had not told us about the plans for the NHS prior to the general election, he responded:
“Because they didn’t believe they could win the election if they told you what they were going to do. People are so wedded to the NHS. It’s the nearest we have to a national religion—a sacred cow.”
He could not have been more clear: the Government intended to misrepresent their position and to mislead voters.
As I have said previously, this Conservative Government have been prepared to play to the gallery while playing Russian roulette with the future of people’s health services. That is still the case, but the gallery is now empty. They are on their own and have no mandate—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. That is not a point of order, because the accusation was not against individual Members.
Rosie Cooper
Oh how the truth hurts! Michael Portillo could not have been more clear that the Government intended to misrepresent their position and to mislead voters.
I believe very clearly that you are playing Russian roulette with people’s futures, but the gallery is empty and you are on your own. I still believe that you have no mandate for these ill-advised reforms. You do not have that support, and it seems to me you do not have a clue—[Interruption.] It is impossible to make a speech with that noise.
I shall just recap. I do not believe that you have any mandate for these reforms. You do not have the support out there and it seems to me that you do not have a clue. For goodness’ sake, stop now before you kill the NHS.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I just remind Members that the Chair is not responsible? I would be pleased if we did not use the word “you”.
Mr Stephen Dorrell (Charnwood) (Con)
I serve on the Select Committee on Health with the hon. Member for West Lancashire (Rosie Cooper), which I enjoy doing. If I may say so, her speech was uncharacteristically partisan, but I guess that that is the nature of debate on the Floor of the House.
The motion moved by the right hon. Member for Wentworth and Dearne (John Healey), the shadow Health Secretary, has a clear, simple message: “Frank was right.” For 20 years, every Health Secretary—starting with my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) and including me and my right hon. Friend the current Health Secretary—with the exception only of the right hon. Member for Holborn and St Pancras (Frank Dobson), has espoused the principles that underlie the Health and Social Care Bill.
The motion is an apologia from the Labour party to the right hon. Member for Holborn and St Pancras, for whom I feel rather sorry. He was roundly rubbished by his party in opposition, and now he is being canonised. As in the Roman Catholic Church, it is better that you are dead if you are to be a saint in the Labour party. I did not agree with him when he was in office, and nor do I agree with him now.
As my right hon. Friend the Secretary of State said, the truth is that the principles in the Bill are principles that every Labour Health Secretary, with the exception of the right hon. Gentleman, sought to carry out in office. Let us go through them. GP-led commissioning was one of the first principles that Labour espoused in 1997. My right hon. Friend rightly refers to practice-based commissioning, but that was actually the previous Government’s second attempt to introduce GP-led commissioning, which happened after the first attempt—primary care groups—had failed. The previous Government tried twice to apply the principle that they espoused; my right hon. Friend is trying once again.
Tom Blenkinsop
The Bill gives primacy to Monitor, which makes economic decisions. It does not give primacy to quality under the Care Quality Commission. Primacy will go to Monitor, which will make economic decisions on what health treatment people receive.
Mr Dorrell
I understand the point, and it is part of the argument that the Labour party has started to make about how, since Christmas, it has suddenly discovered that the Health and Social Care Bill and the policy that it implements—a policy based on commissioners having choices in the interests of taxpayers and patients—require commissioners to have those very choices if the policy is to be effective. As my right hon. Friend the Secretary of State said, the principle of competition for commissioners’ budgets, as funded by the taxpayer, was set out by the last Government in their policy of December 2007. Hon. Members should look at the text—it is there in the record.
The last Government were right. The right hon. Member for Wentworth and Dearne seeks to set up an Aunt Sally when he says that there is something wrong with European principles of competition law when applied to health care. Let us be clear: if we are spending £100 billion of taxpayers’ money on securing high-quality health care on the principle of equitable access, what is wrong with insisting on the principle that we should not allow monopolists to restrict the choices available for using that budget to deliver high-quality care for patients? That is the principle, and that is why I am in favour of competition law applying to the provision of health care in response to a tax-funded budget.
Nadhim Zahawi
Does my right hon. Friend agree that this is political opportunism of the worst kind?
Mr Dorrell
It is, but it is not even political opportunism that applies to a popular principle. Surely opportunism is normally motivated by some popular principle, yet defending the interests of a monopolist does not seem to me to be a very popular principle.
Mr Dorrell
I will give way to the hon. Gentleman, who is another member of the Health Committee.
Grahame M. Morris
I am doubly honoured, because the right hon. Gentleman has afforded me a courtesy that the Secretary of State would not. The concept of having greater clinical engagement—not just for GPs, but for doctors in secondary care—enjoys broad support across the parties. However, the framework laid out in the Health and Social Care Bill opens the service up to privatisation.
Mr Dorrell
I thought that the hon. Gentleman was going to make the point that he has made in the Select Committee—a point with which I agree—that the purpose of GP-led commissioning is to engage the entire clinical community, not just GPs, in the commissioning process. That is a principle that my right hon. Friend the Secretary of State agrees with. It is also a principle that Sir David Nicholson has made clear will be part of the principles that will be expected to be applied in GP-led commissioning consortia.
Before the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) led me down the road of competition policy, I was going through the principles that are consistent across the health policies implemented by all Health Secretaries since 1990, with the single exception of the right hon. Member for Holborn and St Pancras.
Mr Dorrell
If my hon. Friend will forgive me, I will not.
There are two other important principles, one of which was espoused by the hon. Member for Leicester West (Liz Kendall) when she worked for Patricia Hewitt. That is the principle that all NHS providers should be foundation trusts, in order to provide a level playing field, and to ensure that commissioners have a fair choice and that we deliver good value, high-quality care for patients. Finally, there is the principle of “any willing provider”, where the Labour party provided us not only with a policy, but with a slogan and an election commitment to implement that policy. Now Labour wishes to desert both the policy and the slogan in its election manifesto.
This debate makes me feel as though the last 20 years never happened. It could have happened at any time between 1990 and 1997; and in fact it did—many, many times. What has happened since is that Labour in government picked up those principles and sought to put them into effect. Now, less than 12 months after the general election, it has reverted to type. It is as though nothing happened in the past 20 years. We have heard industrial quantities of nonsense this afternoon, and I hope that the House will reject the Opposition’s motion.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
This costly reorganisation of the NHS has no mandate from the British people, and no support from health professionals or, apparently, the Liberal Democrats. It will be the end of the NHS that we know and love. As I have said before, the NHS is not just an organisation that plans and provides our health services; it also represents the values of our society by which this country sets much store. Contrary to the assertions from the Government Front Bench, the NHS reorganisation defined in the Health and Social Care Bill will wipe out the founding principles of the NHS in one fell swoop.
For the first time since the NHS was established in 1948, the Secretary of State for Health will not have a duty to provide a comprehensive health service. I will let that sink in. Instead, it is to be replaced with duties to “promote” and to
“act with a view to securing”
health services—weasel words that beggar belief. The original duty is fundamental to protecting the provision of a universal, comprehensive health service. It is the foundation on which the NHS was established. Without it, we will no longer be sure that a comprehensive national health service will be provided, and Members of Parliament will no longer be able to hold the Secretary of State to account on behalf of the constituents who elected them.
Rather embarrassingly for the Secretary of State, he might recall that, when he presented evidence to the Health and Social Care Bill Committee, I questioned him on this and asked him why he was repealing that fundamental duty. He said that he was not. However, it is absolutely clear from the Bill’s explanatory notes that that is exactly what will happen. Paragraph 64 states that clause 1
“removes the current duty on the Secretary of State in subsection (2) of section 1 to provide or secure the provision of services for the purposes of the health service.”
That duty is absolutely core: the NHS was established to provide a universal, comprehensive health service, but that will soon be gone. It is worrying that the Secretary of State did not appear to understand the implications of competition law, or to know what was being repealed in his own Bill.
The Government have suggested that these functions will now be the duty of the NHS commissioning board and the GP consortia, but the exercise of the functions will be discretionary. There will be no requirement to provide those services. So I repeat that the Bill will take away the duty to provide a comprehensive, universal health service.
Debbie Abrahams
No, I am sorry, I am going to make progress so that everyone gets a chance to speak.
The Government have also said that the NHS commissioning board will ensure that NHS delivery is free from political control, but I am not so sure about that. The Bill contains a variety of contradictions, particularly in relation to the Secretary of State’s appointments to the various quangos. Another of the founding principles under threat from this Government is that treatment should be based on clinical need and not the ability to pay. We heard the Secretary of State say that that would be protected, but the Government’s reorganisation of the NHS will result in opening up that fundamental principle. The NHS commissioning board and the GP consortia will have the power to generate income, perhaps by charging for non-designated services. What constitutes designated and non-designated services has yet to be defined, however. My hon. Friend the Member for Leicester West (Liz Kendall) tried to get some elucidation on that, but none was forthcoming.
Debbie Abrahams
No, I am sorry, I want to make some progress—[Hon. Members: “Give way!”]
Debbie Abrahams
Not only are the founding principles of the NHS in danger of being wiped out, but its culture—the reason that most of its employees work for the NHS—will go as well. The whole ethos of the NHS will change. It will now be driven by competition and consumer interests—[Interruption.]
Debbie Abrahams
My first question to the Secretary of State was about the proposal that the NHS commissioning board will be able to award bonuses to the GP consortia that it deems to be adopting innovative measures. The Bill states:
“The Board may make payments as prizes to promote innovation in the provision of health services.”
That means bonuses within the NHS based on innovation, which is anathema to the NHS and not what we want for it. This is indicative of the Bill as a whole. Central to the reforms are increasing competition across the NHS and opening it up to providers from the private and voluntary sectors. The Government claim that increasing competition drives down costs and improves quality, but there is evidence from across the world—in the US and Europe—that that is not the case. It does not improve quality at all in health care systems.
Although I am glad to see that the Government have reversed their position on price competition, as of yesterday they were still wedded to establishing Monitor as a powerful economic regulator with the duty to promote competition. As has been pointed out, our health services will be subject to EU competition law for the first time. By forcing these GP consortia to put any services out to competitive tender—even if they are working well and patients and the public are happy with them—the Bill encourages “any willing provider” to—
John Pugh (Southport) (LD)
I am glad to be called to speak. I had a hand in drafting both amendments and the motion in that it is taken from the Liberal Democrat conference. I appear to be responsible for the lot, so I may be a parliamentary first.
I begin by stating the blindingly obvious: the Health and Social Care Bill is in trouble. There is hostility to it from the professions, anxiety about it among the public, concern in the Cabinet and an unease that can be felt spreading in all sections and all parties in this House and the other place. That is just a fact, and it matters more than the political knockabout here or any loss of face, because the effects of the policy—for good or ill, for better or worse—announced with unseemly and misguided haste last June are going to be felt in every home in the country.
Nadine Dorries
I thank the hon. Gentleman for having the good grace to give way. Would he describe the 5,000 GPs who agreed to be part of the pathfinder consortia as “uneasy”? It appears to me that they are incredibly enthusiastic to get going.
John Pugh
I think it is Hobson’s choice.
This is not the first health reform—the last Government introduced more “step changes” than could fill an episode of “Strictly Come Dancing”—but it is certainly the biggest, the most expensive and possibly the most risky. The Secretary of State seems to have chosen for himself a path on which future generations will either put up statues to him or burn him in effigy. However, it is no longer his Bill; it is our Bill. No Secretary of State currently commands a majority in this House.
This Parliament may act like all the others hitherto—and, sadly, it usually does, as it has largely done today—but it is not like any other Parliament. There is no party in this House with a majority, so we should dump the tribalism, the point scoring and the political games. We can get round to doing what we have to do and what we need to do. We have the chance to scrutinise, to seek to amend and improve—and, if unsatisfied, the chance to reject the Bill on Third Reading. That applies to Members of all parties. It is not just “top-down reorganisation” of the health service that we should have dropped with the coalition; we should have dropped “top-down legislation”, whereby MPs simply become pawns in a wider political game, and conviction takes second place to coercion.
There has never been a Secretary of State who has looked at the NHS and found it to be perfect and incapable of improvement. That is largely because we demand so many incompatible things of it that any incarnation is unlikely to satisfy all. Each successive Secretary of State suggests proposals for reform, rather like the Flying Dutchman in a hopeless and sadly doomed pursuit of the ideal format for the NHS. I have to say that the current Secretary of State is probably better equipped for this eternal task than any others: he is committed, passionate, well informed—probably the best informed Secretary of State we have had for some time—and he is brave. He voyages on, undeterred by the siren voices of think-tanks from right and left and the warnings about costs and practical difficulties, and unfazed by the lack of enthusiasm, if the polls are to be believed, among the NHS crew and staff. Of course, as a Liberal Democrat I am disinclined to believe polls at the moment. He carries on, unmindful of the uncharted nature of the course he has set. In Committee, we found real gaps in the understanding of how things will proceed. It is not that he is unaware of the possible danger, but the big danger is that any potential shipwreck will cause us all to be engulfed if costs overrun, if productivity falls, if hospitals close, if waiting lists grow, if morale declines, or if the NHS appears to be denatured, privatised, and not safe in our hands. That is why Parliament’s role is so important in this context, and why good argument rather than the Government machine must prevail.
Greg Mulholland (Leeds North West) (LD)
I pay tribute to the work that my hon. Friend is doing on the Bill. Does he agree that, as with the forestry decision, the coalition shows its strength when it actually listens to the concerns that are out there, and is that not exactly what we need the Government to do at this stage?
John Pugh
Indeed. In the circumstances that my hon. Friend cites, both coalition parties listened to the voices that they heard and took serious note of them.
It would be unsafe to draw any conclusions from the voting patterns today. Political gamesmanship and party loyalties will prevail. However, it is not necessary to hang around the Lobbies much to see that a corrosive unease is spreading through Government ranks, even in the most unlikely quarters, and to see how opposition hardens with every defiant, unbending rebuttal from the Richmond house bunker. We must accept that the Committee, for all its forensic talent, will not solve the problem; we must concentrate on Report and Third Reading, and on the debates that will take place offstage beforehand.
This is our Bill, not the Secretary of State’s. It will not come about unless we vote for it. Even the most calculating, the most tribal, the most ambitious of us—but not, possibly, the most stupid—must see the clear risks as well as recognising the opportunities. If we get it right, reform can take place with the grain of professional and expert opinion, without Ministers’ ceasing to be ambitious for the NHS, and with broad political support in the House and in the country, and arguably it will work better as a result. However, it will require dialogue.
It is a profound irony that the Government want to abolish what they call the command and control model of the NHS by means of a command and control model of legislation. Indeed, they issued a Command Paper over the Christmas period, but then Richmond house does not do irony. If Parliament is to help the Government to climb out of the hole into which they threw themselves last June when the White Paper announced the liberation of the NHS, we need genuinely constructive, open dialogue, and we need it to start here. Perhaps, in order to liberate the NHS, we need to liberate Parliament a little bit first.
Karl Turner (Kingston upon Hull East) (Lab)
It is a privilege to follow the hon. Member for Southport (John Pugh). Like him, I am a member of the Public Bill Committee considering the Health and Social Care Bill, and I always listen intently to his well-informed and reasoned speeches. I think that many Opposition Members, at least, will agree with what he has said today.
The Government’s proposed changes will fundamentally alter the nature of the health care system for the worse. That opinion is held not only by Opposition Members but by numerous experts, including the British Medical Association, the Royal College of Nursing and the Royal College of Surgeons, to name but a few. I am pleased to say that we now know that the Liberal Democrats agree with us on this issue, but it is not enough for them to talk tough. They must do what they say they can do. They should not just sit on the fence. They have a real opportunity to prove to the electorate that they can change Government policy when it is damaging and destructive to their constituents.
The damage that this policy will do is, in my view, irrevocable. Let us make no mistake: the Government are ripping the N from the NHS. They are planning, by stealth, a wholesale change in the structure of our health service system. The plans are damaging and, without question, revolutionary rather than evolutionary.
Karl Turner
Not at the moment.
The Government Front-Bench team and its Lib Dem colleagues can argue against what I say until they are blue in the face, but we know what the reality is. The chief executive of the NHS, Sir David Nicholson, says:
“The scale of the change is enormous—beyond anything that anybody from the public or private sector has witnessed”.
When we bear in mind the context of the plans, the destruction to the NHS becomes very apparent. The plans are to be implemented at a time when the NHS is to make £20 billion in efficiency savings. This is a costly, unnecessary and reckless top-down reorganisation of the NHS, and it is without any real mandate. The coalition agreement clearly states that the new Government will stop the top-down reorganisation of the NHS. Instead, we are faced with a reorganisation that is described as being so big
“you can see it from space.”
Christopher Pincher (Tamworth) (Con)
The hon. Gentleman seems to favour top-down organisation of the NHS. Does he agree with his party’s shadow Health Minister, the hon. Member for Leicester West (Liz Kendall), who said:
“Many staff are disillusioned and disempowered by the top-down target driven approach that has dominated much of the last decade of health policy”—
his party’s policy?
Karl Turner
I am well aware of my hon. Friend’s remarks, and they were made in a very different context, but let us listen to the BMA. Yesterday, it held its first extraordinary meeting for 20 years. Interestingly, it has convened two emergency meetings in the past 20 years, both of them under a Tory Government. It is the same old Tory story: they cannot be trusted with the NHS.
The most damaging part of these plans is the competition aspect. The Secretary of State’s smokescreen about GP commissioning is designed simply to divert attention from the underlying plans, which are, as Baroness Williams has said, privatisation by stealth, and Professor Ham of the King’s Fund correctly asserts that the commissioning reforms
“are of secondary importance compared with the radical extension of competition”.
The Health and Social Care Bill brings the NHS within the remit of competition law for the first time, and Monitor, the new economic regulator, will be instructed actively to promote competition under clause 52. Placing a statutory obligation on Monitor to enforce competition creates a situation in which commissioners will not be able to act in the best interests of their patients, for fear of a costly legal challenge lurking in the shadows.
The Government’s approach to Monitor demonstrates how ill thought out these plans are. In a clamour to roll back the state and win favour with the private health companies that have bankrolled their party, the Government’s plans to introduce competition into the NHS will work against the integrated networks needed to ensure that the long-term ill receive the services they need and are entitled to.
The most worrying aspect of this policy is that the Government have ignored expert criticism—or, indeed, criticism of any kind. The divide is pretty stark. On one side there is the BMA, A National Voice, the Royal College of Nursing, the Stroke Association, the Royal College of Surgeons, the Chartered Society of Physiotherapy, the Royal Pharmaceutical Society, the Foundation Trust Network, the Royal Society of GPs, and, since the weekend, the Lib Dems. On the other side, there is the Secretary of State and the private health companies, who are bound to be rubbing their hands, waiting expectantly for their investment in him and his party to pay off.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
It is a great pleasure to speak after the great tour de force that we heard from my right hon. Friend the Member for Charnwood (Mr Dorrell). He dispelled a huge number of the myths that the Opposition have been trying to put forward today and during our entire Committee proceedings on the Health and Social Care Bill—one would almost believe that they had not been in power for the past 13 years. It is clear that one of the main reasons why we need to reform the NHS is not just to build on what the previous Government have done in terms of using private sector providers, but to make sure that we put a lot of things right. We are cutting bureaucracy and putting more money into front-line care—that is one of the main purposes of the Bill.
Before I develop my arguments about bureaucracy, I wish to pick up on what my hon. Friend the Member for Gainsborough (Mr Leigh) said in his intervention. He talked about the challenges of dealing with an ageing population. This country undoubtedly faces a big problem in providing health care as a result of many people living a lot longer, although that is a good thing. A lot of people have multiple medical comorbidities as they get older and they need to be looked after properly. The key financial challenge to the NHS is in ensuring that we look after our ageing population, and properly resource and fund their care, so when we cut bureaucracy and put more money into front-line patient care, that is what that is about.
When we talk about the need to ensure that the NHS has local health care and well-being boards—an NHS that is more responsive to local health care needs—it is a response to the fact that some parts of the country, such as, Eastbourne or my county of Suffolk, have an increasing older population, who need to be properly looked after in terms of funding. That is why it is so important that this Government have committed £1 billion to adult social care and are increasing that. It is also why we are putting an extra £10 billion into the NHS budget over the lifetime of this Parliament—the Labour party would not have done that.
On bureaucracy, it is worth reminding the Labour party of a few things it did when it was in power. Under Labour the number of managers in the NHS doubled. In 1999, there were 23,378 managers and senior managers in the NHS, but that figure had almost doubled by 2009, having increased to 42,509.
Dr Poulter
The hon. Gentleman might wish to listen to this, but I will take his intervention.
Owen Smith
The hon. Gentleman has returned to this point about bureaucracy many times during our proceedings in the Public Bill Committee. Does he not share my concern about our shared ignorance as to how many managers and how much bureaucracy there will be under the new structure in the GP consortia and in the regional presence of the national commissioning board? Does he know what bureaucracy there will be under this Bill, because I do not?
Dr Poulter
What we do know—the hon. Gentleman would do well to listen to this—is that the NHS currently spends £4.5 billion on bureaucracy, and that could be better spent on patient care. Under the previous Labour Government PCT management costs doubled by more than £1 billion to £2.5 billion, and that money could be better spent on patient care. By scrapping PCTs, we will have more money to give to GPs to spend on patients and front-line care, and that can only be a good thing.
Labour Members would do well to listen to a few more of the statistics on NHS bureaucracy that I am about to read to them. Under Labour, the number of managers increased faster than the number of nurses in the NHS. How can that possibly be right? Managers were paid better than nurses in the NHS. In 2008-09, top managers in NHS trusts received a 7% pay rise whereas front-line nurses received a rise of less than 3%. The Labour party was obsessed with bureaucracy, management and top-down targets, and we would much rather see that money spent on patients and front-line patient care.
Grahame M. Morris
We have heard about the layers of bureaucracy that the coalition Government propose to take away, but what does the hon. Gentleman have to say about the additional layers that they are imposing through the exponential growth of Monitor, which will be the economic regulator? They are increasing its budget from £21 million a year to as much as £140 million a year. How many more thousands of people will it employ? How many lawyers? It will cost £600 million over the course of a Parliament.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We must have shorter interventions.
Dr Poulter
This is very much the point. Let us not forget that Monitor was introduced by the Labour party to regulate competition in foundations trusts, and the Government are looking at giving it a slightly increased role while also cutting £5 billion-worth of bureaucracy in the NHS, which has to be a good thing. I hope that the hon. Gentleman agrees that that £5 billion would be much better spent on patients rather than on management and paper trails.
The core of the issue is that Government Members would like GPs to be placed at the heart of the commissioning process. Giving power to doctors and health care professionals is undoubtedly a good thing because the best advocates for patients are undoubtedly doctors and other health care professionals rather than faceless NHS bureaucrats. I am delighted that my hon. Friend the Member for Ipswich (Ben Gummer) is sitting next to me because far too often in Suffolk damaging decisions to remove vital cardiac and cancer care services from Ipswich hospital have been taken by the strategic health authority and the primary care trust, against the advice of front-line professionals. Community hospitals in my constituency in Hartismere have been closed despite GP advice that we need to look after older people and the growing older population. Putting GPs and health care professionals in charge of the new system will bring better joined-up thinking between primary and secondary care, which does not happen at the moment because GPs are often hindered in what they are trying to do and are unable to communicate effectively with the hospital doctors and trusts they need to talk to because of PCTs intervening in the process. Bureaucrats are getting in the way of good medical decisions and the Bill will deal with that problem.
I am aware that others want to speak in this debate so I shall not speak for much longer. I think that all Government Members must oppose the motion. The hypocrisy of the Labour party in its dealings with health care and the NHS has been ably exposed by my right hon. Friends the Member for Charnwood (Mr Dorrell) and the Secretary of State. Government Members want to cut bureaucracy and put money into front-line patient care and helping patients. We believe that GPs and health care professionals are the best people to do that. We want a patient-centred NHS that is locally responsive to local health care needs and that will properly address the fact that we have an ageing population. We want joined-up thinking between adult social care and the NHS, which did not happen under the previous Government. For all those reasons, I commend the health care reforms to the House, and I beg the Conservative party to oppose the motion.
Paul Blomfield (Sheffield Central) (Lab)
Over Christmas, I found myself using the services of the Royal Hallamshire hospital in Sheffield for emergency eye surgery. I want to take this opportunity to pay tribute to the staff there, who saved the sight in my left eye, which is, as hon. Members might imagine, important to me. That procedure was routine for those staff—something that they did day in, day out. The whole experience—the quick diagnosis, emergency admission, successful operation and supportive aftercare—brought home to me the importance of having a national health service that is not only free at the point of delivery but available equally to all and with the capacity to meet the health care needs of our people. Let me contrast it with the system in the United States, where the quality and speed of treatment depends on patients’ ability to pay. Incidentally, the American system costs the public purse more. I know that some Conservative parliamentarians look at that system with enthusiasm. Many of us will recall Daniel Hannan campaigning against President Obama’s health reforms and describing the NHS as a 60-year old mistake, so it is not surprising that the majority of people in this country do not trust this Government with the NHS. When Government Members talk about monopolies, the people of this country see a public service.
Christopher Pincher
The hon. Gentleman talks about Government Members, but he might note that, other than those on the Front Bench, there are only 11 Members on the Opposition Benches for their Opposition day debate. On the Government side there are more than double that number. Does that not bear eloquent testimony to who really cares about the NHS?
Paul Blomfield
What bears eloquent testimony to who really cares about the NHS is our record. Before 1997, I remember patients being stacked up in hospital corridors in Sheffield every winter because the hospitals could not find beds. That situation has been transformed under Labour over the past 13 years.
The Prime Minister has tried hard to reassure the public that the NHS is safe in Tory hands, but he has failed. In January, a major survey of the British public demonstrated that only 27% of people back moves to allow profit-making companies to increase their role in the NHS. That reflects the way in which our people treasure the NHS and its values, and that is why the Government did not have the confidence to say at the general election what their real intention was: the deconstruction and privatisation of the NHS by stealth.
It is not only the public whom the Prime Minister has failed to convince. The Secretary of State told us again today, as the Government have done many times during discourse on the issue, that we should trust doctors—those who understand the NHS.
Paul Blomfield
I am afraid that I will not; I said that I would give way once and then make progress.
I hope that the Government will take their own advice and listen to doctors, because yesterday the doctors spoke clearly and powerfully with one voice, despite reports that we have seen that under the proposals, doctors could earn up to £300,000. At the first emergency conference of the British Medical Association in 19 years, they sent a clear message to the Government: “Think again.”
Five of Sheffield’s hospitals are in my constituency, and I want to focus on the consequences of ending the cap on private income earned by hospital trusts without providing any safeguards. As hospitals face squeezed budgets, they will inevitably look at every opportunity to enhance their income. At one level, they might see the chance of offering additional services such as en suite facilities to those who can afford to pay, but at another, more damaging level, we need to recognise that in Sheffield and across the country, patients are now being refused non-urgent elective surgery. There are increases in waiting times for knee and hip replacements, and for cataract, hernia and similar operations. Those are not operations for life-threatening problems, but they are hugely important for people’s quality of life. Access to that sort of surgery at the earliest point of need transformed the lives of tens of thousands of people under Labour. Those operations may not be life-critical, but delaying them condemns people to pain and immobility.
Paul Blomfield
No. I have said it once: I have given way, and will not give way again, because I want to make progress.
The Government’s plans mean that as we return to the days of long waiting lists, in will step the health insurance companies, perhaps with their links to new commissioning bodies, which will pitch to those who understandably want the assurance of prompt treatment when they need it. There would be a self-reinforcing cycle: more patients would go private to escape worsening NHS services, and NHS providers would then prioritise private patients, worsening services further. Before long, the NHS would be changed beyond recognition. Its founding principles of free and equal treatment for all who need it would be fundamentally undone. No wonder that the chair of the Royal College of General Practitioners has attacked the plans as
“the end of the NHS as we currently know it”,
or that the Royal College of Midwives has said that
“this could accelerate the development of a two-tier service within foundation trusts, with resources directed towards developing private patient care service at the expense of NHS patients.”
Paul Blomfield
No, I will not. The Royal College of Nursing says that it
“cannot support the removal of the private income cap...Until foundation trusts can credibly demonstrate that private income is not at the expense of NHS patients”.
The proposals reveal the ideological heart of the Government and their vision for public services: a two-tier health system, with the best available for those who can afford it, and the NHS becoming a safety net for those who cannot. I was pleased that last Saturday, in the heart of my constituency, the Liberal Democrats found their voice and spoke out against the anti-state, anti-public-services faction that now leads their party. I say to Liberal Democrat Members, as the hon. Member for Southport (John Pugh) said, “This is our Bill”. This is our motion—support it today.
Mark Simmonds (Boston and Skegness) (Con)
It is a pleasure to follow the hon. Member for Sheffield Central (Paul Blomfield), who I thought was going to give a thoughtful speech. The only comment on which I agreed with him was his congratulations to the hard-working, committed staff in the NHS. I am sure that all hon. Members would agree with that.
I have been disappointed by the debate, but perhaps not surprised. Labour Members’ opposition to the reforms proposed in the Health and Social Care Bill and the evidence presented in support of their motion are based on inaccuracies, incorrect assertions and assumptions, and myths about the destruction and privatisation of the national health service. The plans were clearly laid out in the Conservative and Liberal Democrat manifestos. Two thirds of the country is already covered by GP consortia, many of which are keen to crack on with the reforms so that they can improve the care that they are delivering for their patients.
All Government Members are totally committed to the ethos of the national health service. We are totally committed to a free, taxpayer-funded national health service. Most importantly of all, we are totally committed to continual improvement of patient care. The Health and Social Care Bill will achieve all those things, for the reasons set out by my hon. Friends—ageing populations, increasing costs of drugs and technology, and the increasing level of co-morbidities.
In all the debates about the future of the national health service, no Member of the House should forget the most important factor—the user of the service. Some people on the Opposition Benches seem to have forgotten the patient. The Bill moves patient care in exactly the right direction. The reforms are about high-quality care and value for money for the taxpayers. They transfer resources to front-line patient care by reducing bureaucracy and administration. They are about driving up the quality of patient care and improving patient experience and outcomes.
I have no wish to repeat the Second Reading debate on the Bill, but it is wrong to suggest that everything in the national health service is perfect, and that improvements cannot be made through reform. Putting clinicians in a position to lead commissioning and allowing patients to be involved in the decision-making process will drive improvements. Providing easily accessible patient-centric information to inform choice and raise quality standards will drive improvements in patient care.
Nicky Morgan (Loughborough) (Con)
My hon. Friend is making a powerful argument. Does he agree that it is rather tragic—nay, even worse—that we have heard Opposition Members having a go at the motives of both GPs and those who work in hospitals? Opposition Members think that they are driven by money, not by the quality of patient care and outcomes.
Mark Simmonds
I thank my hon. Friend for the point that she has forcefully made. A few—not all—on the Opposition Benches believe that GPs are in it for the money. No GP I have ever met, or with whom I have discussed patient care, is interested in money. They are there to improve the lives of the patients for whom they are responsible.
If we are to engage seriously with improving patient care, we must allow any willing provider to provide services, and allow the provider that is best for optimising patient outcomes in a regulated way to drive up standards. As my hon. Friend the Member for York Outer (Julian Sturdy) said, it is perplexing to hear the arguments that Labour Members have been coming out with today, and ever since Christmas. Is it right that substandard and mediocre services should be allowed to continue purely because they are provided by the state, even when the patient can get better care elsewhere at the same cost? That has to be wrong. What is important is the quality of patient care that is free at the point of delivery, not the delivery mechanism.
The shadow Secretary of State’s position is completely untenable. He must be squirming inside, because he is an intelligent man and a reformer. The Labour party introduced foundation trusts, payment by results, patient choice and private sector provision in the delivery of patient care, and it twice introduced GP commissioning. As recently as 2010, the Labour party manifesto stated:
“We will support an active role for the independent sector”—
that is in the Bill;
“Patients requiring elective care will have the right, in law, to choose from any provider”—
that is in the Bill;
“All hospitals will become Foundation Trusts”—
that is in the Bill;
“Foundation Trusts will be given the freedom to expand their…private services—.
that is in the Bill. Labour also claimed that it would
“ensure that family doctors have more power over their budgets.”
That is in the Bill. The Labour party should support the Bill, not castigate it on the basis of false promises.
The Government are absolutely right to push the Bill, which is on exactly the right lines. We need more investment in the NHS, less waste and more powers for doctors and nurses to be involved in commissioning and clinical decisions. We need to focus on results, create accountability and transparency, and facilitate innovation. The Bill preserves the best of the NHS—equality of access—and creates the architecture to drive and deliver excellence for all.
Angela Smith (Penistone and Stocksbridge) (Lab)
Thank you, Mr Speaker, for giving me the opportunity to take part in this important debate. Health is undoubtedly one of the most important areas of public policy, and one that the British people care about deeply. We on the Opposition Benches are very proud of our record on the NHS. It was Labour who created the NHS in 1947, and Labour who saved it from Tory destruction in 1997. Under the Labour Government there was significant real growth in the resources going into health care. NHS expenditure increased by more than two thirds over 13 years, with real-terms growth averaging around 5.5% per annum. Those high rates of investment led to improvements in hospital waiting times, life expectancy and health outcomes.
It is all too easy to forget what the NHS was like under the previous Tory Government. People waited for years for treatment such as hip replacements, and it was common for patients to spend hours in the cold corridors of old hospitals built in the 19th century while waiting for beds to become available. We changed that by building new hospitals and employing more doctors and nurses.
Angela Smith
I will give way once and no more, because I want other Members to have an opportunity to speak.
Henry Smith
I am interested to hear the tale of life in the NHS before the Labour Government and now, because under Labour my constituents lost hospital provision, including accident and emergency and maternity services. That was the Labour experience in Crawley.
Angela Smith
All I will say to the hon. Gentleman is that I worked in the NHS as one of the so-called bureaucrats in the Tory ’80s, and I remember having a patient crying to me over the phone, begging me to admit him so that he could have his eye taken out, because the Tory NHS was not providing the beds or the theatre space for such operations. We changed that by investing in the NHS so that life chances for many people could be improved. There is no doubt that there are people alive today who would not be so had that investment not been made.
Before the election, the Tories promised to protect the NHS with real-terms increases in spending. Let us get one thing straight: the 0.1% per annum increase that the coalition Government said they would provide does not equate to real increases in spending, because since then inflation rates have gone through the roof. There is no real-terms increase in spending, so one has to ask why the Government want to divert a further £2 billion from tight budgets into a top-down, ideologically driven reorganisation, especially when the coalition agreement specifically stated that the Government would not do that.
Furthermore, it is a reorganisation that no one wants—and that includes the Lib Dems, as we saw with last week’s vote in the great city of Sheffield. Just this week the BMA voted against the proposals, and many other health professionals think that they are dangerous and ill thought through. Without the support of anybody, it seems, the Government are intent on forcing through
“the biggest…upheaval in the health service, probably since its inception.”
Those are not my words but the words of Chris Ham, the chief executive of the King’s Fund.
I have a fundamental disagreement with the Secretary of State’s view that competition and free markets will drive innovation in the NHS, and that profit will motivate performance. I do agree, however, with my hon. Friend the Member for Kingston Upon Hull (East) (Karl Turner), when he says that the introduction of these reforms risks removing the N from NHS. No longer will we have a national service; instead, the system will be fragmented and the postcode lottery of service will become more and more prevalent.
The notion of “any willing provider” means that many NHS hospitals will be at a disadvantage compared with private providers, which will not have to provide a comprehensive service for complex problems. “Fine,” some might say, “if that brings costs down”—but what happens when hospitals and other treatment centres become insolvent and have to close down, leaving many areas of the country without adequate health care provision? Handing over £80 billion to GPs to commission services not only risks the important relationship between patient and doctor; it is extremely risky in itself, because of the lack of accountability.
If the plans are passed unaltered, GPs, through the quality premium bonus, will have a financial incentive to keep costs down and not to refer patients for diagnostic tests or treatment. As we found the last time the Tories tried to undertake such a scheme, they could also become unwilling to take on costly patients with chronic conditions. Those who need the most help could find it more and more difficult to get the treatment that they require.
Of deeper concern is the opaque nature of the consortiums. They will have to produce annual financial reports only for the national commissioning board, and they will not have to publish them. At the same time, every council in the country will have to publish every invoice over £500.
These health reforms have no mandate with the British people. They were in neither of the coalition parties’ manifestos, and even if NHS funding were not being cut, they would still run the clear risk of destabilising the service, because they hand over £80 billion of taxpayers’ money to private institutions, with insufficient safeguards in terms of accountability. The reforms are simply wrong. To allow any willing provider to deliver services risks the destruction of the NHS and a return to the dark days of the 1930s, when we had a two-tier system, with the state providing a minimum service and those who could afford to going private. That, too, would be plainly wrong, and something that the British people have consistently said they would not want.
It was pleasing to see the Lib Dem grass-roots vote against the policy last week, so I say to Lib Dem Members, “The ball is in your court. You can be on the right side of this argument, and your party can be on the right side of the British people, if you go through the Lobby tonight with us. The choice is yours. Flex your muscles and demonstrate that you are prepared to force the Government to revisit their plans by voting with Members on this side of the Chamber tonight.”
Andrew George (St Ives) (LD)
It is a pleasure to follow the hon. Member for Penistone and Stocksbridge (Angela Smith), who made a number of important points about the extent of the reorganisation, quoting Chris Ham of the King’s Fund. Indeed, a number of other authoritative sources point out that these reforms amount to the most significant reorganisation of the NHS since its inception 62 years ago. Therefore, we need to look with great care at the issues that arise as a result of this substantial change. We are talking about the public institution that the majority of people in this country hold most dear, so we have a great responsibility in this House to deal with these issues seriously.
I query the hon. Lady’s final point on the purpose of today’s debate. If the intention was to alienate those who broadly share her and the shadow Secretary of State’s analysis of the Bill, then adopting the device of today’s debate was probably the best way of doing so, so I congratulate them on that. Following the debate in our conference in Saturday, I would say that if Labour Members have a significant interest in the future of the NHS, the most appropriate thing to do would be to try to form a coalition of the people who share concerns about the Bill. Many of the institutions that she and others quoted—the King’s Fund, the BMA, the GMC, the royal colleges and many others—share concerns on the basis of a very objective and dispassionate point of view and could make a significant contribution. That is how we should be doing it, not by using—I am sorry to describe it thus—the playground politics of an Opposition day debate as a means of advancing the issue.
Angela Smith
Is the hon. Gentleman indicating that he would be prepared to talk to Labour Front Benchers on meaningful ways of taking this debate forward?
Andrew George
I am prepared to talk to anyone who wants to engage constructively in improving the Bill to ensure that it achieves its stated intentions, because I do not think that it will, given the nature of the reorganisation proposed in it. The reason I will not be joining the hon. Lady and her colleagues in the Lobby to support the motion is that it is tactically wrong at this stage to engage in such antics. This issue is a great deal too important to be turned into a party political playground game.
I am pleased that the Secretary of State said today that he is prepared to listen and engage. We need to explore every opportunity to engage in constructive dialogue with him, involving all the stakeholders I mentioned, and, indeed, those in the Labour party who want so to engage, to find a way through and to ensure that the genuine concerns about the impact of the Bill are properly scrutinised. Yes, they are being scrutinised in the Bill Committee, but before we get to Report stage in this House, it is important that we create a coalition of the bodies that share these concerns. Rather than inviting them to go out on to Parliament square and wave their placards and so on, it would make a lot of sense to encourage them to engage in greater constructive dialogue than we have succeeded in achieving so far.
Mr Dorrell
Does my hon. Friend agree that the case he is making is reinforced by the fact that our right hon. Friend the Secretary of State has already moved two amendments to the Bill dealing with the cherry-picking issue and—this was mentioned by the Prime Minister today—price competition. The amendments have been tabled to ensure that the Bill addresses concerns expressed by the hon. Gentleman and some of his hon. Friends.
Andrew George
I am grateful to my right hon. Friend. Indeed, that is a very encouraging indication of the fact that the Secretary of State is prepared to listen. As far as I am concerned, however, he is not prepared to go far enough in reassuring me on those points, because taking the word “maximum” out of the clauses relating to price competition and the role of Monitor, the market regulator, is still insufficient. We have not got time to debate that today.
There are several issues, through which I shall canter in the few moments I have left, about the Bill’s objectives and what we want to achieve. First, we want to drive patient choice and innovation. I do not think that anyone would disagree with that, but we do not need to demolish the core—or at least the institutional architecture—of the NHS and PCTs, and alienate the majority of clinicians against achieving such innovation and patient choice.
Again, I think we all agree that giving power to communities and patients is highly desirable. However, although GPs will be given responsibility for commissioning services through the consortia, I do not think that they are particularly asking for that. Having spoken to many of them and listened to the national debate, I believe that they are reluctant, or at best resigned to taking on those roles, feeling that they have to follow that course.
If we want decentralisation, why will we end up with the ludicrous centralisation of commissioning NHS dentistry and dispensing? Indeed, every contract for a GP surgery will be centrally commissioned from an NHS commissioning board in Leeds. That is absurd. It does not even achieve what it is claimed that the Bill wants—decentralisation.
Many attempts have been made to argue that the Bill will cut bureaucracy and managers. I am not sure that that will happen. A big focus of today’s debate is the impact of competition, which will be unleashed. Once the private sector has its foot in the door, the genie will be out of the bottle. It is clear that everything, including designated services, in my view, will be open to contest. Although it is claimed that the Bill will result in fewer managers, I think that it is a dream come true for litigators, lawyers and management consultants.
Andrew George
I am afraid that I do not have time.
The idea that the Bill will drive integration and social care is more wishful thinking because there will be less coterminosity between commissioning boards and local authorities under the Government’s proposals for an increased number of commissioning bodies than we have now.
Much rethinking needs to be done, and I hope that Government Front Benchers are listening.
Helen Jones (Warrington North) (Lab)
In the devastation that followed the second world war, this country had the courage and the vision to realise the dream of a health service available to all in times of need. If the Government’s plans go ahead, that dream will die. [Interruption.] Yes, it will. It is not simply that the reorganisation represents a broken promise, which it does, or that it is costly, although it is, but that it strikes at the very foundations of the NHS. Indeed, if it goes ahead, there will no longer be a national health service, but a vast postcode lottery, with treatment depending on where people live.
Helen Jones
I am sorry—I have not got time. [Interruption.] Other Members are waiting to speak and I will not give way.
The market, not the patient will be king. That is being done under the cloak of localism—the Government’s current buzz word. Remove the cloak and we will see the realities: an NHS driven by the market, run by a vast, unelected and unaccountable bureaucracy, with accountability to Parliament greatly reduced.
The Government plan to give all commissioning to GPs. They conveniently ignore the fact that if GPs wanted to be managers, they would have taken MBAs rather than medical degrees. They will bring in other companies—mostly private—to do the managing.
Helen Jones
I have said no. The hon. Lady was not even here for the beginning of the debate.
It is not sufficient for the Government to ensure that private companies determine our health care; they will also introduce EU competition law into the NHS. That means that the private health companies that are currently hovering over the NHS like a bunch of vultures will threaten legal action if services are not put out to tender. They will then cherry-pick the services in which they can make the most money—they do not want to do geriatric care, paediatrics or A and E. That will fatally wound and undermine local hospitals and some, no doubt, will go to the wall. It is no surprise that the Health and Social Care Bill includes detailed insolvency provisions.
Some hospitals will bring in more private patients to fill the gap, because the Bill lifts the cap on private patients. We will therefore have the absurd situation of private companies making decisions on health care, and of NHS staff and facilities being used not for those most in need, but for those with the ability to pay. There is a word for that and it is not often used in this House: it is quite simply immoral. It is also indefensible.
At the same time, these plans will undermine our ability to deal with long-term conditions. Progress has been made on conditions such as stroke through co-operation, not competition. It has been made through stroke networks, by sharing expertise and by reconfiguring services to get the best deal. All the expertise in primary care trusts on delivering those services will be swept away.
Helen Jones
I have made my view clear, so the hon. Gentleman is wasting his time. The expertise will be swept away, and the plethora of GP commissioning consortia will have no strategic overview of these services.
There has always been a democratic deficit in the NHS, but the Bill will increase it vastly. It will give £75 billion to £80 billion to unaccountable consortia. It will remove from the Secretary of State the requirement to secure the provision of services. I say to Government Members: when the services go, do not come here to complain because the Secretary of State will not be responsible any more. The NHS commissioning board will be appointed by the Secretary of State and he will be able to dismiss its members at will. It will have no independence. Monitor will not have a single elected member.
The Bill does not give power to patients, and it does not empower health service staff. Kingsley Manning of Tribal summed it up cleverly as a Bill to denationalise the NHS. It is not supported by doctors, and it is not supported by patients. I say to the Liberal Democrats that if they go through the Lobby tonight in support of this reorganisation, people out there will not forget and they will not forgive.
Liz Kendall (Leicester West) (Lab)
This debate is about one of the most important issues facing this House and this country: the future of our NHS. It has been an excellent and at times lively discussion, with important contributions from all parts of the House.
My hon. Friend the Member for Sheffield Central (Paul Blomfield) spoke with great passion about his recent experience of using the NHS and the importance of the NHS for his constituents. My hon. Friends the Members for West Lancashire (Rosie Cooper), for Oldham East and Saddleworth (Debbie Abrahams) and for Kingston upon Hull East (Karl Turner) gave compelling speeches about their concerns over what is really in the Health and Social Care Bill, including the implications of removing certain duties from the Secretary of State and of introducing competition law explicitly in the NHS for the first time. The hon. Members for Southport (John Pugh) and for St Ives (Andrew George) raised important and serious issues with regard to the Bill, including the implications of centralising services such as dentistry, pharmacy and primary care. It is far from clear how a national body will know what primary care services need to be commissioned in my constituency. They also expressed concerns about the dangers in the Bill. My hon. Friend the Member for Warrington North (Helen Jones), whom I am proud to be following, raised the importance of the threats to the “national” in the national health service and concerns about patients with long-term and chronic conditions, of whom we know there are an increasing number in the NHS.
The debate has shown that, as on so many occasions with this Government, it is not their rhetoric but the reality that counts. They promised in their manifesto an end to top-down reorganisations, but instead they are forcing the NHS through the biggest reorganisation of its life. As the right hon. Member for Charnwood (Mr Dorrell) has said many times, although unfortunately not in the House today, they are doing that at a time when the NHS faces its toughest ever period of funding, when jobs are already being cut and when, far from what the Secretary of State told the House earlier, waiting times are starting to rise.
The Government also say that they want clinicians to lead changes in the NHS, but their Health and Social Care Bill fails to guarantee even that GPs will be running consortia, let alone that hospital doctors, nurses or other NHS staff, who are so crucial to improving the quality of care, will be involved. As eight of the country’s leading patient charities said in a letter to The Times last month:
“The reforms will place £80 billion of the NHS budget into the hands of GPs, but plans to make GP consortia accountable to the public are far too weak.”
There is no requirement to have elected representatives on GP consortia, as the coalition agreement promised for primary care trusts. The new health and well-being boards will have no power to require GP consortia to do anything, and local councils’ scrutiny committees will actually lose some of their powers to refer decisions to the independent reconfiguration panel in the case of services not on the safe list of designated services.
At the heart of the Bill are proposals to change the NHS fundamentally that the Secretary of State simply does not want to talk about: his plans to run the NHS along the same lines as the gas and electricity companies.
Nicky Morgan
I know that the hon. Lady is a hard-working fellow Leicestershire MP, but I disagree with her. Is not the fundamental principle of the Bill, as we have discussed in the Public Bill Committee, that what constituents want is an NHS free at the point of need and the delivery of services, and funded by taxpayers? Which part of the Bill changes that fundamental principle?
Liz Kendall
What patients want is their views and voices to be heard. As the hon. Lady well knows, eight of the country’s leading patient charities, including the Alzheimer’s Society, Asthma UK and Diabetes UK, have said that the patient and public voice is not strong enough under the Bill, and they have demanded changes. I respectfully ask that she look at their comments and act on their views.
The fundamental issues at the heart of the Bill are turning Monitor, which is currently responsible for foundation trusts, into a powerful new economic regulator to promote competition across the NHS, and enshrining UK and EU competition law into primary legislation on the NHS for the first time. That is not my view but the view of David Bennett, the new chairman of Monitor, expressed in his evidence to the Public Bill Committee. The Government are explicitly modelling the NHS on the gas, electricity, railway and telecoms industries. Government Members who are shaking their heads or looking blank should read the explanatory notes to the Bill, which make that absolutely clear.
Grahame M. Morris
May I point out that yesterday, in an Adjournment debate in Westminster Hall about the future of the blood services contract, the Under-Secretary of State said in response to a question from my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) that EU competition rules would apply?
Liz Kendall
The Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), also said yesterday, in the Health and Social Care Bill Committee, that EU competition law would apply, and gave me some assurances that that would somehow not change anything. When I asked whether the Government had taken legal advice on that, he admitted that they had. I asked him then to publish that advice so that hon. Members did not have to take my word for it, and I shall do so again. Will he publish that advice so that hon. Members can see whether GP-commissioning consortia and providers will be subject to EU competition law? Sadly, it appears that he will not do so.
Dr Poulter
If the hon. Lady is so concerned about competition and markets, why did the previous Government introduce Monitor, and why were they happy to pay the private sector 11% more than the NHS to provide NHS services?
Liz Kendall
I am sure the hon. Gentleman knows that Monitor was established as part of the regulation of foundation trusts. Removing that responsibility will mean that there will be no outside checks and balances on those trusts as there are now. Government Members should think seriously about that.
Our health and our NHS are not the same as gas, electricity or the railway. That the Secretary of State believes that they are shows how dangerously out of touch he is. What is the likely result? GPs will be forced to put local services out to tender even if they are delivering good quality care that patients choose and like; hospitals and community services will be pitted against one another when they should work together in patients’ interests; care, which as many hon. Members have said is vital as our population ages and there is an increase in long-term conditions, will become more and not less fragmented; the financial stability of local hospitals will be put at risk, and they will have no ability to manage the consequences of choice and competition in the system; and the whole system will be tied up in the costs of red tape, as GPs and hospitals employ an army of lawyers and accountants to sign contracts and fight the threat of legal challenge, huge fines and the potential of being sued. Let us also be clear that the Bill gives Monitor the same functions as the Office of Fair Trading, so it can fine organisations up to 10% of their turnover.
The more we see of the Bill, the more the truth becomes clear. The Secretary of State says that he wants clinicians to be more involved, and “no decision about me without me” for patients, but when the Royal College of General Practitioners, the Royal College of Surgeons, the Royal College of Nursing, the Royal College of Midwives, the British Medical Association or anyone else tells him that he should stop, think again and halt his reckless NHS plans, he refuses to listen. When the Alzheimer’s Society, the Stroke Association and Rethink tell him that his proposals will not give patients a stronger voice and improve public accountability, he simply tells them that they are wrong. When health experts such as the King’s Fund warn that driving competition in every part of the NHS will make it more difficult to commission the services that best serve patients’ interests, he simply puts his fingers in his ears and walks away. What makes this Secretary of State think that he is right when professional bodies and patient groups know that he is wrong?
Doctors and nurses do not support the Government’s plan, patients do not want it, some Conservative Back Benchers and members of the Cabinet do not like it, and the Liberal Democrats hate it. They had the sense last Saturday to see what the hon. Member for St Ives (Andrew George) called the potential catastrophe as far as the future of the NHS is concerned, and to ask for amendments to the Bill. I hope they have the sense to join us in the Lobby tonight. I commend the motion to the House.
The Minister of State, Department of Health (Paul Burstow)
I start by thanking the right hon. Member for Wentworth and Dearne (John Healey) for attending the Liberal Democrat conference last Saturday. Unfortunately, no one knew who he was when he arrived. Had he been more clearly identified, I am sure he would have received a very warm welcome from delegates, because he was welcome, as was the registration fee he paid. He will know that I gave my Liberal Democrat colleagues a guarantee on Saturday that, along with other members of this Government, we will listen to every word that Liberal Democrats said at that event.
I agreed with my hon. Friend the Member for Southport (John Pugh) when he said that it was important that we should drop the rhetoric and listen. However, I am not absolutely certain—if I can say this gently to him—whether his contribution entirely measured up to his own statement. Dialogue, yes, but dialogue is not diatribe. Let me also tell him that had the amendment in the name of Conservative and Liberal Democrat Members been selected, I would have urged hon. Members to vote for it, because it sums up the Government’s approach. We are listening to concerns and seeking to strengthen and improve the Bill, and we will continue to do so.
However, that is not what Labour is about. Labour’s purpose is very clear indeed. Those on the Labour Front Bench let the cat out of the bag a few weeks ago when the hon. Member for Islington South and Finsbury (Emily Thornberry) said in Committee that
“many of our amendments seek to undermine the Bill entirely and in every way possible”.––[Official Report, Health and Social Care Public Bill Committee, 3 March 2011; c. 448.]
That is not about improving the Bill; that is about trashing it. Sometimes it seems like we are debating two entirely different Health and Social Care Bills. One is the Bill currently in Committee—the real Bill. The other is the phantom Bill that has been conjured up by Labour Members—a hall of mirrors constructed by the Labour party and the unions that bears no resemblance to the real Bill, and is a gross distortion of so many of its provisions. Let me deal with some of the myths that have been peddled in today’s debate.
First, let me address the charge of privatisation. I thought that the
“ideological battle over using private and third sector providers”
was “over,” and that
“What matters to the public is not who provides but how well a service is provided.”
That is not just my view; that is the view of the Labour Business Secretary from 2008, the former Member for Barrow and Furness. He was a long-standing Health Minister who took that view then and, I suspect, holds it today. My right hon. Friend the Member for Charnwood (Mr Dorrell) was absolutely right: the involvement of the private sector is not new to the NHS. Indeed, involving the private sector was certainly not new to the last Government. Labour imposed private sector treatment centres on the NHS, guaranteed the private sector higher prices and, through all that, institutionalised cherry-picking in the NHS. Indeed, it is a scandal that in none of the Opposition speeches was there any sense of an apology for the £250 million spent on the private sector for doing absolutely nothing.
Instead of loading the dice in favour of the private sector, which is what Labour did, we are correcting the balance, creating a fair playing field for the full range of providers—something that Labour said in its manifesto it would do, but which it is running away from in opposition. We have tabled amendments to the Health and Social Care Bill to put beyond doubt the fact that there will not be price competition, but there will be quality competition, to ensure that, unlike Labour, we will not see differential prices set on the grounds of ownership. Under our plans there will be less competition on price than there is now and more competition on quality.
Angela Smith
Shirley Williams described the level playing field to which the hon. Gentleman refers as “lousy”. How would he respond to that?
Paul Burstow
I am looking forward to further dialogue with my noble Friend to ensure that we deliver the important improvements to the NHS that will ensure that unlike Labour, which cherry-picked and set up contracts with the private sector that undermined the NHS, we deliver a level playing field that delivers good quality care, chosen by patients not politicians.
The debate has shown that we continue to share an enduring commitment across the House to the notion that the NHS must be based on need and free at the point of use. That is what the Bill entrenches and what it will secure. Our plans are all about offering more choice to patients, more accountability for the public and more autonomy for front-line professionals. It is easy for the Opposition to attempt to caricature and distort those policies, but they are based on our belief that we need an NHS that is not about looking up to Whitehall for its lead, but about looking out to its communities and ensuring that it delivers the quality services that make a difference to our constituents.
The purpose of the motion is very clear. It is nothing to do with listening; it is all about scaremongering, opportunism and grandstanding, and the House should throw it out. We will continue to listen and to improve the Bill, but we will not do it by listening to Labour Members, who have no interest in making the NHS better and who would have cut it, had they had the opportunity to do so in government.
Question put.
Owen Smith (Pontypridd) (Lab)
On a point of order, Mr Deputy Speaker. You were not in the Chair at the conclusion of the Opposition day debate, but the Minister of State, the hon. Member for Sutton and Cheam (Paul Burstow), used barely half his allotted time in winding up, as he was clearly short of arguments to defend his position on the important subject under discussion. That left many of us who have plenty to say on the subject short of time to speak. Will you work through the usual channels, Mr Deputy Speaker, to make sure that in future either Ministers use all their time or Back Benchers are given more time to speak?
Mr Deputy Speaker (Mr Nigel Evans)
How long the Minister wishes to speak for is not a matter for the Chair. The Minister spoke, the debate came to an end, and a vote was taken.
Business without Debate
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
European Union (Amendment) Act 2008
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Europe (Mr David Lidington)
I beg to move,
That this House takes note of draft European Council decision EUCO 33/10 (to amend Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro) and, in accordance with section 6 of the European Union (Amendment) Act 2008, approves Her Majesty’s Government’s intention to support the adoption of draft European Council decision EUCO 33/10.
Under the terms of the European Union (Amendment) Act 2008, the House should approve this motion on the proposed change to the European treaties so that the Prime Minister can then support the adoption of the draft European Council decision to amend article 136 of the treaty on the functioning of the European Union at the European Council scheduled for 24 and 25 March. It is my belief that agreement to this, which is about the narrow change brought forward to enable the countries that use the euro as their currency to establish a permanent stability mechanism from 2013 onwards, is profoundly in the interests of the United Kingdom.
Mr Philip Hollobone (Kettering) (Con)
Will my right hon. Friend confirm that this is the first time that the passerelle mechanism—in other words, a fast-track treaty amendment without an intergovernmental conference—is being used? Is this the first time that such a passerelle clause has been brought before the House?
Mr Lidington
We can debate whether or not it is a passerelle. It is certainly the first time that the provisions under the Lisbon treaty for a simplified revision procedure, rather than the full-scale procedure to which my hon. Friend alluded, has been employed.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Can we be absolutely clear what we are doing here? It used to take months, even years, to change a European treaty. Tonight, we are going to debate this motion for 90 minutes and then the Government will go to the European Council and agree to that change in the treaty. That is correct, is it not, because the next time this comes back for scrutiny it will be a fait accompli?
Mr Lidington
No, I do not share my hon. Friend’s analysis of the procedures that lie ahead of us, and I think he underestimates the further opportunities there will be for the House to consider this proposed treaty amendment. I will come on to that in a little more detail later.
First, however, I want to make it clear why the Government believe that agreement to this treaty change is in the interests of this country. As my right hon. Friend the Prime Minister made clear to the House in his statement following the European Council held in December last year, no one should doubt that stability in the eurozone is in the interests of the United Kingdom. Nearly half our trade is with the eurozone, and London is Europe’s international financial centre. It is precisely because of this interrelationship that the UK’s financial institutions and companies, both big and small, have huge exposure to the banks and businesses based throughout the eurozone. Worsening stability, let alone a further and prolonged economic and financial crisis, would pose a real threat to the UK economy and to jobs and prosperity in this country.
Kelvin Hopkins (Luton North) (Lab)
Would it not be more appropriate for an intergovernmental agreement to be reached among the member states of the eurozone, rather than have some change to the treaty on the functioning of the European Union?
Mr Lidington
It would have been possible for the member states of the eurozone to have come to such an intergovernmental agreement, but they chose not to do so. In addition, a number of the other member states which have not joined the euro but aspire to do so and which have an obligation in their accession treaties to do so in due course would prefer any necessary treaty change to be agreed by 27 states, rather than dealt with on an intergovernmental basis alone.
Mr John Baron (Basildon and Billericay) (Con)
Given that this vote will have to be unanimous and we therefore have veto, is this not an ideal opportunity at least to try to extract concessions from the EU? We could take such an approach on, for example, the working time agreement, in line with the coalition agreement.
Mr Lidington
As I hope to demonstrate to my hon. Friend’s satisfaction later in my speech, my right hon. Friend the Prime Minister secured an extremely good bargain for this country when he took part in the negotiations that produced this amendment. First, however, I wish to deal with the points raised by my hon. Friends the Members for Kettering (Mr Hollobone) and for Harwich and North Essex (Mr Jenkin).
This kind of motion has not been debated in this place before and should the European Union Bill, which this House agreed without Division on Third Reading last week, become law, we will not have this particular procedure here in the future. I want to give a firm assurance to the House that, in particular because of the provisions in that Bill, this evening is only the first opportunity for the House to have its say on the proposed treaty change; a second opportunity will be provided through the process of ratification.
I have to say to the House that the previous Government left this country with a system of both popular and parliamentary control over treaty change that was grossly inadequate. Under the inherited arrangements, this motion would have been all that was required by way of parliamentary approval, at least in terms of an affirmative resolution. If the European Union Bill were not to become law, a motion of this type leading to the adoption of a proposal for treaty change would, on ratification, still have to come back to Parliament and be laid before both Houses, but it would then be for Parliament to pray against the provision which had been laid before the House. Obviously the usual problems are involved in terms of what amounts to a negative resolution procedure in giving effect to an understandable desire for full and effective parliamentary scrutiny. However, as I have said, the Government, through the new legislation that we are taking through Parliament at the moment, want to provide a much stronger assurance for the future that this particular proposal and any others that might conceivably come forward will be given much greater and more rigorous parliamentary scrutiny.
Mr David Nuttall (Bury North) (Con)
Let us be clear about what will change if that Bill becomes an Act, as I am sure it will in due course. Is it the case that the sort of debate we are able to have tonight will not be possible in future because we will have post-decision debates, in that decisions will have already been taken before that Act, as it will be then, kicks in?
Mr Lidington
I hope that I can give my hon. Friend the reassurance he seeks. First, I will make a bit of progress and describe how the provisions in the European Union Bill will bite on this measure and any future measures that are modelled on it.
Mr Wayne David (Caerphilly) (Lab)
A very important question has just been asked by a Back Bencher and the Minister has made no attempt to respond to it. Would it not be technically possible to have the new procedures introduced by the European Union Bill as well as the current procedures? One is post and the other is pre.
Mr Lidington
I had better invite the hon. Gentleman to read the Hansard record of the debates on the European Union Bill in which he took part—both in Committee and on Report. If he does read them, he will see that the Government introduced an amendment precisely to make explicit the requirement for this proposed treaty change to be subject to more rigorous parliamentary scrutiny than would have been permitted if the current statutory procedures under the Constitutional Reform and Governance Act 2010 had been allowed to stand and to suffice. I hope that he was not asleep when we debated that amendment. If he examines Hansard, he will find that we have covered that point in some detail.
The previous Government left the country with a system of control that was grossly inadequate. Section 6 of the European Union (Amendment) Act 2008 requires that when a draft decision under the simplified revision procedure—under article 48(6) of the treaty on European Union—is proposed, a Minister must introduce a motion and have it passed by both Houses without amendment before the Prime Minister can signal his agreement to its adoption at a subsequent European Council. That is the point in the decision-making process that we have reached tonight.
There is an option, under the 2008 Act, for the Government of the day to insert a disapplication provision into this type of motion. Such a provision would enable the Government to agree to subsequent amendments to the draft decision to amend the treaty without having to come back to the House for approval. The options were put before me by my officials and I was absolutely clear from the moment I read the papers that to introduce a disapplication provision of that kind would be completely unacceptable and would give Parliament absurdly little control over such an important matter. For that reason, there is no such provision in the motion.
Let me make it clear: if the House approves the motion, it is authorising the Prime Minister to agree to this draft decision—this text alone—at the European Council. Should there be any suggestion of amending the draft decision at the European Council—there is no such suggestion from any quarter at present—the Prime Minister could not legally agree to it at the European Council without first coming back to this House and the other place for additional approval after a further debate. The draft decision that is referred to in the motion will be the version that is agreed at the Council and there can be no other version of the treaty change without the further approval of the House in a debate such as this.
The European Scrutiny Committee has rightly assessed the draft decision as politically important and has recommended it for debate on the Floor of the House. We are scrutinising the draft decision, as the Committee has requested, and debating whether the Prime Minister may signal his support for its adoption at the Council on 24 and 25 March.
Mr William Cash (Stone) (Con)
My right hon. Friend is going through all the procedures and the technical side of things, but, as he knows, that is not really what the treaty is about. I hope he will agree that it represents a huge change in the relationship between the United Kingdom and the European Union. Anyone who cares to look back at what those of us who have argued this case before have said, and to look in particular at The Economist this week, will know that the treaty is a hybrid one that is being devised, driven and pressed forward by Germany and those countries that wish to acquiesce in Germany’s dictated terms. Does he agree?
Mr Lidington
No, I am afraid I do not agree with my hon. Friend on that point. As I have said, it is in the interests of the United Kingdom for there to be stability in the eurozone. To some extent, the measures that the eurozone countries are now taking are a response to the kind of critique that he and other Members of this House made 10 or 11 years ago when the euro was first created. They—I was very much in this camp—argued that it would cause huge difficulties to create a currency union involving a single interest rate and single monetary policy that did not have some way of reconciling very different rates of growth, inflation and unemployment in the countries in that single currency area.
I want to finish on the procedural points and then move on to the content. If the draft decision is adopted by the European Council, all 27 member states will have to approve the treaty change and ratify it in accordance with their respective constitutional requirements before the decision enters into force. The treaty amendment cannot come into effect until we—and everybody else—ratify the adopted decision.
My right hon. Friend the Foreign Secretary and I have already given an assurance at this Dispatch Box that this and every other future treaty change will be considered in accordance with the terms of the European Union Bill, once that enters into force. That Bill will require Ministers to lay a statement before Parliament within two months of the commencement of part 1 of the Bill, explaining whether the treaty change would fall within clause 4 of the Bill—namely, whether it would involve a transfer of competence or power from the United Kingdom to the European Union.
The treaty change will then have to be ratified by primary legislation—a full Act of Parliament—before the United Kingdom is able to say formally that it has completed the ratification process, so even when we get to that stage, the final version, agreed by all 27 Heads of Government, has to come back to Parliament for ratification and will be debated in all the stages of primary legislation. Tonight is therefore not the only opportunity that my hon. Friends will have to debate the measure.
Mark Reckless (Rochester and Strood) (Con)
Surely the key point about this debate is that we have a veto, and that gives us a lever? Most people in this country feel that EU integration has already gone far too far. Is it not the case that the Minister’s refusal to use that lever can only mean that our relationship with the EU will, sooner or later, have to be resolved through an in/out referendum?
Mr Lidington
I will reply to my hon. Friend the Member for Rochester and Strood (Mark Reckless), but first I give way to my hon. Friend the Member for Wellingborough (Mr Bone).
Mr Lidington
It is obviously for those countries and their legal and constitutional systems to say how they will go about ratification, but when the proposal was discussed at General Affairs and External Relations Council meetings, at which I represented the United Kingdom, there was great concern among the member states that have provision for referendums in their constitutional arrangements to ensure that the agreed wording was such that it made it possible for them to ratify without triggering a referendum. I can remember Ministers from a couple of countries making those points very firmly. The president of the European Council, the Commission and the German Government who, it is no secret, had been promoting the need for a treaty change, accepted that. The language that we have is narrow in its scope and provides only for provisions affecting the countries that have the euro as their currency. It is for Ireland, the Netherlands and other countries to decide whether they need a referendum. My understanding is that those Governments think that that is not required.
Mr Lidington
It will come as no surprise to my hon. Friend the Member for Rochester and Strood to know that I disagree with him about the need for an in/out referendum. We debated that at some length the other day in proceedings on the European Union Bill. The Government believe that it is in the interests of the United Kingdom to remain an active and positive player in the European Union. That does not mean that we like everything it does or everything about the way the current arrangements have been established, but we believe that it is in the interests of our country to engage, campaign and fight for our interests within the European Union and not to turn our backs on it.
Mr Lidington
I shall give way to my hon. Friend the Member for Harlow (Robert Halfon), then I shall make progress.
Robert Halfon
As the veto has been mentioned, perhaps it could be waved in front of the EU countries that are so against implementing a no-fly zone over Libya.
Mr Lidington
My hon. Friend makes an important argument, which is probably somewhat outside the scope of the treaty change that we are debating today, but it will have been noted by those he wished to hear his comments.
Mrs Anne Main (St Albans) (Con)
We have touched on whether or not the Minister thinks our membership of the EU is a good thing, but we should ask the people whether they believe we should be in Europe. That is a question which, I am sorry to say, he has not answered.
Mr Lidington
The Prime Minister made it clear in answer to questions last week that he believes it is in the United Kingdom’s interest to remain part of Europe. One of the things that my hon. Friend the Member for St Albans (Mrs Main) needs to say, in the hypothetical choice she advocates, is what the United Kingdom should leave the European Union in order to join. I will not stray beyond the confines of the motion this evening; I merely pose that question to my hon. Friend.
I shall give way to my hon. Friend the Member for Gainsborough (Mr Leigh); then I will make progress and not give way for a while.
Mr Edward Leigh (Gainsborough) (Con)
The Minister argues that we should be part of the process, but is there not a logical absurdity in what he is saying? When the real decisions were taken, our Prime Minister was kicked out. We are like a cork bobbing in their wake. We have no real power over the eurozone. That is why many people now think the time has come for a referendum on whether to stay in or get out.
Mr Lidington
My hon. Friend, uncharacteristically, underestimates the influence of our right hon. Friend the Prime Minister. When we look at how he has managed to assemble and lead a coalition of countries committed to greater budgetary discipline—something that would not have happened without his initiative—and when we look at the work that he is leading at a European level on the need for growth, competitiveness and deregulation, we can see that the influence of the Prime Minister and of the United Kingdom is being felt. I would encourage—
Mr Lidington
I am not giving way further.
I would encourage my hon. Friend the Member for Gainsborough to visit more EU member countries and talk to representatives of their Governments, and I think he will find that our right hon. Friend has in 10 brief months attained considerable respect and a high standing among the partner countries with which he deals and negotiates.
Let me turn to the proposed treaty change and how it came about. It originates from the need for a permanent mechanism to be established by the member states of the euro area to safeguard the financial stability of the euro area as a whole. As the House knows, in May last year the EU established two emergency instruments to respond to financial crises—the European financial stability facility and the European financial stability mechanism. Many hon. Members have expressed their unhappiness at the EFSM arrangements, to which, because of a decision taken in the dying days of the previous Government, this country is a party. That unhappiness is wholly shared by this Government. It is yet another mess that we have inherited and must seek to clean up.
Against that backdrop and the continued uncertainty in the financial markets, the members of the European Council agreed last December to amend article 136 of the treaty on the functioning of the European Union to provide that member states of the eurozone may establish a permanent stability mechanism. That will provide a necessary means for dealing with cases that pose a risk to the financial stability of the euro area as a whole, something that is important to us given the extent of our trade and other economic connections with the eurozone even though we are outside it and intend to remain so.
The proposed amendment contained in the draft decision adds the following paragraph to article 136:
“The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.”
By providing for eurozone members to establish a permanent mechanism, the European Council is making absolutely clear the responsibilities of all members of the euro area to each other and to the overall stability of the euro area. The proposed new paragraph will be added to treaty provisions that apply—I stress this point—only to member states whose currency is the euro. It does not apply to non-euro area member states and cannot confer any obligations upon them. We believe that financial problems within the euro area should be resolved primarily by euro area members.
The details of how the ESM will operate are being discussed in Brussels. In accordance with the conclusions of the December European Council, member states whose currency is not the euro can be involved on a voluntary basis in finalising work on what will be an intergovernmental arrangement to set up the ESM under the authority given by this proposed amendment to the treaties. My hon. Friend the Financial Secretary to the Treasury is responsible for overseeing UK input to those discussions.
I want to stress that while we are involved on a voluntary basis in the design of the mechanism—it is in our interests to be so—we cannot and will not be part of the mechanism. In fact, we could not be part of the ESM unless the UK first joined the euro area, and as the whole House is already aware, the Government have declared their intention not to join or to prepare to join the euro. Furthermore, under the terms of the European Union Bill, if any future Government were so foolish as to wish to do so, they could join only with parliamentary approval by Act of Parliament and the consent of the British people in a referendum.
Mr Baron
Will my right hon. Friend return to the power of the veto that we have? I accept that the matter will come back to this place and that we will discuss it again, but surely we should now be trying to extract concessions in return for not using our veto. I ask him again, because he uncharacteristically did not address the point last time, whether we could be using our veto to extract concessions on the working time agreement—an aim that was, after all, in the coalition agreement.
Mr Lidington
On the working time directive, I completely share my hon. Friend’s objectives. Work is going on involving, in particular, my right hon. Friends the Secretaries of State for Business, Innovation and Skills and for Health. We judge that the appropriate time to seek to give effect to the objectives set out in the coalition programme for government will be when the Commission comes forward with its own proposals to change the terms of the working time directive, which we expect will be some time in the next 12 months. That is the moment that will give us the opportunity to do this. However those changes to the working time directive might be given effect, there will have to be a legislative procedure involving not only the Council of Ministers but the European Parliament. It is at that time that we will need to deal with the matter.
Martin Horwood (Cheltenham) (LD)
Does the Minister agree that the stability mechanism is a test of our willingness to engage positively with Europe and to act responsibly, using the existing procedures of the House and those laid down in the European Union Bill? After all, we have no interest in further weakness or instability in the eurozone; it is positively in Britain’s interest to engage responsibly with the process, rather than to talk of vetoes or of extracting concessions on issues quite unrelated to the stability mechanism.
Mr Lidington
My hon. Friend makes good points. It is in our interests that the euro succeeds. Many in the House still doubt whether that is possible, but I can say only that, in discussions with my counterparts throughout the European Union, I recognise that those countries that have chosen the euro as their currency retain an incredibly powerful political commitment to the project, and I simply do not think it realistic to talk about shaking them from that and trying somehow to bring about some eurozone Gotterdammerung in the near future. The converse would be true: that sort of outcome—the disintegration of the eurozone—would cause enormous damage to jobs and to prosperity in the United Kingdom, precisely because of the interrelationship between the economy of this country and the economies of our chief trading partners.
Mr Lidington
No, I am not giving way again at the moment.
A number of my hon. Friends were also keen to be reassured that the proposed treaty change does not and will not transfer any competence or power from the United Kingdom to the European Union, and I want to reassure them now. As I have mentioned, the treaty change involves an amendment to one of the provisions that applies only to member states whose currency is the euro, not to others. Therefore, we cannot be part of the ESM without joining the euro itself.
The change is also being undertaken using article 48(6) of the treaty of the European Union, which explicitly states in its provisions that it
“shall not increase the competences conferred on the Union in the Treaties”.
All member states are agreed on that point and stated so, in terms, in paragraph 6 of the recitals to the draft decision. The opinion of the European Commission, dated 22 February, reaffirms that the proposed treaty change does not affect the competences conferred upon the Union.
Some hon. Members have questioned whether the Government should be required to hold a referendum even when the United Kingdom is not directly affected, and this starts to address the point that my hon. Friend the Member for Stone (Mr Cash) made in an intervention. As I highlighted earlier, the European Union Bill, after our seven days of debate on it, will ensure that any treaty changes constituting a transfer of competence or power from this country to Brussels will be subject to a referendum. But this treaty change will enable no such thing, and it does not make sense to try to insist on a referendum on agreements that concern only other member states. It makes sense no more than it would have made sense for Germany to hold a referendum on the recent defence treaty between the United Kingdom and France.
The treaty change under discussion is in our national interests, but on top of that, to come to the point that my hon. Friend the Member for Basildon and Billericay (Mr Baron) made, the Prime Minster during the course of the negotiations achieved two further important objectives. First, as the conclusions of the December European Council and, more importantly, the preamble—the recitals, as they are known—to the draft decision itself confirm, once the ESM is established to safeguard the stability of the euro area, article 122(2), on which basis the European financial stability mechanism was established, will no longer be used for such purposes. Therefore, our liability—bequeathed by the previous Government—for helping to bail out the euro area through EU borrowing backed by the EU budget, under the EFSM, will cease. That was an important achievement for British interests.
Mr Cash
As my right hon. Friend will know, according to Reuters and many other news agencies Portugal is on the brink of needing a bail-out because its economy is imploding. Does he accept that, as this debate continues, we will be exposed under the EFSM to the tune of up to whatever is the proportion that we should contribute under the proposals until 2013, and that we should have insisted that that was repealed and revoked when the other arrangement was entered into? That is the concession that we should have got, and the Government did not even seek to achieve it.
Mr Lidington
We inherited from our predecessors a legislative measure that was brought in under an existing competence and treaty base and that was, from that time, legally binding. My hon. Friend will understand that I am not going to be drawn into speculating about the position of other individual member states. My understanding, on the basis of the most recent information that I have, is that no other member state has been asking the EU authorities for additional financial help.
As the Prime Minister has made clear many times in this House, securing a tight and disciplined budget for the future is the highest priority for the European Union. At the last European Council meeting, Britain led an alliance of member states to unprecedented success in limiting the 2011 EU budget increase to 2.91%—a very marked improvement on our predecessors’ performance in the previous year. Crucially, in moving forwards, working alongside key partners such as France, Germany, Netherlands and Finland, we are committed to a real-terms freeze in the EU budget in the new perspective, which we expect to run from 2014 to 2020, and we have written collectively to the President of the European Commission setting out our position.
Mr Lidington
That is no secret. It is a matter of public record that we would have preferred a complete freeze on the 2011 budget, and we voted for that in the Council of Ministers. I regret that we were one country short of achieving the blocking minority. [Interruption.] That kind of protest from the shadow Minister is rank double standards. The Labour Government not only conceded increases in the annual budget that went way ahead of anything like 2.91% but, even more significantly, negotiated an agreement on the current multi-annual financial framework in which they agreed to give up a significant slice of this country’s hard-won rebate from the EU budget in return for no more than a half-promise of a review of agricultural policy, and they did not even manage to get that at the end of the day. We know that they were dysfunctional. According to the memoirs of the then Prime Minister’s chief of staff, the Prime Minister and Chancellor of the Exchequer could so little stand the sight of one another that they refused even to share the figures that they were using in parallel negotiations about an EU budget, the settlement of which was absolutely central to the interests of the United Kingdom. Having let down this country so badly in the past, it ill behoves the Labour spokesman to come and lecture us this evening.
Should this House not approve the motion unamended, I have to say to my hon. Friends that the consequences could be serious and damaging for Britain. The Prime Minster would not be able to signal support for the draft decision in March, and since the decision cannot be adopted without unanimity, it would fall. That would mean, for example, that this country would remain, for the indefinite future, indirectly liable for eurozone bail-outs through the EFSM since there would be no ESM to replace it.
Mr Lidington
I will give way for a last time before completing my remarks so that other hon. Members can make their speeches.
Mr Nuttall
Have we not missed an opportunity to include a specific provision to exclude the EFSM under article 122 of the treaty on the functioning of the European Union to prevent it from being misused, as it was previously? The article specifies providing financial assistance in the case of “natural disasters” or “exceptional occurrences”. We should have spelt it out—it was our opportunity to do that.
Mr Lidington
Article 122(2) was interpreted by the then Governments of all 27 member states as capable of being used as a proper legal basis for the EFSM and we inherited that binding measure.
Martin Horwood
Article 122 mentions
“natural disaster or exceptional circumstances”,
and the position certainly merits the word “exceptional”.
Mr Lidington
We can debate whether that interpretation of article 122 was justified. However, the reality is that the mechanism had been established. I ask my hon. Friend the Member for Bury North (Mr Nuttall) to consider not only the fact that we inherited something that was legally binding, but that, if there had been some renunciation by the European Union of a mechanism, which, for all its imperfections, had given a measure of reassurance to the markets, there could well have been adverse consequences for eurozone countries, which would have had adverse consequences for United Kingdom companies and financial institutions with exposure and investments in those eurozone member states.
If we refuse to agree to the draft decision, the effect on our trading partners in the eurozone would not be helpful. I do not wish to speculate too much, but it is safe to assume that the markets would not view favourably a failure by the EU to establish a permanent support mechanism, especially when all 27 Heads of State had publicly set themselves a timetable that would conclude at the March European Council. The consequences for many economies that are already under pressure could be severe. The knock-on effect on the prospects for jobs, investment, growth and prosperity in the UK would also be severe.
I therefore believe that the case for approving the motion without amendment is clear. By supporting the adoption of this treaty change, the UK will support the members of the eurozone to establish a permanent mechanism, and thereby make clear the responsibilities of all members of the eurozone to each other and to the overall stability of the euro area.
We will ensure through our agreement that our current indirect liability for eurozone bail-outs ends in 2013, and because the mechanism is established using the treaty provisions specific to members of the euro area, it does not apply to us or other non-euro-area member states and cannot confer any obligations or duties on them. We will not be part of the ESM, and the treaty change does not therefore involve a transfer of competence or power from the UK to the EU. However, as I said earlier, I can pledge to the House that hon. Members will have the opportunity to scrutinise the decision in still greater detail, as the EU Bill requires parliamentary approval by primary legislation before the UK can ratify the measure.
Mr Wayne David (Caerphilly) (Lab)
There is no doubt that it is in Britain’s national interest to do everything we can to ensure that the eurozone is stable and prosperous. It was therefore right for the European financial stabilisation mechanism, the EFSM, and the European financial stabilisation facility, the EFSF, to be created last May. In those extraordinary and dangerous circumstances, it was necessary to take swift action. More than 40% of Britain’s exports go to the eurozone. If this country is to secure a strong economic recovery, exports to the eurozone must play a vital role.
Jacob Rees-Mogg (North East Somerset) (Con)
I thank the shadow Minister for giving way. I wonder if he is correct. The history of economic crises shows that the countries that devalue and default first are often the first to recover. By sticking with the euro, Europe has therefore made a mistake and lengthened the period of distress for Ireland, Spain, Portugal and the other economies.
Mr David
It is for other European Union member states to decide whether they wish to be part of the eurozone, and there is no doubting their commitment to it.
When the dust had settled after the fraught days in May 2010, moves were made to establish a more permanent stabilisation mechanism, facilitated by a treaty change to provide a stronger legal base. That mechanism will come into force after 2013 and will replace the EFSM and the EFSF.
I find the procedure before us rather strange, to say the least. When or if the European Union Bill, which is currently in the other place, reaches the statute book, there will be a change to the relevant constitutional procedure, as the Minister explained, and the procedure that we are using this evening will no longer apply. Instead, we will have what is essentially a post-decision procedure. Treaty changes will require a statement to be laid before Parliament on whether the decision falls within clause 4 of that Bill. I understand that the treaty change to establish the European stabilisation mechanism would not fall within clause 4, so would not trigger a referendum. However, it would require an Act of Parliament. The Government have said on at least three occasions, and have confirmed this evening, that they would seek the support of the House, using the procedures of the European Union Bill, by introducing primary legislation. As the Financial Secretary to the Treasury said:
“The mechanism is not a transfer of power from Westminster to Brussels, so it does not require a referendum, but it will require primary legislation, which will be introduced in due course.”—[Official Report, European Committee B, 1 February 2011; c. 12.]
Given that commitment, I wondered why the Government were putting forward this motion at this time. The reason, of course, lies in section 6 of the European Union (Amendment) Act 2008, which requires that when a decision under article 48(6) of the treaty on European Union is proposed, a Minister must introduce a motion and have it passed by both Houses of Parliament without amendment. That must happen before the Prime Minister can give his agreement to the adoption of a draft decision at the European Council. In other words, for the Prime Minister to be able to give Britain’s support to this draft proposal at the European Council meeting at the end of next week, it is necessary to secure the approval of Parliament.
I want to make a point about procedure. I welcome what the Minister said earlier on this matter, and I hope that the Prime Minister will adhere to that if there is even the smallest change to the proposed amendment. I hope that that is truly a cast-iron commitment.
Mr Jenkin
Is the hon. Gentleman saying that the European Union Bill will set aside the procedure set out in the 2008 Act, and that there will no longer be a requirement to bring draft Council decisions before this House before they are made? I think that he should invite the Minister to intervene on him to clarify whether that is the case.
Mr David
I would indeed welcome clarification on that subject. Indeed, I intervened on the Minister earlier and received no clarification. It is my understanding that the new procedure will supersede the procedure that we are using this evening, and that the procedure will be post-decision rather than pre-decision. I invite the Minister to clarify that.
Mr Lidington
I am happy to provide clarification. The present decision is unique, in that it is being handled under the 2008 arrangements but will also become subject to the arrangements in the European Union Bill—assuming that it becomes law. The Bill, which we debated for seven days, will extinguish the 2008 arrangements, but it will ensure that after the adoption of the decision, in order for ratification to take place, the text agreed by Heads of State and Government at their final adoption meeting must go through all stages of primary legislation in both Houses.
Mr David
I thank the Minister for that clarification, but although there might be extensive post-decision debate, after the implementation of the Bill we will no longer be in a position effectively to give the Prime Minister a mandate. That is a step backwards and a negation of democracy.
Matthew Hancock (West Suffolk) (Con)
The hon. Gentleman has just said that he believes it is an error not to have a mandate, but did the previous Government have a mandate when they signed up to the EFSM after losing an election?
Mr Lidington
The idea that the new system that will be introduced in the Bill is somehow weaker than the current one is laughable. An Act of Parliament is a much tougher form of scrutiny and accountability than a single vote before the initial decision is taken. Under the 2008 Act there would be no need for primary legislation before ratification took place. Furthermore, in extinguishing the 2008 provisions the Bill will extinguish the possibility of a disapplication procedure, which exists under the 2008 Act and would allow the Government of the day, by means of a motion such as the one before us this evening, to decide that its Head of Government could agree a change to a text without ever coming back to Parliament to give it a further opportunity to comment.
Jacob Rees-Mogg
I thank the shadow Minister for giving way a second time. It is very generous of him.
Tonight’s debate came about initially because of a suggestion by the European Scrutiny Committee, which could continue to recommend draft decisions for debate in the House before the Prime Minister went off to negotiate, and then we could have a Bill later. I do not really think we have lost anything.
Mr Lidington
What my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) said is absolutely true.
Mr David
I am glad that for once there is unanimity on the Conservative Benches.
I have two concerns that I should like to dwell upon related to the broader situation in which we find ourselves. The first is the fact that the countries of the eurozone have apparently established a new decision-making structure. The reasons they have done that are perfectly understandable, but it is worrying that the Government do not acknowledge that decisions taken by the eurozone countries could have profound implications for the UK. Take, for example, the issue of the single market. The development and completion of the market is of critical importance to Britain, but we have to be aware that there could be a temptation for the eurozone countries to see the single market in eurozone terms only.
In fairness, the conclusions of the Heads of State and Government of the euro area summit last week state that the new pact for competitiveness and convergence will respect the integrity of the single market in the euro area and the EU as a whole, and the involvement of the European Commission in the work of the euro area group should be a safeguard.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Is the hon. Gentleman suggesting that eurozone members propose to break up the single market, which is established by treaty of all member states, and to impose borders, restrictions or differences between the rules that apply in eurozone countries and those that apply in the rest of the single market? If he is not, his point falls.
Mr David
I am not making that point at all, and with respect, the right hon. Gentleman has not listened carefully to what I said. The statement issued by eurozone countries makes it clear that they will acknowledge, respect and uphold the integrity of the single market. I am simply making the point that the development of the single European market is a key issue. It should be one of Britain’s priorities—it would be, if we had a proactive Government—to ensure that the single market continues to develop. My concern is that in future the eurozone countries, which are perhaps more tight-knit than the rest of the EU, could be tempted to extend the single market provision among themselves rather than applying it to other member states.
Matthew Hancock
Is the hon. Gentleman therefore suggesting that the Labour party position is that the UK should be a part of the European stability mechanism, and therefore tied into bailing out eurozone countries, or does he agree with the Government’s proposal that the European stability mechanism should be for eurozone countries only?
Mr David
If the hon. Gentleman bears with me, I will tell him what I propose.
One sure way to prevent the single market from developing in a way that does not work to Britain’s advantage is for Britain to be involved in the current discussions. It is important for us to have an appropriate involvement in eurozone summits. I understand that countries such as Poland and Sweden, and even the Czech Republic, which has absolutely no intention of ever joining the single currency, have already indicated that they wish to be involved in those discussions. In contrast, Britain has made it clear—so I am told—that it does not want to be involved in any way whatever. I suggest that that is potentially harmful to Britain’s national interest, and therefore urge the Government not to close the door on our eurozone partners.
The second issue is another important and profound one. I have reservations about the economic and political assumptions that underpin this treaty change and the ESM. Let me be clear that the eurozone countries are correct in agreeing a permanent crisis mechanism. To that extent the treaty change is understandable, but my concern is that the ESM is part of a wider economic approach that is completely insufficient to address Europe’s deep-seated economic problems. Austerity, rapid economic retrenchment policies and fiscal consolidation will not of themselves create the kind of growth that the eurozone desperately needs. If all EU countries cut back at the same time, growth is likely to be sluggish at best. The hardest hit countries could find themselves facing stagnation, or even another recession. The risk is low economic growth and high long-term unemployment, with the poorest member states being hit hardest.
Of course, Europe has a 2020 strategy, which is supposed to be a 10-year strategy for jobs and
“smart, sustainable and inclusive growth”.
The stated aim of the strategy is to help Europe to deliver structural reforms and to recover from the crisis. However, although it is full of good intentions, the strategy plays second fiddle to Council and the Commission plans for deep economic retrenchment. It is clear that throughout most of Europe economic recovery is far from strong, and there is little evidence that private sector job growth will be fast enough to compensate for the huge number of jobs lost in the public sector. My concern is that the political and economic philosophy underpinning the treaty change and the ESM will make economic recovery in the eurozone both fragile and uncertain. As I said at the beginning of my speech, that is not in Britain’s best national interests.
These are important and serious reservations, and I hope that our concerns will be listened to carefully. Europe, including Britain, needs a coherent, well-thought-out growth strategy. Without that, the treaty change will fail to deliver the stability and prosperity that we all want.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The debate will finish at 8.41 pm, so there is slightly over half an hour left. There will be no wind-up, so the allotted time is for Back Benchers. However, there is no time limit on speeches, so if Members could please show discipline and restraint, more people will get in.
Mr William Cash (Stone) (Con)
The essence of this debate is not just the technicalities, which we heard about at great length from the Minister, but something far more fundamental—the political landscape of Europe. The Minister knows it and the Foreign Office knows it. To give an example, there was a massive row between Nicolas Sarkozy and Mr Kenny about the terms of European economic governance only a few days ago. Furthermore, as was said this week in The Economist:
“Mrs Merkel has struck a Faustian bargain with France’s Nicolas Sarkozy.”
He knows that France is losing influence, and as one senior EU official commented:
“France needs Germany to disguise its weakness, and Germany needs France to disguise its strength”.
The fact is that we have the strength to prevent this hybrid treaty arrangement, which presents Germany with a predominant role. We have great sympathy for Germany’s predicament, given that it contributes so much to the European Union and is having to pay out so much. I have fairly regular meetings with German politicians, who tell me that if their country had the opportunity, it would almost certainly go back to the Deutschmark. There is a serious crisis in Europe, but the response is about the nature of a treaty, something in which this Government are acquiescing—it is not far short of appeasement.
The plain fact is that this is a serious moment for the future of Europe. This is a new, unprecedented situation, and it is accompanied by other proposals, which, as I understand it, will also be considered on 24 and 25 March, namely the proposals for the euro pact, which has otherwise been known as the competitiveness pact. However, nobody really knows exactly what the ingredients of it are, any more than they knew about the ingredients of the proposal that we are discussing this evening in its earlier stages. Indeed, I had to use an urgent question to extract from the Government the fact that it was even being made. That is the manner in which Europe works: by secrecy and behind closed doors. Indeed, there are already signs of committees meeting, and we are discovering—through leaks and otherwise—the manner in which they are going forward.
One element in all this is that, as my hon. Friends have rightly said, it would have to be determined by unanimity, so we would have the leverage to stop this juggernaut moving forward. I described it the other day as being like an aircraft carrier in comparison with a rowing boat, but we in Britain will not be regarded as a rowing boat by any means. If such arrangements were being made co-operatively by a voluntary association of nation states, I would be the first to say, “This is fine”, but they are not. They are being dealt with in the context of a legal treaty. We are parties to it, which is why clause 4 of the European Union Bill is such a disgrace. I say this with great respect for my right hon. Friend the Minister, but he talks about how we would be under no legal obligation and how there would be no transfer of powers or competences, but that is not the issue. The issue is whether the United Kingdom is affected. That is the point that I put to the Prime Minister repeatedly, and he cannot answer it. The fact is that the arrangements in question do affect the United Kingdom. They are matters of foreign policy; they are not just constitutional questions relating to sovereignty, competence and powers.
Martin Horwood
I hope that the hon. Gentleman appreciates that I am missing the Cheltenham festival to be in Parliament this week, which I do not mention flippantly. The festival is enormously important to my constituency economically, and it depends enormously on Irish euros to make it succeed. If in the long run the outcome of the stability mechanism adds some discipline and rigour to eurozone economies such as Ireland, can he not see that that would be of enormous benefit to the festival, to Cheltenham and to the whole of the UK, and should we not do everything in our power to facilitate it?
Mr Cash
I was one of the first—in fact, I think I suggested that we should help Ireland through the bilateral Bill that we eventually produced. However, the Irish are now being put under pressure, at the dictation of Germany in particular, to reduce their corporation tax. That will not do much for the Cheltenham gold cup.
There is a serious problem, because the Government are effectively obscuring the nature of this measure by giving the impression that it is all about institutions. It is about realpolitik. In the days of Bismarck, the German states were brought together in a customs union. That was done for understandable reasons; I do not want that to be misunderstood. However, there is now a problem for Europe. Our problem is that, in the 43 minutes that the Minister spent addressing the House, he did not deal with the politics of this matter at all. That is most unfortunate. In every serious commentary on this issue, including those in the Financial Times, the real question is whether Germany is becoming increasingly predominant, and whether that is intentional or whether it is happening by accident and Germany is making the most of it.
Germany is making the most of the financial crisis to get a greater degree of political control, and the question of whether we can influence that by entering into an arrangement of this kind—which affects us even though we are technically excluded from it—is a serious foreign policy matter for the innermost parts of the Foreign Office. It is also a matter for this House. I believe profoundly that these issues, including the euro pact itself, are not being properly disclosed. The Minister might know what is going on, but we do not. We are not being told. We do not know what the strict conditionality affecting the other member states in the eurozone will be under article 138 as amended. The plain fact is that in that conditionality a crisis lurks. If over-severe conditions are imposed, we will have another crisis in Europe.
This is a bad treaty proposal. The leverage comes now, when we have the opportunity to say no. The Government propose that this will be dealt with in a Bill, but that will be far too late. The Government are acquiescing in this, and I regard that as a form of appeasement to the modern problems of Europe in the form of a predominant Germany, which is not in the interests of Europe, not in the interests of the United Kingdom, and not in the interests of Germany itself.
Mr Denis MacShane (Rotherham) (Lab)
I actually agree with some of what the hon. Member for Stone (Mr Cash) said: a lot of this does turn on Germany. We are told that the eurozone is a disaster zone, economically, but we can now see that Germany is succeeding rather well in the eurozone according to all the indices that matter: growth, falling unemployment and exports. I agree that Germany is playing its hand. I am worried about the German position on intervening in Libya, but that is the price we pay for—
Martin Horwood
I hope that, while endorsing the words of the hon. Member for Stone (Mr Cash), the right hon. Gentleman will dissociate himself from the hon. Gentleman’s use of the term “appeasement” in connection with Germany. It was profoundly distasteful and quite inappropriate to this debate.
Mr MacShane
I thought the hon. Member for Cheltenham (Martin Horwood) made an important intervention earlier this week about the Saudi invasion and occupation of Bahrain, but that is another point. I am sorry, but the hon. Member for Stone has put his finger on a very profound point, although I would not use the term “appeasement”.
I have affection for the Minister for Europe, who was like Horatio defending the bridge, fighting all by himself “for the ashes of his fathers and the temples of his Gods”, as the Tuscan hordes—the Eurosceptic hordes—bore down on him and tried to thrust him to one side in order to bring to bear their vision of what Britain should be like. This is a very serious development. The Government have used article 48(6) of the treaty of the European Union—the famous passerelle clause, which was not meant to be used.
We are agreed that part of the problem is connected with the budget freeze, about which the Minister spoke so passionately and proudly, but in exchange the President of France is going to get an absolute block on any common agricultural policy reform. Right hon. and hon. Members should have no illusions about that; if any part of Europe is frozen, it all tends to start freezing. In the agreed statement, although the new mechanism applies only to eurozone or euro-using members, it fully engages Britain. As the key statement we are debating tonight states:
“The Heads of State or Government of the euro area”—
that is not us—
“and the EU institutions have made it clear… that they stand ready to do whatever is required to ensure the stability of the euro area as a whole. The euro is and will remain a central part of European integration. In particular, the Heads called for determined action in the following areas”,
which were specified. The Heads of the European institutions speak for us. That means the President of the European Council. We appointed him, as we appointed the President of the European Parliament. Our MEPs elected him. I am afraid that this is not simply a matter solely and exclusively for the eurozone. Frankly, this might be a comfort blanket that my dear friend Horatio is trying to throw over the noisy bedsteads of the Tuscans behind him, but the fact is that this will commit Britain to take part in decisions that involve us as a nation.
When I said in a debate last week that the Prime Minister, after discussing the Libyan crisis on Friday, would be asked to leave the room, the hon. Member for Stone intervened, as some Members might remember, and read out a press release saying that the British Prime Minister would take part in these decisions on the architecture of economic governance of Europe as a whole. The hon. Member for Stone might care to recall that, last Friday, as soon as the Libyan discussions were over—they ended, frankly, in nothing, with bits of paper being waved around—the serious decisions of the European Council started and lasted all through Friday afternoon, Friday evening and Saturday. The Irish Prime Minister, the new one of the newly elected Government, went home, not achieving what the Irish people had voted for, but we were absent. This is what the Deputy Prime Minister rightly calls the “empty chair” policy of the present Government, which greatly worries me.
We will pass this legislation tonight, but I accept what the hon. Member for Stone said—this is a matter of high importance. I worry that we are slowly isolating ourselves from the main thrust of decision making in Europe. I think the Minister is putting up a firm defence. The Prime Minister, however, at Prime Minister’s Questions last week, dismissed the intervention of the hon. Member for Wellingborough (Mr Bone)—I do not mean that unkindly, as I thought it was one of the nicest interventions ever. The hon. Gentleman appealed to the Prime Minister for an in-or-out referendum, but the Prime Minister effectively said on behalf of the British nation state that we are not leaving and that we are not going to a have a referendum, as we are part of Europe.
Mr MacShane
Yes, and I am going to win the lottery on Saturday! I think the Prime Minister was very clear that we are not going to have an in-or-out referendum and that we are staying in the EU. If we are to stay in the EU, it is better to work co-operatively and effectively in it. Unfortunately, the Government do not accept the consequences of their full membership of the EU. They are pretending—here we find that dear Horatio has been waving a wooden sword—that the measure before us somehow excludes Britain from future responsibilities. It does not; it will not: the European Union issue will go on and on for the rest of this Parliament.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I intend to speak very briefly. First, let me thank my right hon. Friend the Minister for clarifying the procedural issues. I wrote in a note to colleagues that I understood that this would be the last occasion on which we could scrutinise the process before ratification. I now understand that that is not correct, although certainly the decision will be set in stone, and we shall not have an opportunity to change it unless we vote down the Act of Parliament that will be implemented. However, I should like one further clarification.
I understood that whatever amendment was made to the text of the treaties would require an Act of Parliament, regardless of whether the European Union Bill was passed, because that is the way in which we have always implemented treaty changes. To that extent, the EU Bill means no change. It would be a shame if we lost the opportunity to discuss matters before they go to the Council, but I accept the point made by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) that it is up to the European Scrutiny Committee to bring them before the House.
In the few minutes for which I intend to speak, I shall concentrate on what was said by my hon. Friend the Member for Stone (Mr Cash) and by the right hon. Member for Rotherham (Mr MacShane). The Government should be worried when there is agreement between those two Members. On this occasion, they agree that momentous events are afoot. My hon. Friend seemed to be saying, in so many words, that while we had always opposed the formation of a federal Europe which would inevitably be dominated by Europe’s major economic superpower—Germany—we were now facilitating the creation of a federal Europe, at least within the eurozone.
The text that we are approving states:
“Member States whose currency is the euro may establish a stability mechanism to be activated”,
and so forth, but there is no explicit exclusion of countries that are not participating in the euro in terms of its effects. What exactly is a mechanism? We have in mind some kind of bail-out fund, but the annex to the Council conclusions that were produced in December contains a draft decision that refers in more detail to what this instrument might actually concern. It states:
“The ESM will complement the new framework of reinforced economic governance, aiming at an effective and rigorous economic surveillance, which will focus on prevention and will substantially reduce the probability of a crisis arising in the future.”
All that sounds extremely beneficial and positive, but, as we know, the problem is that although specific sanctions do not apply to non-euro state, there is no exclusion of economic governance over all member states. Everything that the EU does implies that one day all its members will be members of the euro. That is clearly the direction in which it wants things to travel.
Mark Reckless
Is my hon. Friend aware that the issue is clarified by the decision made on 11 March on the pact for the euro? Annex I contains four guidelines. Guideline (b) refers to “Participating Member States” and guideline (d) to “Euro area Member States”. Guideline (c) states that we must consult our partners
“on each major economic reform having potential spill-over effects”,
and that that applies to “Member States”, but it makes no reference to the euro or to participating. It does involve us.
Mr Jenkin
I am grateful to my hon. Friend for pointing that out. It underlines the fact that we are at a crucial crossroads in the development of the European Union and our relationship with our European partners.
A few months ago I attended a private discussion, and those present included some very senior recently retired Government figures. One of them said—Chatham House rule, I am afraid—“You must be very pleased, Bernard, that the new Government are going to consider all this, because obviously there will be a consolidation of the eurozone area, and Britain will have to establish a different relationship with the European Union because we will remain outside it.” I said, “Well, I’d love to think the incoming Government have thought about all these things, but it seems that their minds are closed. I don’t think they want to think about this at all.” The result is that events are sweeping us along. We are not setting the agenda. The agenda is being set for us, and we are not even looking ahead at the consequences of what we are agreeing to.
That could have profound consequences for the future of our relationship with the EU. Indeed, I would say that it brings forward the inevitability of the United Kingdom finishing up having to make a dramatic in-or-out decision. If the Government have a lever in their hands but are still unwilling to exercise leverage to start drawing the distinction between those who want to consolidate the euro area and those who want to remain outside it, we do not have a European policy worth the name. We will therefore be driven into deciding on this binary question of whether we stay in or get out—and I hear that the Labour party may be beginning to flirt with the idea of holding the referendum that it denied the British people when it was in office.
We should consider the vote achieved by the UK Independence party at the recent by-election, as there has been a constant upward trend in every by-election since 1997. If we do not recognise that a part of the despair with politics that we experience in our daily contact with our constituents is a result of our powerlessness, and of our denial of the real choices and issues facing this country, we will drive those who feel such despair into the hands of more extreme parties than the mainstream ones where we all wish to be.
I leave the following thought with my right hon. Friend the Minister. As this Parliament progresses, this debate will not subside or go away. Instead, it will become more intense, particularly as the economic realities of the euro are based on denial. It is rather like the denial that there was for a period in respect of the European exchange rate mechanism before it broke up. However, because it is so much harder to break up the euro, the denial will go on for longer and the pain inflicted will be much more intense. There will be riots in the streets of European capitals before this situation is resolved, because I do not think it is possible for countries to make the kind of adjustment that the euro is currently imposing on them without the flexibility of separate currencies, which is why it is an accepted fact among many economists that at least some of the southern European states will leave the euro before this crisis is out.
Several Hon. Members: rose—Order
Mr Deputy Speaker (Mr Lindsay Hoyle)
Three speakers wish to contribute, and there are eight minutes to go. I call Steve Baker.
Steve Baker (Wycombe) (Con)
First, I wish to associate myself with the remarks of my hon. Friend the Member for Harwich and North Essex (Mr Jenkin). Too often, when addressing questions such as the one under discussion we get bogged down either in procedural matters or, matters that verge on the nationalistic, but this evening he has transcended that old territory and talked about what is good for the UK and Europe in broader terms. I shall attempt to add to his remarks.
If we wish to say something about what is going on in Europe today, we must talk about the broader sweep of political economy, and I therefore also refer to the remarks of my hon. Friend the Member for Stone (Mr Cash). We must say something about the EU, and I say this:
“It is the last gasp of an outdated ideology, a philosophy that has no place in our new world of freedom, a world which demands that we fight this bureaucratic over-reach and lead Europe into the hope and potential of a new, post-bureaucratic age.”
That is how the BBC reported the remarks my right hon. Friend the Prime Minister made in Prague in November 2007, which, coincidentally, was the month when I joined the Conservative party and approached my right hon. Friend the Minister for Europe to discuss becoming a Member of Parliament.
Steve Baker
I see that my right hon. Friend remembers that, but I suspect he regrets giving me the reference.
Steve Baker
I am most grateful for that.
We have talked about political economy, and great matters are at stake. It seems to me that there have always been two visions for Europe: a classical liberal vision and a vision of a so-called social Europe—an interventionist Europe. A classical liberal Europe would enable free movement of people, services and goods, all of which are to be applauded because we know that human flourishing depends on free trade and peace. The big question is: when did Europe become a social Europe, a socialist Europe and an interventionist Europe? Is it right that we put our faith in the omnipotence of government to solve all our problems and to deliver stability and prosperity?
With this measure, the European Union becomes explicitly a transfer union and is explicitly moving money and wealth around from one member state to another, and I suspect that Germany has very nearly had enough of it. We should not persuade ourselves that this is an entirely new phenomenon. I was most grateful to my hon. Friend the Member for Stone for giving me the opportunity to write in his European journal with a colleague and friend of mine, Professor Philipp Bagus, a German economist at a Spanish university. We explained how the European Union is inherently a monetary transfer union. By monetising their debts, profligate countries have been able to appropriate for themselves wealth from the productive nations such as Germany. This has been going on in a way that very few people understand for a very long time, and I believe that it has substantially contributed to the crisis that we are in. Having lived with this principle of redistribution by subtle means for a long time, we now seem to be explicitly adopting the notion of fiscal transfer union and direct economic governance.
Mr MacShane
May I invite the hon. Gentleman to read the Hansard record from 1984 when Mrs Thatcher brought back the rebate? My right hon. Friend the Member for Blackburn (Mr Straw) said that she had hauled down the Union Jack and hauled up the white flag of surrender to Brussels. She replied that that was quite wrong, that it was right that we should transfer, and right that we aid Portugal and the poorer members of the EU. At times, I feel like a Thatcherite.
Steve Baker
I am grateful to the right hon. Gentleman for that, but the question is not whether we should help our friends in Europe, but how we should do so. Everybody here is interested in securing the maximum of human flourishing right across Europe—I do not doubt that—but the question is how to do that. Should it be done through the omnipotence of the state or through free trade, free markets and peace?
I believe in stability and prosperity for Europe, but I do not believe for one moment that the European Union is capable of delivering it. I finish by reading a quote from a great French liberal statesman. He said:
“The state is that great fiction by which everyone seeks to live at the expense of everyone else.”
If this measure goes through, Europe will indeed have adopted that idea and it will have done so very much to its disadvantage.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
I am grateful for the opportunity to speak in this debate. I had not intended to do so, but I wish to set the Minister’s mind at rest. I can assure him that few, if any, Members who have reservations about this wish to block the treaty amendment incorporated in this motion. He rightly said that it is in our national interests that the eurozone should seek the maximum stability and be empowered to do so. He went on to say that we must therefore not impose any conditions in giving Europe permission to go ahead with this treaty change. That is a non sequitur. As long as we suggest reasonable and moderate conditions and concessions by way of repatriation of powers, there is surely no conceivable likelihood that Europe will forgo something of first order importance to it in order to prevent our having something that is of very minor importance to it. Would Europe seriously forgo establishing a stability mechanism for the euro in order to prevent our getting back powers over the working time directive? This is of second order importance to us, but of first order importance to Europe, so it provides an opportunity for us to seek concessions, and we should take that opportunity.
The second reassurance I want to give the Minister is that we on the Government Benches want the coalition agreement to be implemented. We see in the measure an opportunity to carry forward that agreement, which commits the coalition to a review of all the powers and competences that have been given to the European Community. The only purpose of doing so is to see which of them should be returned to this country. Many suppose that the Liberal Democrats do not really want that to happen. I am sure that some do not, but one of the joys of coalition for me has been getting to know more Liberal Democrats, and I know that many of them are quite pragmatic about this. One very senior member of the coalition Government has told me that he believes that 30 or 40 of the measures that were transferred in the Lisbon treaty and others should be returned. The whole coalition Government, not least the Liberal Democrats, are committed to the principle of localism. They want to see government in this country when it is not appropriate for it to be transferred, or if it has been wrongly transferred to Brussels in the past. This is an opportunity to secure the return of those powers and I urge the House to take that opportunity.
Question put.
The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 23 March (Standing Order No. 41A).
petition
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Gavin Williamson (South Staffordshire) (Con)
It is a pleasure to present this petition, which has been signed by 1,256 people who support my campaign to keep a police station in Wombourne.
The petition states:
The Petition of residents of the South Staffordshire constituency, and others,
Declares that the police station in Wombourne is being considered for closure; and further declares that Wombourne has a population of 14,000 who depend upon the service that it provides.
The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that the police station or a new alternative station is opened in the village of Wombourne to serve its residents and those in the local area.
And your Petitioners, as in duty bound, will ever pray.
[P000902]
Classroom Teaching Assistants (Cumbria)
(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Tony Cunningham (Workington) (Lab)
It is nice to see so many Cumbrian MPs in the Chamber, because it demonstrates just how important this issue is. I will begin by being extremely blunt. What Cumbria county council is doing through the single status process is wrong and unfair. Classroom teaching assistants are angry, disillusioned and demoralised. I have had more than 70 teaching assistants come to my surgery recently. They feel hurt, upset and desperately worried about their future. The situation has brought some of the most caring and professional people I know out on to the streets of Cumbria. That is how important this matter is to them. Regardless of the levels and bandings they fit into, they see what is happening as grossly unfair. This is really about reducing people’s salary by a third. It applies to staff in care homes, some of whom came to see me recently, and I am told by a lady called Sarah Field that adult education teachers are in the same position, but this debate is about teaching assistants.
I recently spoke to a head teacher in west Cumbria who told me that back in 1997 the only additional resources she had had were packs of felt-tip pens. Her school had since had new classrooms, new computers, whiteboards and all sorts of modern innovations, but she said, “I’ll tell you something: the most important resource we have in schools is classroom assistants.” That is how strongly she felt about the situation.
Teaching assistants work as an integral part of the team. It is not strange or even a coincidence that Cumbrian primary schools are in the top 10% in the country; I think it is very much to do with the support staff, who are working with teaching staff and improving standards in teaching and learning. Support staff enrich the experience of pupils. Teaching assistants cannot be lumped together as their jobs vary enormously. They do a fantastic job, and some work with children with complex needs.
Mr Jamie Reed (Copeland) (Lab)
I wish to point out the expertise that my hon. Friend brings to this debate: he was formerly a teacher in west Cumbria. Does he agree with me and with Ofsted that the introduction of teaching assistants has made an absolutely fundamental difference to attainment levels in primary and secondary schools, not just in west Cumbria but across the country, and that the abolition of the national pay and conditions framework, the effects of which we are now seeing, will lead to a race to the bottom when it comes to pay?
Tony Cunningham
I wholeheartedly agree; I could not agree more with my hon. Friend. Let me read out what an assistant teacher in a special needs school has said:
“Children with complex needs have to be changed because of incontinence, and then physiotherapy is needed and leg splints applied, then hoisted onto the standers. After one hour they need taking out of their standers, tubes put in place and connected for feeding, after feeding medication is given. Children need this every day, plus hydrotherapy once a week. Children with challenging behaviour need assistance with Makaton (This uses signs, symbols and speech to help people with learning and communication difficulties to communicate.)…Children with learning difficulties need a lot of time, encouragement and resources like Makaton to enable them to achieve objectives and enjoy their lessons.
These are only a few of the duties I do with our children. I love my job, but a reduction in my wage will make it very difficult to carry on working in this school. Our children are the only reason we love to go to work”.
Is anyone going to tell me that that classroom assistant deserves the loss of a third of her salary?
If one asks the teachers and school governors what they think, they will say that the assistants do a great job and thoroughly deserve the pay that they get. They do not earn a lot; a full-time teaching assistant earns around £14,700 for a 32.5 hour week. The cuts will reduce their salary to £11,140. The council justifies the pay cuts by arguing that teaching assistants have a shorter working week and longer holidays than other staff. The council claims that teaching assistants get paid for 37 hours a week and receive 14 weeks’ paid holiday.
Rory Stewart (Penrith and The Border) (Con)
I thank the hon. Gentleman for raising this important issue. Will he clarify the single status aspects of the issue? To what extent does he think that the situation is part of national law, or is Cumbria doing something different from other county councils? What might the other options have been, within the legislation?
Tony Cunningham
If the previous Government’s policy had been continued, those classroom assistants would not have fallen within the single status process. That is the reality. It is not too late to change that; there are opportunities to do so. My figures are only rough but, interestingly, in Cumbria teaching assistants get something like £8.60 an hour, whereas in Lancashire they get £11-something an hour. It is not as though Cumbria has to, or is forced to, do what it is doing.
John Stevenson (Carlisle) (Con)
Is not one solution to make teaching assistants a sub-group for the purposes of single status, so that their job qualifications and requirements are analysed on that basis?
Tony Cunningham
That is worth looking at, but inherent in what the hon. Gentleman says is the fact that he, like many other Cumbrian MPs, can find faults and flaws in the system; otherwise, he would not suggest changes to it.
I return to the point that I was making. The council’s claim is denied by the assistants. They are contracted for 32.5 hours and are paid for 32.5 hours. As for holidays, they are paid term-time only, albeit in 12 equal monthly payments. The special educational needs allowance given to teaching assistants working in those schools, doing work that I have just outlined, is being abolished. I echo Brian Lightman, the general secretary of the Association of School and College Leaders, who said:
“Working in a school is not the same as working in a county hall or local authority. These people need to have a proper set of pay and conditions that recognises what they actually do in schools.”
As my hon. Friend the Member for Copeland (Mr Reed) pointed out, I taught for about 11 years in west Cumbria, and I am the parent of children who have gone through the system, so I know the value of teaching assistants. The proposed pay cut is not just about money. It is about the standing in society that it gives to those who get little but give a lot. It is about people who are already on a low wage having that wage reduced even further, with no regard for what they do, what they contribute, or their input into our community.
Let us imagine what would happen if the Deputy Speaker suddenly announced that the wages of all of us in the House of Commons were being cut by a third, and the furore that that would create. Teaching assistants are not asking for thousands. They are not asking for bonuses. We read in the papers about the millions of pounds that bankers get in bonuses. Teaching assistants are asking to keep their wages the same as they are. That is not too much to ask. As a further insult, they do not even have the individual right of appeal. The fact that the volume of appeals is large should not be a reason to take away someone’s right to be heard.
I go back to what this says about our values. Surely these people should not be subject to a pay cut. Such an attack demoralises the very people we need to inspire our children. For my constituents, it is vital that their children—our children—are valued. That means that we value, and show that we value, the people who work with them. We do not just give them warm words; we give them a decent wage. We need to help our schools to continue to improve. To do that, we need highly motivated staff. We need to recognise the value of teaching assistants and what they give to our schools.
I plead with the Minister to do everything in his power to stop what is happening, to ask the county council to rethink its strategy, and to work with the unions and any other relevant bodies to find a satisfactory solution. My message to Cumbria county council is clear—please, stop and think again. The bottom line is this: if the process goes ahead, it will be bad for the classroom assistants, for teachers, for schools and for the children we care so much about.
Tim Farron (Westmorland and Lonsdale) (LD)
I pay tribute to the hon. Member for Workington (Tony Cunningham) not only for calling the debate, but for being generous with his time. I shall be brief and not take advantage.
The debate is about a group of people who are already not well paid—Cumbria’s teaching assistants are the second worst paid in the country, and that is before any pay cuts. It is about justice for them and about the impact on the quality of education experienced by our children throughout Cumbria. As a parent of three children at primary school, seeing the impact that Cumbria’s teaching assistants have in supporting them in their development and learning is overwhelming. It is appalling that they are under such a threat.
The issue arises as a result of a botched rebanding under the single status process. It was not even intended as a cost-saving exercise by the county council, which makes it all the more ludicrous. It is a huge error. It is important to say that we do not necessarily object to single status as a process. We understand that there are job evaluation processes to go through, but the process was utterly flawed, and the outcome is therefore flawed.
Rory Stewart
Is not the answer, then, to define a single status which gives the right salary, the right respect and the right position to teaching assistants, rather than grading them below where they should be?
Tim Farron
My hon. Friend makes a good point. Someone without much human resources experience could see at first glance that the county council had botched the exercise by putting teaching assistants alongside talented, able, hard-working people who do a completely different job. It stands to reason that at the very least a different family needs to be created for teaching assistants to belong to. It is wrong to equate people who do teaching assistant jobs to a position that is on fixed hours.
Teaching assistants at the school my children go to in Milnthorpe are there helping with preparation at least half an hour before their working day begins. They are there afterwards if a child is in need or upset. They help with extracurricular work and child development. Crucially, from the point of view of the child, who will not differentiate, a teaching assistant is part of their teaching team. They should absolutely have a band of their own.
I want to quote a teaching assistant from Kendal in my constituency to point out the very different and intensive nature of the role that puts it beyond that of a regular fixed hourly job:
“I have been working with a child with severe autism. I support him every second of the day. He cannot be left unattended. I prepare all his activities and research different strategies to implement with him on a daily basis, often working late into the night. I have always felt valued by my school, but not now by my employer, Cumbria county council.”
That sums up the situation for many people in Cumbria.
The hon. Member for Workington rightly pointed out the issue of appeals. The county council, which is overwhelmed with appeals, says that it will look at only some of them. I am sorry, but it should either deal with them all, as a matter of justice, or get the message from the fact there are hundreds of appeals that they have got the banding badly wrong.
I understand that the Minister will probably say that that is a local government matter, but the issue is clearly about the impact on the quality of education in Cumbria due to a demoralised work force who are being deprofessionalised by a county council that has simply got this wrong. It is not too late to put this right. The lot of us here would like the Government to press the county council to think again.
Mr Jamie Reed (Copeland) (Lab)
It is a pleasure to follow the hon. Member for Westmorland and Lonsdale (Tim Farron), who spoke convincingly about what I hope and think is a shared aim among all Cumbrian Members who want to resolve this issue. I will be brief. In February alone I was lobbied by almost 100 people in the town of Millom. I had been asked to attend a brief drop-in session at a local school, only to find myself in front of 100 people faced with life-changing alteration to their remuneration as a result of the single status process that Cumbria county council is engaged in.
I was asked to attend a similar meeting at my children’s school in Whitehaven. There were more than 200 people there, with standing room only in the school hall. Some of those people could lose around £9,000 a year, a life-changing amount of money. For some of them, who were visibly upset, that means that they will be unable to pay their mortgages. For those who are married to other teaching assistants or other people affected by the single status process, it really is a calamitous event. I hope that the Minister and the Government will take that into account.
I make no apologies for relating the issue to my constituency rather than to Cumbria as a whole, because my constituency is the single most heavily reliant upon public spending in the country, with more than 50% of all jobs, according to independent tables, relying on public spending. It goes without saying that unprecedented and arbitrary reductions in the salaries of so many of my constituents will have a significant socio-economic effect outside those immediately affected by the move.
Pay equality is something that we all wish to see. I understand that the county council is having to cut its cloth because of the cuts it has to deal with, but the winners of the process that is under way in Cumbria—even those who are seeing slight improvements in their terms and conditions—do not like what is happening to their colleagues. They do not think that it is right to rob Peter to pay Paul.
Finally, I am clearly not a spokesman for any trade union or any of those involved in the single status process, and nor am I an advocate for industrial action, particularly indiscriminate industrial action. No one ever wants to see industrial action, which is the very last resort for any professional, but I completely understand why someone facing a life-changing reduction in salary who does not have their appeal heard would feel moved towards withdrawing their labour. That is a natural human impulse. Without continuing negotiation and a fair resolution of the situation, I struggle to see what options, apart from threatening industrial action, remain open to those who are being subjected to such swingeing changes to their standards of living. As my hon. Friend the Member for Workington (Tony Cunningham) said, none of us in this House would put up with it, and we should not expect our constituents to put up with it, either.
John Woodcock (Barrow and Furness) (Lab/Co-op)
I add my thanks to my hon. Friend the Member for Workington (Tony Cunningham) for securing this debate, and for his generosity with his time. I will be brief, because I want the Minister to have a proper chance to respond.
I, too, attended a standing-room-only meeting of teaching assistants, at Ormsgill primary school on Friday, and the people there were absolutely united not only by the deep sense of commitment that they retain towards the children whom they care for and help teach day by day, but by the anger at the way they feel the cards have been dealt. There was such a strong feeling in that room, and it is felt unanimously by teaching assistants throughout Barrow and Furness and throughout the county.
We need to recognise that teaching assistants have brought enormous value to schools throughout the county and throughout the country over the past decade—value that is probably beyond their remuneration. The Government, pupils, parents and schools have had a brilliant deal out of teaching assistants, and that is why they find it so hard to take the fact that they face such an enormous cut, rather than a pat on the back for their work over the past decade. We all understand that the single status process is difficult, and we all understand that is probably necessary, but we all want the council to recognise that it has just got it wrong in this instance.
I shall finish with the words of a teaching assistant whose door I knocked on by chance while canvassing on Saturday, as I do every Saturday. During our conversation, she broke down in tears and said to me, “I just don’t understand how I’m going to be able to make ends meet and pay my mortgage, and I don’t understand why the work that I do every day is simply not being recognised.” I ask the Minister to reflect on what he can do to give guidance to the council, and to reflect the value that he knows teaching assistants bring throughout the country. We all urge the council to make the appeals process meaningful, not partial, and to look again properly at the whole issue, which in this instance it has just clearly got wrong.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
May I congratulate the hon. Member for Workington (Tony Cunningham) on securing this debate and thank him and the other Members who have spoken for the way in which they raised an issue about which people in their part of the country clearly feel very strongly. I understand that. It is classically and appropriately one of the functions of an Adjournment debate in the House to raise issues that involve strong local feeling.
As I will explain, and as the hon. Gentleman and other Members will know, the Government’s role in decisions on pay and conditions and on work force issues is limited, but I will set it out. This debate has, none the less, given them an opportunity to vent the views of their constituents, and, as someone who has served as a member of a local authority and as a school governor, including at a special school, where particular demands were placed on the staff, I recognise and completely understand the issues to which they referred.
These decisions are essentially for the county council, as they are for any other local education authority, so it is probably appropriate that I set out factually the legal position that gives rise to the situation in relation to equal pay and single status on the one hand, and to the terms and conditions of the employment of teaching assistants on the other, because obviously in the case before us the two are interlinked.
Historically, the terms and conditions on which teaching assistants and many other local government staff are employed are decided not by central Government but by local authorities. In principle, that is right and proper, because they are generally best placed to do so. As hon. Members will know, there is a well-established mechanism in place with the National Joint Council for Local Government Services and other negotiating bodies of employers, trade unions, and other work force representatives that historically deal with these matters.
It is worth putting the single status agreement, which gives rise to this, into that context. The single status agreement is a national agreement between the trade unions and local government employers. The Government welcome the greater transparency that the agreement provides. Its principle is a good one, in line with the fact that we remain committed to promoting equal pay and ending discrimination in the workplace. I do not think that the underlying principles, or the agreement itself, are an issue between any of us. The signatories, including any local authority and the relevant trade unions, commit themselves to placing the majority of their work force into a single pay and grading structure, which is generally referred to as the green book structure. That provides the harmonisation that we all want and increases transparency.
Things such as spine points, which are familiar to all those of us who have been in local government, are set by the national joint council. However, the decision on where employees are placed on the pay spine is a matter for the local authority. Although virtually all local authorities remain within the scheme, it is not compulsory; Government cannot compel authorities to be a member. Some authorities—I think only three, in fairness—have opted out in relation to areas such as school support staff. Broadly speaking, however, the scheme works satisfactorily and efficiently.
The fact that there is that need to place employees on a single scale means that local authorities need to go through a process of ensuring that equally valued work is paid an equal amount, so that they can then assess whether they are meeting their obligations under the Equality Act 2010. The implementation of the single status agreement, following several court judgments that have been pretty well publicised, has revealed some historical inequalities in pay. For that reason, authorities such as Cumbria, and many others, have carried out job evaluation exercises. Of course, the outcomes and decisions taken are individual matters for each authority, but many have gone through the process.
Tony Cunningham
Does the Minister accept, though, that if the process itself is flawed, we end up with a very different result than we would if it were a proper process?
Robert Neill
Any local authority must act properly in carrying out a process. As we have heard, an appeals process is in place. I am told—in a sense, I am relaying factual information held by my Department—that because, as has rightly been observed, there is a very high number of appeals, schools have been invited to nominate a representative for each post being appealed to attend a hearing on behalf of their colleagues. It is a little bit like a class action in the courts. That is not a decision that Government take or can impose; that is the view that has been taken.
Tim Farron
Will the Under-Secretary take the view that it is wrong, given the volume of appeals, to decide that the majority will simply not be heard? Is not that an obvious signal that the county council has botched this grade?
Robert Neill
It is dangerous and not helpful if I make a judgment on something to which the Department and I are not party, because I am not seized of all the evidence. However, I observe as a matter of common sense and of law that any employer who goes through a process has to meet their obligations under employment law more generally. It is probably best that Ministers do not try to advise either party about employment law, but it is a factor that everybody has to bear in mind in ensuring that any process is appropriate.
Mr Reed
The Under-Secretary is being generous with his time and I genuinely appreciate the constructive way in which he is trying to engage with the issues. I also feel for him because he has to answer the debate. Does he agree that it might be a more elegant and effective fit if he went back to his colleagues in government, particularly the Secretary of State for Education, and asked him to reinstate the School Support Staff Negotiating Body? That abolition, which the Secretary of State for Education announced last October, has landed the process in the single status framework, where it should not be.
Robert Neill
Of course all Ministers always take back to their colleagues matters that overlap, and that is on the record in Hansard for all to see. Let me deal with the specific point about the School Support Staff Negotiating Body. The previous Government set it up, and the hon. Gentleman is right to say that that my right hon. Friend the Secretary of State for Education decided to bring those arrangements to an end. However, it is worth noting that that body had not reached agreement about any of the issues with which it was tasked. Its existence or non-existence therefore had no influence on the particular circumstances that were determined in Cumbria. We could have a separate debate about whether that was desirable, but the decision to discontinue the body had no impact on the pay and negotiations of the school support staff with whom we are concerned today. It is important to state that. However, the hon. Gentleman has raised the matter, and it is now on the public record.
Robert Neill
I hope that I have been exceptionally factual. It is my duty to the House. Against that background, I hope that hon. Members will understand—
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Mr Rob Wilson (Reading East) (Con)
It is a great pleasure to serve under your chairmanship for the first time, Dr McCrea.
Let me begin by welcoming the coalition Government’s work to date on education. I am sure that more freedom for schools, more meaningful accountability, a commitment to driving up teacher quality and new powers for schools to get tough on the blight of poor behaviour will, over time, help to deliver the improvements in pupil attainment across the sector that we all desperately want to see.
The coalition Government are right to be concerned about the educational attainment of the least affluent children in our society and, in that respect, I very much welcome the additional early years provision and the introduction of the pupil premium. Members may not know this, but I was one of the early advocates of the pupil premium and, for some time, convincing my colleagues of its usefulness felt like an uphill task. I was delighted when the pupil premium was adopted, perhaps with a little help from our coalition partners. I strongly suspect that the Minister’s response to my proposals today will be similar to how it felt all those years ago when I started this journey.
This discussion is well worth having; we never know what will happen a couple of years down the line. I propose, as I have in the past, that in order to make the pupil premium successful, we need to do two things. First, we need to direct it at the very poorest children in the education system. Secondly, we need to make it flexible so that it gives those children real choices within the education system.
I fear that our reforms, particularly in relation to the pupil premium and its current structure, will not do enough to bridge this country’s great and growing educational divide between the very rich and the poor. By focusing our attention solely on the state sector, we risk ignoring the fact that some of the very best educational opportunities that this country has to offer in terms of the schools that dominate the top A-level and GCSE results are in schools that are largely reserved for the children of the wealthy and well-connected, and are closed off to a vast majority of the children who live on their doorstep. That is not to say that many middle-class parents do not stretch their household budgets to breaking point to ensure that they get the best educational opportunities for their children.
Although only about half of pupils achieve five good grades at GCSE, and fewer than one in 100 children eligible for free school meals makes it to university, some of the leading private schools routinely send half their pupils to Oxford and Cambridge; Westminster school and St Paul’s girls’ school are good examples. On the rate of low-income attendance at top universities, a recent report by my hon. Friend the Member for South West Norfolk (Elizabeth Truss) states:
“The rate of low income attendance at top universities has stagnated at 2 per cent.”
It will therefore come as little surprise that former private school pupils have a disproportionate hold on the leading professions. Social mobility has declined and it has become even harder for the least affluent to make it to the top of the tree.
Despite evidence in a recent report showing that the situation has improved slightly over the past few decades, former private school pupils still account for two thirds of judges, more than 60% of barristers, and more than half of solicitors, chief executive officers and doctors. I also note with a wry smile that the proportion of journalists who attended independent schools has risen in recent years.
If we contrast that with the performance of pupils eligible for free school meals, we see that the difference is very striking. Just 27% of free school meal children get A* to C, including English and maths, at GCSE. That is half the national average, which is already too low. The situation is even worse when evaluated against the English baccalaureate subjects, something the Secretary of State likes to do. The report produced by my hon. Friend the Member for South West Norfolk is again relevant, because in many respects, low-income students are being mis-sold the new GCSEs and A-levels on the basis that they are equal according to league tables and UCAS points. The evidence shows, however, that universities and employers value core academic subjects, such as mathematics, English, the sciences and English baccalaureate subjects. The result is poor performance, with only 4% of free school meal pupils achieving five A* to C grades in core academic subjects, compared with the 15% national average.
Research shows that a wealthy child attending an independent school is 55 times more likely to win a place at Oxbridge than a child eligible for free school meals, whose chance of winning a place at one of our ancient universities is less than one in 100.
Mr Stewart Jackson (Peterborough) (Con)
I congratulate my hon. Friend on securing this timely and important debate. Is he as concerned as I am about figures showing that in 2009 just 4% of children on free school meals took chemistry or physics, while fewer than one in five took history and less than 15% studied geography or French?
Mr Wilson
Yes, that concerns me enormously, and that is why the report by my hon. Friend the Member for South West Norfolk is so timely. I hope the Minister will take the issue on board and address it directly later.
I do not say what I have said in order to criticise universities, but I hope that it demonstrates to Members the epic scale of the challenge that we face as a nation. If we are serious about fairness and about unleashing aspiration and opportunity for all, we should take action to make first-rate teaching and the ethos of excellence available to everyone, rich or poor.
Before I give details of what I think should be done to remedy the situation, let me be clear about what I am not calling for and not claiming today. First, I am not making sweeping claims that independent schools are better than state-maintained schools. There are huge variations within the independent sector in terms of standards and pupil attainment. The bottom half of private schools accounted for just 7% of A* A-level grades in the independent sector last year. Moreover, the OECD has argued that on average the difference in attainment between state schools and private schools is largely accounted for by the socio-economic background of the students.
Secondly, as I will explain later, I am not calling for a system-wide educational passport or public subsidy for private schools. Thirdly, I do not wish to re-enter the argument about selection or reintroducing grammar schools. None of the main parties has plans to expand selection in the education system in England, and neither do I. Fourthly and finally, what I shall propose in the next few minutes is not a panacea for improving educational attainment across the whole population of school children, but I stress that it will make an important contribution to social mobility and aspiration in England.
That is not an excuse for ignoring the fact that selective private schools exist and that many of them offer first-rate educational opportunities, with an ethos of excellence. Last summer’s A-level results show that of the top 40 schools in terms of academic A* grades per pupil, three quarters were private schools. Independent school pupils make up 33% of all pupils who get three As at A-level. Despite the fact that the independent sector as a whole educates just 7% of school pupils, students who attended private school still account for more than 45% of places at Oxford and 40% at Cambridge.
Who has the opportunity to attend these schools? The answer is that since the demise of direct grant schools and the assisted places scheme, apart from bursaries and scholarships, admissions are largely restricted to pupils whose families have the ability to pay. Some of the best performing schools in the nation are closed off to a vast majority of the poor children who live on their doorstep.
If we are serious about boosting the life chances of more children from poor homes, and increasing social mobility so that children from disadvantaged backgrounds have a better chance of making it to the top, something must be done to break down the social apartheid in our schools. I would like the Minister to consider a proposal that could broaden the social base of some of our leading private schools and boost the life chances of many less affluent pupils now, rather than in however many years it takes to dramatically raise teaching quality and tackle issues of poor behaviour across the entire school system.
Specifically, I would like a number of the leading private day schools to consider offering a number of free places to pupils in their surrounding area who are eligible for free school meals. The Government could support them by meeting some of the cost, but by no means all of it. It would be entirely up to the children and their families whether they applied for a place at participating schools. The pupils would have to demonstrate their aptitude and potential through a competitive admissions process. As the Sutton Trust has noted, tests these days are far more sophisticated than the old 11-plus. For example, many independent schools have developed tests around verbal reasoning, which test the child’s aptitude rather than how well they have been tutored or taught at school. My proposal is not an exercise in social engineering, so all those who take the test—rich or poor—should have the same chance of success.
My proposal is completely cost-neutral to the Government and therefore to the taxpayer. All that changes is that the per pupil funding and the pupil premium shift to another school. The remainder of the cost of the fees is met by the independent school itself or its supporters. Many such schools have alumni who are willing to step in. It is interesting to note that the Government will provide £150 million for a national scholarship scheme for disadvantaged young people attending our universities. Those resources are devoted to creating a more balanced intake for our elite universities, which, after all, are independent, selective, fee-charging educational institutions. Will the Minister explain where the difference lies in relation to independent schools?
It is important that the proposal is evidence based, and the evidence suggests that opening up access works. Between 2000 and 2006, the Sutton Trust joined forces with the Girls’ Day School Trust to sponsor an open access scheme at the then fee-paying Belvedere school in Toxteth, a very deprived part of Liverpool. With the support of both organisations, every place at the school was allocated on the basis of merit alone, not ability to pay; the way the scheme operated was almost needs-blind. A five-year evaluation of the Belvedere school scheme was conducted by the Centre for Education and Employment Research. It found that open access could lead to a broader social mix of pupils at some of our very best schools and that it could raise aspiration among pupils to go on to university and improve the exam results achieved by the participating school.
In the first three years of the Belvedere scheme, the school attracted an average of 366 applications for just 65 places, with applications from three quarters of primary schools across the Liverpool area. During the five years of the scheme, entries from middle and lower income postcodes increased considerably. The proportion of pupils eligible for free school meals over the five years was 32.8%, which is more than double the national average for girls aged 11 to 15 in the maintained secondary sector. Far from the scheme’s threatening academic standards at the school, Belvedere went on to achieve its best ever results in 2005. Some 99% of pupils achieved five good GCSEs, compared with an average of 49% across the rest of the local education authority. Survey evidence showed that the school was a happy place, and that 95% of the pupils were hoping to go to university.
Sir Peter Lampl, chairman of the pioneering charity the Sutton Trust, told me that he regards the open access scheme as the most important project that the trust has undertaken. He sought to persuade the previous Government to take up open access and expand it, initially to 12 schools, but ultimately to 100 or more top independent schools. Unfortunately, despite a broad base of support and great willingness from schools in the independent sector, the previous Government failed to take forward the programme.
Mr Stewart Jackson
Does my hon. Friend agree that the Charity Commission and its esteemed head, Dame Suzi Leather, would be better off supporting similar initiatives to that pursued by the Sutton Trust in Liverpool, rather than hounding small private schools on the spurious basis that they are not opening their rolls to children across the community?
Mr Wilson
I thank my hon. Friend for that important question. My experience of dealing with the independent sector is that, perhaps more than any other sector, it is focused on trying to do all it can to help children from poorer backgrounds. A number of schools have contacted me about the subject during the past few days and they are very keen to get involved, and to do more of this type of work and give more opportunities to poor children. I find it hard to know where the Charity Commission is coming from, when those independent schools are doing such a wonderful job trying to help the life chances of children from poorer families.
Since I wrote an article on the issue that appeared The Daily Telegraph last Friday, I have received an e-mail from John Claughton who is chief master of King Edward’s school, Birmingham. He told me that
“our central purpose at the moment is to extend accessibility: we would love to become needs blind. We certainly have the demand for places from low-income families. We would respond positively to any government initiative to encourage attendance of such pupils in our schools.”
King Edward’s, the former school of the Minister for Universities and Science , already has a hugely impressive record in making places available to less affluent pupils. More than 30% of its pupils get some kind of financial support and more than 15% attend for free. For the coming academic year, the school is offering a quarter of its places for free—30 free places in an intake of 120. Mr Claughton believes that if the Government could meet half the cost of providing more places to free school meals pupils, the school’s alumni would be in there like a shot to support that initiative.
Mr Kevin Fear, the headmaster of Nottingham high school—attended by the Secretary of State for Justice and none other than the shadow Chancellor, the right hon. Member for Morley and Outwood (Ed Balls)—wrote to me over the weekend fully endorsing the proposals to expand open access:
“I welcome these proposals to support the most needy in our society to access the great independent day schools. As a school, we already support as many pupils on bursaries as we are able to, but with support of this kind, we would be able to support many more and greatly assist social mobility, particularly in our inner cities.”
Independent schools are already making a strong contribution to the educational success of pupils from poorer homes. Nearly a third of the students admitted to Oxford in 2010 from households with an income below £16,000 had been in the independent sector. The head teachers and organisations I have spoken to believe that the kind of Government support I am advocating would allow them to double the number of bursaries they can offer. The message from the independent sector is clear: schools are keen to do what they can to offer real chances to some of the poorest children in their areas. Only yesterday, private schools belonging to the Headmasters’ and Headmistresses’ Conference created 60 extra bursaries to sponsor sixth-form school pupils from the state sector to study physics, chemistry and languages.
David Levin, chairman of the HMC, has made it clear that he wants private schools to offer even more bursaries, but the difficulty is obviously raising the funds. However, as the schools have indicated to me, Government support would have the added advantage of leveraging and unleashing philanthropic contributions from alumni, business and charitable communities.
As I have already said, what I ask from the Minister is unlikely to be forthcoming today, but we can but try. I am aware that the resources of the Department for Education are extremely tight. We have been left with a very difficult economic inheritance and we have to deal with the situation as it is. I am also aware that any move by the Government to get involved with, let alone support, independent selective schools is fraught with political difficulty. I realise that the Government may be reluctant to reallocate money from the state sector to the independent sector on the basis of a single study, but does the Minister agree that the open access scheme sponsored by the Sutton Trust shows exceptional promise? Does he agree that the idea should be explored further? If he does, how will that initiative be taken forward, and will he ask the Secretary of State to meet a delegation of those interested in pursuing it?
In time, I hope that the Government will take another look at opening access in a number of leading private schools, perhaps beginning with a pilot of up to 12 schools, as envisaged by Sir Peter Lampl. That would give a broader and stronger evidence base from which to evaluate open access policies. At the very least, I hope that the Government will look at what leading independent schools are doing to broaden access, and will do what it can to support them and encourage best practice. Opening up access would send a powerful message that none of the nation’s best educational opportunities is out of reach of children solely on the basis of their family’s resources. What I ask for today is a very small change, but it could have huge implications for social mobility in this country.
James Wharton (Stockton South) (Con)
Thank you, Dr McCrea, for the opportunity to make a contribution to the debate. I congratulate my hon. Friend the Member for Reading East (Mr Wilson) on securing the debate. I know that he cares passionately about this important subject, in which he is deeply involved, and that he is far more knowledgeable than I would claim to be. I want to take this opportunity to make a short contribution and to discuss my experience of some of the excellent independent schools in my constituency of Stockton South. We have two independent schools: Teesside High, which was founded in 1833 and, until recently, was an all-girls school; and Yarm, which was founded in 1978. It is the experience of Yarm school that I want to relate today.
Yarm school rose from the ashes of Yarm grammar school, which had closed. It was brought about by a group of determined parents, who decided that they wanted alternative educational provision for children from the Cleveland area, as it then was. Much as free schools today will be started in small numbers by dedicated parents and then grow, hopefully, into successful educational institutions, Yarm school started in an old, dilapidated building. Parents and supporters gave up their own time, donated materials, found funds, painted, renovated and taught.
The founding headmaster, Neville Tate—a great man who has made a significant difference to the education of many thousands of children who have passed through the school, and who will do so for many years to come—used to go in at weekends, paint the lines on the rugby pitch and drive the school minibus to the train station. It was a hands-on endeavour, to which many people, who cared passionately about what the school wanted to achieve, contributed.
In the early years, the school found things quite difficult and challenging because, unlike a modern free school, the parents who wanted to send their children there also had to pay. The offer that it put on the table was limited, as it did not have modern classrooms and facilities. All it had was the right attitude, the right atmosphere and a dedication and will to get things done.
That school has now moved. It bought the location across the road and expanded. It has built countless new buildings and offered educational opportunities to countless more children. I should, of course, declare that I had the privilege of going to that school in my constituency when I was younger. Now that the school is expanding and doing very well, it also makes a greater contribution to the local community, and not just in the education of its pupils or the local economy, of which it is a significant feature. It also works with local state schools. It had an excellent partnership with Grangefield school, which is in the southern Stockton part of my constituency, sharing services and working together to ensure that pupils at both schools had better access to facilities and a better quality of education.
Yarm school has a track record of delivering locally, not just for itself, but for others in the community that it serves and represents. It also serves another purpose. It relieves pressure on some of the excellent nearby state schools, which are currently overcrowded and oversubscribed; for example, Egglescliffe school and Conyers school. Egglescliffe school, in particular, which is a superb high-quality secondary school in my constituency, is on a relatively small site that was designed for many fewer children than it currently accommodates. With the growing population of Stockton, it has seen more and more people applying for fewer and fewer available places. It also serves a large and growing housing estate in Ingleby Barwick, which I believe is one of the largest private housing estates in western Europe and has grown exponentially in the past two decades. That housing estate has one secondary school, All Saints, a 600-place Church of England school, which is a very good local secondary school, but not sufficient in size to serve local needs. Hundreds upon hundreds of children are bussed off the estate to nearby Egglescliffe and Conyers every morning. Some also go to Yarm, because they have not been able to secure places at the secondary schools of their choice.
That brings me to the exciting new prospect that is on the horizon for the people of Ingleby Barwick, who are now progressing with their own bid for a free school. I have certainly done what I can to make representations to the Secretary of State to support the bid for a free school in Ingleby Barwick. We will hopefully see a new school in the next few years that will deliver diversity of choice and more school places, so that children from that community can choose which school they wish to apply to and parents which school they want to send their children to. It will also allow local children to go to a school in their own community. That will relieve pressure on other schools in the area, so that they can better manage the facilities that they already have. We want to secure the future of all of the schools in the south of the Stockton borough—the school in Ingleby Barwick itself and Egglescliffe, Conyers and Yarm schools.
That exciting new project is one step in the direction in which we need to go, opening up choice, diversity, access and possibilities in our education system. My hon. Friend the Member for Reading East spoke passionately about how he would like to see access opened, so that those who are not necessarily from the most affluent backgrounds are able to get into those schools that have perhaps been seen as not within their reach in the past. I would like to add my voice to his call that the Government should look to do everything they can to ensure that every child, no matter what their financial or social background, has access to the highest possible quality of education, in the way that they and their parents believe it should be best delivered to suit their individual needs.
I am grateful for the opportunity to speak in the debate and make a small contribution, and to comment on a number of the excellent local schools that serve my constituency. I look forward to what the Minister has to say in response to the comments of my hon. Friend the Member for Reading East.
Mr Stewart Jackson (Peterborough) (Con)
It is a pleasure to serve under your chairmanship for the first time, Dr McCrea. May I also commend my hon. Friend the Member for Reading East (Mr Wilson) for securing this excellent debate on a very important subject? His great knowledge, expertise—from his time on the Front Bench, and from his own research—and commitment, especially to social mobility, shines through in his passionate remarks. He is a little more shy than I am at ascribing fault in the existing system. We inherit not only a significant debt—to the extent that we are paying £120 million a year in debt interest as a result of the financial mismanagement and incompetence of the previous Government—but, to be charitable, a mixed picture in terms of educational attainment.
I believe that this is an existential debate—a philosophical debate—about the future of our children’s education. We are debating that age-old struggle between whether we commit ourselves to equality of outcome, which I think is difficult if not impossible, or whether we commit ourselves to strive for equality of opportunity. If we move towards the initiatives that my hon. Friend the Member for Reading East has spoken about, we will be paying due regard to a progressive, Conservative tradition that goes back many years. Disraeli would have called it the enervation of the condition of the working classes. I would not be so pompous as to compare myself with Disraeli, but it is about a one nation tradition of saying that whatever the household income or background, whatever one’s parents have done and whatever their attainment, a child has as much right as any other to be educated to the best of their ability, and to achieve the maximum attainment possible.
Where are we now? We have a ghettoised situation in which 7% of children go to independent schools, but, for the other 93% of children, there are mixed results. It so often comes down to where one lives and their household income, because if a parent cannot afford to provide for their children by buying a house and sending them to a good school in a good neighbourhood—this particularly applies in London but also in many other parts of the country, whether Bristol, Manchester or Cambridge—their children will often be confined to schools where attainment is poor, and that is not acceptable.
We are also in a position where, according to the latest Programme for International Student Assessment survey, the United Kingdom has slipped since 2000 from 7th to 25th in reading, 8th to 28th in mathematics, and 4th to 16th in science. Only 15.6% of pupils in England achieve A* to C GCSE grades in English, maths, sciences, a modern or ancient language, history and geography—one in six children.
The previous Labour Government offered some powerful symbols to people. It seems beyond belief that their first priority on being elected in 1997 was the completely unnecessary, gratuitous and spiteful decision to scrap the assisted places scheme for purely ideological reasons. One of the leading lights of that party dedicated himself to destroying grammar schools. I shall not add the epithet that he used. That was what he believed in. To quote Abraham Lincoln:
“You cannot strengthen the weak by weakening the strong.”
The decision to destroy the grammar schools was, in fact, a calamity in terms of social mobility, education and political policies.
That set the tone, as did the idea, which has been tested to destruction, that throwing money at a problem is a solution, and that it will of necessity deliver better educational attainment. I do not believe that that is the case. Whether we like it or not, parents choose to send their children to independent schools for a number of reasons, but it is as much as anything else about discipline, ethos, culture and philosophy. Why should children from poorer backgrounds be excluded from the opportunity to partake of that culture, and to achieve what they are capable of achieving?
My constituency is a proud, blue-collar, engineering centre. The city has gone through great change over the past 50 years. Its population was less than 50,000 after the war; it is now 170,000. We have significant pockets of deprivation, but we also have in the immediate travel-to-work area some of the finest independent schools in the country: Stamford, Uppingham, Oundle and, of course, the excellent Peterborough school, headed by Adrian Meadows. We have significant levels of poor attainment and underachievement in the state sector in Peterborough, yet we also have excellent schools with enormously good results of more than 85%—often 90%—attainment of GCSE A* to E.
My hon. Friend the Member for Reading East is right in saying that, at present, children from families with more modest incomes are precluded from being able to attend such schools. There must be a way for the most gifted children—not necessarily on the basis of academic results or setting, but intelligence and other criteria—to go forward to achieve their potential.
I pay tribute to the Sutton Trust and Sir Peter Lampl, who is passionate about social mobility, which, if I may be partisan again, ossified under the Labour Government over 13 years. The gap between the richest 10% and the poorest 10% grew. The hon. Member for Chesterfield (Toby Perkins) might not like to hear it, but his party is represented by the noble Lord Mandelson, who said that he was
“intensely relaxed about people getting filthy rich”.
Fair enough, but he did not at the same time endeavour to drag up the educational attainment of the people in the bottom 10%.
We really need to think about supporting, with the limited resources that we have, initiatives such as those at the Belvedere school in Liverpool. It is a superb example—in fact, it is the opposite of what normally happens. With the best will in the world, Toxteth, where the school is based, may have been a salubrious neighbourhood many years ago, but it is not now. Middle-class parents would not necessarily have moved to Toxteth so that their children could go to that school. In fact, I imagine that parents from all over Merseyside, Lancashire and even Greater Manchester are sending their children to that school, while children in the poorer neighbourhoods around Scotland Road, Toxteth, West Derby and Walton are excluded from it. With the proposed initiative, those local children in Liverpool could go to their local school and receive an exemplary and superb education into the bargain.
It would be remiss of me to ignore the excellent initiatives being pursued by this Government, and I have no doubt that the Minister would remind me of them if I did that. I agree that the English baccalaureate is an enormously important qualification to be pushing forward into secondary schools. It speaks to a mature debate about a division in society and, in particular, in education, which we have shied away from for too long. I give as an example the well known book written by Melanie Phillips, “All Must Have Prizes”. All must be academic, all must go to university. We have ignored, to our economic disadvantage, the fact that technical and vocational education can be and is just as important.
The economic success of countries such as Sweden, Germany, Italy and France is the result of their taking a mature, long-term approach and disregarding the apartheid between academic, and technical and vocational. This Government understand that and are moving forward by replacing Train to Gain with an apprenticeships programme and saying that engineering and manual trades are as important for growing our economy as the knowledge economy, the environment, tourism, leisure, finance and banking. That is important.
The pupil premium is the right way forward. I had a debate in this place a month or so ago with the Minister of State, Department for Education, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb), who brings to his role enormous commitment and diligence, and a passion for driving up educational standards in primary and secondary schools. He is the epitome of a square peg in a square hole, and is doing a fantastic job.
However, the pupil premium could be construed as a blunt instrument. There are issues other than free school meals that should inform the review of the dedicated schools grant. In my own constituency—I shall not rehearse the arguments—31% of primary school children do not speak English as their first language. If we ignore such factors, we blind ourselves to their importance in informing the results in primary and secondary schools.
I am delighted with the agreement that £430 per pupil for the pupil premium is a good start, and with the broad consensus across the House, but other factors need to be taken into account. One of them is social deprivation in particular wards and super-output areas. That may need to be looked at in consultation with the Treasury, but I know that dealing with it could be very resource-intensive and that the Department has only limited means.
This debate is about obtaining from the Minister at least an indication that he is receptive to the eloquent arguments of my hon. Friend the Member for Reading East. The independent sector would then begin to feel that it can use the mechanism of Government support to develop a much more thorough and comprehensive scheme of bursaries and scholarships, and take a much more altruistic and charitable approach. If the Government are supportive, it will introduce outreach programmes and recruit children from poorer families because that will deliver the goods for the school and attract kudos and support. It is a circular argument. To say that we must have nothing to do with the independent sector, and that it is an iron curtain through which we cannot tread is short-sighted and foolhardy. We need more open access policies, such as those at the Bluecoat school.
The best independent schools can impart lessons to the state sector—that works both ways—on tackling ill discipline. They can impart lessons on special educational needs. Some independent schools have a number of children with special educational needs, and provide special help for children on the autism spectrum, with dyspraxia or dyslexia, and so on. They have expertise that they can share with the state sector, and there should be more dialogue.
Freedom and autonomy are the templates for the free schools, and I am delighted that there will be an announcement this week in my constituency that the former Hereward community college will become a free school. I do not often say this, but Peterborough city council has done a fantastic job in pushing the proposals forward, and inviting bids from five extremely good providers in a competitive bid process in an area where attainment at primary and secondary schools has not been good. We look forward to the revolutionary zeal of the free school movement in driving up standards, involving the community, valuing professionals at senior management, teaching and teaching assistant levels, and providing autonomy. We should have more free schools in my constituency.
I conclude by inviting the Minister to respond positively. The issue is not about assisted places two, or about the debate on grammar schools. In some respects, I was on the wrong side of that debate in my party in 2007, because I said that it was better to take a holistic approach to academies, instead of fixating on a relatively small number of grammar schools—there were then 164. I speak as an alumnus of a grammar school—Chatham House grammar school, Ramsgate—the other alumnus of note being our former right hon. Friend and Prime Minister Ted Heath, although he and I did not have closely shared political views.
The issue is about how to enable children from families with modest incomes to achieve their full potential. Today is the beginning of the debate. I know that the Secretary of State is absolutely committed to using education as a catalyst to tackle lack of social mobility, so that we deal with the underlying endemic social problems of welfare dependency, worklessness, and lack of competitiveness in our economy. Education is the most powerful tool for doing that, and I fully commend and welcome my right hon. Friend’s commitment to starting that debate. I hope that we have a positive response, not only from the Opposition Front Bench spokesman, the hon. Member for Chesterfield, but from the Minister. I am sure that we will.
Toby Perkins (Chesterfield) (Lab)
It is a pleasure to speak under your stewardship, Dr McCrea. You seem to have controlled the debate very well, despite all the heckling. We have had a good debate, and I congratulate the hon. Member for Reading East (Mr Wilson) on securing it, and on his thoughtful contribution. I thank him for taking the time yesterday to notify me in more detail about the subjects that he wanted to cover. That was helpful to my contribution, and I hope that it will add to its quality, at least at some small level. His valuable experience before coming to this place brings to the debate knowledge, passion and well intentioned motives, in his case, towards the Government.
Before commenting on the hon. Gentleman’s points, I want to touch briefly on the other contributions that we have heard today. The hon. Member for Stockton South (James Wharton) spoke about his experience with two local schools in his constituency, and the extent to which access has been opened up. One independent school was set up with, perhaps, similar intentions to the free school model, and it was interesting to hear about that. He referred to the freeing up of spaces in other schools, and to creating the best for every child. The test of any education policy should be whether it delivers for every child and enables every child and every school to improve, or whether it increases educational disparity. That is one of my tests for the proposal of the hon. Member for Reading East.
The hon. Member for Peterborough (Mr Jackson) gave what may have been a less measured contribution. At least, he warned us that he did not intend to be shy, and he stuck to his word. When describing his contribution as partisan, he was, if anything, understating it. I started to write down the areas I disagreed with, but I filled a full side of A4, so I shall touch on a couple of areas where there was agreement, which may save time.
The hon. Gentleman spoke about the importance of discipline. He is of course right that the independent sector takes discipline very seriously, but he does a great disservice to the state school sector if he is suggesting that that is not also the case there. We welcome some of the measures in the Education Bill to clarify the role of teachers and the possibilities for discipline. The Bill contains some welcome moves.
The hon. Gentleman also referred to the importance of technical and vocational education, and said that it is as important as academic education. I entirely welcome that sentiment, which I fear is missing from the Government’s move towards the EBacc, but very much drove some of the previous Labour Government’s policies.
I do not intend to cover every area in the hon. Gentleman’s contribution with which I disagreed, but I will touch on a couple. He started by rehashing the financial mismanagement line, completely overlooking, of course, the fact that his party supported the previous Government’s spending plans right up to 2008. He should not rehash that line if he was not speaking out against the policies pursued by his party at that time.
The hon. Gentleman claimed, perhaps rightly, that the policies suggested by the hon. Member for Reading East fit into a progressive Conservative tradition; I think he described it as a one-nation approach. That brought to mind the drama “Cranford”, which the hon. Member for Peterborough may have had the opportunity to watch. In one scene, the lady in charge of the grand manor house was shown as a firm disciple of the idea that the working classes should work in the fields, and that there should be different jobs for different types of people in different environments. She also had a clear idea that she wanted to help the poor by employing them in her fields, but that they should never move beyond that. The idea that on one level we help the poor as a way of assuaging our conscience, while fundamentally nothing is changed, lay behind a lot of the hon. Gentleman’s remarks.
Mr Stewart Jackson
I have never before been compared to a mid-Victorian matriarch in her mansion. The hon. Gentleman is a passionate and articulate spokesman for his party, but he should not believe its class war rhetoric and propaganda. My party is proud to have been responsible for an enormous amount of progressive social change through Housing Acts and through civic renewal, education and health over many years. He suggests that my point was “You stay in your place while I stay in mine”, but perhaps he is referring to some of his esteemed parliamentary colleagues who had a good grammar school or independent sector education, but chose to kick the ladder away for those who followed.
Toby Perkins
I do not know whether that was an intervention or a second speech, but I thank the hon. Gentleman either way. Without delving deep into history, he should do his research before he refers to the gap between rich and poor. If he listens to people such as Wilkinson and Pickett, who influence the policies of the Prime Minister, they will tell him that the huge gap between rich and poor occurred under the previous Conservative Government. Policies introduced by the previous Labour Government such as tax credits, attempts to improve the education of people from the lowest demographics, and the reform of the welfare system were designed to close the gap between rich and poor, and they made positive steps towards that.
Toby Perkins
The hon. Gentleman shakes his head, but that is what he will be told. He said that the previous Government were supremely relaxed about people getting rich and did not care as much about the bottom 10%, but that disgraceful comment bears no relationship to what actually happened over the past 13 years. The hon. Gentleman’s contribution said much about his values, and the values that have always informed sections of his party. I recognise, however, that there are good motives behind contributions from Conservative Members.
I turn to the more thoughtful contribution made by the hon. Member for Reading East. He spoke first about the academic disparity that still exists in our system, and which has challenged politicians from both parties for a long time. The original academies programme was introduced precisely to combat that disparity, and the previous Government set out specific attainment levels that they expected every school to achieve, with 30% of all pupils achieving five A* to C grades at GCSE as an absolute minimum. That academic disparity lay behind the massive investment in Sure Start, which has been welcomed across the House, and it is why we welcome some of the sentiments behind the early intervention policies pursued by this Government. It is also why the education maintenance allowance was introduced, to assist pupils from more deprived backgrounds to continue their education past age 16.
When Labour came to power, half of all schools failed the basic minimum standard. The figure is now fewer than one in 12, which is one of the ways that the attainment of pupils right across the financial spectrum improved under the previous Government. Of course, that is not the same as saying that we have arrived at some promised land and things are now good enough. Clearly, they are not and I recognise that the contribution made by the hon. Member for Reading East is an attempt to make things better.
The hon. Gentleman referred to the fact that the most elite private schools are currently only for the wealthy and the well connected. He hit on a key point in terms of those connections and the idea that, “It’s not what you know, it’s who you know,” which I hope hon. Members across the House would be against. The hon. Gentleman made another key point about Oxbridge entrance, and I would like to hear more about that from the Minister and the Government. As the hon. Gentleman explained, although 50% of children from elite public schools go to Oxbridge, only 2% of those from the most deprived backgrounds do so.
Last Friday a young lady, Charlotte Crossley, came to see me. She qualified for free school meals and came from a home in a deprived part of Chesterfield. Her first secondary school fell well below the national challenge level of 30% of pupils achieving five GCSEs. However, she studied fantastically and got excellent GCSE results. She subsequently went to another state school to do her A-levels, and finally achieved three A*s and one A—a fantastic achievement. At that time, children in her cohort were the first group to achieve a 30% pass rate at GCSE. Charlotte Crossley was an exceptional student, but when she applied to Oxford she was not even given an interview.
Alongside removing the academic disparity between children in secondary schools, pressure must be put on elite institutions. The hon. Member for Reading East explained that the ratio of passing core subjects is 1:4 for children on free school meals against those from elite public schools. The ratio between those two groups in terms of Oxbridge entrance is 1:25. There are two sides to the equation and more pressure needs to be applied.
Selection was mentioned, and the hon. Gentleman claimed that he did not see how a return to the grammar school system would be helpful. Fundamentally, however, his proposal would continue to weaken schools that are left behind. If we cream off the best pupils from the more deprived communities, we perpetuate the idea that to get the best pupils, we must look at the schools they come from. The best schools will already have the highest levels of attainment because of their pupils’ privileged and advantageous backgrounds, but such a proposal would mean that those schools can also cream off the best of the pupils who have not had an advantage due to the financial well-being of their parents. As the hon. Gentleman says, it is not a panacea. He is right; potentially, it is positively unhelpful in terms of social mobility.
The hon. Gentleman also claimed that private schools do more to help poorer pupils. In response to an intervention from the hon. Member for Peterborough, he questioned the effectiveness of what the Charity Commission wanted. It was interesting that in the initial move towards that, two independent schools had to open up the availability of bursaries. It could be argued that if they were already doing everything that the Charity Commission wanted, that would not make any difference to them.
For the reasons that I have given, we do not agree with the proposals that the hon. Member for Reading East has put forward, although we recognise that they are well intentioned. From the Labour party’s point of view, the first thing to say is that we do not wish to interfere with the freedom of independent schools to develop a distinctive curriculum and to manage the day-to-day operation of their schools. However, the standards that all independent schools must meet ensure that pupils are able to learn in a safe and secure environment and to have suitable learning opportunities, which match their age, aptitudes and needs. We will continue to insist on those basic safeguards, which protect pupils’ interests, while recognising the freedoms of independent schools.
We abolished the assisted places scheme. Looking back, I would say that we put unprecedented amounts of investment into education in the state sector. We dramatically improved the standard of the state school estate, by which I mean the quality of buildings. As I have outlined, we also made a dramatic difference to attainment in those schools. The percentage of people going to university from more deprived communities has dramatically increased, far outpacing the increase in access among people from more privileged areas.
Labour has always argued that approaches such as those that we are discussing today represent a narrow ladder of opportunity for a few bright but disadvantaged children, with the side-effect of creaming off the most able pupils from state schools.
Mr Jackson
The hon. Gentleman has nothing to fear. I thank him for his generosity in giving way again. I am struggling to follow his argument because he uses the traditional Labour argument that if we elevate a small group of children, we “cream off” those children and the rest are subject to very poor educational attainment, yet his party spent an enormous amount of money over 13 years. He seems to be saying that it did not do any good, because those schools, if the best pupils are taken out of them, are still not very good schools, with not very good educational attainment and perhaps not very good staff. Where did the money go? Why are all schools not at an internationally recognised, demonstrably good standard?
Toby Perkins
Just before the hon. Gentleman intervened, I had said almost entirely the opposite to what he has said about the improvement in school performance under the Labour Government, so it is hard to understand why he thinks that I was saying the opposite of that—perhaps it is my accent.
In relation to the improvement in our schools, I have already referred to the massive improvement in the number of schools in which 30% of pupils get five GCSEs at grades A* to C. The figure has gone from 49% to 88%, so that is one massive step forward. I have also referred to the massive improvement in the number of people from more deprived schools going to university. Therefore, I do not accept at all that people are set up to fail if they go to the wrong school.
However, I do say that the proposals that we are debating today are sticking-plaster. They do not address the fundamental issue of improving the education of every child and every school, but are about creaming off a small number of the most talented pupils. Yes, that will inevitably leave a weaker school behind, albeit at a small level. More important, it will perpetuate the idea that if an organisation wants a talented employee, or a university wants a talented student, it needs to look at the school the person went to. That is what I am saying. It is not to say that the education system that we left behind was not giving our schools value for the massive investment in them.
Just last week I visited Milton Keynes academy, which was one of Labour’s newest academies. The pride that people in that school have in the new school building and the investment that has been made in them was heart-warming. To a school such as that, where I believe more than 70 languages are spoken as a first language and which is working so hard to improve its standards, it is a savage blow when the English baccalaureate is introduced retrospectively and the school is judged and told that it is failing because no one is achieving a standard that the school was not even aware that it was working to.
Today’s debate cannot be taken out of the entire context of education spending. That context includes a dramatic 60% cut in capital funding and the fact that schools that already educate the most deprived pupils are convinced that after the advent of the pupil premium, alongside all the other changes that will be made to their financial systems and budgets, they will end up worse off. That is the context into which this debate has been plunged. To say that we need to give extra money to independent schools to take away the best pupils seems absolutely the wrong priority.
I will conclude by adding a few questions for the Minister. At a time when hundreds of schools have seen their desperately needed capital rebuilding projects scrapped, will he really support a scheme that perpetuates and increases the educational dominance of the elite public schools? What steps are the Government taking to get Oxbridge to be more open-minded about their intake to ensure that the Charlotte Crossleys of tomorrow are not denied those opportunities? Why are so many schools that take a high number of children from poorer backgrounds convinced that they will be worse off in real terms when they receive this year’s budget? Does he think that increasing privilege and the disparity between different educational establishments will assist, in the Prime Minister’s words, every child to have the chances he had?
The Parliamentary Under-Secretary of State for Education (Tim Loughton)
It is a pleasure to speak under your chairmanship for the first time, Dr McCrea. Perhaps in contrast to the last speaker, I shall address the subject of the debate, but before doing so, I congratulate my hon. Friend the Member for Reading East (Mr Wilson), and not only on securing the debate. As anyone who knows him will testify, he is uncompromising in his belief that all children should have access to the best possible education, as well as passionate about speaking up on behalf of the most disadvantaged children. Those are the only motives behind his bringing this subject to the Chamber, and he articulated them typically well in his comments. The sentiments that he expressed are wholly admirable, well founded and respected by hon. Members on both sides of the House. He has great experience and knowledge in this area, and he made a typically well informed speech.
I am grateful to my hon. Friend for telling us what the debate was not going to be about, because we would have needed longer than the time allotted to us to cover all those interesting and often contentious areas. I congratulate him also on something that I had not realised—that he was one of the pioneers of the idea of the pupil premium. He was advocating that in the wilderness for many years and then the rest of us caught up with him. As he said, this discussion is well worth having. The subject perhaps has not been aired as much in this Chamber as it might be. Some of the figures that he cited for the decline in social mobility, which is the real problem behind the whole subject, are very stark and were repeated by a number of hon. Members who spoke after him.
My hon. Friend said he was not overly optimistic about what I might say, but I aim to give him as many grounds for optimism as possible. I do not want to undermine in any way what he is trying to do, and I am more than happy—particularly as I am not one of the Schools Ministers, who I am standing in for—to help facilitate a meeting between my hon. Friend and ministerial colleagues in the Department.
We have had a real glitterati of talent and knowledge, given the contributions from my Back-Bench colleagues. It took my hon. Friend the Member for Stockton South (James Wharton) some time to declare his interest in what was one of the original free schools, which was in his constituency. I should perhaps call him the child of the free school in Yarm. I do not have to declare an interest, as the 100% product of a state primary school and a state comprehensive school. None the less, my hon. Friend repeated the sentiments and the aim that we all share—that children should have the best possible chances of accessing the best possible education.
I do not agree with the accusation that my hon. Friend the Member for Peterborough (Mr Jackson) was not measured; I thought he was considered and forthright, as one would expect. I certainly would not put him down as a Victorian matriarch, even though he embellished the debate with the quote from Disraeli about the elevation of the condition of the working class. He speaks with great knowledge, given the various social deprivation challenges in his constituency, which are greater than those faced by many hon. Members.
The response to my hon. Friend and to the debate from the hon. Member for Chesterfield (Toby Perkins) gave us something of a treble whammy. He did not seem to deal with the subject in hand; indeed, I do not think he talked at all about access to private schools for children on free school meals, which is the nub of the issue raised by my hon. Friend the Member for Reading East. Instead, his speech gave us a return to deficit denial; indeed, we had deficit denial in the context of the Building Schools for the Future programme. Although the capital programme has nothing to do with the scheme we are debating and is entirely irrelevant, there would be rather more money to go round for schools that are still in a parlous state if money had been spent more efficiently under the BSF programme.
In addition to deficit denial, we had the usual class warrior clap-trap on this subject, which is not about class war, but about giving equality of opportunity to as many children as possible in the education system. I mentioned a treble whammy—we also had social mobility gap denial. Social mobility has never been in a more parlous state. The gap between those who are privileged in terms of finance, education and opportunities and those who are not has widened enormously, and the Government are now trying to pick up the challenges in education after 13 years in which social mobility absolutely ground to a halt.
Toby Perkins
The Minister said that he would like to see educational equality “as far as possible”—I think that that was his phrase. Perhaps he could explain what he means by that. Will he also confirm that when he was in opposition, he argued against the then Leader of the Opposition—now the Prime Minister—who was saying that the Conservative party should maintain the Labour Government’s level of public spending right up to 2008? Was the Minister arguing against the now Prime Minister at that point?
Tim Loughton
I am not entirely sure about the relevance of that question. What I do know is that we argued for 13 years in opposition that the Labour Government were spending money like it was going out of fashion. The efficiency of that spending was enormously compromised, as we have seen. Anybody who comes to the Department for Education will throw their hands up in horror at the amount that was wasted. I am afraid that deficit denial will not butter any parsnips in this debate.
Mr Jackson
Does the Minister not think that the hon. Member for Chesterfield (Toby Perkins) and the Labour party have a cheek lecturing us about social mobility when, after 14 years of economic growth, they have bequeathed us a situation in which 5.2 million people are on out-of-work benefits and we have the highest number of young unemployed ever, as well as the highest number of young people not in education, employment or training? Is that not the tragic legacy of the previous Labour Government?
Tim Loughton
My hon. Friend is absolutely right, and all Government Members know that.
I want to get on to my substantive comments. Before I do, however, I should say that it was slightly worrying that the hon. Member for Chesterfield started by saying that his party did not want to interfere with independent schools, but then listed a whole area where they had better watch out—I think that that is what he was telling them. The Labour party still cannot stop meddling. It was also rather patronising of him to say so many times that Government Members have well-intentioned motives, even if he did not agree with any of us.
My hon. Friend the Member for Reading East referred to the excellent work of the Sutton Trust, to which I pay tribute, and that is particularly true of its head, Sir Peter Lampl. For more than a decade, the trust’s work to promote social mobility has played an important role in all debates covering the early years, schools and higher education.
It is important to recognise at the outset of any debate about the quality of education that we have many great schools in the state and independent sectors, where the hard work and commitment of superb head teachers and inspirational teachers enable pupils to achieve good qualifications. The Government have a responsibility to ensure that all children have access to the best possible education. The challenge facing us is to ensure that there are more of these great schools so that all children can get the best possible education.
Over the past decade, we have slipped down the international league tables for school performance, as my hon. Friend the Member for Peterborough said. What makes that so much worse is that we also have one of the most stratified and segregated school systems in the developed world. Studies such as those undertaken by UNICEF and the OECD underline the fact that we have one of the most unequal educational systems in the world, coming near bottom out of 57 countries for educational equity.
The gap in attainment between rich and poor remains persistently stubborn, as my hon. Friend recognised. It opens even before children get to school. We know from Leon Feinstein’s research that the highest early achievers from disadvantaged backgrounds are overtaken by lower achieving children from advantaged backgrounds by the age of five. The achievement gap between rich and poor then widens at the beginning of primary school. By the end of key stage 1, a child eligible for free school meals is a third as likely as other pupils to reach the expected level in reading, writing and maths.
The gap then widens further still. A child eligible for free school meals is less than a third as likely to achieve five or more GCSEs at grade A* to C, including in English and maths, than a child from a less deprived background. By 18, the gap is vast. In the most recent year for which we have data, of 80,000 young people eligible for free school meals, just 40 made it to Oxbridge— less than some independent schools manage in a single year. Our schools should be engines of social mobility, offering a route to liberation from the constraints imposed by accidents of birth and background. At the moment, however, that just is not the case.
Like my hon. Friend the Member for Reading East, I am a big fan of independent schools; like him, I want the advantages of the independent sector to be available to a great many more of our children. Independent schools have a proven track record of success. Children who attend private schools are three times more likely to achieve three A-grade A-levels than those who attend state-funded schools. The coalition Government believe independent schools have a vital role to play in our education system in ensuring that more children achieve such excellence.
In the past, access to independent schools was provided to disadvantaged pupils. During the 1980s and 1990s, as we have heard, the previous Conservative Government’s assisted places scheme provided means-tested Government-supported places at leading independent schools. In fact, I made my maiden speech on the very Bill that did away with the scheme—the first piece of legislation from the previous Labour Government to do away with something.
The scheme followed the principle that the lower a family’s income, the more support the state should provide. I am pleased to say that the coalition Government are following the same principle today with our pupil premium. As I said, the previous Government phased the assisted place scheme out. That is not to say that no disadvantaged pupils are educated in the independent sector, because they are. Independent schools cater for about 7% of pupils. Of those pupils, more than 160,000—about a third—receive support to help cover the cost of their fees. That support is worth more than £660 million every year.
Around 80% of that support comes as bursaries or scholarships provided by the schools themselves. I welcome that and hope that it continues. Access to an independent education can also be supported by local authorities; for instance, where a vulnerable child is at risk of being taken into care and where it may be in the interests of the child to attend a boarding school, or where support needs to be provided to a child with a special educational need that cannot be met in the state sector. Again, that support is welcome and it is right that it continues. Indeed, independent schools can approach local authorities that can come up with arrangements of their own. In Cheshire, I gather the local authority already buys in places at the boys’ independent grammar, Sandbach school, for example. Many local authorities also place pupils with special educational needs in independent mainstream and special schools. I have already mentioned children in the care system.
My hon. Friend the Member for Reading East specifically mentioned the open access project run by the Sutton Trust to support access to the Belvedere school. It is an impressive project, and I would naturally be fascinated by any proposal that my hon. Friend might put forward that would enable more pupils from disadvantaged backgrounds to access independent education. However, I regret to say that it is neither practicable nor affordable for the state to fund a similar project today. Instead, our priority must be to improve the state school system and to close the gap between rich and poor for all.
Those were the twin goals of our recent White Paper, “The Importance of Teaching”, which set out a comprehensive programme of reform, based on evidence of what has worked for nations with the best-performing education systems in the world. While they have taken their own unique approach to education reform, all successful systems share certain common features. They have prioritised plans to improve teacher quality, for example, granted greater autonomy to the front line, made schools more accountable to their communities, modernised curricula and qualifications, and encouraged more professional collaboration.
We are enacting the same kind of whole-system reform here in this country, with both profound structural change and rigorous attention to standards. We have also taken steps to support the education of the most disadvantaged pupils. Our pupil premium, as I mentioned earlier, will see schools receive additional money—starting at £430 per pupil but rising in total from £625 million this year to £2.5 billion per year by 2015—that will provide an incentive for them to take pupils from disadvantaged backgrounds, and, I hope, give them a better education than they are able to access at the moment.
On top of that, we have created a new education endowment fund worth £110 million, which provides a further incentive for schools and local authorities to work together to bring forward innovative projects that will raise attainment of disadvantaged children in under-performing schools. Because nothing matters more than giving more of the poorest children access to the best teaching, we are more than doubling the size of Teach First, so more of the best young graduates are able to teach in more of our most challenging schools, including primary schools. We have appointed Dr Liz Sidwell, herself an inspirational head, to use her experience and knowledge to work with local authorities to identify those schools most in need of support and help them develop plans for their improvement.
Once again, the independent sector has an important role to play. At the heart of our approach to school improvement is a belief that the best way to help schools improve is to encourage other schools with great head teachers and impressive track records to collaborate with them. There are already many examples of successful partnerships between schools in the independent and state sectors. The Independent Schools Council survey showed that more than four in five independent schools are now working with local state schools, to mutual benefit. I am very keen that that continues. Indeed, an independent school has sponsored an academy in my constituency. Beyond the financial and direct assistance given to the academy, there is shared teaching, use of resources and a greater integration between those two sets of pupils, to the benefit of both schools.
One way to build on that is for independent schools to become academy sponsors, as I have said. As outstanding schools in their own right, they can share their expertise and set a clear ethos that together help to transform state schools that are under-performing. More than 30 independent schools are already sponsoring academies, and I hope many more will do so in future, again, as I say, for the mutual benefit of both the independent and maintained sectors.
Another way that independent schools can play a wider role in the school system is by proposing a new free school, and we have already heard examples of that. We have already received applications from independent schools and I hope that others will join them in the months and years ahead.
Let me end by thanking my right hon. Friend—my hon. Friend, rather—once again.
Tim Loughton
Exactly. I thank my hon. Friend for calling the debate. He is right to draw attention to the vital role that independent schools have to play in supporting the education of disadvantaged children in our country. While I might not have given him the full response he was looking for, I empathise with the intentions and motives behind the points he made. I encourage him to continue pursuing practical ways that we can get more children from maintained sectors integrating better with children from other backgrounds from the private sector. I look forward to continuing to work together, with him and other Ministers, to help all children access the best possible education, which it is their absolute right to want and our duty to provide.
A38 (Amber Valley)
(13 years, 7 months ago)
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Nigel Mills (Amber Valley) (Con)
It is a pleasure to speak under your chairmanship, Dr McCrea. I am grateful to have the chance to raise this issue, which is of great importance to many communities throughout my constituency.
It would help to start by putting the issue in context, in case the Minister is not fully familiar with the stretch of road. The A38 is a dual carriageway, providing a convenient link from the M1 to Derby and on to Birmingham. Despite the efforts of some signposting on the M1, it is an attractive commuter route to Birmingham, especially when faced with the risk of delays on the M1 and M42, the generally suggested route.
Since the road was constructed about 30 or 40 years ago, the level of traffic, especially heavy lorries, using it has grown consistently, exacerbating the noise. There is real concern that the level of traffic will only continue to increase. There are some proposed developments, including one in my constituency that would add a new junction to the road and a new business park. As a result, we would all expect to see an increase, certainly in heavy goods traffic.
Employment and jobs are attracted into my constituency by the great transport links provided by the road, especially to the various industrial parks nearby. That is not something any of us wants to stop. I suspect the strategy for increasing the number of jobs is to build on the attractiveness of the road. However, that leaves us with the problem that a number of people up and down the road are suffering significantly from the level of noise.
It is useful to paint a picture of the geography of Amber Valley. The clue is in the name of the constituency. It is made up of lots of hills and valleys, through which the A38 sweeps. In places the road is higher than the neighbouring houses, and in others the houses look down on the road. Those two situations suffer some of the most significant noise problems.
Various communities up and down that nine-mile stretch of the road are in my constituency. We can start in the south in the small village of Coxbench, working northwards to Rawson Green and various bits of the town of Ripley that are quite close to the road. Moving further north, we come to Swanwick; that, too, abuts the road. The place that perhaps suffers the most significant problem, given the volume of houses, is the town of Alfreton. I have not listed every place that suffers an impact from the road, because my constituency contains so many separate communities.
It will be useful to explain the history of the road. Some places that are affected were there before the road was built. Sadly, when the road was constructed, the present rules and regulations on how close to houses new roads can be built, or on what noise abatement measures should be put in place, were not in force. We ended up with some slightly strange situations where houses are incredibly close to the road.
In various places, the road almost goes over houses, and some unfortunate people in Alfreton live in houses that are almost sandwiched between the A38 and the slip road that joins it at that point. One can only imagine the level of noise suffered by those who live there. I have visited one of those houses, and even with double glazing and with all the doors and windows closed there is a constant burr of noise when the road is busy; when the windows or the back door are open in the summer, the noise is unbelievable. It is not something that any of us would choose. The noise obviously has a major impact on quality of life.
I have tried to stress how significant a problem it is, although I do not doubt that it is a problem for all who live near trunk roads. The problem was recognised by the previous Government, because noise action plans for major roads were signed off by the then Secretary of State almost a year ago, on 15 March 2010. They set out action plans for tackling the problem.
A study has come up with some scary statistics. For instance, 9.7 million people in the country have to live with noise of more than 55 dB from major roads. That figure falls as the level of noise increases; about 74,000 people have to live with noise of more than 75 dB. Having experienced what I suspect was noise of more than 75 dB, I can tell the House that urgent action is needed. The study says that dealing with those locations is the first priority. The details provided by the Highways Agency show that four patches in my constituency fall within those first priority locations—Coxbench, Rawson Green and two stretches in Alfreton.
I have some concerns about exactly how that study was done. I was told that it was a desktop study that mainly considered distances between houses and the road. I do not know whether it took account of the fact that the road towers over houses or that other houses are somewhat higher than the road, but the nature of valleys can cause the noise to echo, resulting in the noise being louder than expected from a distance. Perhaps further work needs to be done to validate whether those sites, too, should be a first priority. I have listened to the noise in some parts of my constituency, and I am surprised that they are not shown as being at the same level as those that are considered to be first priority.
That leads me to the two themes that I hope the Minister will address. First, when can we expect to see action for those who live in first priority locations? Secondly, where will that leave those who are not in those locations? The action plan produced a year ago sets out four potential courses of action for those who live in first priority areas. In simple terms—I am not an expert—they are to erect noise barriers, with which we are all familiar; to install low-noise surfaces; to introduce traffic management measures; and to improve the noise insulation of affected properties. I suspect that on this stretch of the A38, traffic management measures will be a challenge, as it is a long run with no junctions from the M1 to Derby, and it attracts some to drive at high speeds—except at the rush-hour peak, when the traffic tends to back up.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
To what extent does traffic divert from the A38 to the B6179, which seems to run parallel to it for a long stretch?
Nigel Mills
As with all such matters, trying to work out who uses what route at what time and for what purpose is a challenge. The A38 is a major trunk road, and unless there is a problem for those travelling through Amber Valley from Derby to the M1 or vice versa, I suspect that they are unlikely to divert to other routes. People who are making short, local journeys will clearly take a different view, and there are other options for those who might prefer a different route, but it depends where they are going. Most of the noise problems are caused by heavy goods vehicles going at significant speeds, but it is unlikely that HGV drivers would divert from the main road.
I doubt whether traffic abatement measures will help. If we were to say that the solution was to reduce the speed limit to 50 mph, we would hear howls of protest, especially as the Government are apparently talking about raising the speed limit on motorways to 80 mph. If the speed limit on the A38 were reduced, I am not sure how many drivers would observe it, given that many do not observe the existing speed limit.
A low-noise surface would be an attractive solution. It is used in some places, but I understand that funding does not allow the proactive replacement of such a surface; in most cases we have to wait until the existing surface has worn away and needs to be replaced, at which point the change could be made. I wonder whether there is any scope for proactive replacement of that surface where there is a clear problem. That leaves the erection of noise barriers, when effective, or helping people to insulate their houses.
The study suggested four potential outcomes for people in high-priority areas. The first is the implementation of action, with financial resources being immediately available. That sounds like a great scenario. Will the Minister say what financial resources will be immediately available? I am not sure that we in Amber Valley look forward to his answer.
The second is the implementation of action but with no immediately available resources. That may be possible, but what resources does the Minister expect to be available in the short to medium term, and how are we to go about finding them? The problem is caused by the Highways Agency’s trunk road and there is a duty to take some action. It is not a discretionary matter, where people can say, “Yes, we know it’s a problem but it is not our problem.” There is a duty to act.
The third is that action is possible but there is no scope to construct or there are overriding technical problems. The worst potential outcome is that action will not be possible owing to large adverse effects—perhaps environmental matters.
The questions are these: what can be done and when can it be done? It is all about timing. My constituents have known about the problem for many years, and have been waiting for some kind of action. There is an action plan, and I suspect that everyone wants to see progress being made. Will the Minister say when he expects to see these projects being started? I am not sure that I can press him for this level of detail, but when can we expect to see some help in Amber Valley? The action plan implies that some of the action will start from April 2011. Is that still the case, or is there likely to be some delay?
I wish to raise one more matter, as I want to give the Minister plenty of time to respond.
Neil Carmichael (Stroud) (Con)
You are probably wondering why I am intervening on the subject of this road, Dr McCrea. It is because it goes through my constituency as well. There are two points that I should like to bring to the Minister’s attention. First, we have difficulty with the varying speed limits, and it would be easier to have a consistent speed limit for some parts of the A38. Secondly, we need to lower speed limits to deal with the problems of noise. Can the Department for Transport be more flexible and allow our local councils to alter speed limits to suit local needs?
Nigel Mills
I am grateful for that intervention. I was talking about speed a few minutes ago. Although such a solution would be helpful for my hon. Friend, I struggle to see how practical it is as an option and how likely it is even to be observed.
Before my hon. Friend intervened on me, I was asking about the people who are not in the areas of first priority. What hope do they have of seeing some noise mitigation measures even in the medium term? Will this Parliament only be able to deal with those in the first priority areas, or is there some hope for the next highest band? A significant number of people who are not in the first priority area have to live with noise of more than 60 or even 70 dB. If it is unlikely that we will have any significant amounts of funding from the taxpayer to deal with that, what other options are available? Is it possible to consider match funding? If there is some significant development in the area that will increase traffic, is there a way in which we can raise section 106 contributions to put in noise barriers, even if they are not exactly adjacent to the new development? It is probably not right to rule out any option. If we think creatively, we may be able to improve the quality of life for people who live in these areas.
I hope that the Minister can give me some good news on when we will start seeing some action. At the very least, I hope that he can help my constituents to understand what the timings and processes are before we can resolve this long-standing issue.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I thank my hon. Friend the Member for Amber Valley (Nigel Mills) for raising the important subject of traffic noise and securing time to allow us to debate the issues. I speak for the Government on 97% of the roads in England—the local roads. The Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning), deals with trunk roads and motorways, so the A38 is one of his roads. Unfortunately, he cannot be here today, so I am standing in for him. I will discuss with him the issues that have been raised today and draw his attention to my hon. Friend’s comments about the road in his constituency.
Nuisance from traffic noise is an issue that the Government recognise. Action is being taken to reduce the problem and real progress continues to be made. The strategic road network provides the backbone for the distribution of goods, services and people within England and beyond, thus providing a valuable contribution to the UK economy.
The network carries a third of all traffic and two thirds of all freight traffic, but represents only 3% of the road network by length in England. With such a concentration of use, combined with the speed of vehicles, noise from motorways and high-speed trunk roads is an understandable concern for those living close to them.
My hon. Friend has raised a number of concerns about traffic noise at sites along the A38 in his constituency. I sympathise with his concerns and I will explain our policy on dealing with traffic noise from roads and what measures the Highways Agency has taken, and will take in the future, to deal with the issues identified by him.
Before 1998, the assessment of noise impacts was carried out only for new roads. Where noise levels have been predicted to be high as a result of the construction of a new or improved road, measures such as noise barriers or earth embankments are normally included in the design of the road as a means of reducing noise to more acceptable levels. Where such measures cannot be provided, either because of high costs or for practical reasons, there are provisions in the Land Compensation Act 1973 and the Noise Insulation Regulations 1975 for the provision of noise insulation at the affected properties. Such measures have, for many years, provided protection against increased road noise for those affected by new roads.
Since 1998, quieter surfacing materials have been installed on new strategic roads as a matter of course. They have also been installed on existing strategic roads when they have required resurfacing to restore them to a safe and serviceable condition. Such materials have provided significant reductions in traffic noise for many in recent years.
The UK has used quieter surfaces from as early as the 1970s, developing the use of porous asphalt, which was known to reduce tyre noise as well as spray in wet conditions. That material has successfully been used for a number of years on some strategic roads, but it is a more costly solution than recently developed materials. Further progress has been achieved in the development of a new generation of quieter surfacing materials, which are cost-effective, reduce the time needed for resurfacing and can be used routinely on motorways and other high-speed trunk roads. To date, 40% of the strategic road network has been resurfaced with these materials, including a section of the southbound A38 between Ripley and Rawson Green.
The Highways Agency regularly reviews ways in which it can maintain the network in the most cost-effective way. It is currently reviewing maintenance strategies for the strategic network in its drive to reduce cost. I will ask the Highways Agency to keep my hon. Friend informed of the outcome of the review, particularly if it has an impact on future maintenance of the A38 in his constituency.
My hon. Friend mentioned resurfacing as one of the possible ways in which to deal with these matters. I am advised that the Highways Agency policy is to install quieter surfaces when a road is due to be resurfaced, but it will not resurface a road solely for noise-abatement purposes. That is deeply frustrating for hon. Members. I have been trying to persuade the Highways Agency to resurface the A27 in my constituency for similar reasons, so I understand the concerns that he and his constituents have. I am advised that there will be not much new surfacing along this particular stretch of road for the next four or five years.
Looking to the future, we will continue to manage road traffic noise levels as a result of the introduction of the environmental noise directive. The directive requires member states to undertake five-yearly cycles of noise mapping and action planning for all major sources of environmental noise, including that from road traffic.
This approach will help us to understand the extent of traffic noise problems alongside our major roads, and to identify where action to reduce road traffic noise needs to be taken, subject to funding being available. Although the Department for Environment, Food and Rural Affairs has overall responsibility for delivering the directive’s requirements in the UK, the Highways Agency has been working with it for a number of years to deliver its noise mapping and action planning requirements.
The first round of noise mapping results were published in May 2008 by DEFRA. That was followed in March 2010 by the noise action plans, which were designed to identify important areas that sustain impacts from major sources such as road traffic. The action plans require those important areas that contain first priority locations to be investigated initially. My hon. Friend referred to those locations in his constituency. I am advised that there are about 1,500 important areas containing first priority locations along the strategic road network. Two of those are along the A38 within his constituency and, as he is aware—from his meeting with Highways Agency officials on 16 August last year—they are at Rawson Green and Coxbench.
Nigel Mills
The details provided by the Highways Agency have identified some further locations in Alfreton in addition to the two at Coxbench and Rawson Green. Is that something that is not correct now, or is it something that the Minister needs to check?
Norman Baker
The information that I was given by officials is that there are two areas on the A38 within my hon. Friend’s constituency, but as he has put his query on the record, I will ensure that either I or my hon. Friend the Member for Hemel Hempstead writes to him to clarify that point.
As with all important areas with first priority locations, the agency will investigate the sites at Coxbench and Rawson Green during 2011. Those investigations will identify what measures could be effective at reducing noise levels at the individual locations. As they are not yet complete, I cannot confirm what measures will be identified at the two sites and whether any funding will be available to install them. However, I will ask the Highways Agency to inform my hon. Friend of the outcome of the investigations at these two sites when that information is available. If there is any further information that is available when I or the Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead, write to him about the points that he has raised in this debate, we will include it in the letter so that he has the most up-to-date information available at that stage.
My hon. Friend the Member for Amber Valley also mentioned a number of possible solutions. Barriers will obviously be considered as a potential solution, if their use is thought to be appropriate. I must make it clear that I am not promising that barriers will be installed, but they will be considered just as a matter of common sense. Obviously, barriers have a cost and an impact on the countryside, and those factors must be taken into account when considering the use of barriers on any trunk road in the country.
My hon. Friend is probably right to say that the potential for traffic management on the A38 in his constituency is limited, although I note his comment about speed limits. Again, I will pass that back to the Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead. In addition, my hon. Friend the Member for Stroud (Neil Carmichael) made an intervention about speed limits. The general approach of the Department and indeed of the Government is to move towards having more localism, but obviously speed limits for local roads—the 97% of roads that are within my portfolio—more easily lend themselves to local authority influence than speed limits on trunk roads. However, if a local authority, particularly a highway authority, wants to suggest a speed limit for a motorway or, more likely, a trunk road, there is no reason why that suggestion should not be fed in to the Highways Agency and properly considered at that stage. If there are particular views about the speed limit on the A38, I encourage hon. Members to feed them in to the Highways Agency or to the Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead.
There was also mention of section 106 agreements. In principle, section 106 agreements can be designed and used to achieve helpful changes to the road network in a particular location, if they are germane to the planning application that has been submitted and agreed to. However, that is really a matter for the local authority—the planning authority—to take forward and to determine what, if any conditions, are appropriate for a section 106 agreement. That is not a process that we would get involved with directly, but if there was a feeling in an area that section 106 money should be used to tackle a trunk road problem, obviously the Highways Agency would want to become involved at that stage, to discuss whether or not that course of action was appropriate for that location.
My hon. Friend the Member for Amber Valley also mentioned the action plan on noise. As he knows, that plan has already been published by DEFRA and, as I have already said, at the start of next month the Highways Agency will begin to consider noise mitigation measures that, in theory, can be installed in 2012-13.
Lastly, the policies that are already in place have led to significant improvements for many residents living close to strategic roads across England. Real differences have been made and we will continue to help those people who are most affected by road traffic noise in the long term, including people in my hon. Friend’s constituency.
Nigel Mills
I am grateful to the Minister for those comments. The “pushback” that we get from constituents is that these action plans are meant to be five-year action plans and what we all want is that, during the five years of these plans, we actually see some action. Is the Minister suggesting that we will start to see some action on some of the 1,500 projects around the country during the life of this Parliament, or is it likely that the funding constraints will mean that there is little chance of these noise hot spots being dealt with during that time? He was not entirely clear about how much resource was immediately available to address these issues.
Norman Baker
Dr McCrea, I had actually finished my response to the debate, but I am happy to take a further intervention and respond to it as best I can. My hon. Friend will be aware that the resources that are available at the present time are stretched, because of the appalling inheritance that we received from the last Government. Therefore, we have had to look carefully at where we spend our money. On the other hand, we have legal obligations—for example, the environmental noise directive—and we will seek to discharge them.
If there is any further information that I can add about time scale in the letter that we will send to my hon. Friend—it will come either from myself or from the Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead—after this debate, we will do that. We will certainly try to include as much information as possible at that time. I hope that that response has been helpful.
Wood Panel Industry
(13 years, 7 months ago)
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Mrs Anne McGuire (Stirling) (Lab)
It is a pleasure to take part in this debate under your chairmanship, Mr Weir. I do not think that I have had the pleasure of being on a Committee that you have chaired. We go back a long time in this place, so I am delighted to see you here today. I am also very pleased to see both the Minister, with whom I have had conversations on this issue in other parts of the Commons, and my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), who is representing the Opposition.
I am delighted that we have secured the debate, because we are at a crucial juncture for the wood panel industry. It is the UN international year of forests, which presents a good opportunity to review policies that affect our forests and associated industries. Last week’s announcement on the renewable heat incentive was a great blow to Norbord, a panel manufacturer in my constituency and one of seven plants that constitute the UK’s wood panel industry. The industry produces, wholly from UK-sourced wood, two thirds of the UK’s consumption of wood-based panels—chipboard, MDF and oriented strand board. Much of that wood is post-consumer waste wood, with Sonae UK in Merseyside now making chipboard from 98% recycled material. All virgin material is certified by the Forest Stewardship Council. The industry plays a valuable, if somewhat understated, role in carbon abatement, by locking carbon into the product, often for decades, as is the case with housing.
Norbord plays a vital role in my constituency. It employs more than 250 people directly and is one of the few large private sector employers in the area, offering a valuable apprenticeship scheme in addition to manufacturing. Its campaign to highlight the detrimental impact of large-scale biomass energy is fully supported by the workers at the factory, under their trade union Unite.
Let me be very clear to the Minister from the outset: neither Norbord nor the wood panel industry has any objection to the aims of the RHI. Indeed, the sector accounts for a third of the British industry’s generation of renewable heat. However, that huge contribution is threatened by exclusion from the RHI of the industry’s existing capacity. This is, in many respects, an issue that does not gain the headlines, so I want to put on record the fact that we have support from organisations such as the United Kingdom Forest Products Association, Timcon, Valpak and other wood supply outlets that have fears about some of the issues that I will raise this afternoon.
As the Minister knows full well from meetings with the industry and with the all-party group for the wood panel industry, of which I am chair, biomass is unlike any other major form of renewable energy because of the ongoing fuel costs involved and the potential for serious distortion of the wood market. I appreciate that the Government do not want to support all early adoption of renewable technologies. That is perfectly understandable, but I hope that the Minister recognises that the industry has an important contribution to make to renewable heat. If we do not get some resolution to the current situation, that important contribution will be jeopardised by subsidies to new entrants to the wood market, and by the arbitrary nature of the July 2009 cut-off date for installed installations.
I have to be frank with the Minister. The wood panel industry feels particularly aggrieved by the apparent lack of consideration given by the Department of Energy and Climate Change to its well-evidenced arguments about the impact of subsidised biomass demand on the UK wood market. I would, therefore, like the Minister to tell us why the wood industries are not even mentioned in the RHI impact assessment, despite the submission to his Department of data on timber prices and availability. The four paragraphs devoted to competition assessment make no mention of the wood market, which, as the Minister knows full well, will be the source of most of the biomass feedstock. There appears to be little point in conducting an impact assessment when adverse impacts that are clearly detailed to the Department are, apparently, studiously ignored. If assessments are not objective, who will trust them? I am sure that my all-party group colleagues who are here today can, like me, attest to the clarity of information and evidence that the Wood Panel Industries Federation has produced for the Department’s scrutiny.
I am not sure whether the Minister heard the recent BBC “Today” programme’s coverage of the RHI announcement. It picked up on the sustainability question: will biomass demand prove as unsustainable and environmentally damaging as biofuels? Roger Harrabin, the environmental analyst, raised the important issue of the double-counting of land when assessing potential biomass availability. That relates not just to the UK; it appears to be the case across Europe as well, where the combined biomass demand from EU member states, as declared in their national renewable energy plans, is just short of 1 billion tonnes of wood every year. That would require the total global harvest of wood to increase by a third. Does that sound sustainable?
On the renewables obligation, although the Government’s decision on the RHI is a further crushing blow to the competitiveness of the sector, the core problem remains the unsustainable and flawed support for large-scale electricity from wood. The wood panel industry has long argued that the renewables obligation has had the unintended consequence of distorting the UK wood market. That was not done deliberately, but we now have to deal with it. Several cumulative factors contributed to the distortion. First, demand for UK wood is beginning to outstrip supply; secondly, energy crops have not been planted in significant volumes, despite there having been generous incentives for a decade; and finally, the scale of biomass plants is huge. For example, Port Talbot’s Prenergy plant will burn about 3 million green tonnes of wood per annum, with no guarantees that the material will be exclusively imported. That represents close to a quarter of the biomass available today in the UK. The consequences for the wood-processing industry are extremely serious, and will only be compounded by the introduction of an RHI that does not support the industry’s existing renewable heat generation.
I hope that the Minister will accept that one of the most important myths that has to be confronted is that biomass plants will satisfy their demand from overseas—from imports. That is hugely inaccurate, misleading and irresponsible for three main reasons: first, the global pressure on wood supply; secondly, the differential in price between imported and domestic wood fibre; and thirdly, the fact that biomass plants are not committed to any supply chain when they receive planning permission.
Let me start with global wood supply and demand. Investment in biomass and biofuels is increasing significantly around the world, as the Minister undoubtedly knows. Canada and the US, which are frequently cited as potential sources of fuel for the UK, are seeing more and more biomass plants proposed, as the cost margin between energy generation from oil and from wood decreases. The Government know well how difficult it is to estimate how much wood will be available from abroad in the next 10 or 20 years, yet they are somehow confident that energy companies will be able to secure imports and will, therefore, not impinge too greatly on domestic wood. Many organisations are a great deal more sceptical about the sustainability of such global demand. They include Friends of the Earth, WWF and BirdLife International, to mention but a few. Furthermore, does the building of numerous import-reliant biomass plants not have serious ramifications for UK energy security?
The second factor undermining wood imports is price. As long as domestic wood is significantly cheaper than imported wood, which is currently about double the price, any energy company worth its salt will source as much cheaper UK wood as it can. That is just business. Forth Energy, for example, which is trying to build four large electricity plants close to my constituency in central Scotland, has been more open than most in stating that it intends to burn as much indigenous biomass—that is British wood—as possible.
The consultancy E4tech produced a report for DECC’s renewable energy strategy in 2009 that considered international biomass supply. E4tech concluded that the UK could import significant volumes of woody biomass to supply UK demand, but that import costs would remain high. It predicted that in 2010, all imported material would be more expensive than domestic wood, and would still be more expensive even by 2030. That was true in each of the four scenarios that the report used, from business as usual to high growth.
E4tech produced another report for DECC earlier last year on biomass prices in the UK electricity and heat sectors. On wood chip prices, the report concluded:
“In 2020, imported chips are estimated to be much more expensive…than chips from UK energy crops…hence are unlikely to be used for heating. The UK biomass heating sector is therefore likely to only see the UK energy crop chip prices.”
I hope the Minister will accept that that goes to show that the RHI will only add to pressure on domestic wood supply and drive up prices above levels that the wood panel industry can absorb or pass on to customers. Biomass energy companies will buy wood from established wood markets, such as the market for small roundwood, unless they are specifically encouraged not to do so. Why would they seek out twisted branches, stump and brash when they can outbid existing industries for small roundwood, sawdust and even logs?
The final and crucial factor concerning imports is that biomass plants, once built, can source material from wherever they see fit as long as the wood is certified under a forest management scheme. The fact that many such plants are situated at ports does not mean that they will not buy huge amounts of wood from the UK. As I have explained with the aid of DECC-commissioned reports, there is no prospect of international woody biomass becoming cheaper than domestic wood.
On carbon balance, my fundamental question to the Government is this: what is the best possible environmental outcome for this precious and limited resource? The Government must not simply weigh the carbon balance of energy generation from fossil fuels and wood; they must also consider the environmental benefits of competing uses of wood. It is a well-established fact that wood products are an important carbon sink that can be burned for energy after their useful life.
According to the Forestry Commission’s Biomass Energy Centre, direct CO2 emissions from combustion of wood chips for electricity in a large-scale plant are more than five times as high as emissions from the combustion of hard coal. I acknowledge that life-cycle CO2 emissions from large-scale wood-fired electricity production are considerably less than coal, but there is a considerable and crucial time lag, or carbon debt. It will be between 30 and 40 years before new plantings in coniferous temperate forests can reabsorb the carbon released through combustion. I represent a constituency with large forests—a landscape you will recognise, Mr Weir, as someone from Scotland—so I know that is not a short-term fix. In the short to medium term, new large-scale biomass plants will massively increase carbon emissions. If climate change is to be taken seriously, how can we be comfortable with such a perverse outcome?
Roger Williams (Brecon and Radnorshire) (LD)
I congratulate the right hon. Lady on securing this important debate. She is making a powerful case for which I have a lot of sympathy. A lot of wood ends up in landfill that could be used in biomass facilities, which would be of benefit in reducing carbon.
Mrs McGuire
That chimes with the views of the industry. Some of that wood could easily be used for biomass energy generation, instead of the wood currently used by the wood panel industry and other industries. The hon. Gentleman makes a powerful point. An appropriate comment might be that we must look beyond the trees so that we can see the wood.
The Environment Agency’s 2009 report “Biomass: Carbon sink or carbon sinner?” got to the nub of getting the best environmental outcome from the material. Although I accept that the introduction of a heat incentive is a good step in principle, wood will continue to be consumed in massive quantities for electricity production as long as financial incentives make it attractive. Because wood supply is limited and displacement of the wood panel industry is a realistic outcome, it is vital to compare the carbon emissions of electricity from biomass with those produced by panel board manufacture.
A study by Carbon River submitted to DECC last year demonstrated that CO2 emissions from the wood panel industry equate to 378 kg of CO2 per tonne of timber processed. By comparison, CO2 emissions from the biomass industry consuming domestically sourced timber equate to 1,905 kg of CO2 per tonne of timber processed. The wood panel industry’s annual consumption of timber is between 4 million and 4.5 million tonnes per annum. If it were displaced by the biomass industry, the increase in net CO2 emissions would equate to 1,527 kg of CO2 per tonne of timber processed. That works out at about 6 million tonnes of CO2, or a 1% increase in the UK’s net CO2 emissions each year.
If the UK is to burn 50 million tonnes of timber a year to satisfy its energy requirements, direct CO2 emissions could increase by 95 million tonnes per annum. Will the equivalent capacity of fossil fuel plants be retired to compensate, or will the carbon reduction policy in fact increase our carbon footprint? Large-scale growth of biomass usage for electricity production will not only be detrimental to the wood processing industries, including sawmills; it is also likely to put even greater pressure on land in the UK and abroad that is currently used for farming food crops.
I hope that the Government can accept some responsibility for elements of that powerful challenge. In response to a Channel 4 news exposé of biomass and timber prices last week, the Government stated:
“It is not our intention for our renewable support mechanisms to adversely affect other industries. We believe this can be minimised by increasing the supply of wood and forestry residues available, better management of our waste wood”—
that chimes with the comments of the hon. Member for Brecon and Radnorshire (Roger Williams)—
“and the increased use of other biomass resources such as food waste and perennial energy crops.”
Frankly, it is not good enough for the Government to say that it is not their intention to affect industry. If they are interfering in the market, which they are, they must make certain that they obey the golden rule: do no harm. Therefore, I respectfully suggest that it is negligent of the Department to omit the industry from its RHI impact assessment.
The Government’s answer to concerns about the sustainability of biomass energy is to cite the proposed sustainability criteria. With regard to wood, those are simply measures of good forest management and in no way provide a picture of sustainable levels of demand and supply, or of the impact that biomass will have on carbon sinks and recycling. The Government say that they will act if distortion occurs, but frankly, any action will be far too late. Distortion is occurring today, and these industries are already at their competitive limits.
No one doubts the complexity of the problem. However, we have to recognise that there is a better way of making decisions about the use of wood. At present, no other country in the European Union encourages wood-fired electricity generation on the scale seen in the UK. Countries with much greater forest cover, such as Germany and Austria, have sensibly instituted minimum efficiency standards that preclude electricity generation from wood alone, thus encouraging the development of high efficiency heating and small-scale combined heat and power. The Minister does not even need to look beyond these islands. You will love this sentence, Mr Weir: we could follow the lead of the Scottish Government, who have expressed a preference for those processes over large-scale electricity from biomass. I am pleased to tip my hat, on this occasion, to the Scottish Government’s lead on the issue.
Despite the introduction of the RHI, the Minister cannot deny that the current incentive regime still makes burning virgin timber for electricity an attractive proposition. The best way to end market distortion and to achieve the best environmental outcomes is to end support for electricity-only generation from wood, and to exclusively support quality CHP, heat generation and energy from treated wood waste. That would ensure high energy efficiencies, protect current and future wood recycling, and reduce landfill. It would also greatly reduce the impact on wood processors, who play a vital role in carbon abatement, through the manufacture and recycling of low-carbon, sustainable construction and furniture materials.
If the Minister recognises the valuable contribution made to the carbon agenda by the panel board industry, will he please comment specifically on how the creation, through a subsidy, of a four to fivefold increase in the demand for limited biomass cannot but distort that market and impact detrimentally on that industry? Finally, does he feel that the loss of the UK’s wood panel industry is acceptable collateral damage for hitting renewable targets? That is what appears to be happening. It would be a sad conclusion, not just because of the jobs and skills that would be lost in a rural industry, but because, perversely, such displacement of wood would actually increase carbon emissions, which is the very thing that I am sure the Minister would not want. I welcome this opportunity to put these issues to the Minister and look forward to the response of my hon. Friend the Member for Liverpool, Wavertree for the Opposition, as well as that of the Minister himself.
Guy Opperman (Hexham) (Con)
Thank you for the opportunity to speak in this debate, Mr Weir. I apologise for being late, but I was detained briefly in another meeting.
I will begin by giving some background to the debate. I have 49,000 square hectares of forest in my constituency, which has at least six major forests. I have three times more than anybody else in the House of Commons. I did not vote for the Government’s forestry proposal. I abstained and did so for a number of reasons, not least because I did not think that it was the best way forward for individual forests to be assessed. I also abstained because a significant number of jobs were under threat—one must not diminish the numbers involved. I agree almost entirely with the comments of my friend the right hon. Member for Stirling (Mrs McGuire), because the law of unintended consequences may be relevant. We have a significant supplier in the form of Egger, which has more than 400 people involved in the forestry business. A second supplier, SCA Timber, has another 400 people. The third supplier is the Forestry Commission, which, along with others, is associated in a multitude of different ways.
I am talking about the most sparsely populated part of England, and it is hard to think of what else individual people could do to make a living. They have eked out a good, successful niche business, based around the forestry proposals. The difficulty is that the wood, and the approach to it, is what binds those people together. It is the glue that holds the community together. I do not want to overstate this, but it seems that we are approaching a crucial decision on the way forward. To that end, I am surprised that there is no mention of the wood panel industry’s views in the RHI consideration. Will the Minister comment on that when he responds? I fully understand that the RHI has been delayed and accept entirely that there are many difficult problems, but the fact that the views of the wood panel industry have been ignored is important. The impression given is that the wood panel industry will survive with or without RHI. In fact, one could go further and say that that implies that the wood panel industry will survive in the absence of RHI.
I remind all parties involved of the huge amount of capacity involved in wood biomass. The forestry industry believes that one of the core problems is the Department’s optimism about wood biomass supply. I grant that a modicum of extra material could be brought to market, but even the most optimistic estimate of the Department for Environment, Food and Rural Affairs is an extra 2 million tonnes a year. Last year’s report by John Clegg Consulting categorically states that current wood demand is in balance with wood supply. In other words, the demand and the amount in this country—give or take a little either way—are, effectively, the same.
Roger Williams
I apologise, Mr Weir, that I will have to leave shortly, so I will not be able to make a speech. I, too, represent a constituency that has a lot of forestry and a lot of people employed in forest jobs. Eighty per cent. of the forestry estate in England is in private hands, and of that 80%, only 60% is properly managed. If the other 40% were brought into proper management, that would generate more wood fibre and deliver more public good.
Guy Opperman
I am glad that the hon. Gentleman raised that point because it is absolutely key. It is often argued in relation to these particular environments that wood capacity will increase—we could market it better, find it better and produce it better—and we can then find the supply we need. Even allowing for the hon. Gentleman’s argument, given the amount that we will have to find, there is a massive disparity between what the Minister will say and the point we are trying to make.
I shall give one example in relation to the Drax argument. The level of wood demand will be approximately 40 million to 50 million tonnes a year if various things go forward, but we must bear it in mind that we are at a level of just over 10 million tonnes, going up to 12 million tonnes on an ongoing basis, so there is a massive disparity. I flag up the point that if Drax gets its way in the next renewables obligation review and the co-firing cap is removed, it could consume a further 10 million tonnes. I hope that that is not the case because it would mean that a standard wood producer—an owner of a supply—would struggle in terms of their contribution and ability to function. The Government have to respond to the industry’s extremely reasonable argument that biomass electricity plants will consume the cheapest and most easily available material—namely, virgin timber from UK forests.
I urge the Government to reform the renewables obligation before it is too late, so that biomass energy is proportionate, sustainable and highly efficient. At the moment, there is a real danger that if someone is involved in this particular product, they will face the issue of overseas supply. I cannot see how we will be able to produce this type of work, and this amount of wood, on an ongoing basis without there being significant overseas supply, with all the environmental factors that are attached to that. The statistics are effectively unarguable. I would welcome the Minister’s views on the matter.
Given that we have a very successful ability to produce good jobs in a competitive economy on an ongoing basis—1,000 people are employed in the industry in my constituency—it is odd that we are trying to pass legislation, which, as my friend the right hon. Member for Stirling explained very eloquently, will cause long-term difficulties. If we do not address the matter, we will end up with problems.
Susan Elan Jones (Clwyd South) (Lab)
I am delighted that we are holding this debate on the wood panel industry. I congratulate my right hon. Friend the Member for Stirling (Mrs McGuire) on securing time for it. I thank the hon. Member for Hexham (Guy Opperman) for his thoughtful contribution and the hon. Member for Brecon and Radnorshire (Roger Williams) for his thoughtful intervention.
The wood panel industry is represented in my constituency by Kronospan, which is based at Chirk. The factory is a key employer in the area and is one of the largest in north Wales, with around 600 direct jobs on site. Those are highly skilled comparatively well-paid jobs that make a huge difference to the economy of the area. Kronospan worldwide is the number one producer of medium-density fibreboard and particleboard, and it operates in 24 countries. Locally, it is impossible to overestimate the massive economic impact that that company has. It spends in the region of £30 million a year on local suppliers and close to £ l million in rates. I am extremely concerned to hear that support for large-scale wood-fired electricity generation is threatening the very survival of that sustainable and crucial business in my constituency.
Let me make it clear—this point has been previously made by hon. Members—that we recognise that what is happening is an unforeseen consequence and we also recognise the reasoning behind support for what was the fledging biomass industry. It is not our place to be critical of that. However, we recognise the reality of what is happening to the wood panel industry as a consequence of that position. Wood supply and the best use of wood have suffered in policy making because of the way those issues fall between three Departments—DEFRA, the Department of Energy and Climate Change and the Department for Communities and Local Government—and their respective agencies. I know that DEFRA is well aware of both the limits of domestic wood supply and the extreme inefficiency of burning wood purely for electricity. For example, it is worth noting that the Environment Agency’s report, “Biomass: Carbon Sink or Carbon Sinner,” explicitly calls for a
“strong presumption in favour of combined heat and power”
over electricity-only generation. DCLG certainly supports the use of wood products for construction as a low-carbon alternative to other materials, but the policies that will most affect how wood will be used are the most lucrative ones, namely renewable energy. That is partly because DECC is doing its level best to achieve extremely ambitious renewable energy targets.
The industry has long suspected that information sharing between the Forestry Commission and DECC and its predecessors is simply not up to scratch. The commission undoubtedly has a good grasp on the availability of UK wood. However, for a variety of reasons, it does not have an equivalent expertise in forecasting wood demand. It is the wood industry’s belief that DECC’s understanding of wood fibre streams, uses and demands is totally inadequate, considering the impact that the Department’s policies have on the wood market. The renewable heat incentive’s timber coverage is a case in point. The RHI document states:
“We do not expect significant quantities of prime timber to be diverted into energy as a result of the RHI. However, should evidence show that high grade timber is being diverted into heat use, and that turns out to be a perverse outcome from a greenhouse gas lifecycle perspective or causes concerns about deforestation, measures will be introduced to prevent it.”
That is the sum total of the policy’s attention to the largest source of biomass in the UK.
The industry is most interested to know what DECC means by “prime” or “high grade” timber, as the RHI document provides no explanation. We already know that energy companies are seeking long-term contracts for the supply of small round wood, which is the core feedstock for the wood panel industry. The Department seems to be ignoring the fact that that distortion is happening today. Wood pellet plants, such as the one near Inverness, are using high-grade timber in the production of pellets. That trend will only increase with the additional incentive of the RHI. Will the Minister comment on what he deems to be prime timber? What evidence would his Department wish to see to convince it that such an outcome is already a reality? Does a wood panel factory have to close before measures are introduced to prevent that happening? I sincerely hope not. The Minister needs only to look at the experience of German and Austrian wood processors, which have suffered greatly as the result of massive increases in timber prices in 2004 and 2005.
Of course, this debate is also about the crucial issue of jobs, particularly but not exclusively in rural areas. If an overly generous biomass subsidy continues to be given to electricity producers, wood panel manufacturers will simply be priced out of the domestic wood market on which they rely. It will then become uneconomic to produce wood panel boards in the UK. A report on the wood panel industry by Europe Economics produced last year and submitted to DECC estimated that the loss of the industry would risk more than 8,500 full-time equivalent jobs. Taking the Government’s re-absorption rate into consideration, that still means the estimated loss of well over 4,000 jobs. The displacement of the industry by large-scale biomass would also cost nearly £1 billion in lost economic activity across several industries, as calculated using basic input-output measures.
It is extremely significant that six of the seven panel plants we are discussing are in rural areas with moderate to high unemployment rates. We are speaking of rural or semi-rural communities with at most one or two large-scale employers; indeed, many have no such employers, which is why the employment we are discussing is so vital. In some places—Hexham, Ayrshire, Chirk, which is in my constituency, in north Wales, and South Molton, which is in Devon—the plants dominate the economic landscape, and their loss would be devastating for local communities. Whatever one’s political persuasion, and whatever one’s views on the wider macro-economic debate and on what will happen at this point in our economic history, such losses do not bear thinking about.
I recognise that we are not talking about one of the largest industrial sectors, but the Europe Economics report that I cited earlier said that the sawmilling industry would become vulnerable if biomass demand continued to increase and generators looked to buy the whole tree. The Forestry Commission estimates that the sawmilling sector accounts for about 12,000 employees, and the Government would surely be worried about the loss of that employment.
Biomass plants frequently cite green jobs in applications for planning consent. In reality, however, the number of such new jobs is minimal—on a plant-to-plant comparison and per tonne of wood consumed—compared with the number created in the paper and panelboard sectors. On any objective analysis, biomass plants are less green. I am, of course, extremely concerned about the potential loss of a major employer in my constituency, and I trust that the Government will be, too.
The risk to the industry has been recognised right across Europe, with panel companies shutting down production lines or whole factories in Belgium and Germany because of a lack of wood. In 2009, the EU officially recognised the wood panel sector as one of several industrial sectors exposed to carbon leakage—the risk that companies might relocate outside the EU to countries with less onerous environmental regimes, thereby increasing global emissions. How can that recognition by the EU be reconciled with the RHI impact assessment for the panelboard industry?
As all Members present will recognise, the wood panel industry faces an extremely serious situation unless such consequences are foreseen and dealt with.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I apologise for not being present at the commencement of the debate, and no discourtesy was intended. I was participating in a debate on the Floor of the House on fuel prices, an issue that will be of some interest to the wood panel industry and the wider timber industry.
I want to make a brief contribution because others will already have covered a number of points. The issues raised in the debate are of concern to me because I represent an Ayrshire constituency, which borders the constituency of Ayr, Carrick and Cumnock. The Egger plant at Auchinleck is on the border between the two constituencies, although, technically, it is in the constituency of Ayr, Carrick and Cumnock. I have had the privilege of looking around the plant on a couple of occasions in my capacity as MSP for Carrick, Cumnock and Doon Valley, although I will become the former MSP when the Scottish Parliament breaks up for the election in a few days. However, I continue to take a close interest in what happens at the plant and in Government policy on the industry in Scotland and the UK.
As Members will have heard, some very high-quality products are made at the Egger plant. I was certainly amazed, as a consumer of all things DIY at various stages in my life, to see how high-quality chipboard was made, finished and then used to make the doors that we have all seen in new housing developments. However, the important point for me was that this was a high-quality product and created high-quality jobs in my constituency, which has particularly high unemployment and which has suffered for many years because of the loss of the mining industry and other parts of the manufacturing sector. The plant is therefore crucial, and the then Cumnock and Doon Valley district council was quite brave to pursue moves to locate the plant in the area. To be fair, it had to persuade the local community a little that it would be a good thing, and the company certainly worked with the council on that. I should add that the plant’s work force have been retrained and upskilled to keep them up to date with what is required in this modern industry.
I was therefore somewhat disconcerted when I first heard that the supply of the waste wood that was being recycled and used to produce the new items at the plant might dry up if a significant amount were channelled for use in biomass. It seemed slightly perverse, at a time when we are trying to make the best use of recycled products, that there would be more incentive to burn waste wood than to recycle it, reuse it and turn it into something much more useful and productive. Obviously, I hope that we will hear about that from the Minister.
It is also slightly perverse that there seem to be incentives to use all waste wood in biomass. There should be some way of incentivising people to sort it and to strip out the treated wood from the wood that can be reprocessed sensibly. The Scottish Government, for example, support a proposal to ban the production of energy from materials that could otherwise be recycled. That would also reduce landfill. That is a particularly sensible approach. I am not sure whether I should be standing up for the Scottish Government, given that we are about to have elections.
Mrs McGuire
I should just let my hon. Friend know that, in the spirit of solidarity on this issue, I also took the opportunity to congratulate the Scottish Government, and I think you, Mr Weir, were delighted.
Cathy Jamieson
With due respect to you, Mr Weir, I suppose we might as well make it a double. Two Labour Members supporting the Scottish Government in one day is surely not something that happens all too often in this place.
The ban is important. In my role as an MSP, I had the opportunity to raise questions about it. I was pleased that the Scottish Government decided to move on the issue and that they have proposed a ban in respect of wood that could be put to a positive use and be suitably recycled and reprocessed. Such a ban will ensure that only wood that is not suitable for processing in any other way goes to landfill.
We have to be a bit more imaginative and adventurous. I hope that we will see a shift when we talk about some of the issues facing the construction industry and some of the challenges facing us at the moment. I hope that we will talk about building our way out of the present difficult economic climate. When we renovate housing or look at new school buildings and other things in our local communities, I hope that we will look all the way through at what we can do to recycle and reuse wood products.
To conclude, if there is any opportunity to use Ayrshire-made products, which are manufactured on my doorstep and which are of the highest quality, I hope, of course, that people will do so—indeed, I am sure they will.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Weir. I also add my thanks to my right hon. Friend the Member for Stirling (Mrs McGuire) for securing the debate and highlighting the challenges that the wood panel companies are facing, particularly Norbord in her constituency.
It is important to recognise the role that wood panel industries play in local communities. The Wood Panel Industries Federation estimates that UK wood panel companies directly employ around 2,300 people and, including indirect jobs, secure around 8,700 full-time jobs.
We have heard representations from hon. Members about the highly skilled jobs that the wood panel industry provides in their constituencies. Many of those are located in small rural communities that depend on the industry, so it is important that the Government take seriously the concerns expressed. Careful consideration needs to be taken of the effect that renewables subsidies are having on the wood industry. The Opposition want to encourage a sustainable energy mix, with renewables playing a significant role. We recognise that biomass will play an important part in our energy future, if we are to reduce our carbon emissions and meet our renewables targets. If produced sustainably and burned efficiently, biomass emits low levels of carbon. However, WPIF and hon. Members today have expressed their concerns about the efficiency of biomass plants. Improving the efficiency of biomass plants and ensuring that we have a sustainable energy mix will be key to ensuring our energy security and meeting our carbon reduction targets.
The Minister will know that, as we are discussing this matter, the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), and my hon. Friend the Member for Ogmore (Huw Irranca-Davies) are debating in Committee the draft Renewables Obligation (Amendment) Order 2011, which seeks to amend the sustainability criteria for biomass. The Government have considered several options, from doing nothing to several levels of new obligations in respect of sustainability. If passed, the measure will require all generators of solid biomass or gas over 50 kW to report against greenhouse gas emissions criteria and land use sustainability criteria. One notable exemption would be biomass generators wholly derived from waste. Many people and organisations have been calling for that clarity from Government.
What impact might that development have on the concerns raised by my right hon. Friend the Member for Stirling? In the 12-week consultation up to October 2010, which solicited 80 responses, were any representations made by the wood panel industry, and what was the gist of those representations? In the same order, the Minister has delayed implementing a requirement for biomass generators over 1 MW to comply with—as opposed to report against—greenhouse gas emissions and land use sustainability criteria, until closer to the intended start date for the requirement in 2013. That is to allow experience from reporting against the EU criteria to be taken into account before amending the renewables obligation. Will the Minister commit to take the intervening time to consult widely again? I stress “widely”, including specifically with the wood panel and associated industries to make sure their voice is heard.
As well as raising questions about how we produce our energy, today’s debate has highlighted serious questions about how the Government are making their decisions. As was said by my right hon. Friend the Member for Stirling and the hon. Member for Hexham (Guy Opperman), the Department for Energy and Climate Change did not consider the effect the renewable heat incentive would have on the wood panel industry in its RHI impact assessment. I hope that the Minister will say why that was the case, especially as the Department took so long to announce the RHI and much of the work had already been done by the previous Government.
It would be helpful to learn from the Minister what meetings he has had with representatives of the wood panel industry, the work force and representatives from Unite. In addition, can he tell us what discussions, if any, DECC Ministers had with their counterparts in the Department for Business, Innovation and Skills and the Department for Environment, Food and Rural Affairs on the effect of biomass on the wood panel industry?
As most biomass energy is derived from wood, it is only renewable as long as forests are controlled locally and managed in a sensitive way. We saw just a few weeks ago how exercised the public are about protecting our forests and woodland, when the Government tried to sell off our forests to the highest bidders. Even after the Government’s painful U-turn, the public still doubt whether the Government can be trusted with our forests.
The Government parties were keen to talk up their green credentials when they were in opposition, and we heard them today on aspiring to be the greenest Government ever. However, green government is about actually delivering a low-carbon future, not chasing headlines. It is about delivering low-carbon investment, not delaying on the green investment bank and dithering on feed-in tariffs. It is also about protecting our woodlands and green spaces, so that we leave the next generation a greener country than we inherited. It is slightly ironic that, in the UN international year of forests, when we are meant to be doing everything we can to protect against deforestation, the Government were considering selling them off and are still planning to sell off 40,000 hectares of public forests.
The debate has highlighted the clear need for a serious strategy to protect our forests and to do all that we can to increase them. As the report “Combating Climate Change: A Role for UK Forests”, commissioned by the Forestry Commission, shows, if an extra 4% of the UK’s land were planted with new woodland over the next 40 years, it could reduce our national carbon emissions by 10% by 2050.
We have already heard that Port Talbot’s Prenergy plant will burn around 3 million tonnes of wood per year. There are real concerns about where the wood will be sourced from, and the effect it will have on the UK’s wood stocks and the wood panel industry. Will the Minister give us details of the plans the Government have to ensure that wood for large-scale biomass will not lead to a drastic reduction in our woodland? What ongoing review and monitoring will he undertake of the sustainability criteria for timber used for biomass? What further work is he doing in the UK and with the EU on the sustainable use of biomass, to reduce the negative impacts on land use and food production, referred to by hon. Members today?
Will the Minister update us on the Government’s progress in imposing a UK domestic ban on illegally sourced timber imported to the UK? Finally, will he outline what plans the Government have to ensure that we enhance our public forests, in order to help to reduce our carbon emissions?
I would continue, but the debate has raised a great number of questions for the Minister and we are all keen to hear his response.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I am delighted to participate in the debate under your chairmanship, Mr Weir. I congratulate the right hon. Member for Stirling (Mrs McGuire) on securing the time. She has a commendable record for keeping the issue at the forefront of debate at Westminster. I had the opportunity to meet her and other colleagues in September for a productive meeting with the all-party group on wood panelling. I met industry representatives on numerous occasions before that, particularly while in Opposition.
A range of important issues has been raised, not only by the hon. Lady but by my hon. Friend the Member for Hexham (Guy Opperman), who is also an articulate champion, not just for his constituency but for this industry in particular. We also heard thoughtful speeches from the hon. Members for Clwyd South (Susan Elan Jones) and for Kilmarnock and Loudoun (Cathy Jamieson). I have anticipated in my remarks many points made in the debate and I will seek to address those questions raised as best as I can in the time that I have at the end.
I appreciate that very serious issues have been raised, and if I am not able to cover all of them in this time, I will be happy to follow up with more detailed answers. I can assure all hon. Members that I understand their concerns about the wood panel industry. The coalition Government value the significant investment made in the UK wood panel industry, and we certainly acknowledge the important benefits it delivers, including the real carbon benefits of locking carbon into new buildings. It also provides the benefit of offering jobs—skilled, sustainable jobs—right across the UK, often in rural areas where there is no alternative employment. I think it is not unfair to say that there has been an attitude of complacency in the past, and that the voice of this industry has not always been effectively heard. I am determined to listen.
The right hon. Member for Stirling raised the question at the outset of why the RHI impact assessment did not include the impact on the wood panelling industry. I would like to say, up front, that that is a very good point and I do not have a proper answer for her. She is right to raise it and I will pursue that issue as soon as I get back to the Department. I invite her to meet me so that we can go through the data. I can tell her, and the hon. Member for Liverpool, Wavertree (Luciana Berger), who also raised this matter, that in respect of the renewables obligation consultation there was a significant contribution from the wood panel industry, which set out its concerns along the lines that have been highlighted today. We are now working on guidance about what will be considered as waste and excluded from sustainability criteria. I will say more about that in the course of my remarks.
Mrs McGuire
I welcome the Minister’s frankness in admitting that there may have been an omission in terms of the impact assessment. I would be delighted, and I am sure that I speak on behalf of my colleagues, to meet him to see whether we can rebalance that impact assessment in a way that recognises the importance of the issue to the industry.
Gregory Barker
I look forward to meeting the right hon. Lady and going through those issues in more detail. Before I go into more substantive points about UK policy, may I also just echo the remarks made by the hon. Member for Liverpool, Wavertree and go on record to say that the UK welcomes 2011 as the international year of forests? This is an excellent opportunity to raise public awareness of the importance of forests—although I think that the coalition Government have done quite a good job of doing that already—and in tackling climate change, halting biodiversity loss and preserving the livelihoods of forest-dwelling peoples.
Forests have a dual role in helping us to reduce greenhouse gas emissions and to tackle climate change. First, forests act as carbon sinks, removing carbon dioxide through photosynthesis and storing it in plant and soil matter, but forests also contribute by providing wood for energy and renewable materials for construction and manufacturing, and reducing the use of fossil materials. However, deforestation is a very real risk that must be addressed. If the world’s growing demand for bio-energy and renewable materials were to lead to the clearing of forests, particularly primary forests, that would increase total global emissions dangerously and drive forward, rather than tackle, dangerous man-made climate change.
The coalition Government are committed to tackling the drivers of deforestation, in particular the global trade in illegal timber—an issue raised by the hon. Member for Liverpool, Wavertree. The international year of forests provides a useful platform to highlight our recent achievements in that area, particularly in terms of EU timber regulation. That regulation prohibits the first placing of illegal timber on the EU market, and will send a clear message to producer countries that illegal timber has no place in the UK market. That complements our wider efforts to improve forest governance in developing countries through the EU forest law enforcement, governance and trade action plan.
The international year of forests is also an excellent opportunity to promote the importance of sustainable forest management in building a greener, more equitable and sustainable future. To complement our work on tackling deforestation, the UK is working with the International Union for Conservation of Nature and other international partners to promote the role of forests in restoring degraded landscapes. The Forestry Commission is using its programme of educational, community and recreational events throughout 2011 to highlight the international year of forests. I am sure that those activities are going on in many of the constituencies of hon. Members who are present.
The hon. Member for Liverpool, Wavertree raised the issue of our clear ambition to be the greenest Government ever, which goes right to the heart of the coalition’s programme for Government. My right hon. Friend the Prime Minister has spelled that out on numerous occasions, but our ambitions go much further than our work to stop deforestation, critical though that is to us. We want to be a global leader in the world-wide transition to a low-carbon economy. We are committed to producing 15% of the UK’s energy from renewable sources by 2020, and to reducing our carbon emissions by 80% by 2050. Renewable energy, and bio-energy in particular, must play a very important role as we decarbonise our economy and seize opportunities to create new businesses, employment and long-term green prosperity in the UK.
Heat and electricity from biomass could provide nearly a third of UK needs from renewables by 2020, meeting approximately 4.5% of our overall energy demand. Bio-energy offers the rare benefit, for a renewable technology, of not being intermittent. It can generate electricity or heat on demand at any time of the day or night. The UK needs the flexibility and security that that supply brings. Moreover, bio-energy can provide significant new business and employment opportunities to the UK. For example, the expansion of biomass use in off-gas-grid areas of the UK will mean a growing order book for specialist boiler manufacturers, demand for new local businesses to provide installation and maintenance, and will create opportunities across the wood fuel supply production and distribution chain. Just last week, we set out a portfolio of major policies that will help us achieve that. Bio-energy will make a significant contribution to our decarbonisation plans, but that must not be at the expense of other jobs. I am very aware of unintended or perverse consequences and hon. Members present are perfectly entitled to raise those issues. We will work harder to look at the consequences for the wood panel industry. Many powerful arguments were made today, not least how it is better to lock up carbon rather than to burn it, and I am mindful of that.
Mrs McGuire
While welcoming future discussion and recognising that issues have been raised, is the Minister in a position to say to us today that he thinks there may be some flexibility in the way in which the RHI is being implemented to the current detriment to the wood panel industry? While discussions with the Minister are wonderful, I would like to push him that wee bit further to see what commitment he can give to us today.
Gregory Barker
I will develop my theme in my speech, but I think that there is a genuine point of disagreement in our approaches. I agree with the right hon. Lady; there is absolutely no excuse for not publishing the account that we take of the impact on the wood panel industry in the impact assessment, and we will address that. I am sure that there are ways that we can improve measures to mitigate the impact on the wood panel industry, and we are keen to see more wood used in houses. However, the difference between us may lie in the fact that, fundamentally, we believe that the market will respond with more supply, both domestically and globally. This is an immature market—this is a theme that I wish to develop—and the biomass industry in the UK has fallen to a very low level. Historically, we powered the country on biomass. I represent a constituency in East Sussex, the most wooded county in England. I know, just from my own experience, that the vast majority of woodland in that county has fallen into a state of disrepair and is not actively managed. There is significant scope to bring in new supply, both globally and in the UK, and I will come to that in more detail if I may.
Guy Opperman
Does the Minister not see that there is a real risk of the law of unintended consequences? If he does not address the problem of subsidised biomass and its effect, then the impact on the wood panel business will be significant and severe, and until he says something on that issue, we will struggle.
Gregory Barker
Let me make a little progress with my speech. I am getting slightly ahead of myself, and I will address those issues in the course of my remarks.
On Thursday, as hon. Members have said, we launched the world’s first incentive for renewable heat. That was an important step forward for an Administration who claim they want to be the greenest Government ever, and a genuine, tangible sign of walking the walk as well as talking the talk, of putting investment—money—where our mouth is.
The scheme will provide long-term support for renewable heat technologies, from ground-source heat pumps to wood-chip boilers. It will help drive a sevenfold increase in renewable heat over the coming decade, which will help shift what currently is a fringe option firmly into the mainstream. We expect the RHI to deliver an additional 57 TWh of renewable heat, bringing the total to 68 TWh by 2020 and saving 44 million tonnes of carbon by that year. It is part of a bigger picture, in that we expect 500,000 jobs to be created by the end of the decade in the renewables industry across heat, electricity and transport. The RHI alone could potentially stimulate billions of pounds of new capital investment.
We are reviewing the incentives for renewable electricity under the renewables obligation. The RO banding review will ensure that the level of support for biomass electricity reflects industry costs. It will also reflect the UK Government’s ambition for large-scale bio-electricity, which is being considered through an evidence-based review of biomass resources and their use, to be published in 2011. Analysis of the best use of biomass will form an integral part of that work. I would certainly welcome further contributions to it from hon. Members and the interests that they represent, because it needs to be evidence-based, and we are genuinely open-minded about it.
As I have just mentioned the RHI, I would like to take the opportunity to address the question of why we have decided that only renewable heat installations installed after 15 July 2009 will be rewarded. The RHI is a mechanism designed deliberately to bring forward sufficient new renewable heat to meet our renewables targets. The design was begun by the previous Government—I have to give them credit—and is not something that we dreamed up. It is not intended to be a retrospective reward mechanism for early adopters or existing users of renewable technologies. The justification for it was to pull in renewable heat technologies and renewable heat users that otherwise would not have moved in this direction.
Moreover, in the context of the current economic climate and the huge deficit that we inherited from the previous Government, it is vital that we maximise the value for money delivered by public expenditure. Existing renewable heat generators have already invested in the new technology without needing or expecting the support of a financial incentive, so while I can see why they could make a case for it, I am afraid that we would not consider extending the RHI to include installations prior to July 2009, as that would not be a prudent use of taxpayers’ money.
Susan Elan Jones
If plants ripped out existing equipment to access the subsidy, presumably they would be eligible. Of course, that is not the sort of thing that responsible plants would do, but it demonstrates the inequity of what the Minister is saying.
Gregory Barker
If it were simply a dodge to try to get around the regulations, they would have great difficulty in proving their case. If they were to upgrade their plant or adopt new technologies in a new installation, that would be a different proposition.
We recognise that mainstreaming bio-energy is not without risk—hon. Members have done a good job of outlining the risks. We acknowledge the critical importance of taking action to ensure that rapid growth in bio-energy does not result in loss of important habitat either at home or internationally, or the release of more carbon than we actually save. Hon. Members raised concerns about that. Biomass can be a low-carbon energy source, as the hon. Member for Liverpool, Wavertree said, but that requires it to be grown, harvested, processed and transported sustainably.
We are introducing mandatory sustainability criteria to ensure that the biomass power generation supported by the renewables obligation is genuinely sustainable. From April, generators will be required to report to Ofgem on their performance against a target of 60% greenhouse gas emissions savings compared with fossil fuel use, and on land criteria. Following a transition phase, we intend to make those criteria mandatory from 2013 for all generators of 1 MW capacity and above. We expect that similar standards—again, mandatory sustainability criteria—will be introduced for biomass used for heat under the renewable heat incentive from 2013.
Sustainable forest management is a critical part of biomass sustainability. Therefore, the Government are actively working with stakeholders to develop an approach that will robustly protect not just UK forests but global forests, and enable UK woodlands to come under active management, with the many benefits that that will bring not just to those who use the products but also in terms of biodiversity and recreational benefits for the communities that live around them.
Mrs McGuire
I do not believe that any of us who are participating in this debate have any problems with some of the good things that the Minister has identified, but I would like to draw him back to the fundamental questions posed by the debate. The first is the impact when wood that could be utilised for other purposes is burned in biomass-powered generators, and the second—this was my final question—was about jobs, which the Minister mentioned. Is he willing to recognise that there will be collateral damage to an important rural industry which links into all the forestry management that he has spoken about, in order to get the other elements of his policy through? I do not believe that any of us have any problems with some of the good things that he is talking about, but we need to draw him back to the crucial question and the nub of the debate.
Gregory Barker
Let us be absolutely clear: the coalition values the jobs in the wood panelling industry, as we value all jobs. It is certainly not our aim—unintended or otherwise—to see those jobs disappear. That neatly brings me on to my next point, which is about the impact of other wood-using industries on wood prices and trends, and competition for a limited resource.
We recognise that the increased use of wood for energy risks negative impacts on other potential users of wood. We understand that the wood panel industry is facing more competition for their raw materials. We also want more wood to be used in the construction of homes. Our analysis shows that the deliveries to wood fuel markets are increasing from a very low base. In 2005, just 100,000 green tonnes of softwood were delivered to fuel markets, accounting for just 1.2% of total softwood deliveries. In 2009, that had increased to only 600,000 green tonnes, less than 7.5% of total softwood deliveries.
In real terms—perhaps this is the most telling point—the price of softwood saw-logs increased by 14% over the five-year period ending in September 2010. I have not done the arithmetic, but I would have thought that the rise was below inflation over that period. I apologise that I do not have more recent statistics. Obviously, this is a dynamic model, and we will continue to inform Members. I do not think anyone could argue that that represents significant inflation in costs. If there were a problem of the magnitude hon. Members have described, it would be reflected in the price, but, clearly, we have not seen that to date. However, I accept that that is clearly something that we will have to watch.
Guy Opperman
Surely it is unarguable that prices have risen, and it is surely without doubt that the opportunities to proceed on the basis that the Minister is talking about, although entirely laudable, as we all accept, are limited by the amount of wood in this country that can be produced and sold on.
I have one final point, but I will be brief—
Guy Opperman
The Minister has plenty of time. What is his expectation of how much wood will be sold?
Gregory Barker
I do not agree with my hon. Friend. Yes, there has been a rise in wood prices, but my maths tells me—I am happy to be corrected if I am wrong—that it is below the inflation rate. Wood is a commodity like everything else, but a 14% rise over five years is not alone a cause for concern. Over 20 years, the real-terms price of softwood saw-logs has fallen by almost 46%. The lowest value was reached in March 2009, so the pricing indicators do not support his argument.
Price have recovered slightly since March 2009, but the bottom line is that even if prices increase—I anticipate that they will—we are starting from a very low base. In real terms, they are substantially lower now than 20 years ago.
Mrs McGuire
I hope that I highlighted some of the information that DECC has on forward supply of and demand for wood. It is unhelpful to be historic about that when all the analyses show that the demand for wood will outstrip supply.
Another element is that one part of the market—the demand side—is being subsidised when other elements of the market are not. I know that the Minister is a great believer in competition, but surely the Government are putting the wood panel industry in an unfair position when its competitors are being subsidised for the same products.
Gregory Barker
It must be remembered that timber prices are set by global markets, not solely by national Government energy incentives. According to some sources, international energy markets are already influencing timber prices. There was a forecasted 10% drop in log prices for 2010, but instead they were higher than in 2008, which was probably due to increased demand for wood fuel. I assure the hon. Lady that we are looking at that carefully. In addition, we are very aware that wood fuel is increasingly traded as a global commodity, so UK wood supplies can and will be exported for energy use in other countries if that will deliver a better price, and we may import timber from abroad. Nevertheless, as I stated in my introduction, the value of the wood panel industry in terms of green jobs and the carbon stored in its product is significant, and we are mindful of that. That is why the Government are taking action to reduce those displacement issues.
Our actions fall into three main areas: increasing the use of biomass feedstocks that the wood panel industry has no use for; bringing more wood supplies forward; and diverting more waste from UK landfill. To increase the use of other biomass—for example, food waste and anaerobic digestion—it is important to look beyond just wood when sourcing biomass. Biomass suitable for energy generation may come from a wide range of plant and animal materials, many of which are unsuitable as raw materials for our wood processing industries. They include perennial energy crops, such as Miscanthus grass and short-rotation coppiced willow, which can be grown on lower grade land. Similarly, dry farming residues, such as straw, can be combusted for energy.
The Government support perennial energy crops, so long as they do not displace food crops. The renewables obligation provides additional support for energy crops over other biomass feedstocks. That uplift of half a renewable obligation certificate aims to stimulate interest in energy crops grown by the power generation sector, and to help to develop the fuel supply chain.
Support is also provided directly to farmers through the energy crops scheme, which is part of DEFRA's rural development programme for England. The ECS seeks to remove one of the most significant barriers for prospective energy crop growers—the high initial cost of establishing new plantations. The ECS provides grants that reimburse 50% of planting costs.
Another important area is the use of wet biomass residues, such as food waste, sewage and animal manure, that can be anaerobically digested to produce biogas, which can then be used to produce heat and electricity. The UK produces about 100 million tonnes of wet organic material that is suitable for treatment by AD. That includes up to 20 million tonnes of food waste from households and industry; 90 million tonnes of agriculture by-products, such as manure and slurry; and 1.7 million tonnes of sewage sludge. By diverting those wet organic wastes into energy, we can stop slurry surface water run-off polluting our rivers, reduce pressure on landfill sites, and avoid methane emissions, which are 23 times worse than those of CO2 . The Government are working with the industry to draw up a joint programme to tackle the barriers to the deployment of AD. That will be published in May 2011. We are also looking at the feed-in tariff scheme to see whether the tariff rates are enough to make farm-based AD worthwhile.
What about bringing more wood supplies forward? A further key way to reduce the impact on the UK wood processing industries is to bring new supplies of wood to the UK marketplace. There is a large underused bio-energy resource in the UK. Around 40% of the UK's forest and woodlands, measured by land area, are not currently under an active management plan, as the hon. Member for Brecon and Radnorshire (Roger Williams) said. When woodland becomes overly mature, leaf cover prevents sunlight from reaching the forest floor, and the biodiversity is poor. Sustainable management would allow a wider range of shrubs, birds, trees and bees to thrive, and at the same time bring more UK timber and wood supplies to the market, and generate new business, jobs and opportunities.
The Forestry Commission is developing a wood fuel implementation plan, to be launched later this year. It will set out actions to bring forward an additional 2 million green tonnes of wood from unmanaged forests and other sources by 2020. The commission is also developing a wood fuel woodland improvement grant to assist harvesting and marketing activity. Key features of the new grant are that the wood fuel WIG will offer a 60% contribution to costs, and can support forest roads, access tracks and other related harvesting infrastructure. Further details will be published later this year.
Alongside the development of UK woodlands, developing the biomass import market and securing a healthy share of that for the UK will be essential. We have estimated that a global market of up to 50 million oven-dried tonnes annually will be available to the UK by 2020. I recognise that the wood panel industry is rightly proud of the use it makes of the UK's waste wood. It is estimated that around 4.5 million tonnes of wood waste are generated in the UK every year, of which more than 1 million tonnes, mainly from packaging waste and wooden pallets, are recycled by the panel-manufacturing industry. But we estimate that a considerable quantity is still going to UK landfill.
Wood in landfill is particularly dangerous because it decays and generates methane, so the Government are actively considering how best to make further reductions in the amount of waste going to landfill as part of the review of waste policies, which is due to conclude in the spring. It will look at all aspects of waste policy and delivery in England, including the role of energy from waste. The aim is to ensure that we are on the right path towards a zero waste economy.
In particular, we want to address the priority of moving wood up the waste hierarchy so that it best delivers the right environmental outcome. The waste hierarchy will be legally binding in the UK, so we will seek better to address the potential for diverting treated wood waste, which is not suitable for use in the wood processing industries, from landfill to energy recovery.
In conclusion, the wood panel industry has an important and valuable role to play in the UK's low carbon economy. I have set out today the proactive actions that we are taking to bring new biomass to the UK market, and to ensure that we have the supply to meet demand. We are increasing the use of biomass, other than clean wood, for energy; we are bringing forward more wood supplies; and we are diverting more waste from landfill. But we are open to new ideas. I do not pretend that we have the perfect solution yet, and DECC would very much welcome continuing engagement with the wood panel industry.
I thank all hon. Members who have participated in an important and valuable debate. The agenda will certainly continue beyond today.
Health Care (West Cumbria)
(13 years, 7 months ago)
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Mr Jamie Reed (Copeland) (Lab)
I am pleased to have secured this debate because few things, if anything, are more important to my constituents and the wider population of west Cumbria than the future of the NHS and local health care services.
Mr Reed
Before continuing, I ought to declare some interests. I shall be talking about the West Cumberland hospital today. Not only was I born there, but so was my wife and our four children; my nieces and nephews were all born there; and about a year ago it saved my life.
At best, the future provision of health care services in west Cumbria—indeed, in Cumbria in its entirety—is confused. Given the majority of representations that I have received, from ordinary people and medical professionals, at worst it is in crisis. Before the election, and immediately after it, the development of health care services in Cumbria was praised by the Secretary of State for Health and those sympathetic to his views as a model for the rest of the country. I shall return to this aspect in due course, but suffice it to say that the Secretary of State has stopped using Cumbria as an example of best practice; surely even he realises the chaos that is being caused there by the top-down, unwanted and unwarranted reorganisation of the NHS that he is inflicting on us.
First I shall give a brief history. In 2007-08, NHS Cumbria, the primary care trust for the area, undertook a huge public consultation under the closer to home initiative. It was an enormous task; 140,000 people contributed to the consultation, a huge proportion for any consultation, let alone for a county with a total population of just under half a million. It identified the need to redevelop the West Cumberland hospital and to integrate and improve primary care services as part of the closer to home deal.
During a period of record and sustained funding for the NHS, the public reluctantly agreed to a reduction in the number of beds at the West Cumberland hospital. I have no doubt that the Minister will say that beds do not equal services, and I accept that from the outset. Negotiations with the public were incredibly difficult, but the change was accepted with two provisos. First, the reduction in the number of beds would result in more complex surgery and tertiary-level care coming back to Cumbria from the north-east, taking place at the Cumberland infirmary in Carlisle; that would reduce travelling times for people in my constituency and west Cumbria and help with family concerns for those requiring tertiary-level services.
Secondly, the reduction would effectively result in the building of a new hospital on the site of the West Cumberland hospital. The hospital would retain its acute status, its consultant-led maternity, paediatric and anaesthesiology services, develop specialisms not available at Carlisle, and develop its teaching function. Crucially, it would be surrounded by a network of refurbished or even entirely rebuilt community hospitals in Millom, Keswick, Cockermouth and Maryport, with a brand-new health centre in Cleator Moor; together, they would be able to deal with an increased level of primary-care needs, to allocate resources better, to sign-post acute care when necessary and, importantly, to provide care closer to home.
After real difficulties, hospital consultants from both hospitals in north Cumbria—the West Cumberland hospital in Whitehaven and the Cumberland infirmary in Carlisle—began to forge an effective working relationship with local GPs. I brokered many of their meetings, chaired them and tried to help navigate a route towards an integrated provision of local health services in west Cumbria—one that was outcomes driven in the best interests of patients and that would underpin the future professional and economic stability, viability and sustainability of the local NHS. I believe that it was achieved, albeit imperfectly.
Collectively, the local community and primary and acute medical practitioners were developing a model that would best fit Cumbria. I am delighted to see my hon. Friend the Member for Workington (Tony Cunningham); he had a huge part to play in those developments. So advanced was the relationship, and so strong was the plan, that we were able to insist that a publicly funded, privately operated clinical assessment and treatment centre was not introduced in the area. We knew that it would destabilise the local NHS. My right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), then Secretary of State for Health, listened and did as we asked. It seems that times have changed—and significantly for the worse.
A funding package was developed for west Cumbria, through the west Cumbria strategic forum, and the principle of “west Cumbria proofing” was consistently implemented by the previous Government. That funding was meant to provide £100 million for the West Cumberland hospital and up to £80 million for the community health facilities that I mentioned earlier. Do the Government and the Department of Health remain committed to “west Cumbria proofing”, and the memorandum of agreement that underpinned it?
After the election, these moneys were arbitrarily withdrawn, despite the fact that demolition had already begun on the site of the West Cumberland hospital. The events in my constituency on 2 June 2010 caused me to ask the Prime Minister to visit the hospital and to see for himself the extraordinary clinical work being undertaken by the accident and emergency team in the face of quite unprecedented events. I also used the opportunity to lobby for the money that had been taken from us. Eventually, the Department of Health returned £70 million to the project.
John Stevenson (Carlisle) (Con)
Finance is obviously an important part of health care in north Cumbria. Does the hon. Gentleman agree that the PFI scheme has been a burden to the area?
Mr Reed
I would like to examine our PFI scheme forensically and try to discover why other PFI schemes around the country work so well. What is it about the Carlisle scheme that causes such difficulties for the health economy of our area? However, the burdens that it imposes pale in comparison with the GP fundholding system that we face.
The North Cumbria University Hospitals NHS Trust remains committed to its £20 million investment. However, the abolition of the north-west regional development agency and the instruction from Downing street that incomplete projects were to have RDA funding withdrawn has led to a £10 million shortfall in the new-build budget. Will the Minister please reinstate that missing £10 million? If not, will she and her Department help me to identify money to cover that shortfall from other sources—even, perhaps, not from the Department of Health? Can she help expedite the detailed business case approval for the West Cumberland hospital?
Already £10 million down, the trust and NHS Cumbria have also been instructed to make 4% annual recurring cuts. That would be an incredibly difficult situation for the west Cumbrian health economy at any time, but we have not yet approached the real horror that threatens to hole it below the waterline.
At Prime Minister’s Question Time today, the Prime Minister made a Freudian slip when referring to GP fundholding. The Department of Health prefers to call it GP commissioning, but GP fundholding is the practice that brought hospitals to their knees and that almost bankrupted the NHS in the 1980s and 1990s. That is precisely what GP commissioning is. There is all the difference between GPs commissioning and designing services in an integrated way with their hospital colleagues, and GPs being forced to hold the purse strings for the provision of each hospital service upon which their patients rely.
Will the Minister tell us what limit, if any, will be placed on GPs’ remuneration under the new system? Does she have any fears relating to soaring salaries and the fact that the bond of trust between patient and doctor could become severed as a result? Does she have any concerns with regard to the imbalance now between GPs and their acute colleagues and does she think that that will affect future recruitment and the provision of services within the NHS?
With GP fundholding effectively in place in Cumbria—in shadow form—we are witnessing a massive cut to the North Cumbria University Hospitals NHS Trust and to the West Cumberland hospital. Last year, the hospitals trust provided acute hospital services worth some £183 million across its sites. Under GP fundholding, that is being reduced, in the space of one year, to £153 million, which is bound to affect the provision of acute hospital services at the West Cumberland hospital. Does the Minister agree that such a financial hit cannot be absorbed without affecting front-line services?
The shortfall has plunged the trust into chaos. It is now unable, not unreasonably, to meet the foundation trust status qualifying criteria deadline of 2013-14 and that has caused it to seek a merger with another trust or any other willing provider. I hope that the Minister will be able to tell us categorically what the Department means by “any other willing provider”. Minutes from meetings of senior consultants across the North Cumbria University Hospitals NHS Trust, which have been leaked to me, show that those consultants fear that this could result in the closure of the West Cumberland hospital. That would be—as the cuts are—the direct consequence of centrally imposed, top-down Government policy in the NHS.
Will the Minister guarantee that she will not let that happen and that the current level of services will only be added to and not taken away from? Will she agree to arrange a meeting between the Secretary of State, concerned local clinicians and me to hear the case in detail? Will she also grant the trust extra time to meet the foundation trust qualifying deadline so that a merger can be avoided? A merger of trusts is not in the interests of the trust itself or any other trust being asked to take it on. If not, will she guarantee that no other trust or willing service provider will reduce the services provided by the West Cumberland hospital? In short, will she commit today to ensure the delivery of the closer to home programme, which my constituents and those of my hon. Friend the Member for Workington have been consulted on and reached agreement on?
What of our local community hospitals and planned health centre? Will the Minister guarantee that the money for those facilities will be provided by Government, or financially facilitated, very soon, so that these long promised and keenly anticipated investments can take place? What is the status of the programme to rebuild and replace our community hospitals in west Cumbria and provide a new health centre in Cleator Moor? Does the Minister agree that the closer to home initiative will collapse if these facilities are not forthcoming and that a deal will then have been reneged upon? Were that to happen, the sense of betrayal would be profound and the consequences significant.
The West Cumberland hospital was the first new hospital in this country to be built by the NHS after its creation. Right now, it risks becoming the first casualty of what many see as the stealth privatisation of the NHS by a right-wing Government implementing centrally driven health policies that command no democratic mandate or clinical support. As I speak, Bevan will be turning in his grave. I am asking for help, compromise and understanding of the problems facing the future of health service provision in west Cumbria. There is still time to put that right and I hope that the Minister and the Government will see sense.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
It is a pleasure to serve under your chairmanship for the first time, Mr Weir. I congratulate the hon. Member for Copeland (Mr Reed) on securing this debate. My goodness, it is quite a thing that he, his wife and his four children were all born in the West Cumberland hospital. The hospital also saved his life. Despite our political differences, I am sure that he will join me in saying that whenever we debate the NHS, we always pay tribute to the staff who work in it at every level. We tend to talk about doctors and nurses, but there are many members of staff who ensure the safe delivery of children and who save lives. I am sure that the hon. Gentleman would like to associate himself with those comments.
The hon. Gentleman has been actively involved in campaigning for the redevelopment of West Cumberland hospital, and he is also a strong supporter of community hospitals. He spoke with some passion about his role and his long history in that regard.
Tony Cunningham (Workington) (Lab)
The Minister mentioned community hospitals. There is one in my constituency at Cockermouth, and for a considerable period the authorities have been promising to rebuild it. After the terrible flooding in 2009, parts of the hospital are in portakabins. We are desperate for the new hospital. The funding and the planning permission are in place, yet we are still waiting for a decision. Will the Minister please look into that situation—she does not have to do it now—because the people of Cockermouth are desperate to get their new hospital?
Anne Milton
I thank the hon. Gentleman for his remarks. It is frustrating for local people when they are waiting for decisions to be made. General elections come along, disrupt things and, sadly, slow down the process even more. I can understand his constituents’ frustration. Later in my remarks, I will address how we can move forward.
The hon. Member for Copeland was right to make the point that local NHS organisations are precious not just for the services that they provide, but for the employment and economic support that they bring to the area. I note, in particular, his work with the west Cumbria strategic forum and the development of the energy coast master plan for west Cumbria. The development of local NHS services plays an important role in that.
The hon. Gentleman will also know that in west Cumbria, as in other parts of the country, the NHS is under tremendous financial pressure. Indeed, he alluded to that. We are where we are; we have inherited a substantial deficit. Both parties acknowledge the fact that we face some serious economic challenges, and we are determined to find £20 billion in efficiency savings so that we can then reinvest in quality care, and the need to do that is real and urgent. Such pressures would have existed whoever was in government. The fact that we have protected NHS budgets is an important step in ensuring that the challenges facing the NHS are slightly less than those facing other areas. None the less, the upshot is that every NHS trust in the country will have to make tough choices to put health care on a sustainable footing, and that is what is happening in west Cumbria.
I understand that the North Cumbria University Hospitals NHS Trust has struggled financially for a number of years. Clearly, there are some unresolved issues that people are now keen to sort out. Like the country as a whole, the trust is on a journey to restore balance to its finances, and we need to consider how we get better value for money. When I visit hospitals and trusts, it is interesting to see how substantial amounts of money have been taken out of costs by small changes in the way services are delivered. Although this is a challenge, it is also an opportunity, and I am impressed with the innovation that people are demonstrating.
As the hon. Gentleman is aware, the trust concluded in February 2011 that it would not be in a financially viable position for achieving independent foundation trust status by the 2014 deadline. It has made the difficult choice to pursue an arrangement with an existing foundation trust, through merger or acquisition, to ensure its ability to deliver high quality services in the future. The trust reached that decision for a number of reasons, including reduced contract income as more health care is provided outside acute settings, historical debts, costs associated with the private finance initiative scheme, to which the hon. Gentleman alluded, and ongoing requirements to meet cost saving targets.
Having trained as a nurse and worked in the NHS for 25 years, including as a district nurse, I am acutely aware that although our focus is always on acute care the majority of health care is delivered outside acute settings. It is the tension and the co-operation between those two elements of health care that we must now finally get right. The trust must address the issues that I have just mentioned. In particular, it must identify and agree an affordable clinical model that will deliver sustainable high-quality services. It is no good going for short-term gains. We need the process to be sustainable and lasting.
The hon. Gentleman will know that, back in 2007, the NHS in Cumbria set out its plan to reduce unnecessary hospital admissions by looking after people closer to their homes, which is where they want to be. The closer to home programme supported the development of community-based services and the redevelopment of acute facilities to meet local needs. In support of that programme in Cumbria, there is the redevelopment of West Cumberland hospital, which will deliver acute services with support from a wider range of community services.
Following recommendations by the national clinical advisory team last year, I understand that the north Cumbria health economy is now working to develop an affordable clinical strategy, covering primary, secondary and acute hospital services. I understand that the strategy will be published this summer. I suspect that it cannot come soon enough for the hon. Gentleman and many others in the area. In many ways, the strategy will build on the closer to home programme by considering how local health care services can be delivered more affordably, while keeping service quality at the very highest level, which is critical. As part of that process, it is true that the review group is looking at what will happen to acute services at West Cumberland hospital.
During his tour of hospitals in Cumbria last year, my right hon. Friend the Secretary of State for Health acknowledged the importance of West Cumberland hospital to the local people. That view is shared by all of us and it is being taken into account by the Department of Health, the North West strategic health authority and the NHS in Cumbria, which is working on the full business case for the redevelopment of the hospital. That business case will need to reflect the clinical strategy. It is very important that these decisions are driven by clinical need and that they meet the needs of local people.
Mr Reed
The Minister talked about the trust’s unique responsibilities. Of course, one of the unique responsibilities that the trust must address is the unique service that west Cumbria provides to this country in the form of the nuclear industry, and the unique challenges that the industry poses for the trust. It is in the interests not only of my constituents but of the whole country that the issue is addressed, and it must be done on a cross-party basis. Would the hon. Lady care to say something about that?
Anne Milton
Yes. I thank the hon. Gentleman for that intervention. He is absolutely right to tie up the facts. As politicians, we tend to use the word “sustainable” in a rather flippant way, but what he has just said is what “sustainability” should be about. It should take account of the changing needs of the area; we should be building services not for the next five years but for the next 10, 20 or 30 years.
Tension between acute services and community services has always existed, as has tension between acute services and specialist services. If I think back to my own time in the NHS 30 or 40 years ago—I am very old and it was a long time ago—I recall that regional centres for neurosurgery were being developed. Specialist services need to be provided in specialist centres. Local people want to know that they can go to their local hospital for the majority of things that are wrong with them. That is important. There needs to be a clinical driver in the process, to ensure that people get the quality of care that they need. However, one also needs to take account of people’s wants and desires, and they want care on their doorstep.
The hon. Gentleman raised a number of issues. I recommend that he attends the debate that is happening elsewhere in the House today if he wants a fuller discussion of NHS services. He wanted a number of guarantees from me, so he wanted a number of guarantees from the centre and yet in the same breath he talked about “top-down” and “centrally imposed” diktats. Again, that is one of the key issues, because the centre is never very good at making local decisions. What matters locally is that changes and discussions have the support of clinicians, and ideally are led by clinicians. Those changes and discussions must also have the confidence of local people. That confidence is possibly what has suffered in the past.
The hon. Gentleman talked a little about GP commissioning, GP fundholding and “any other willing provider”. He asked what “any other willing provider” means. I suggest that he goes back to his own party to ask that question, because using “any other willing provider” was at one point its policy. I feel very strongly that the reforms in the NHS will bring decisions about commissioning and getting care right for people absolutely where they should be: with the GPs who know and understand their local communities. It is extremely important that GPs’ inputs and commissioning skills are used to the fullest.
I am told that the national clinical advisory team is reviewing the draft strategy and that a final version will be put to the strategic health authority in the months ahead. In addition, the full business case for West Cumberland hospital, together with the business cases for development of community services, will need to be considered alongside the final clinical strategy. I know that the delay is frustrating, but it is absolutely vital if the decisions are to be made. I or my ministerial colleagues will be very happy to have a meeting with the hon. Member for Copeland. In fact, it might be useful if a meeting was set up with a number of MPs from the area, to thrash out some of the more difficult issues when we have slightly more time to do so.
The process must be clinically led and choices must be made on clinical grounds. The primary care trust must also be satisfied that proposals are properly costed and can deliver sustainable solutions and a sustainable model of care for Cumbria. However, I emphasise that no final decisions have yet been made.
This is an important period in the story of the NHS. An ageing population, rising demand and increasing costs are combining to make it a uniquely challenging time. It is always challenging to deliver health care, with rising expectations and rising demands. That means that all parts of the country must look critically at how they can make the best use of resources to deliver effective health care, in whatever setting it can be most effectively delivered. It also means more care being provided in the home and in the community. I think most people see that development as a positive step, and there must be support for it. The difficulty is that realising cost savings ultimately means changing hospital services as demand changes. However, the NHS actually has a good history and a good record on evolving and changing to meet changes in demand and patient choice.
Tony Cunningham
I quite agree with the Minister, and we understand why there need to be more services in the community. However, the point that I was trying to make in my earlier intervention is that we are desperately in need of a new community hospital in Cockermouth. If we are to have acute services at the West Cumberland hospital, we need up-to-date modern community hospitals that can do the sort of work that she is talking about. Will she at least undertake to look personally into why there is such a delay in the development of the community hospital in Cockermouth?
Anne Milton
Yes. I thank the hon. Gentleman for that intervention and I understand completely his passion on the subject. It is terribly frustrating to wait for something and I will ensure that we come back to him specifically on that point, because the hospital has been delayed for too long.
Anne Milton
Our ministerial doors are open, so I urge Members to set up a meeting to thrash out some of the issues that we have discussed today. Obviously, no final decisions have been made yet and we are waiting for reviews to be completed, so that all the relevant information is on the table. However, it is terribly important that local politicians feel confidence in the process, which must always be led by clinical needs, and feel that they can bring the public with them.
It is not an easy time in west Cumbria. Change is not easy and we are in a difficult financial climate. However, change requires proper scrutiny and this debate has been an opportunity for some of that scrutiny. As I have said, change also requires public engagement. I hope—indeed, I am sure—that the hon. Member for Copeland and his colleagues in the area will play their part in making change happen and ensuring that there is public engagement with it.
School Crossing Patrols (Dorset)
(13 years, 7 months ago)
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Annette Brooke (Mid Dorset and North Poole) (LD)
It is a pleasure to serve under your chairmanship, Mr Weir. I am very pleased to have secured this debate, because parents across Dorset are deeply concerned about the county council’s proposals. It is true to say that my hon. Friend the Member for South Dorset (Richard Drax) and I will be speaking today on behalf of thousands of parents.
I understand that 2011-2020 is the United Nations decade of action for road safety, and that in Great Britain pedestrian injury is the leading cause of accidental death among children. Each year, 5,000 children under 16 are seriously injured or die on Britain’s roads. The incident rate for children peaks between 8 am and 9 am, when they are travelling to school, and again at 3 pm when they are on their way home. Incidents on school journeys account for 14.6% of all five and six-year-old casualties, 21% of all eight to 11-year-old casualties and 23.9% of all 12 to 15-year-old casualties. Although the United Kingdom has the second lowest road death rate in the EU, its child pedestrian death rate is worse than in 10 other EU countries, and eight times higher than in Sweden.
Research by Royal Holloway, university of London shows that children are unable to accurately judge the speed of vehicles travelling at more than 20 miles per hour. The study found that children aged six to 11 suffered from speed illusion, which means that they cannot make a reliable guess at a car’s speed if it is going at more than 20 miles per hour, unlike adults, who accurately judge speeds of up to 50 miles per hour. Since 2003, death and injury rates have fallen every year, but road safety groups fear that that trend could end if school crossing patrols were axed.
The Minister will be aware that several authorities, including Dorset, propose changes in their provision of school crossing patrols. Dorset county council proposes to cut 65 jobs and save £200,000 by not paying for lollipop patrols, at least eight of which are in my constituency. Other Dorset councils do not propose to make cuts in the service. Bournemouth council says that it has no plans to cut funding to its 46 crossing patrols, and Poole has no current plans to change its service, which employs 26 people, plus five relief staff to help children to cross the road. Incidentally, neither Poole nor Bournemouth proposes to close any libraries, whereas Dorset proposes to close 20 out of 34.
Of the Dorset county council sites, 55 meet the national criteria for the provision of such crossings. The county council’s total budget is about £273 million, and although the council had a better financial settlement than most other councils, it still has to find £31 million of savings this next financial year. However, the benefits of saving £200,000 in this way are minimal compared with the wider costs placed upon communities.
The council insists that its proposal to stop funding the salaries of school crossing patrol guards does not amount to a withdrawal of the service, as it would retain the management, supervision and training responsibility for it. Schools and communities are being given until March 2012 to explore how they can take over the patrols themselves, and it has been suggested that volunteers could come forward to take over the jobs, or that additional funding streams could be tapped.
I do not consider that the service could be run reliably by volunteers, because of what the job entails: getting up early in the morning in all weathers; an absolute commitment to be there on time morning and afternoon; and sometimes being placed in a dangerous environment with cars not stopping when requested. In recent years, we have rightly been honouring paid lollipop men and women for their sterling service. The job is very different from that of volunteering in a library. The county council acknowledges that parents can, on an ad hoc basis, escort groups of children across the road, that its road safety team can provide guidance on the safest way to do that, but that the parents cannot legally order traffic to stop. So that does not sound like a permanent solution.
Should, and can, schools find the money from their budgets to pay the £3,000 salary per year? The county council in its report says that schools cannot use their devolved budgets to pay the salaries. So as to provide full clarification, will the Minister answer the following questions, or obtain clear answers from his colleagues in the Department for Education? Are there rules that prohibit a school using some of its delegated school funding for the salary of school crossing patrol staff? Is there any school funding apart from parent-teacher association funds that could be legally used for such purposes?
Even if funds legally could be used, it seems immoral that children should have less spent on their education just because their school is located on a busy road. One of the school crossing patrols in my constituency is for a very small village school, which has about 65 or 69 pupils and is on a busy road, and it would be untenable for a small school such as that to find money within its budget. At any rate, there would still be a cut in front-line education services, which surely goes against the principle of maintaining such services.
The other suggestion is that money could be raised through the parent-teacher association. That, I suggest, is not possible for a small school and, as some PTAs are in a better position than others to raise money from parents, it could lead to an inequitable situation, with deprived areas losing their crossings while affluent areas were able to maintain theirs.
Another option is for a parish or town council to fund the crossing. In my constituency two crossings are under threat—a £6,000 bill—and the parish council’s total budget is £30,000, so I really do not think that the Secretary of State for Communities and Local Government would be pleased with the size of the precept that would be necessary. Another parish has three crossings, but is fully committed to supporting an important youth project and hence cannot possibly fund the crossings. The county council’s report says:
“If no funds or volunteers are forthcoming from the local community then as long as the site still meets national criteria it would remain ‘dormant’.”
That is totally unacceptable, and is incompatible with other Government policies. The Education Act 1996 places upon local authorities the obligation to promote sustainable travel to school, and to produce a strategy for developing the sustainable travel and transportation infrastructure. To what extent does the Minister believe that the removal of funding for school crossing patrols conflicts with those obligations?
Dorset county council makes much of the fact that it is parents and carers who are responsible for the safety of their children but, given that in many families both parents work, if the safe crossing point were not there, I believe that there would be a greater incentive for parents to take their children to school by car. The county council, however, says that there is no evidence that more children would be driven to school if the crossings were not staffed. What does the Minister think, and how does he believe that the lack of a safe crossing point will enhance walk to school programmes? In addition, the Government are encouraging single parents to return to work while their children are of school age and that, I suggest, is another conflict of policy.
Dorset county council says that there is no evidence that child pedestrian casualties will increase if school crossing patrol sites are not staffed. I would be interested in the Minister’s comments on the evidence, especially in light of the statistics that I quoted at the beginning of the debate. What obligations, statutory and moral, do local authorities have to provide safe crossings for pedestrians, including, but not limited to, children and adults walking to school? Since Dorset county council is proposing a blanket removal of all its school crossing patrols, and says that if a community solution is not found the crossings will be “dormant”, should there not have been a risk assessment of the 55 patrols that meet the national criteria?
The roads through communities in my constituency are heavily trafficked, which, as the Minister will be aware, is due to the nature of Dorset’s road system. For example, one area that has two patrol crossings on the A351 carries 26,000 vehicles per day at peak season. The county council installed a pelican crossing. In January 2009, it decided that the pelican crossing alone was not safe and retained the patrol crossing person at that point. Has it become more safe since then? Quite the contrary, I would argue.
Lytchett Matravers has a road that is incredibly busy and dangerous for parents and children to cross. In Colehill, three crossing patrols serve five schools. Without a crossing, parents cannot get a child to the middle school and one to a first school on time. The county council recently spent £28,000 on a cycleway and pavement to help to support the walk to school programme, but parents and children reach the end of the pavement and find no safe point to cross the road. Corfe Mullen parish council has vehemently opposed the cut, making the point that children’s safety is paramount.
What additional powers would be needed to ensure that local authorities fund school crossings that are shown to meet the agreed national criteria? I am beginning to conclude that the power should not be discretionary, and I point out that if a few authorities cut school crossing patrols this year, it could become widespread across the country, which would be of great concern.
We are discussing vulnerable children who should be walking and cycling to school where practicable. The cut is small in relation to the county council’s budget, achieves nothing and destroys a lot. I hope that the Minister will respond with some facts and figures that will help to persuade the county council that it should find savings elsewhere.
Richard Drax (South Dorset) (Con)
Forgive my voice, Mr Weir. It is a bit croaky, so I will try to speak up. I pay tribute to my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) for securing this debate. It is an excellent topic that affects Dorset. My constituency is more rural than hers, and its nature, topography and make-up demand that lollipop men and women should stay. Many of my local schools are stuck in remote communities. We do not have motorways—we have one dual carriageway, and we hope to have a new relief road—and many schools are at the end of cul-de-sacs or rutted roads, often in ill repair, particularly in the winter months. Cars come flying down those roads at night when children are going home and in the morning when they are going to school, during the rush periods when people try to get between their rural homes and their places of work.
I suspect and fear that the move by the county council will have unintended consequences. As my hon. Friend said, tough spending cuts have, of necessity, been imposed on our county councils. To ease constraints, the Government have removed ring-fencing from local authority grants so that councils can set their own priorities. However, it was not expected that councils would downgrade the importance of road safety.
Tackling road child casualties is a stated priority for this Government and is the subject of recent new initiatives. As the Under-Secretary of State for Transport, the hon. Member for Hemel Hempstead (Mike Penning), said in a recent interview with The Daily Telegraph,
“We would expect that road safety would remain a priority for local communities and that local spending would reflect that”,
yet in Dorset, in order to cut £200,000, a tiny portion of the county council’s huge budget, more than 60 lollipop wardens will go, a decision that was reaffirmed at a full council meeting on 17 February.
As my hon. Friend said, the Government suggest that that role should be taken over by schools, charities and parish councils, but I argue, as she did, that it is not a volunteer role. In the past year, one lollipop person in the United Kingdom was killed, two more were seriously injured and several more were hurt.
The School Crossing Patrol Order 1954 introduced the first lollipop warden to our streets, and the benefits were crystal clear. It was never thought necessary to make their employment compulsory. As a result, local authorities have the power to provide lollipop wardens, but no obligation to do so. I argue that any transport grant made to a council should be conditional on its keeping existing school crossing patrols. Indeed, like my hon. Friend, I believe that local authorities should have a statutory duty to provide this excellent service. Naturally, I understand that such legislation would fly in the face of our Government’s move towards localism, but some things are more important than ideology. Our children’s safety is clearly of paramount importance. In recent years, this country has managed to reduce road casualties. It would be nothing less than a tragedy if that reduction were reversed.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on securing this debate on a subject so important to children, families and schools in Dorset and elsewhere. I assure the House that we take the safety of children, and indeed all road users, very seriously indeed. The hon. Member for South Dorset (Richard Drax) correctly quoted my colleague the Under-Secretary of State for Transport, the hon. Member for Hemel Hempstead (Mike Penning), on that matter.
I listened with great interest to the points made by both my colleagues, who were eloquent and persuasive in their arguments. I will start by explaining the legislative background to the school crossing patrol service. The service is provided by local authorities. Legislation gives local authorities the power, but not the duty—my hon. Friend the Member for South Dorset was quite right—to appoint school crossing patrols to help children cross the road on their way to and from school. A school crossing patrol officer appointed by an appropriate authority, wearing the approved uniform and displaying the familiar sign has the power to require drivers to stop. It is correct that others acting on an informal basis do not have that power. School crossing patrol officers operating outside those conditions have no legal power to stop traffic.
Local authorities have a general duty under section 39 of the Road Traffic Act 1988 to promote road safety. The duty requires them to take such measures as appear appropriate to prevent accidents. It is for them to decide whether those measures should include school crossing patrols. The Education and Inspections Act 2006 introduced a duty on local education authorities to promote sustainable travel to school. If a particular road is considered unsafe for children to cross en route to school, the local authority can address the issue in various ways. School crossing patrols are one of the options available to them.
There are no specific requirements in the rules on school crossing patrols about the funding of the service, and there is nothing in those rules to prevent a school from providing such funding. Schools have considerable freedom in how they spend their delegated budget. Regulations prescribe that they can spend it on anything for the “purposes of the school”. That includes expenditure that will benefit pupils at the school and other maintained schools. We therefore believe that it is legitimate for schools to spend their budgets on school crossing patrols as long as governing bodies are satisfied that it is for the purposes of the school. All those matters are the business of the local authority and not something in which my Department can or should intervene.
I understand my hon. Friends’ concerns about a power as opposed to a duty, but I must advise them that we do not intend to introduce new legislation to place obligations on local authorities to provide specific road safety measures, whether they are school crossing patrols or any other measures. We believe that local authorities are best placed to decide the priorities for their local areas and the best way to improve road safety in those areas. Dorset county council, like other county councils, is democratically elected and answerable for its decisions to its local electorate. If it makes wrong decisions or decisions that appear to be or are interpreted as wrong, the electorate can make that known in how they cast their votes at subsequent county council elections.
The Government continue to provide substantial funding for local transport, including for road safety. It is for local authorities and their communities to decide what resources are used to improve road safety, and to determine their own solutions, tailored to the specific needs and priorities of their communities. Dorset county council has decided to seek to continue providing its school crossing patrols by inviting those who value their service to make some contribution. It has advised us that the changes are not due to take effect until September 2012. The word used was “postponed,” but I wonder whether that means that they really have been postponed or whether that is in line with the council arrangements that have been voted on and that were referred to earlier. In any case, that is the intended start date. My hon. Friend the Member for Mid Dorset and North Poole and the hon. Member for South Dorset may be interested to know that I am not aware of any other local authority with no crossing patrols at present.
Although we want decisions to be made locally wherever possible, we accept that national Government still have a crucial role in providing leadership on road safety, delivering better driving standards and testing, enforcement, education, and managing the strategic road infrastructure. We also provide information and guidance to support local delivery. We are preparing the strategic framework for road safety and have held workshops to inform its development. We plan to publish it in the near future. The Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead, will lead that process.
The Department for Transport does much to promote the safety of children in many ways. For example, as well as working to protect children by improving driving standards, we issue advice, guidance and teaching materials so that children can be given the skills to become safe road users when they are out and about. In our most recent campaign, we piloted an innovative new partnership between the Think! child road safety campaign and four football clubs located in regions with higher than average casualties of six to 11-year-olds. The football clubs used Think! materials, prepared by the Department for Transport, in their after-school clubs and in activities in schools and on match days to help children learn how to find safe places to cross the road, which evidence shows is a key factor in helping children stay safe on the roads. The materials are on the Department’s website and we hope that other authorities will use them, too.
We have also made available to all schools our comprehensive set of road safety teaching resources, so that they have good-quality materials that they will want to teach. Think! education is aimed at four to 16-year-olds and covers all aspects of road safety, from car seats for young children to pre-driver attitudes for secondary schools. It includes materials for teachers, pupils and parents and can also be used by out-of-school groups, such as the Cubs and Brownies. The suite of teaching resources is currently being independently evaluated. We have also disseminated the Kerbcraft child pedestrian training scheme, whose evaluation has shown that the scheme is highly effective in delivering a lasting improvement in children’s road-crossing skills and understanding.
We strongly advise parents to encourage their children to take cycle training at about the age of 10 onwards. It provides the opportunity to influence their future travel behaviour by enthusing them and equipping them with the necessary skills. I want to make it plain that the Government are fully committed to supporting sustainable travel, including cycling. We are delighted to support Bikeability training—the cycling proficiency for the 21st century— for the remainder of this Parliament. It is designed to give children and adults the skills and confidence to ride their bikes on today’s roads. In 2011-12, £11 million will be available to local authorities and school sport partnerships to enable 275,000 more children to receive training.
I recently launched the new local sustainable transport fund, which was mentioned in the Department for Transport’s White Paper. The fund makes available £560 million to local authorities to encourage local sustainable travel. I hope that Dorset county council and other highway authorities will submit a bid for the fund. The hon. Members present may want to draw the county council’s attention to it to encourage sustainable travel initiatives in Dorset.
Annette Brooke
I thank the Minister for drawing attention to that large fund and for the emphasis that the Government are placing on sustainable travel to school. Walking is very important. We are talking about patrol crossings that meet national criteria, so should there not be more leadership from the Government, in the form of conversations with councils, if we are faced with the possibility of those crossings disappearing?
Norman Baker
We in the Department for Transport have a view of what would be desirable for each individual local authority to adopt as best practice, and, as I have indicated, we try to make available the materials and information to enable them to reach sensible conclusions about their own practices. Members will be aware, however, that, ultimately, we are encouraging democratically elected bodies to be responsible for their own actions. As a consequence of that, county councils, district councils and unitary authorities will take decisions that, in some cases, are not the ones that the Department would have taken had the matter been centrally controlled. In the era of localism, it is for county councils to be free to innovate. That might drive up performance, but on some occasions it might drive down performance. That is a consequence of localism. It will be more of a patchwork arrangement across the country.
What we can do is make it plain from the centre what we believe best practice is—we are beginning to do that through the methods that I have described—but, ultimately, it is up to Dorset and other county councils to decide whether they want to pay attention to that. Obviously, I hope that Dorset and every other county council in the country takes its road safety responsibilities seriously.
I was asked whether there should be a risk assessment before the matter is decided. I am advised that there is no requirement to carry out a risk assessment before stopping the service. As my hon. Friends know, the service is discretionary, so Dorset county council is not duty bound to produce a risk assessment, although it could, of course, have done so had it wished.
In conclusion, I pay tribute to the men and women all over the country who work as school crossing patrol officers—our much-loved lollipop men and women. I am very grateful for the invaluable work that they do. They are important members of the community, performing a difficult job in all weathers to ensure that children get to school as safely as possible. They have a crucial role to play in introducing children to road safety and respect for traffic. Everybody should value their contribution. I know that many have served their community over many years. They have seen the children grow up and then bring their own children to school, and they are remembered with affection by those of us young enough to have benefited from their help.
I am grateful to my hon. Friend the Member for Mid Dorset and North Poole for introducing this debate. The Department, the Government and I consider the issue of child safety to be very important, and I hope that I have demonstrated that this is an area in which we are active. On the specific matter to which my hon. Friend and the hon. Member for South Dorset have referred, they will appreciate that any decisions are to be made, ultimately, by Dorset county council. However, my hon. Friend was absolutely right to introduce the debate and I am grateful that she has received support from her parliamentary neighbour, the hon. Member for South Dorset. I believe that she has put together a compelling case, and hope that Dorset county council will reflect very carefully indeed on her remarks and those of the hon. Gentleman.
Question put and agreed to.
Written Ministerial Statements
(13 years, 7 months ago)
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Public Bodies Reform Programme
(13 years, 7 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The coalition Government are committed to reducing the number and cost of quangos and increasing accountability by transferring the responsibility for key decisions of public policy back to Ministers.
On 14 October 2010, I placed in the Libraries of both Houses a list of proposed reforms to take forward this commitment. The Public Bodies Bill has since been introduced to provide the legislative basis for reform. I have also placed in the Libraries an updated list of proposed reforms this morning.
Committees of both Houses have shown significant interest in the Government’s review. This statement accompanies our response to a report of the Public Administration Select Committee, “Smaller Government: Shrinking the Quango State”.
The Government welcome this opportunity to restate the aims and intentions of our reform programme for public bodies, and to correct some misunderstandings and inaccuracies apparent in that report.
With these reforms, we will increase accountability by putting into practice our clear presumption that functions carried out by the state should be accountable through democratically elected structures. We will ensure clear chains of democratic accountability through to Ministers, by transferring functions into a Department, or by creating a new executive agency. We will also increase accountability to local decision makers and will also support our big society, transferring functions from public bodies to local government, voluntary or charitable bodies or social enterprises.
A secondary, but important, purpose is to remove duplication and waste, save taxpayers’ money and to streamline a chaotic and confusing public bodies landscape.
PASC has criticised the Government for being unable to identify exact cost savings. We were always clear that savings would flow from this programme of rationalisation and reform. I can now announce that we estimate that cumulative administrative savings of £2.6 billion will flow from public bodies over the spending review period. When reductions in programme and capital spend are taken into account, we estimate that total spending through public bodies will be reduced by at least £11 billion per year by 2014-15, a cumulative amount of £30 billion over the spending review period. This does not include spending simply transferred elsewhere.
At the time of the October announcement, I indicated a number of reviews were still in progress, with bodies listed as “under consideration”. I publish with this statement an updated list of reform proposals, giving more certainty to the staff in those public bodies as to how the Government’s review programme will affect them.
Implementation is being taken forward by Departments, with the Cabinet Office operating as a source of support and guidance. I publish two key Cabinet Office documents today: a checklist of issues Departments need to consider in implementing public bodies reform; and a set of eight key requirements that must be followed in all cases (these requirements are annexed to the Government’s response to PASC).
The Government’s commitment to reform of public bodies does not end with the implementation of this first stage of reform proposals. I also publish today a summary of a new robust system of triennial reviews and underline our determination to take decisive action where future reviews highlight inefficiency and waste. The Government intend that the powers in the Public Bodies Bill will provide a proportionate mechanism to implement the conclusions of subsequent reviews.
Reducing the number and cost of public bodies is a coalition priority. It is important that we make progress and I make no excuse for the speed at which we have sought to realise our commitment. There is momentum and cross-party support for a radical programme of reform. We have already brought forward proposals on an unprecedented scale and with the Public Bodies Bill and our implementation plans we take those proposals to fruition. With our future process of review and reform, we will continue to ensure accountability in public life and identify and drive out inefficiency, duplication and waste.
Ex-service Personnel
(13 years, 7 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
My hon. Friend the Under-Secretary of State for Justice, the Member for Reigate (Mr Blunt) and I wish to make the following joint statement.
Further to the announcement on 15 September 2010, Official Report, column 40WS on the number of ex-service personnel in prison in England and Wales, we want today to announce the findings of the Defence Analytical Services and Advice (DASA) study into the number of former service personnel on probation in England and Wales. DASA estimates that 3.4% (or 5,860) of those supervised by probation trusts in England and Wales, as at 30 September 2009, had previously served as regulars in the UK armed forces. The figure has been adjusted upwards to take into account the incompleteness of DASA’s service leavers database which did not hold reliable records for those who had left the services prior to 1979 (Naval Service), 1973 (Army) and 1969 (RAF).
The analysis entailed matching the personal details of all 18-year-olds and over with a supervision record held by the 35 probation trusts in England and Wales (172,203 records as at 30 September 2009) against DASA’s service leavers database (1.3 million records). Of the matched records, 57% were for community orders; 25% for suspended sentences orders and 18% for post-release licences. DASA also found this group to be predominately male (99%), ex-Army (81%), other rank (99%), with 50% being 35 years of age or over. DASA calculated that for ex-service personnel on probation, the time between discharge from the armed forces and the start of their current supervision record varied from zero to 47 years, with 49% having received their supervision record within 10 years of leaving and only 6% within a year of leaving. Information on previous cases of supervision records for these individuals was not available. However, DASA also estimated that overall, a male member of the general population aged 18-54 was 12% more likely to have a probation supervision record than a former member of the armed forces. The proportion of the general population who had probation records for criminal damage was 74% higher than for a veteran. On the other hand, DASA determined that the proportion of ex-service personnel subject to probation supervision records for robbery was 37% higher than the proportion of the general population of similar age group.
DASA’s report is published in full on their website: www.dasa.mod.uk?pub=veterans_on_probation. A copy of the report will be placed in the Library of the House.
RAF Brize Norton
(13 years, 7 months ago)
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The Secretary of State for Defence (Dr Liam Fox)
I wish to inform the House that repatriation ceremonies for those killed in operational theatres will move from RAF Lyneham to RAF Brize Norton by 1 September 2011.
The Ministry of Defence is committed to recognising the sacrifice made by service personnel on operations and part of that commitment is to ensure there is a formal repatriation ceremony, which is a solemn occasion to provide the appropriate level of dignity and respect when the body returns to the UK.
For the last three and a half years, repatriation ceremonies have taken place at RAF Lyneham. The Ministry of Defence announced in July 2003 that RAF Lyneham will be closing as part of defence estate rationalisation and therefore, following a detailed option study, it has been decided that the most appropriate air base for future repatriation ceremonies would be RAF Brize Norton. This move will take effect by 1 September 2011, before the cessation of flying operations at RAF Lyneham.
I would like to thank RAF Lyneham for its excellent work in supporting the important task of repatriation ceremonies. I am certain that RAF Brize Norton will maintain the standard of solemnity, dignity and respect to our service personnel killed on operations as shown by the personnel at RAF Lyneham. I would also like to record publicly my thanks to the people of Wootton Bassett who have chosen to pay their respects in a unique and special way. It is such spontaneous public support that captures the spirit of the British people.
I am very grateful for those who have participated; such gestures do not go unnoticed by those deployed on operations.
National Identity Register and ID Card Cancellations
(13 years, 7 months ago)
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The Minister for Immigration (Damian Green)
I am today placing in the Library certificates of destruction from contractors confirming compliance with section 3 of the Identity Documents Act 2010. These certificates are accompanied by a covering note that sets out the process and method of delivery of destruction of the national identity register.
I can also confirm that all ID cards ceased to be valid legal documents on 22 January 2011. Cardholders were notified by post to their registered address shortly after enactment of the 2010 Act and border agencies and other interested parties were informed of the cancellation of the scheme.
The cost of decommissioning ID card systems and securely destroying the personal data is, subject to final invoices, £375,000. The cost of terminating and amending National Identity Service contracts with suppliers was £2.253 million. I will also be placing in the Library a copy of a letter sent on 10 February 2011 to the hon. Member for Hackney South and Shoreditch (Meg Hillier) that sets out the breakdown of these costs in more detail.
Immigration Rules
(13 years, 7 months ago)
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The Minister for Immigration (Damian Green)
My right hon. Friend the Home Secretary is today laying before Parliament a statement of changes in the immigration rules that will reshape tier 1 of the points-based system (PBS) for migration, tighten the requirements of tier 2 of the PBS, and tighten criteria for indefinite leave to remain in the United Kingdom. The changes also include a route of entry for family reunion for those granted protection; reduce the re-entry ban for immigration offenders who leave promptly, and facilitate visits by diplomatic and special passport holders from Oman, Qatar and the United Arab Emirates. The statement of changes will take effect from 6 April 2011.
This Government are committed to reducing net migration to the UK to the tens of thousands. We review all routes of entry to the UK and implement a range of measures spanning all aspects of the immigration system.
In July 2010 the Government implemented an interim limit on tier 1 general and tier 2 general of the points-based system. These measures were taken to prevent a surge in applications through these routes while the Government consulted on the design of a mechanism to operate a permanent limit on non-EU economic migrants.
The UK Border Agency consulted employers in all sectors and received around 3,200 responses. Those responses helped shape the new tier 1 and 2 policies that formed the basis of the Home Secretary’s statement on 23 November and were elaborated upon in our tier 2 statement of intent published on 16 February. I will today place a copy of our tier 1 statement of policy in the House Libraries along with the impact assessment for the tier 1, tier 2 and settlement changes. The policies detailed in the statements will be given effect by the immigration rules laid before Parliament today.
Tier 1
Tier 1 is being re-focused to provide a route for migrants that have real value to offer the UK.
In support of the principle that all non-EEA workers should be sponsored by their employer, we will close tier 1 general to new applicants from 6 April. We closed the route to new applicants out of country on 23 December. Transitional measures will be put in place to ensure that tier 1 general migrants already in the UK will be able to extend their stay so long as they meet the requirements in place at the point they entered.
Current tier 1 investor and entrepreneur categories will be reformed to fit the profile of the high-value migrants they are intended for and to ensure that unnecessary bureaucracy does not stand in the way of these important individuals.
Investors will continue to qualify for settlement after five years if they have invested £1 million in the UK. Additionally, those who have invested £10 million will be able to apply for settlement after the investment is in place for two years. Those investing £5 million will be able to apply after the investment is in place for three years. Allowable absences will be increased from 90 to 180 days, enabling international business people to better manage their affairs abroad.
A new prospective entrepreneur visa will be introduced to allow entrepreneurs to come to the UK to secure funding. Switching in to the tier 1 entrepreneur category will be allowed.
For the tier 1 entrepreneur category: the existing £200,000 funding threshold will be reduced to £50,000 where the funding was provided by a venture capitalist, a Government Department or a seed competition. Up to two business partners will be able to use the route if they have equal access to the funding. Finally, successful entrepreneurs who create 10 full-time jobs or have a turnover of £5 million will be able to apply for settlement after three years.
A new category for exceptionally talented migrants working in science or the arts will be introduced in tier 1. The scheme will be administered by competent bodies in the arts and science. We will announce the details of these organisations in due course. We will apply a limit of 1,000 places in the first year. That limit, and the success of the route, will be monitored throughout the first year.
Tier 2
The number of certificates of sponsorship available for out of country migrants in tier 2 general will be limited to 20,700 for the year from 6 April.
The route will be reserved for graduate level occupations only. On Monday we announced that we have accepted the Migration Advisory Committee’s (MAC) recommendations on graduate level occupations on the current shortage occupation list. I have also asked the MAC to undertake a full review of the shortage occupation list.
In addition the minimum English language requirement for tier 2 general will be raised to B1 on the CEFR scale.
The limit will be operated on a monthly basis. A total of 4,200 places have been reserved for the first month and 1,500 places per month thereafter. When the limit is undersubscribed in a given month the places will be carried over to the next month. Where the limit is over subscribed we will prioritise according to scarcity of skills in the first instance and then according to salary. Scientists, academics and researchers will be afforded an additional premium. A points table will give effect to this prioritisation.
The tier 2 intra-company transfer route will be reshaped and focused on specialists and managers. Transferees will be able to come to the UK for up to five years if they are paid over £40,000, including allowances. Other transferees will be able to enter for up to 12 months if paid £24,000 or more. There will be a 12-month cooling off period at the end of the migrants’ stay to prevent individuals being perpetually sent to the UK for 12-month periods.
Transitional arrangements will ensure that the new requirements do not apply to those granted a tier 2 visa before 6 April.
Settlement
On settlement the rules change applies a new criminality threshold to settlement applications, requiring all applicants to be clear of unspent convictions and also extends the income criteria that applies to those on a temporary route, so that it also applies when they apply for settlement, and to require such applicants to pass the “Life in the UK” test prior to gaining settlement, subject to some transitional provisions.
Re-entry bans
I am also introducing an amendment to the immigration rules relating to the general grounds for refusal. The existing re-entry ban for those previously removed from the UK is being amended to make it clear that where migrants participate in an assisted voluntary return programme or leave otherwise voluntarily, we expect them to do so promptly after being told to leave the UK. Those who voluntarily leave the UK promptly at public expense will have their re-entry ban reduced from five years to two years. Those who continue to delay receive a five-year or 10-year re-entry ban. This addition seeks to bring cases to a conclusion earlier by providing a clear incentive for people to depart from the UK sooner and increase participation in assisted voluntary return programmes.
Asylum
There are also changes to the immigration rules in respect of certain family members of refugees and those granted humanitarian protection, where the family relationship arose after the sponsor in the United Kingdom left his or her home country.
Visit visas
I have also made provision to enable nationals of Oman, Qatar and the United Arab Emirates who hold a diplomatic passport to be able to come to the United Kingdom for a visit without the need for a visa. This will facilitate travel and close working relations between these passport holders and the United Kingdom.
Prisoner Escort and Custody Services
(13 years, 7 months ago)
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The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
I am today announcing that the Government have awarded four new contracts for the prisoner escort and custody services to Geo Amey PECS Ltd ( a joint venture between the Geo Group Ltd and Amey UK plc) and Serco Ltd.
This follows a competitive tender conducted in accordance with Public Sector Procurement Directive (2004/8/EC). Geo Amey PECS Ltd and Serco Ltd have offered the best overall bids in terms of quality of service and cost relative to the other bids received and will take over the service from 29 August 2011 for an initial period of seven years.
The award of contracts to Geo Amey PECS Ltd and Serco Ltd enable the MOJ to release significant cost savings, reducing current costs by 20% on current spend.
The scope of services being delivered by Geo Amey PECS Ltd and Serco Ltd include all inter-prison transfers, the movement of prisoners with mental health problems, extradition and cross-border moves. It excludes all category A movements. The final specification incorporates a number of business changes, including improvements to facilitate the operations of the courts.
Independent Monitoring Commission
(13 years, 7 months ago)
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The Secretary of State for Northern Ireland (Mr Owen Paterson)
I have today published and laid before Parliament my sixth annual report on the operation of the agreement between the British and Irish Governments which established the Independent Monitoring Commission (IMC). This report covers the period 18 September 2008 to 17 September 2009.
In line with a commitment made by one of my predecessors, this report also contains the audited accounts of the IMC for the 12-month period ending 31 March 2009.
The report covers the 20th and 21st reports on paramilitary activity. It does not refer to the 22nd report on paramilitary activity as it fell outside the 12-month period under review.
The IMC performs an important role, supporting the transition to a peaceful society and stable and inclusive devolved government in Northern Ireland. I am very grateful to the Commissioners for their valuable contribution and the work they have undertaken over the past year.
Grand Committee
(13 years, 7 months ago)
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Arrangement of Business
(13 years, 7 months ago)
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The Deputy Chairman of Committees (Lord Skelmersdale)
My Lords, before the Minister moves that the first statutory instrument be considered, perhaps I may remind noble Lords that, in the case of each one, the Motion before the Committee will be that the Committee do consider the statutory instrument in question. I should perhaps make it clear that the Motions to approve the statutory instruments will be moved in the Chamber in the usual way. Furthermore, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Social Security (Contributions) (Amendment No. 2) Regulations 2011
(13 years, 7 months ago)
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Lord Sassoon
That the Grand Committee do report to the House that it has considered the Social Security (Contributions) (Amendment No. 2) Regulations 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, I am pleased to introduce the Social Security (Contributions) (Amendment No. 2) Regulations 2011 and the Social Security (Contributions) (Re-rating) Order 2011. It is worth noting that all the changes covered by these two instruments were announced as part of a Written Ministerial Statement in December last year. As both the regulations and order deal with national insurance contributions, it seems only sensible that they should be debated together. As a matter of course, I can confirm that the provisions in the regulations and the order are compatible with the European Convention on Human Rights.
I shall begin with the social security regulations. The previous Government’s 2008 Pre-Budget Report announced an increase in class 1 and class 4 national insurance contribution rates of 0.5 per cent. These rate rises were due to come into force from the start of the 2011-12 tax year, but 12 months later the former Chancellor of the Exchequer declared his intention to double the increases. This would have placed additional burdens on businesses at a time when they are most in need of our support. While this Government confirmed that these rate rises would be implemented, we are implementing them as part of a wider package of reforms that will reduce the overall cost of employment and will support people on lower incomes. We will achieve this by increasing the income tax personal allowance, the primary threshold and the secondary threshold. The social security regulations before the Committee today are a vital part of this process.
To start with, the point at which employers will have to start paying national insurance will increase from £110 per week to £136 per week from April of this year. This is a weekly rise of £21 above indexation, which means that employers will not pay any national insurance on the first £7,072 of any worker’s earnings.
From April of this year, the class 1 primary threshold, which is the point at which employees start to pay class 1 national insurance contributions, will increase from £110 per week to £139 per week. This is an increase of £24 a week above indexation, which will help to mitigate the effects that a 1 per cent increase in the employee’s rate of national insurance contributions will have on the lower-paid.
As a result of the increases in thresholds included in today’s regulations, around 950,000 low earners will no longer pay national insurance contributions, while their contributory benefit entitlements will be protected. Employees earning under £35,000 a year will pay less both in terms of income tax and NICs. Employers will pay less in NICs on all workers earning less than £20,000 a year. In relation to NICs thresholds, employers will be better off by £150 for every employee earning above the secondary threshold.
Compared with the plans that this Government inherited, more than £3 billion a year is being returned to employers through the secondary threshold rise. Even more money will be going straight into the pockets of hard-working families due to the changes in the primary threshold.
Today’s regulations also set the level of the lower earnings limit. This takes into account changes that we are making to the way in which the basic state pension will be uprated. As part of last year’s June Budget, my right honourable friend the Chancellor announced that the basic state pension will be linked to earnings from April 2011. Not only that, we included the added guarantee that it would rise in line with either earnings, prices or 2.5 per cent, depending on which is greatest.
Now that the earnings link has been restored, the lower earnings limit is no longer legislatively linked to the basic state pension. This means that the Treasury can set its level independently of the basic state pension through affirmative resolution. As a result, large rises in the basic state pension will not result in lower earners being taken out of contributory benefit entitlement. This is fair and progressive and it will support the poorest and most vulnerable in our society. For the upcoming tax year, the lower earnings limit will increase by RPI to £102 per week, while the upper earnings limit will go down from £844 per week to £817 per week. This is to maintain the alignment with the point at which the higher rate of income tax is paid. It is also worth noting that the regulations will increase the main rate primary contributions paid by women who married before 6 April 1977, taking them up to 5.85 per cent from this April.
The social security order sets out the NICs rates and thresholds for the self-employed and those paying voluntary contributions. In the case of the self-employed, it raises the small earnings exception for paying class 2 contributions. The exception will rise in April from £5,075 to £5,315 a year, which is broadly in line with prices. The rate of class 2 contributions will increase from £2.40 to £2.50 a week. The rate of voluntary class 3 contributions will also increase from £12.05 a week to £12.60 a week. Again, this is similar to the general increase in prices.
Today’s order sets the profit limits for which main rate class 4 contributions are paid. The lower limit at which these contributions are due will increase from £5,715 to £7,225 a year, in the same fashion as the class 1 primary threshold. At the other end of the scale, the upper profits limit will be reduced from £43,875 to £42,475. This maintains alignment with the upper earnings limit for employees, which, as I said, is being reduced to reflect the changes made to the higher rate of income tax. The changes to the class 4 limits will ensure that the self-employed pay contributions on a similar range of earnings to employees paying class 1 contributions. The increase in the lower profits limit will guarantee that the 1 per cent increase in the class 4 NICs main rate is offset for the self-employed. This is in much the same way as the increase in the primary threshold offsets the 1 per cent increase for employees.
The legislation included as part of today’s order and regulations is an important part of the Government’s plans to reduce the taxation of labour. It will encourage employers to take on more workers, help those on the lowest incomes and support private enterprise and employment across the country. This is important for the economy and important for the recovery. I commend the regulations and the order to the Committee.
Lord Davies of Oldham
My Lords, I am grateful to the Minister for the explicit way in which he outlined the contents of the regulations and the order. He will forgive me if I do not spend a great deal of time responding to them. First, it seems that the main principles adumbrated in his contribution were debated pretty thoroughly at the general election and largely resolved by crucial decisions then. Secondly, we have had the opportunity to debate national insurance contributions with some degree of intensity over the past few weeks. These issues have also already been considered by the other place. Therefore, the noble Lord will forgive me if I am not able to match the strength, force and length of his opening contribution. However, I have two specific questions to ask, to which I would like him to address his mind and respond.
The Government—or the more senior party of the coalition—made much of this in their rhetoric during the general election. Afterwards, there was in the coalition agreement this commitment—indeed, a pledge—to stop the rise in employer national insurance contributions from April 2011. However, there seems to be a difference between the expectations to which this might give rise and the reality that we see in the SI before us. What is given back to the employer through the threshold changes to class 1 secondary contributions? The threshold goes up from 12.8 to 13.8 per cent but this appears to be somewhat less than employers might have thought they were getting following the pledge to stop the rise entirely as far as employers are concerned. It looks as though the Government are giving back with a degree of generosity that does not quite fulfil their commitment. The noble Lord mentioned that he thought that as much as £3 billion was being returned. Can he confirm that figure and say whether it is consistent with employers’ expectations of what they would get back?
Secondly, I want to comment on what I am sure the noble Lord will indicate is a minor issue, although it is not minor to many of us. I refer to the contribution of married women and widows. I know that they form a limited group but I see that the increase in their contributions will be from 4.8 to 5.8 per cent. What are they getting for that increase? We know that they get no retirement pension, that they cannot get jobseeker’s allowance if they become unemployed and that they receive no sickness benefits. Yet, in all the Government’s bravado about the restrictions that they would place on increasing national insurance contributions, they could not exempt this group. That seems to be at one with an awful lot of the dispositions made by the Chancellor and by Ministers responsible for Treasury matters over the past few months. I think particularly of child benefit for women who earn more than £40,000 a year. Whether intended or not, the legislation seems to discriminate pretty heavily against women when we would have thought that, if the Government were true to the principle that the noble Lord adumbrated in his concluding remarks, which reflected some fairness, this group would have been treated more generously. Will the Minister comment on that? In more general terms, the Opposition are supportive of the regulations.
Lord German
My Lords, perhaps I may add a few words of welcome for these regulations. They give effect to a significant commitment that this Government made to try to reduce the costs to business of employment, to try to make sure that those who are in employment at lower levels of income receive a boost and to give effect to that commonly held and often-referred-to statement that work will always pay. Taken in the round, we cannot omit the other part of this package—the Welfare Reform Bill—which will ensure that those on lower earnings always benefit by being in work and that they do not lose their pensions.
Primarily, these regulations give help to support people on lower incomes. They help those at the lower end of the pay scale but, as the Minister said, they are part of a package to lift people—many tens of thousands and nearly a million in this case—out of national insurance contributions altogether and to reduce the tax burden as a whole for a substantial number of working people throughout the country. That is a crucial change, which, taken with the Welfare Reform Bill, will support the poorest and ensure that it will always pay for people to be in work, to seek work and to find work. It is progressive and as such should be encouraged.
We were told by the opposition party during the last general election that it would be better not to raise VAT but to raise national insurance contributions. We have increased VAT to 20 per cent. To what level would national insurance contributions have to rise to match that switch? Is it not far better to ensure that people who are on the lowest earnings can keep more of their income and that the poorest in our society benefit most from these changes? Is not the progressive nature of these changes crucial to fairness in our society?
Lord Sassoon
My Lords, I thank the noble Lord, Lord Davies of Oldham, for his characteristically short, to-the-point and putting-me-on-the-spot remarks. Without getting into unnecessary detail, he extracted one or two big points, which it was very reasonable to raise. I thank also my noble friend Lord German, who succinctly pointed to the significance of the changes that the coalition Government have made to the plans that they received from the previous Government. I have not seen any specific numbers that might answer his very interesting question, but I shall go away and see whether a comparison has been made between the effect of a rise in VAT and the effect of a rise in national insurance. However, he made absolutely the right point, supported by all the economists’ evidence, that a rise in national insurance is a direct tax on jobs. Regrettable though the rise in VAT was, it was necessitated by the dire predicament that the Government inherited and in line with all the economic evidence that a rise in national insurance contributions as proposed by the previous Government would have been much more damaging. The VAT increase raises about £13 billion. That would have required a huge rise of almost 3 per cent in the employer NI rate. Without taking it any further, one can see how just how burdensome that would have been on employers.
I should address the points raised by the noble Lord, Lord Davies. He asked, first, whether we had met the expectations set out in the coalition agreement. I certainly believe that we have delivered on what could reasonably be expected of the Government. Compared with what would have happened under the plans of the previous Government, employers will be more than £3 billion better off next year, rising in future years. Indeed, although £3 billion is correct in the round, the figure is slightly more. It is exactly what employers would have expected, as it matches not only the Conservative manifesto but the coalition agreement. Yes, as a result of the coalition agreement, some of the benefit is switched from national insurance contributions to income tax. It is a point that has been made and answered before. Indeed, there will be a net rise in national insurance contribution payments, compensated by a larger fall in income tax payments. Just to underline the point, employers will be better off in respect of employees earning up to £20,000, while employers who have among the highest-earning staff will pay more national insurance contributions. We believe that that is the right and appropriate way to do it.
On the question of women, as a general point I would note that, in terms of the effects based on gender or whether someone is disabled, as well as in terms of those in other groups, the coalition Government took their responsibilities in the overall spending package last year more seriously than has ever been done before. We are certainly not in any way trying to dodge our important responsibilities to consider the effects of all our measures on different groups in society, including, of course, women.
Married women who paid national insurance contributions at the reduced rate are a unique group. They elected to pay reduced rate contributions in return for reduced benefit entitlement; these women can revoke their reduced rate election and pay contributions at the standard rate at any time they choose. It is not the case that women who opted to pay reduced rate contributions have received nothing in the way of benefits, in case there is any suggestion of that. Before 1975, such women who were employed were eligible for a full range of industrial injury benefits and, later, they became eligible for statutory sick pay and maternity pay. They can also receive a pension of up to 60 per cent of basic state pension based on their husband’s contributions when he reaches pension age. There have also been three major publicity campaigns about the married women’s option—the first in the late 1970s, the second in the late 1980s and the third in October 2000—to advise them of changes that may affect them. They also benefit from the increase in the primary threshold that is now coming in. There are around 5,000 to 10,000 married women who still have in place a reduced rate election; the numbers are falling because only women married or widowed before 1977 are entitled to pay at the reduced rate. I hope that I shall not be accused again by the noble Lord of piling Pelion on Ossa, but I thought it worth going through the position as it is and confirming that in the generality the Government take their responsibilities very seriously.
Without rehearsing again any of the important points in the regulations and the order, I am grateful for the focused and brief debate. I reiterate as a last point that more than £3 billion a year is being returned to employers through the employer threshold rise and even more to individuals through the increase in the primary threshold. I commend the regulations and the order to the Committee.
Social Security (Contributions) (Re-rating) Order 2011
(13 years, 7 months ago)
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Lord Sassoon
That the Grand Committee do report to the House that it has considered the Social Security (Contributions) (Re-rating) Order 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
Road Vehicles (Powers to Stop) Regulations 2011
(13 years, 7 months ago)
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Lord Shutt of Greetland
That the Grand Committee do report to the House that it has considered the Road Vehicles (Powers to Stop) Regulations 2011.
Relevant document: 15th Report from the Joint Committee on Statutory Instruments.
Lord Shutt of Greetland
My Lords, I am pleased to introduce the Road Vehicles (Powers to Stop) Regulations. The purpose of these regulations is to provide examiners from the Department for Transport’s Vehicle and Operator Services Agency, or VOSA, with direct powers to stop commercial vehicles at the roadside throughout Great Britain in order to enable them to conduct compliance checks.
These compliance checks are to ensure that commercial vehicles and drivers of commercial vehicles comply with the requirements of EU legislation relevant to vehicle roadworthiness and driving requirements. For example, EU legislation prescribes minimum standards of technical compliance for vehicles circulating on our roads. There are rules that prescribe maximum weight limits for commercial vehicles. There are also very detailed rules about maximum driving time and rest periods and about the recording equipment and records that are needed to verify compliance with these rules.
Of course, all these requirements and rules are there to help to keep our roads safe, but they are effective only if there is adequate enforcement. Consequently, the legislation also stipulates that member states must put in place appropriate systems and checks for compliance, which is something that we would want to do in any event, regardless of the country of origin of the vehicle and driver.
As things stand, VOSA already has a limited power to stop vehicles for checking in England and Wales. It has the power to do so under provisions in the Police Reform Act 2002—or, more precisely, the law allows chief officers of police to accredit individual VOSA examiners with the power to stop vehicles in order to carry out roadworthiness checks. Although this is a rather cumbersome administrative process, the general arrangements for enabling VOSA to stop vehicles for inspection work well in practice, since they save time in overall terms both for the police and for VOSA. They also release police officers for front-line duties when they would otherwise have had to stop vehicles for VOSA, as they used to do in the past.
The main problem is that these arrangements do not apply in Scotland, which currently commits the police to having to support VOSA at roadside enforcement checks. The draft regulations before the Committee today will resolve that problem. Under the provisions of the draft regulations, VOSA officers appointed by the Secretary of State will be able to stop commercial vehicles for checking throughout Britain without having to have a police officer present. The main benefit that this will bring is that it will release a significant amount of police resources in Scotland that are currently taken up in assisting VOSA with this task.
The regulations will also simplify the process of accrediting VOSA stopping officers. The proposal is that VOSA stopping officers will, in future, be appointed by the Secretary of State for Transport—in practice, that would be done by the chief executive of VOSA—rather than by individual chief officers of police. Of course, no one will be authorised as a stopping officer until they have successfully completed all the necessary training, which will be equivalent to the training that stopping officers in England and Wales currently have to undertake. The benefit of simplifying the process of appointing stopping officers will be in reducing the administrative burden on both the police and VOSA.
Lord Bradshaw
My Lords, I have some experience of what is proposed in the regulations because for six years I worked in Northern Ireland, where VOSA’s equivalent had to use stopping officers; if policemen had been used, they would have become targets for terrorists. What is proposed in these regulations worked in Northern Ireland and I believe that it is sensible to extend the provisions here. Indeed, I have been surprised that it has taken successive Governments so long to wake up to this.
If, like me, you have experience of roadside checks, you will know that some of them are extremely expensive to mount. They are not just a matter of one man pulling a lorry off the road. Often 10 agencies are involved in checks, which might cover drugs, ill treatment of animals, customs fraud or immigration fraud—a whole range of things is covered by these checks. They are very expensive to organise and at the moment, if a check is mounted and the policeman is called away to other duties or does not show up, the whole process is frustrated because nobody can stop a lorry or a coach to send it to the inspection centre. I very much welcome these regulations and can only wish them well. I think that the noble Lord, Lord Shutt, made it clear in his remarks that it would be possible for VOSA officers to stop other vehicles.
I suggest that traffic censuses might also be considered. They do not need a policeman; they just need somebody with a yellow jacket on to organise the thing. I presume that even when the police have stopping officers there is an occasional person who offends and does not stop, but there are plenty of means of identifying those people and bringing them to justice. I fully support the proposed changes.
Viscount Simon
My Lords, in these times of policing budgets, I wonder whether chief constables will be persuaded to let VOSA work completely independently of roads policing officers and rely on it to make routine checks on vehicles, thereby releasing their officers from such requirements. I acknowledge the fact that the regulations refer only to commercial vehicles, but could they be extended to all vehicles in time? I do not know. Will this be used by chief officers to obtain large savings being targeted at policing?
It is well known that some commercial vehicles are used for criminal activities. If VOSA is the only body inspecting such vehicles to examine their roadworthiness and the police are not there, criminals will get away with all kinds of things. A trained police officer can examine the vehicles and their drivers in more detail while there are still road policing officers qualified so to do, but their expertise may well be hit if chief officers rely on VOSA and VOSA alone. What will happen if a VOSA stopping officer comes across a driver who is obviously drunk or wanted for a criminal offence?
I wonder, also, how VOSA stopping officers will be trained in appropriate driving and related techniques. Will they be trained by the police? Even with such advanced training, am I correct in assuming that, other than using their powers to stop a commercial vehicle, they will comply with the law and that they will not be able to use exemptions in relation to exceeding speed limits or other matters enforced by police officers? I assume that they will not be permitted to have blue lights. What will be their method of stopping a vehicle?
Does VOSA have a budget within the spending review to meet the expectations of providing, training and equipping the stopping officers to provide the required services every day of the year and at all hours? I hope so, because there are already problems with VOSA setting targets and, when those are met, simply stopping the work that it does. That could result in VOSA weighing a number of vehicles and then not weighing any others for the rest of the month because that target had been met. Currently, VOSA officers are not there at night or weekends unless on a special operation. That must not be a reason for the police to remove resources and to leave it to VOSA, as VOSA does not have the continuous responsibility throughout every day of the year that the police have.
Relying on VOSA to take over some of the roads policing operations—I declare that I am an honorary member of the Police Federation of England and Wales roads policing central committee—is fraught with problems. It used to be so simple: a police officer only. But now it seems that it could be anyone—a Highways Agency traffic officer, VOSA, who next? I do not expect the Minister to reply to my concerns today, but I would be grateful if he would write to me in due course and I hope that he will forgive me for raising these matters, some of which are not strictly related to this legislation.
Lord Davies of Oldham
My Lords, the two noble Lords who have spoken have raised some exceedingly pertinent questions. I knew that we would benefit from the experience of the noble Lord, Lord Bradshaw. He has carried out what has often looked like a one-noble-Lord campaign on certain aspects of the entry of foreign lorries into this country and the difficulties that have arisen from their compliance with the law. I was interested to hear about his experience in Northern Ireland. Such is one’s preoccupation with the legislation that obtains generally across the United Kingdom that it comes as a bit of a shock when one realises that part of it relating to traffic is not UK-wide legislation at all but, because of the police dimension, applies only to England and Wales. I therefore very much support this instrument, which extends the issues to Scotland and Northern Ireland.
My noble friend Lord Simon has addressed a number of the questions that I would otherwise have articulated at some, no doubt boring, length. It is incumbent on the Minister not to write to my noble friend but to answer, so far as he is equipped to do so today, the very important point about who exercises the powers to stop and for what offences. I very much approve of the extension of the offences in the regulations, but they are all traffic offences. My noble friend Lord Simon probably picked up the reference made by the noble Lord, Lord Bradshaw, to what might have obtained in Northern Ireland and he asked about other illegalities that the driver or others responsible for the lorry might be guilty of and be likely to be charged for. I presume that powers are not to be given in relation to those offences. If they are, that should have been stated in the regulations. However, I take it that the instrument is about traffic regulations and the regulation of trucks and lorries—that is, big vehicles. We know that the road haulage industry is pleased to see a tightening up of these issues, because it does not want to be besmirched by road hauliers who give the others a bad name when accidents occur in circumstances where it is clear that the law has been infringed.
However, what greatly exercises the British road haulage industry and all of us who take an interest in road transport in the United Kingdom is the enormous increase under the single market in the number of foreign trucks coming to the United Kingdom. It has been predictable but nevertheless it has carried on apace in the past decade with the significant economic growth across Europe. The minor grievance that we have is that these trucks have large tanks that are loaded with less expensive fuel on the other side of the Channel and are then able to travel huge distances on British roads without contributing to taxation because the fuel has been bought elsewhere. Of more concern to us all is that some of these trucks do not meet European standards on maintenance and equipment. Any accident involving a heavy lorry will cause concern in a locality, but it is bound to exercise people a great deal more when it involves a truck that comes from a considerable distance beyond these shores.
Of course, we very much support these regulations. In fact, they are overdue. However, I hope that the Minister will give reassurance about the identification of those carrying out the stopping exercise. Authority cannot be in question when there is a truck that is 44 tonnes against an individual who is standing by the side of the road. The authority either works or the individual officers are in danger. There must be clear identification and I want to know what is guaranteed on that. I particularly want the Minister to address whether the list of traffic offences in the regulations is what the stop will be organised for. It would be a different matter if we went on to other issues. Will the Minister say how that will impact on the role that the stopping officers play?
We understand the necessity of economising on police time, which is why the initial changes in the Police Reform Act were made, but that has to be consistent with a proper authorised road for the VOSA people so that they are protected in their job and can discharge it fully. The Minister has a number of questions that he needs to address.
Lord Bradshaw
Before the Minister does so, I point out to the noble Lord that in Northern Ireland we had an international border and many of the international troubles to which he has referred, which the stopping officers dealt with. The flagrant breaches of the law by lorries from one side of the border were often caught. VOSA officers have the power, as do Customs and Excise officers, to immobilise the vehicle. If there is any trouble, the police can be called anyway, but the officers have powers to stop the vehicle. That is the big sanction.
Lord Shutt of Greetland
My Lords, I thank the three noble Lords who have contributed to this short debate. Clearly, these regulations enable VOSA examiners to stop commercial vehicles for inspections that they routinely carry out at the roadside. These checks are on the roadworthiness conditions of vehicles and on whether the driver is complying with all relevant laws, including the particular law on maximum permissible time spent behind the wheel.
The noble Lord, Lord Bradshaw, made one or two points and was generally supportive. The stopping powers relate only to VOSA; no other agency can be legitimately associated with those roadside checks. The point about census checks could perhaps be looked at in future; I do not think that I can say anything about that, but I shall take it back to the department. The current priority is to enable VOSA to complete its duties throughout Great Britain.
The noble Viscount, Lord Simon, made several points. I am delighted that I had some degree of notice on one or two of them, but not necessarily on all—if we cannot cover them all, we will have to write. He asked whether chief constables would be happy to let people work completely independently. VOSA officers will continue to maintain close links with the police. They have already been stopping vehicles in England and Wales since 2002—nine years—and there have been no problems. These regulations will allow VOSA to stop vehicles in a similar way in Scotland. They have the support of ACPO in Scotland and the Scottish Government.
The noble Viscount asked whether the fact that VOSA will be working on its own would encourage criminals to take advantage. VOSA officers will continue to maintain strong links with the police; even though they have the power to stop vehicles for inspection, they still have those strong links. In the event that they encounter any difficulty, they will immediately request assistance from the police in the normal way.
The noble Viscount asked how VOSA stopping officers will be trained. They will need to complete an intensive police driver training course before being appointed and an in-house training course to familiarise them with the extent and limitations of the powers—for example, the fact that VOSA officers are under no circumstances allowed to chase suspect vehicles. They will not be permitted to have blue lights. Their vehicles will have stopping matrix signs that request drivers to follow the vehicle to a safe stopping point, as they do at present.
The noble Viscount also asked whether VOSA has the necessary budget to provide a 24/7 service by stopping officers. Obviously, there is a limit to resources, just as there is for the police, and priorities have to be targeted. In some areas—on the main arterial roads into Britain, for example—VOSA can provide a 24/7 service, as it does. In other cases, it has fewer resources available but will rely on intelligence to determine when it is best to run enforcement exercises.
The noble Viscount asked whether in time the regulations could be extended to all vehicles. There are no plans to seek to extend the scope of these regulations to cover any other classes of vehicle. The law could be amended in the future, but that is not contemplated at the moment. VOSA’s main priority is commercial vehicles, not cars—cars are primarily a matter for the police.
The noble Lord, Lord Davies of Oldham, asked how the VOSA officers would be identified. While on duty, they will be required to wear a uniform that is unique to them; to carry clear identification; and to be in clearly marked vehicles that have a black and yellow Battenberg livery, are clearly marked “VOSA” and have amber light bars on the roof.
The noble Lord asked questions and commented on the extent to which there are more vehicles on the road. He referred to foreign commercial vehicles in particular. He will be interested to learn that, in 2006-07, 56,596 roadside checks on foreign vehicles were made by VOSA. In 2009-10, that figure had increased to 177,460. Those figures come from the most recent random fleet compliance survey and VOSA’s effectiveness report.
I trust that I have answered the bulk of the queries, as I have endeavoured to do. I will carefully check that nothing that I ought to have responded to is outstanding. As I have indicated, the purpose of the regulations is to create an efficient and effective mechanism for stopping commercial vehicles throughout Great Britain so that they and their drivers can be checked by VOSA examiners. These checks cover a wide range of compliance issues affecting vehicles and their drivers; they are necessary to keep our roads as safe as possible.
Historically, the police have stopped vehicles for VOSA, but it has to be said that that does not necessarily make the very best use of their valuable time. Of course, they have many other pressing priorities, which only they can deal with. For that reason, VOSA was given the opportunity in 2002 to stop vehicles for roadworthiness enforcement checks in England and Wales. That arrangement worked well in practice and we are now seeking to extend that practice to other types of compliance checks and to extend the new system throughout Britain. As well as making the process easier for VOSA, the new provisions will help to free up police resources in Scotland in a similar way for core policing priorities. The new provisions will also make easier the process of appointing VOSA stopping officers and provide a useful minor clarification of the relevant equivalent law in Northern Ireland. I commend the regulations to the Committee.
Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2011
(13 years, 7 months ago)
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Lord McNally
That the Grand Committee do report to the House that it has considered the Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the regulations concern the use of emblems on ballot papers by candidates at local authority mayoral elections in England and Wales. Their purpose is to make the changes necessary to address an oversight that has arisen in the drafting of the existing regulations governing the conduct of local mayoral elections.
The changes being considered today will enable a candidate who is standing on behalf of two or more registered political parties at such an election to request that the ballot paper should feature, alongside the candidate’s particulars, an emblem registered by one of those political parties. I understand that a number of local mayoral elections are scheduled to take place in England in May 2011—I think that the number is five. The regulations will ensure that the issue is addressed ahead of those elections.
Under Section 29 of the Political Parties, Elections and Referendums Act 2000, a political party registered with the Electoral Commission may register with the commission up to three emblems for use on ballot papers by candidates standing for the party at elections. Electoral law is clear that a candidate standing on behalf of a single party may request that an emblem registered by that party appear on the ballot paper against the candidate’s particulars.
However, at the May 2010 general election, it came to light that amendments to the parliamentary election rules set out in Schedule 1 to the Representation of the People Act 1983 made by the Electoral Administration Act 2006 had had the unintended effect of preventing candidates standing on behalf of two or more registered political parties at UK parliamentary elections using on the ballot paper a party emblem registered by one of those parties.
This has affected jointly nominated candidates who have wanted a party emblem on their ballot paper, most notably those wishing to stand for the Labour Party and the Co-operative Party, and the Ulster Unionist Party and the Northern Ireland branch of the Conservative Party, where candidates have stood under the description, “Ulster Conservatives and Unionists – New Force”. I should perhaps pre-empt any comments from the other side by saying that, as far as I know, these are the only two examples of political parties planning joint candidatures in the future.
These provisions have been replicated in the rules governing the conduct of various other elections. These include the rules for the conduct of local mayoral elections in England and Wales as set out in the Local Authorities (Mayoral Elections) (England and Wales) Regulations 2007. Schedule 1 to those regulations contains the rules for a stand-alone local mayoral election and Schedule 3 sets out the rules where a local mayoral election is combined with another poll. As a result, there is now an inconsistency in the use of registered emblems on ballot papers at local mayoral elections by candidates standing on behalf of a single party and those standing on behalf of more than one party. The draft regulations we are considering today address this inconsistency, which has resulted from an oversight in the 2007 regulations. As I have explained, these regulations are being made to address the issue ahead of the local mayoral elections scheduled for the 5 May. It might be helpful if I briefly explain the changes made by the regulations.
The issue arises in the context of the 2007 regulations. Rule 18(4) in Schedules 1 and 3—about candidates using an emblem on the ballot paper—makes reference only to Rule 7(1), which concerns the nomination paper for a candidate standing for a single party. To address the situation, Regulation 2 of the draft regulations before us inserts new Rule 18(4A) in Schedules 1 and 3. It refers to Rule 7(3), concerning the nomination paper for a candidate standing for more than one party. Further, Regulation 2 amends Rule 18(5) in each schedule so that it refers to paragraphs (4) and (4A) of Rule 18. The effect of these changes is that it will be possible for a candidate who is authorised to stand on behalf of more than one party at a local authority mayoral election in England and Wales to use an emblem registered with the Electoral Commission by one of those political parties, if they wish to do so.
The draft regulations allow such a candidate to use one emblem only on the ballot paper, which must be an emblem registered with the Electoral Commission by one of the parties for which they are standing. Our approach maintains the current policy that candidates nominated by a political party may have only one emblem featured against their details on the ballot paper. A candidate’s request to use an emblem must be made in writing to the returning officer before the deadline for the delivery of nomination papers, which is noon on the 19th day before the day of the election. For the local mayoral elections on 5 May, this is noon on Monday, 4 April.
The Electoral Commission and the Association of Electoral Administrators highlighted this issue in their reports on the May 2010 election. The political parties have also raised this issue with us. There is a broad consensus that the issue should be addressed at an early opportunity and in time for the elections scheduled to take place in May of this year. I can confirm that the Electoral Commission was formally consulted on these regulations and has indicated that it is content with the changes being made to the 2007 regulations. The same issue was replicated in the separate rules governing the conduct of other elections. We are addressing the issue in the relevant legislation for the other elections scheduled for 5 May. It will require primary legislation to address the issue for a UK parliamentary election, and we will look for an opportunity to do this in advance of the next general election.
These regulations make a sensible and appropriate change to put right an oversight in the drafting of the existing rules governing the conduct of local authority mayoral elections to allow the use of emblems on ballot papers by candidates nominated by two or more parties at those elections. In that spirit, I commend them to the Committee.
Lord Tyler
My Lords, I hope not to detain the Grand Committee for more than a few minutes. Before I come to specifics of the regulations that my noble friend introduced, would he comment on the report I read today? It said that Ministers and departments are under strict instruction, under the deregulation initiative or in/out process, that every time a new directive or regulation is introduced, one should also be abolished or repealed. If that is the case, I hope that we will, in future, get a brief description of what will be repealed to enable the new regulation to be introduced. Obviously, this is a very helpful and entirely desirable improvement to the situation, and I commend my noble friend for introducing it—in a totally non-partisan spirit, because I anticipate that the main advantage will be to the opposition party. I hope that the noble Baroness will acknowledge that on this occasion at least there is no ignoble partisan initiative or motive behind this, because clearly the primary benefit will be for Labour and Co-operative candidates. I know that there is a long tradition of them working together, and I hope that this will be accepted as an extremely helpful and consistent implementation of a principle that has been accepted in other parts of the electoral law.
I have three specific questions. As I understand it, it will now be possible for candidates standing for more than one party to have exactly the same opportunities for the use of an emblem on the ballot paper as those who are standing for a single party. However, it is a standing policy of all Governments that there should always be one emblem. The idea of combined emblems will provide a very interesting design objective in some circumstances. Whether the red rose is sometimes painted green—or there may be other opportunities for amalgamation—it will be a challenge to all designers. But there is also a problem of definition. I imagine that bringing together two emblems in a way that apparently creates a combined emblem will not be entirely easy to distinguish from two emblems separately put on the ballot paper. That is something that all Ministers in all Governments have rightly sought to resist as, once you open to door to that, you could have multi-emblems attempting to get on the ballot paper and more space being required—or else they would be too small to be legible. Is my noble friend entirely satisfied that the regulation will prevent what would otherwise look like two emblems being rather loosely combined? That may seem a small design problem, but it could turn out to cause difficulties.
Secondly, and relating to that, we are approaching the noon deadline on Monday 4 April at considerable speed. The consultation on this issue took place immediately after the 2010 election, both with the Electoral Commission—and I have declared an interest as having a minor role on an informal advisory group for the commission—and more widely. It is unfortunate that the elections for mayors in Bedford, Middlesbrough, Mansfield, Torbay and Leicester, where they must now already be starting their campaigns, have not been briefly and appropriately informed of the change. I have no idea whether there are candidates in any of those five locations who intend to stand on behalf of more than one party, but we are near the deadline and I hope that some attempt has been made to inform people in those areas, the political parties and those responsible for electoral administration, that this proposal was coming forward.
Thirdly, in his introduction, my noble friend referred to the fact that in due course primary legislation would be required for UK parliamentary elections. Can he tell the Grand Committee whether this is yet another candidate for the so-called “Christmas tree Bill”? That is rather an unfortunate description; it might be more properly described as the “Odds and Sods Constitutional Reform Bill”, because I know that a number of different proposals are likely to be contained in it. If it is, how soon may we expect to see that Bill? To adopt more parliamentary language, perhaps it could be called a portmanteau Bill. Either way, it is obviously important that the parties are given due notice that proposals will be brought forward as soon as time is available to deal with the bigger issue of the 2015 general election. As my noble friend has said, it is extremely important that we have total consistency so that the political parties, candidates and agents, as well as those responsible for electoral administration, have clear guidance that there will be a consistent approach right across the board.
Very briefly, since we are dealing with mayoral elections, I hope that my noble friend will be able to confirm that some of the issues arising over how executive mayors have been introduced into this country over the past 10 years are being reviewed in preparation for the Localism Bill, which is already under consideration in the other place. There are important problems that arise from that legislation, not least the fact that financial decisions are incredibly controversial when they are made by an elected mayor, because he or she can introduce a budget when two thirds of a council votes against it. There is also the issue of special responsibility allowances, which give the elected mayor huge patronage opportunities.
Obviously, this afternoon is not the opportunity to discuss these issues. However, I hope my noble friend will acknowledge that we cannot completely detach the issue of mayoral elections from wider concerns about the way in which the system is working, after a long period where it has caused some controversy in different parts of the country. When we come to the Localism Bill shortly, I hope that we will be able to address these.
I think my noble friend and his colleagues in the coalition Government have introduced some very sensible and, some might say, rather latter-day improvements to the system. They are correcting an inconsistency, a discrepancy that unfortunately managed to find its way into the previous basis for the identification of candidates on the ballot paper. I very much support and welcome the order before us.
Baroness Golding
My Lords, if I may for a moment, I was on the Committee of the Political Parties, Elections and Referendums Act 2000. I can remember very vaguely why it was called that. It was something to do with political parties so-called registering themselves in similar names—I think it was something like Liberal and Literal—so that voters would be confused by not reading properly. I had a letter in 2007 from someone saying that they had attempted to obtain the committee minutes and reports of this committee. He goes on to say that the committee office had performed a search in the Houses of Parliament and the parliamentary archives for the committee’s records. Unfortunately, and also rather incredibly, they reported on 20 January that the contents of the only file they had located related mainly to the establishment of the committee and included virtually nothing about any advice it may have given about the registration of parties. That seems incredible. I would like to know if in fact these minutes were found. I think it is important, because the registration of parties came before the registration of these emblems. The parties that are registered should be proper political parties, not ones that were originally trying to imitate another party. So I would be grateful if the Minister could let us know if the minutes have been discovered.
Baroness Royall of Blaisdon
My Lords, I, too, am grateful to the Minister for his clear explanation of the order before us and I completely accept, of course, that it was under the Labour Government that the oversight occurred. I am very glad that the Minister and his colleagues are seeking to put that right. As the noble Lord said, some Labour candidates are also members of the Co-operative Party. I myself am a proud member of both parties. I recognise that we will benefit from this particular regulation, as the noble Lord, Lord Tyler, said.
As a consequence of the oversight, if a person stands for both parties, they are unable to use an emblem for either one on the ballot paper. Clearly, that was not the intention, and I am glad that that is going to be righted. The noble Lord suggested that he was very glad, because there would not be able to be a plethora of emblems on a ballot paper. While I accept that we would not want to have rows and rows of emblems, I would ask the Minister why one cannot have two emblems, perhaps, rather than one. It is just a simple question.
Lord McNally
My Lords, having desisted from drawing the attention of the Committee to the fact that we are yet again clearing up a mess left by the previous Administration, I was disappointed that the noble Baroness could not resist making the suggestion that this might be legislation for the coalition partners. I thought that I had pre-empted that. As has been clearly stated by both parties, there is no intention of putting forward joint candidates. We will be fighting the next election in May 2015, Parliament permitting the legislation, as separate and distinct parties. I believe that the noble Baroness really knows that.
I was interested in the comments made by the noble Baroness, Lady Golding. If she were on the committee, we have the guilty woman with us today. She made an important point about how, with the best of intentions, this kind of legislation came about. I remember the by-election in which the guy stood as the Literal Party candidate, while at the Hillhead by-election one of the candidates changed his name to Roy Jenkins in order to confuse. I am therefore well aware that the origins of this legislation were, rightly, to try to prevent the electorate from being confused, deliberately or otherwise, and to clarify the rules around the candidature.
On whether two or more emblems should be allowed, it is a matter of judgment. If we say one or two, someone will ask, “Why not three?”. The general principle of the legislation is that there should be a level playing field for candidates. It is therefore right that candidates standing for a political party may use one emblem only on the ballot paper. I am quite sure that if at some stage somebody wanted to amend a piece of legislation, Parliament would consider it, but I suspect that we would return to the balanced view in the original legislation—that the best level playing field is to have one emblem. As long as the emblem chosen can be cleared by the Electoral Commission, it could possibly be a hybrid of the two, but I suspect that it would make sense to have just the one emblem.
Certainly, I was not saying that this is just for the Labour and Co-op parties, although the noble Baroness is right that the title “Labour and Co-op candidate” has a proud history in British politics. The redoubtable Alf Morris fought all his elections as a Labour and Co-op candidate in my neighbouring constituency of Manchester Wythenshawe when I was in the other place.
Of course, emblems have changed from time to time. I remember the Labour Party as a torch rather than a red rose. I cannot remember what the Conservative Party emblem was before the tree. Was it as torch as well? The torch obviously went out of fashion.
I was also asked whether the mayoral candidates had been informed. The political parties were consulted about these plans. Indeed, I am told—and this shows that the Labour and Co-op party machines are on their toes—that they actually approached the Cabinet Office to seek clarification. I will not say that things have changed since my day, but I was impressed by that.
I was also asked when the point about the general election would be addressed. My honourable friend Mark Harper was more daring than my brief in that he suggested that the individual electoral registration Bill might be a suitable vehicle. I do not know whether that would be the case or whether the suggestion made by my noble friend Lord Tyler of a portmanteau Bill would be better. However, I take on board the point made about the by-election. One of the things that we will take from this debate is that there might be a sense of urgency rather than simply thinking that it is a matter for 2014 or 2015. Certainly, the Government’s intention is to address the issue.
On the question of the merits and demerits of elected mayors, although the regulations are about elected mayors, we will have to leave the debate that my noble friend Lord Tyler tried to tempt me into to our consideration of the Localism Bill, if that is where it will be. I do not know whether these regulations are covered by the in/out commitment. I do not know whether the rules are quite so rigid when we are carrying out a tidying-up exercise such as this.
On the question of where the missing minutes are, I can assure the noble Baroness, Lady Golding, that I will try to find out. I am also the Minister responsible for the National Archives. Missing minutes are very important, particularly minutes on an issue of such interest. Perhaps the officials responsible for this cock-up in the first place have stolen the minutes. I am grateful to all those who have contributed to this debate and I commend the regulations.
Marine Licensing (Licence Application Appeals) Regulations 2011
(13 years, 7 months ago)
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Lord Henley
That the Grand Committee do report to the House that it has considered the Marine Licensing (Licence Application Appeals) Regulations 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)
My Lords, the Committee will be aware that my honourable friend the Parliamentary Under-Secretary for Natural Environment and Fisheries presented these statutory instruments in another place on 7 March, where they were fully supported and passed with relatively little debate. The regulations form part of the new streamlined and transparent marine licensing system, to be introduced in April this year under Part 4 of the Marine and Coastal Access Act 2009, which we all remember. The Act was broadly welcomed by all parties when it was debated in both Houses, although it took some time.
The new system replaces two out-of-date and overlapping pieces of primary legislation—Part 2 of the Food and Environment Protection Act 1985 and Part 2 of the Coast Protection Act 1949—and establishes a single system for approving most projects at sea. The Marine Management Organisation, established in April last year, will carry out most of the Secretary of State’s licensing and enforcement functions. The Secretary of State for Energy and Climate Change will license oil and gas-related activities. One feature of a modern, more transparent and accountable licensing system is the right to challenge a decision made by a regulator. The regulations before the Committee today establish two rights of appeal.
First, the Marine Licensing (Licence Application Appeals) Regulations 2011 are made under Section 73 of the Marine and Coastal Access Act. These allow an applicant to appeal to an independent body within six months of a decision on their marine licence application. These appeals will be handled by the Planning Inspectorate. The regulations set out what an applicant must do to appeal against a decision, as well as the responsibilities of the licensing authority and the appeals body. The Planning Inspectorate will decide whether the appeal is to be heard by means of written representations, a hearing or—in the larger cases—an inquiry, based on the complexity of the case, as in all other planning matters. The rules that apply to each type of process are set out in the regulations and have been aligned, in general, with similar regulatory regimes.
The draft Marine Licensing (Notices Appeals) Regulations 2011 are made under Section 108 of the Act. The Act makes provision for a range of notices to enable a more proportionate approach to enforcement in the marine environment, designed to bring people into compliance. The regulations before the Committee set out a right of appeal against certain notices to the independent First-tier Tribunal, which was set up under the Tribunals, Courts and Enforcement Act 2007, specifically to hear civil enforcement appeals. The instrument sets out the powers of the tribunal in relation to appeals against notices and the notices that can be appealed. Appeals will follow the rules and procedures of the First-tier Tribunal General Regulatory Chamber, which are set out in secondary legislation that came into force in 2009.
I give an assurance that the Government consulted on both sets of regulations in the summer of 2010. Respondents broadly welcomed the introduction of both the appeals mechanisms and the detailed proposals. The devolved Administrations in Scotland, Wales and Northern Ireland are licensing authorities under Part 4 of the Marine and Coastal Access Act and are each making their own regulations under Sections 73 and 108 of the Act. Therefore, what we are talking about today relates purely to England.
I hope that the Committee will agree that the proposals set out in these regulations provide the level of transparency and accountability that the public have come to expect from modern regulators and I hope that the Committee will join me in supporting this measure. I beg to move.
Lord Tyler
My Lords, I congratulate my noble friend and the Government on producing what I think is a very workable set of proposals. Indeed, this is an opportunity to pay tribute to the former Government for introducing the Marine and Coastal Access Bill. I think that I remember there being 17 sessions. My noble friend Lord Taylor may recall how many there were.
Lord Tyler
I think that we had 17 Committee evenings on that Bill. Some of them went long into the night but on the whole they were extraordinarily amicable, in contrast to some of our recent debates on other matters.
This is a very neatly designed scheme. It seems to be streamlined yet still transparent in terms of licensing and appeals under Part 4 of the Act. Of course, it is extremely important not just that there is a transparent process for licensing but that the appeals procedure is open to everyone to see how it works. In that context, and inevitably with a new system, the proof of the pudding is in the eating. It will not be until we have seen some case law and have had some experience of the system that we will know whether it is as fool-proof as one would hope.
Perhaps I may take up one point that my noble friend made. The Planning Inspectorate will decide whether the appeal is to be heard by means of written representations, a hearing or an inquiry based on the complexity of the case. The definition of “complexity” is obviously a matter of judgment. That is inevitable; we cannot prescribe it in advance.
I am sure that anyone who was involved in the long process of the legislation’s gestation through your Lordships’ House will remember that there were a great many interested parties, all of whom had an amazing array of expertise. I hope that, together with the consultation that has already taken place, experience over the next few months and years will show that the amicable, united spirit that we set in place is maintained. This is a very important new framework for the management and conservation of our coastal and marine neighbourhood. This set of detailed proposals looks relatively straightforward. I am happy to support them and to commend all those in both Administrations who have been involved in producing them.
Baroness Quin
My Lords, I, too, welcome these regulations. I thank the Minister for bringing them forward today and for the way in which he spoke to them. As he pointed out, they have already been considered in the other place, where they were generally supported. Indeed, as the noble Lord, Lord Tyler, recognised, they are supplementary provisions to the Marine and Coastal Access Act 2009, which, as he and the Minister pointed out, commanded strong cross-party support in both Houses of Parliament.
These regulations deal with licensing and enforcement issues. Under them, the Marine Management Organisation takes over most of the licensing and enforcement functions of the Secretary of State. We agree that the MMO is the suitable body to carry out these functions. We very much support the aims of making the system clear and transparent, which was one of the points that the noble Lord, Lord Tyler, stressed. We also support the fact that these two instruments, which are obviously linked, are being taken together in this debate, but perhaps I could ask one or two questions relating to the instruments separately, arising from reading the documentation in front of us.
Regulation 5(2) of the licence application appeals regulations mentions that the instrument,
“may provide for payment to be made to the appointed person”.
However, it was not clear to me what kind of payment this was. Obviously, we are talking about an appeals system and we want people to feel that they are able to appeal if they believe that a decision has not been correct. I simply wanted to ask what kind of payment, if any, might be involved in that process. I may have misread it, but I would be grateful for clarification from the Minister.
The Minister will not be surprised to hear me question whether the MMO has the staffing and resources necessary to undertake these functions. Page 2 of the impact assessment mentions the cost to the MMO in terms of training, new forms that have to be produced, changes to the IT systems and so on. I hope that the Minister can reassure us that the staffing and resources are there to be able to carry out these tasks.
I note that for the licence appeals system there will be a review in three years, but under the notices regulations the review will be two years after the introduction of the system of new monetary penalties and notices. I am not quite sure what date that means for the notices system, but I wondered, given how linked the two things are, whether the review period should be more or less the same for both.
The notices regulations introduce a,
“more flexible toolkit of enforcement options”.
We support that. As the Minister said, these provisions apply only where the Secretary of State is the appropriate licensing authority, so we are talking about England. I wondered, however, whether the devolved Administrations will have a similar or even the same system and in particular, in terms of monetary penalties, whether the devolved Administrations will have systems that are very much aligned with the one that will be introduced in England.
I found the impact assessment generally very helpful. However, I refer the Minister to paragraph 61 on page 21, which talks about the cost of familiarisation with guidance. It says:
“It is assumed that 20% of those holding FEPA licence will each spend 40% of a working day familiarising themselves with the guidance”.
To me, that somewhat begs the question: what about the other 80 per cent? Perhaps the answer is elsewhere in the document; if I have simply misunderstood it, perhaps the Minister can put me right on that point, either now or in writing.
As my colleague William Bain noted in the other House, these regulations comply with the Hampton recommendations on taking unnecessary matters out of the courts. As the noble Lord, Lord Tyler, said, they introduce a reasonable system, so I am happy to support these additional measures, which complement and supplement the 2009 Act.
Lord Henley
My Lords, I am very grateful to the noble Baroness and to my noble friend Lord Taylor for their remarks. I will join my noble friend Lord Tyler in paying tribute to the previous Government—it is only occasionally that we do such things—for the passage of the Marine and Coastal Access Bill. I would also add how sorry we are that the noble Lord, Lord Greaves, who spent so much time on that particular Bill, as my noble friend Lord Taylor remembers it, is not able to be here today.
As regards how this legislation works, my noble friend Lord Tyler said that the proof of the pudding will be in the eating, and he referred to the problem in terms of the definition of “complexity”. I can give some sort of assurance from my ancient memories as a pupil at the planning bar—a very, very long time ago—that this is well understood in planning law. In terms of transposing—perhaps I may use that EU expression—these matters on to general planning law, there will be a great problem. Obviously, there will be questions of fact and degree as to where something lies and whether it should be undertaken by written representation, by some other appeal or by general public inquiry. However, these matters have previously been dealt with without too much problem.
The noble Baroness, Lady Quin, first asked about payments. I understand that a salary or fee will be paid by the planning inspectorate to any appointed inspector, as has always been the case. That is what happens with terrestrial planning systems—they are paid for the work they do, as is right and appropriate. She also asked about staffing, saying that I would not be surprised by her question on whether the MMO would be able to meet its commitments. We have certainly taken advice from the MMO enforcement team on the level of resource required for this activity. It is perfectly happy that it has budgeted accordingly and will be able to deal with everything that it needs, as set out in the impact assessment.
I shall turn to the noble Baroness’s complicated question—I am not sure whether I have got it right—about the different review timescales we have set out for two different things. One is of three years and the other two years. I understand that we are committed to monitoring and reviewing the use of notices after two years. Obviously, appeals on that system are different. However, if I have not quite understood her exact concern, I will certainly write to her and set out a proper response.
I am grateful that there is general agreement on both these two orders and the fact that they should be agreed. If I have failed to answer any of the concerns expressed by the noble Baroness and the noble Lord, Lord Tyler, I will obviously do so in writing. In the mean time, I commend the regulations to the Committee.
Marine Licensing (Notices Appeals) Regulations 2011
(13 years, 7 months ago)
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Lord Henley
That the Grand Committee do report to the House that it has considered the Marine Licensing (Notices Appeals) Regulations 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
Waste (England and Wales) Regulations 2011
(13 years, 7 months ago)
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Lord Henley
That the Grand Committee do report to the House that it has considered the Waste (England and Wales) Regulations 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)
My Lords, these regulations are being made to transpose in England and Wales Directive 2008/98/EC on waste, which is known as the revised framework directive.
The Waste Framework Directive is the foundation stone on which all EU waste legislation has been built. It was originally adopted as far back as 1975—a date which many of us in this House can still remember—in what was then known as the Common Market. At that time, most waste was disposed of by landfilling or incineration.
However, the Waste Framework Directive has developed over the years as our awareness of the environmental consequences of waste disposal, and the unsustainable use of resources, has grown. The directive was substantially revised in 1991 and its scope extended from disposal to include also the recovery and recycling of waste. In recognition of the increasing international trade in waste for recovery, the 1991 revision also introduced an EU-wide definition of waste.
The latest revision of the directive builds on those solid foundations. Its aim is to place much greater emphasis on the sustainable use of resources by taking measures to prevent the production of waste, and by making better use of the waste that continues to be produced. It also simplifies regulatory controls by incorporating the Hazardous Waste Directive into the revised directive and repealing most of the Waste Oils Directive. However, protecting the environment and human health remains a key objective.
The fulfilment of the directive’s objectives is of interest to everyone—householders, local authorities and businesses, big and small. We have developed our proposals to transpose the directive in close consultation with these customers and stakeholders. The process was begun by the previous Government, which consulted on the transposition of several key provisions. The coalition Government took this forward and consulted last year on a draft of the transposing regulations. In transposing the directive, we have sought to keep costs to businesses, local authorities, regulators and taxpayers to the minimum. Many of the directive’s requirements can be met without additional measures or burdens and do not involve additional costs. Where new controls are necessary we have adopted a light-touch approach. I can assure the Committee that the transposing regulations do not gold-plate the directive.
A key new provision of the revised directive is the five-step waste hierarchy, which is to apply as a priority order in waste management legislation and policy. Our proposals for implementing the waste hierarchy through minimum changes to the planning, permitting and waste transfer note arrangements were well supported in consultation. They were widely recognised as representing a light-touch approach. The revised directive also sets two new targets for 2020: first, to recycle 50 per cent of waste from households; and, secondly, to recover 70 per cent of non-hazardous construction and demolition waste. The regulations impose no new measures to meet these targets. Current projections are that existing policy measures, including the landfill tax, should be sufficient to ensure that we meet them. There are no requirements in the transposing regulations that directly affect issues such as the frequency of local authorities’ collection of household waste, charges to householders or the enforcement of waste collection services.
The revised directive also requires member states to introduce separate collection of wastes, where practicable, by 2015. The previous Government obtained clarification from the European Commission that what is known as co-mingled collection—where recyclable materials are collected together for subsequent separation—is an acceptable form of separate collection under the directive, provided it results in materials of sufficient quality to be recycled. The Government are satisfied that co-mingled collection is capable of providing the right quality of recycling material, so the transposing regulations we have laid before the Committee confirm that co-mingled collection is a valid form of separate collection. The regulations therefore contribute to the coalition Government’s policy on localism by ensuring that decisions on the best ways to collect household waste remain a matter for local authorities. The regulations would allow local authorities to make those decisions and to provide the waste and recycling services that their residents want.
The regulations also provide scope for residents and local groups to contribute to the big society—for example, by setting up local re-use networks and helping to prevent waste, both of which come much further up the hierarchy and are to be applauded. I commend the regulations to the Committee. I beg to move.
Lord Tyler
My Lords, my noble friend was kind enough to refer to my noble friend Lord Greaves. I must confess that I am standing in for him with even more trepidation on this set of proposals than I did on the previous one, where I had had some role in the passage of the marine Bill.
I think that the first thing that my noble friend would have said is that it is rather unfortunate that all this paper before us appears not to be recycled. I do not know whether my noble friend the Minister can confirm this. The symbol that usually appears on documents of this sort to show that they are on recycled paper is not present. It may be that the emblems have been mistaken, but we all have an increasing responsibility to try to make sure that we practise what we preach.
I have one or two questions. First, will my noble friend confirm that the long period since the European Court of Justice decision of, I think, 2005 that is referred to in some of the notes before us has been put to good use in dealing with the issues then raised? It is quite a long delay. I accept that these regulations deal with the directive on waste of 2008-09, but it should surely have been the concern of the previous Administration to deal with the ECJ judgment previous to that.
Secondly, I am sure that my noble friend Lord Greaves would have been able to cope with the concept of co-mingled collection much more adequately than me because it is new to me—I have no doubt that the Minister is all too aware of it—but there is a real dilemma here, of which I shall give just one illustration. My own local authority insists that the transparent windows on window envelopes are detached from the envelopes and disposed of in a completely different way. It is the first time that I have come across that anywhere in the country. It may be perfectly acceptable under these regulations for co-mingled collection, but in my locality it is not. A huge number of envelopes have such windows, as I am sure other Members of your Lordships' House will know from the mail that they receive. Every time I go home, I find myself spending quite a long time detaching windows from envelopes. The regulations do their very best, with what is described as a light-touch approach, to marry the objectives of consistency through the whole country with localism—my noble friend the Minister has referred to that. However, it is a real dilemma for the householder who, perhaps like Members of your Lordships' House, has to dispose of refuse in different parts of the country on completely different bases. Co-mingled collection is obviously an interesting issue.
I understand from what the Minister said, as well as from the briefing that I have received, that the Government are very properly insisting on trying to avoid overregulation and on giving local authorities the opportunity to take their own decisions. However, on these matters, it makes for a postcode lottery, with businesses and households through the country faced with quite different concerns and costs. It should be a constant concern of any Government to try to get that balance right. I would like to be reassured that, under the regulations, the avoidance of gold-plating and the insistence on a light touch will not result in a plethora of quite different policies in different parts of the country. That is an inevitable dilemma.
I have one other point, on timing. I note that, under the directive of November 2008, it was intended that the Government should achieve this transposition by 12 December 2010. I understand that, as a result of their failure to do that on time, an infraction letter was issued which I presume the Government have had to take note of and respond to. I just wonder where that matter stands and whether the Minister is confident that the Commission will not be able to, or will not wish to, take further action since we are some two or three months behind time on that.
I cannot pretend to be a great expert on these regulations, and no doubt I will be subject to the inevitable scrutiny of my noble friend Lord Greaves afterwards, but he would at least be concerned that these proposals seem to have been quite a long time in gestation. It so happens that they appear to have been printed on paper that has not been recycled, but I trust that when it is collected in waste bins around your Lordships' House will be appropriately recycled in the future.
Baroness Quin
My Lords, these regulations are important. As the Minister pointed out, they transpose the Waste Framework Directive. Indeed, as the Explanatory Memorandum points out, in one way or another the fulfilment of the directive's objectives is of interest to everyone in the country—householders, local authorities, businesses, including small and medium-sized enterprises, NGOs, consumer groups and so forth. I am grateful that we have had the opportunity today to look at these regulations. I also thank the noble Lord, Lord Tyler, for representing the noble Lord, Lord Greaves, whose knowledge we miss on these occasions. I know that he has taken a deep interest in these issues for a long time.
Despite the fact that not many noble Lords are present for this debate or have spoken, these matters are of ongoing concern. I am sure that we will return to them at many points in the future on the Floor of the House and in Grand Committee. Certainly, the Opposition will be watching progress on this important matter carefully.
We are fortunate in that the Minister is in charge of this subject within the department. He is smiling—I hope that he is pleased to be in charge of it. Therefore, we are able to ask the relevant Minister the pertinent questions that need to be asked today and as this matter progresses.
The Minister reminded us that the regulations re-enact, repeal or revise three predecessor directives. With the EU, it is not always a case of adding new regulations. Sometimes, it involves repealing and scrapping previous regulations. I welcome the way that this has happened.
The noble Lord, Lord Tyler, mentioned that we were somewhat late in not complying with the deadline. He mentioned the infraction letter. I note that the Minister in the other place said that this was partly due to wanting to have as thorough a consultation process as possible. Obviously, I welcome the fact that a consultation has taken place. I note that the Minister in the other place also mentioned the point that was reinforced by the Minister here: that they had not wanted to gold-plate the regulations. However, I somewhat share the concern raised by the noble Lord, Lord Tyler. We are really just introducing the minimum requirements under the directive and keeping a light touch, as the Minister said. But we need to be assured that that light touch will be effective. We also want to be assured that encouragement to go beyond these requirements will be part and parcel of the system.
The last time that the Minister and I discussed environmental issues, his noble friend Lord Deben was present. He gave the Minister a hard time in terms of wanting an assurance that we could move faster in future. Many of the points that he made in the debate on the draft producer responsibility regulations should be borne in mind for this debate, such as the possibility of an earlier review if necessary.
In response to the noble Lord, Lord Deben, the Minister said in the previous debate that the timing and circumstances of the waste review meant that two years was an acceptable period. None the less, if there are ways in which standards can be raised more quickly, that would be of great interest to us.
Lord Henley
My Lords, I thank the noble Baroness for her remarks. She asked whether I was pleased to be in charge of waste. My Secretary of State the other day accused me of having become, after just nine months, what she described as a “waste nerd”. I had to say yes and took pride in the fact that I had become a waste nerd; it is a subject of great interest to me and should be of great interest to all of us. I hope that this is a matter we will come back to in due course, when the waste review comes out in May. That is our current estimate; the trouble is that May seems very close at hand now but that is when we hope to get it out. It cannot come out in April because of local government elections and the purdah that goes with those. This is a matter that affects local government to a great extent. However, we hope to get it out in May. I hope we will have considerable discussions on the whole subject of waste—on how it should be seen as a resource and not just as waste; how we should dispose of waste; and how we should meet all our commitments. We will deal with those matters at that time. I am not sure that tonight is necessarily the opportunity to go through all that. If we do, I suspect all those waiting to debate Manchester might get somewhat irritated with me because I would take up too much time, having become a waste nerd.
The noble Baroness also referred to my noble friend Lord Deben, who said that he wanted to make sure there was no loss of momentum. Following that, she referred to various EU comparisons. It is always worth looking at what other countries in the EU are doing and how they deal with these matters. Looking downwards, it is always worth looking at what different local authorities do. By pursuing a policy of localism—which might mean that some authorities do better than others and that there is an element of postcode lottery—rather than trying to impose the same system from above, we can learn new things. Certainly, we look at what is happening in Europe.
It is also worth pointing out that we are not necessarily doing worse than many of our European comparators. Only today I saw some representatives of the packaging industry. They explained to me how well we had done in reducing packaging. After all, reducing waste is the most important part of the whole waste strategy. We have seen virtually no growth in our packaging waste over the past 10 or so years, despite the growth in the economy, whereas most other countries in Europe have. I do not know whether those figures covered England or the UK, but that is an area in which we are doing very well indeed and of which we should be proud. I pay tribute to what the previous Government did and what we shall continue to do when we come forward with our waste review, which I hope the noble Baroness will welcome in due course.
I will deal with one or two of the points that have been made by both the noble Baroness and the noble Lord, Lord Tyler, on this. I can say only mea culpa—or somebody culpa—for what the noble Lord said about the document produced by the Stationery Office not necessarily being printed on recycled paper. That is probably a matter for the Stationery Office. However, I will ask officials to take it up and ask what the Stationery Office is doing about the use of recycled paper. That is important because it is something that Defra is very keen to do, not only by example within the department but by encouraging it throughout the whole government estate, to make sure that we do the right thing. Dare I say at this stage—two or three months before we produce our waste review—that I will give a guarantee that that will be produced on recycled paper and will be as environmentally friendly as it is possible to be?
The next important point made by the noble Lord, Lord Tyler, echoed by the noble Baroness, Lady Quin, is on this very difficult question of co-mingled waste collection. I appreciate that there are concerns about this. Speaking from my own experience of having been a Minister for Waste for all of nine months, and the number of visits I have made to materials recycling facilities—MRFs, normally shortened to “Merf”—I can say that the technology gain with MRFs is improving by the day. They are getting much better at separating the different recyclables from a co-mingled collection. That is very important, because only some authorities can pursue a policy of having a good kerbside separation which is appropriate for that particular authority and which seems to be the best at giving purer recyclables at the end. Technology will move on and will make MRFs even better at separating things. In the mean time, we have to accept that different authorities have to do different things.
That is one of the reasons why I am a great believer in localism. I appreciate that my noble friend Lord Tyler said that there were real dilemmas in localism. One point that people always make is that it leads to what is called a postcode lottery. I do not think that that particularly matters, provided that the postcode lottery means that the best ones always get better and encourage the less good ones to follow them upwards. The other advantage of the so-called postcode lottery and of the localism view, which is particularly true in waste collection, is that any idea that the Government imposed their own rules top down would be wrong. We would get it wrong. Different local authorities pursue different ideas—it is almost the Maoist approach of letting 100 flowers bloom. I see the colleague of the noble Lord, Lord Tyler, laughing; he hears a Tory talking about flowers. However, having different approaches coming from different authorities allows different ideas to be developed and I believe that that is good.
When I started visiting local authorities and watching the whole collection and disposal process, the first one I visited, not far from me, was Richmondshire in North Yorkshire. It is a very different place from the London borough of Richmond. Similarly, I live in Carlisle, partly an urban and partly a rural seat. It is very different from the other place I live in, Westminster. They offer very different services because of their different nature: the houses are high-rise, or whatever. Local authorities have to do different things, and some will want to pursue the co-mingled route and some another. The assurance we sought from the EU—which I gather the previous Administration also did—is that co-mingled will be satisfactory in terms of dealing with whether this is genuinely recyclable. But that is a matter that will have to be kept under review.
Lastly, may I deal with the question of timing to which my noble friend, Lord Tyler, referred? I appreciate that it is a matter that should have been dealt with by December 2010. However, as I think my honourable friend Mr Benyon made clear in another place, we thought it was better—as did the previous Government—to overplay the consultations to ensure that we got these matters absolutely right, that we were not going to gold-plate the directive and that all our measures were achievable. I hope that with that in mind, as well as the fact that in due course we will be producing our waste review, which I look forward to debating with the noble Baroness and others, the Committee is prepared to accept these regulations.
Greater Manchester Combined Authority Order 2011
(13 years, 7 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Taylor of Holbeach
That the Grand Committee do report to the House that it has considered the Greater Manchester Combined Authority Order 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
Lord Taylor of Holbeach
My Lords, the order would establish a combined authority covering the area of the 10 local authorities of Greater Manchester. The establishment of the new combined authority will leave Greater Manchester better placed to tackle its economic challenges and improve public service delivery.
Part 6 of the Local Democracy, Economic Development and Construction Act 2009 enables the creation of economic prosperity boards and combined authorities. These are designed for groups of local authorities that wish to work closely together to deliver improvements in economic development, regeneration and, in relation to combined authorities, transport. They are corporate bodies with their own governance structures. They can be given local authority functions relating to economic development and regeneration and the transport functions available to integrated transport authorities. I should stress that whether to establish a combined authority is a voluntary decision for the local authorities concerned and that Ministers cannot impose combined authorities on areas.
The 10 local authorities of Greater Manchester have a long history of collaboration. For more than 20 years, the voluntary partnership known as the Association of Greater Manchester Authorities (AGMA) has successfully co-ordinated cross-boundary collaboration between the 10 local authorities on a wide range of issues.
The previous Government consulted in March last year on AGMA’s proposal to establish a combined authority. The consultation showed strong support for the combined authority from a range of private sector and public sector partners across Greater Manchester. The combined authority has strong support within the business community and has the support of all 10 local authorities in Greater Manchester. In November, we confirmed our intention to support the establishment of the combined authority and to proceed with the order establishing the new authority.
Membership of the combined authority would consist of the 10 local authorities of Greater Manchester. Under the order, each constituent local authority is required to appoint one of its elected members as a member of the authority. The combined authority would be funded through appropriate contributions from each of the 10 local authorities and through the transport levy.
The order would transfer the functions of the integrated transport authority to the combined authority, which would also assume some existing transport functions held by the Greater Manchester local authorities. The order would also devolve to the combined authority certain local authority functions relating to economic development and regeneration. This should ensure more effective alignment between decision-making on transport and that on other areas of policy such as land use, economic development and wider regeneration. In particular, the same authority would determine Greater Manchester’s sustainable community strategy and its local transport plan.
The Greater Manchester Integrated Transport Authority has a good history of delivering and improving transport in Greater Manchester. For example, it manages a concessionary fares scheme for senior, blind, disabled, and young permit holders and organises about 7.5 million school journeys each year. It has masterminded the expansion of the Manchester Metrolink, including important extensions to East Didsbury, Ashton, Rochdale, Oldham and Manchester Airport. However, with the establishment of the combined authority we would see a greater concentration of transport functions across Greater Manchester within one authority. This would help to deliver transport benefits beyond those which the existing integrated transport authority structure can provide.
The new arrangements will allow the combined authority to have much greater influence over the full range of transport infrastructure and services across Greater Manchester. In view of their decision to establish a combined authority, the Government are committed to working with Manchester on a forward-looking programme to examine how Greater Manchester can assume greater responsibilities and influence, comparable to those enjoyed by Transport for London. This agenda will be taken forward through a protocol on heavy rail that facilitates closer working between Greater Manchester and the Department for Transport, and a similar protocol on highways which will facilitate closer working between Greater Manchester and the Highways Agency.
The protocols will provide the basis for the combined authority to plan and develop its transport strategy in full awareness of programmes on national rail networks and the strategic road network in and around Greater Manchester. They will also enable the combined authority to be able to have a real influence on those national programmes, bringing to bear the authority’s knowledge of what is needed from transport to facilitate the authority’s strategy for promoting economic growth in Greater Manchester.
In October last year, the civic and business leaders of Greater Manchester were invited to proceed with the establishment of their proposed local enterprise partnership. They hope to have their new local enterprise partnership up and running next month. The Greater Manchester combined authority will work in close partnership with the local enterprise partnership to drive economic growth across Greater Manchester. Under Greater Manchester’s proposals, the local enterprise partnership will provide strategic direction and leadership in delivering on Greater Manchester’s economic priorities. The combined authority will act as the primary accountable body for Greater Manchester and as a repository of certain statutory functions, including those of the integrated transport authority.
We do not anticipate that establishing the combined authority will involve increased costs for the 10 local authorities within Greater Manchester, as a lot of the infrastructure to support the authority is already in place. Indeed, our expectation is that the combined authority will lead to considerable efficiency savings through sharing and avoiding the duplication of services. This is important at a time when public resources are so stretched.
In conclusion, I believe that the new combined authority will leave the local authorities of Greater Manchester better placed to support the delivery of economic improvements across Greater Manchester and to support the ambitions of its local enterprise partnership.
Lord Smith of Leigh
My Lords, I should first declare a number of interests in this matter. I am leader of one of the 10 Greater Manchester authorities and chairman of the AGMA executive board. Last month, I was appointed chair of the shadow combined authority, because we anticipate the success of the order. We are well into planning for it.
I thank the Minister for the clear and thorough way in which he introduced the order and through him thank the Government for the way in which they reviewed the application for the combined authority for Greater Manchester and for agreeing to it.
There are some familiar faces here. We were in this very Room discussing the Committee stage of the wonderful Local Democracy, Economic Development and Construction Bill. That lasted a long time and, in one session, I rather surprised the Minister at the time by saying that, if you want this sort of thing to work, you have to give it some real teeth and real powers; otherwise, what is the point of going through all these processes? Fortunately, the Minister listened and, as a result, the combined authority is a more effective and more accountable form of government.
As the Minister described, with wonderful timing we entered the consultation phase in March last year, which of course straddled the general election. Therefore, there was an impasse before the election but, as I said, we were extremely pleased that the Government listened, and there was overwhelming support for the combined authority from partners in Greater Manchester. The authority shares with the Government the desire to improve the economy of Greater Manchester, and it does so in a number of innovative ways, particularly working with the private sector. We have no quarrels with that. We have a long history in Manchester of working with the private sector. We recently set up the Business Leadership Council, which is a fairly free-flying body. It can criticise AGMA if it does not think that it is responding to the needs of business across the conurbation.
As the Minister said, we have now been working together in AGMA since the abolition of the old met counties in 1986. That means that we have been working together for 25 years. I think that we have become more effective because we have realised that there is more to do. The tyranny of some local boundaries means that, when trying to achieve something locally, you need to think bigger, particularly on economic matters. With the support of the previous Government, there was an independent economic review for Manchester. A group of distinguished economists was able to come and say what was good about the Greater Manchester economy and, perhaps more importantly for all of us, what was not good and what we needed to do. One thing that the economists said we needed to do was to improve the governance, making it stronger, and integrate decisions on transport with other economic decisions. That is what the combined authority will allow us to do.
I want to comment on one thing that the Minister said which was not quite correct. In the wake of a very painful experience concerning the congestion charge, in which a referendum was broken, AGMA agreed to set up a Greater Manchester transport fund. It increased the levy from each local authority by 3 per cent above the demands of the service and put it into a transport fund, which was able to pay for the extensions to Metrolink, as the Minister evidenced. Therefore, although it went through the CA, the CA did not pay for it; the AGMA leaders agreed to do that. That is the kind of thing that we will do in the future. Despite the current pressures on local government, we are sustaining that going forward.
We also want to work with the Government on reforming public services, as the Minister said. In particular, we are a pilot for community budgets. We understand the need for work to be done regarding families with complex needs and the great costs that arise for local authorities and government. Often, we just manage a problem; we do not cure it. Therefore, we hope that we will be able to do better work on that.
The Minister is absolutely right: we have no intention of setting up a bureaucracy to run the combined authority. We see it as a way of saving in the long term by combining work. A lot of work is going from local authorities’ highways services into the new combined authority, and that will produce savings across the board, apart from the general work that we are doing in that regard.
Finally, again, I thank the Government for their foresight. We believe that we can work together with the Government and achieve a lot on this matter.
The Lord Bishop of Manchester
My Lords, I have been Bishop of Manchester for eight and a half years now. During that time, I have been increasingly impressed with the way in which the different local authorities in Greater Manchester work together. The further co-ordination that the order will provide in terms of economic regeneration, development and transport is something that is not only a natural progression from all that has previously happened but something that I know will be enormously and widely welcomed within Greater Manchester.
I want to take this opportunity in Committee to pay a public tribute to the noble Lord, Lord Smith of Leigh, for the considerable work that he has personally done with this co-ordination over the years. He is held in very high regard across the local authorities and his wise guidance is a considerable reason why the different local authorities work so positively together.
I notice that at the end of the Explanatory Memorandum for the draft order it says:
“The impact on business, charities or voluntary bodies is expected to be negligible”.
I entirely understand why that is said, but I want to add that many people, not least in the churches, will feel that the greater coherence that the order will provide will enhance the work of the voluntary sector. I very much hope that the order will be passed.
Lord Bradshaw
I obviously support the order. It seems very sensible. In earlier legislation under the Labour Government, I moved amendments to allow the then PTEs to be joint signatories of railway franchises in their areas. I had a lot of support from the PTEs but faced an absolute stone wall from the Minister at the time. There will be huge railway development in Manchester, particularly the northern hub at the centre. It will require great work in Manchester. The Minister mentioned that there would be close working with the DfT, but I would like him to say what that means. In the past, people with experience in Liverpool and Leeds found that that close working led to very expensive delays and people feeling that they were not being helped by the department so much as throttled.
Going forward, when there are large developments, will the department bring itself to treat these large organisations that they are creating as partners rather than servants of the department? I am sorry if that sounds rather unpleasant, but I met several leaders of these authorities at the weekend and they were strong about that. There is an old saying, “I'm from the council: I'm here to help you”. But it almost seems to be, “I'm from the department and I'm here to curse you”. I would like the Minister to expand on how these freedoms will be exercised.
Lord Tope
My Lords, I, too, join in the general welcome for this order. I give it our warm and enthusiastic support. It must be as near to perfection as any Government order can achieve. It is enabled by an Act of Parliament passed under a Labour Government. The noble Lord, Lord Smith, recorded the many happy hours we spent on the Local Democracy, Economic Development and Construction Bill as it then was. I am hugely reassured to know that something good has at last come out of the many hours that we spent on it.
The order is supported by 10 local authorities and all the political parties, by business and now we hear that it has the blessing of the church as well. What more could any Government ever seek to achieve? Furthermore, we know that this is happening, quite rightly, by voluntary means rather than being imposed from above, and there is a strong lesson in that. We hear, too, that not only is it not going to cost more but there is an expectation of savings and that it can all be implemented without any great bureaucracy. This must be as near to perfection as we can ever hope from any government order, and I am sure that there will be nobody who would wish it ill or wish to oppose it on that basis. We give it our enthusiastic support, and I hope that it will show that this is the way of the future and this will be the first but not the last of a move in this direction. We wish it well.
Lord Beecham
My Lords, I join the right reverend Prelate in paying tribute to my noble, and indeed personal, friend Lord Smith. George Orwell would recognise him as an exemplary Wigan Peer if he were to rewrite his book. I also congratulate the Minister and the Government on proceeding with reasonable alacrity to bring forward this order. I have not checked, so I am not sure whether it meets the requirement of the noble Lord, Lord Tyler, of being printed on recycled paper. If not, that is the only defect one could possibly find with it. However, although this was the first order of this kind and there was a change of Government, it is nearly a year since the proposal was made. One would hope that on the basis of the experience of this order, if further applications are made—and I certainly hope that they are—the process will be a little swifter. Otherwise, particularly if there are a number of such applications, it will be quite a long time before they can be dealt with. However, presumably now that government departments have the experience of dealing with the process, it will be speedier.
I must also pay tribute not only to my noble friend but to his colleagues across the political divide in the authorities in Greater Manchester. They had their differences over the congestion charge, as he reminded us, but generally speaking they have worked very well together. I am sure that that will be the case after the pending local elections in May, although whether there will still be the same number of councillors of different political colours remains to be seen. In any event, it is clear that, not for the first time, Greater Manchester has blazed a trail for metropolitan governance in this country. The councils have, of course, a very strong municipal history. Now that they have come together and formed, in effect, a sub-region, those of us who are concerned with other areas of that kind need to watch carefully and learn from that.
I hope that the Minister will forgive me if I strike a slightly partisan note, but it is regrettable that the Secretary of State has seen fit to single out Manchester City Council for, in my view, excessive criticism—not in relation to this proposition but in more general terms. One hopes that the spirit animating the Government in reaching this satisfactory conclusion to the approach from Greater Manchester will be reflected in more measured language in looking at the problems encountered by all the authorities in that area. But of course they have worked successfully for many years, as the Minister and other noble Lords have said. There has been a very striking urban renaissance in Manchester itself and in Salford, which is welcoming hordes of reluctant BBC employees with open arms as the headquarters move there but also in other parts of the conurbation. As an LGA study some time ago demonstrated, the scale of sub-regional governance is a key factor in bringing together the requirements for the development of the local economy and some of the infrastructure that goes with that, although there are other issues which transcend those boundaries and which need to be considered on a regional basis. In that regard, the structures that have existed will unfortunately no longer exist, and that may slightly impede the success of a very promising venture. Of course, it has to be borne in mind that this takes place against a background of a very difficult financial situation for the authorities.
My noble friend referred to Community Budgeting, or Total Place, as it was known before it was rebranded after the election. There is certainly potential here to look at problems across the range of public services that might be tackled more effectively, given the fairly cohesive nature of the area, although each borough has its own distinctive character. In the local health economy, for example, the issues of skills and further and higher education are not confined by boundaries. Like my noble friend, I hope that the new organisation will be able to influence developments there. Equally, I hope the Minister will persuade the relevant government departments that they must look outside the traditional silos and co-operate fully in the development of such an approach.
I join all those who have spoken in warmly welcoming this critical development. I hope that others will seek to follow it. I have but one question for the Minister, which relates to the constitution. Manchester city is to be visited with the novel creation of a shadow mayor, assuming the proposal is accepted under the Localism Bill. It is an interesting concept: the shadow mayor has to be appointed and there then has to be confirmation of the position in a referendum, perhaps the following year. However, that applies only to the city of Manchester, which is extremely well led by Sir Richard Leese. He will not be the mayor of Greater Manchester—the surrounding boroughs will not quite accept that proposition, although I have no doubt that the press will try to portray him in that capacity—nor will anybody who might be elected to that position, if the referendum goes in favour of an elected mayor.
A question arises from the constitution, on which the noble Lord can perhaps help me. The membership is described as being based on each constituent council appointing one of its elected members to be a member of the new body. Maybe I am being even more pedantic than usual but it is not clear whether a mayor is an elected member of the council. The shadow mayor will be in place for the duration of that year; he is, by definition, a member of that council. If there is an elected mayor, the question then arises of whether he is to be regarded for the purposes of this order as an elected member of the council. He is not an elected member in the way that every other member is an elected member. It may be that this is a point with no substance to it but it might need to be considered. If it is not clear, perhaps some thought might be given to dealing with the situation. If it is clear, that is wonderful—we can all go away happy.
Lord Taylor of Holbeach
It is quite clear that we all arrived happy. It is very nice, as a Minister standing in for a colleague, to get such a warm and congenial reception across the board for a statutory instrument. Perhaps I should volunteer to do this more often. It is a very pleasant experience. It has been interesting, too. I pay tribute to the noble Lord, Lord Smith of Leigh, for his involvement in Manchester and for the way in which he welcomed this measure. I acknowledge the work of AGMA in serving as a nursery for this. What is so useful about it is the way in which both AGMA and Whitehall have worked together to make a success of the opportunity that the GMCA represents. I hope that that can be built on. During the debate, various noble Lords have suggested ways in which it can be built on. In many ways, it forms a model and is very much the pioneer. Of course, Manchester would say that it is always the pioneer.
Lord Taylor of Holbeach
I apologise if I have got it wrong. My briefing states that mayors would be elected members of the constituent councils and can sit on the combined authority. The mayor would be an elected member of the authority. However, I stand corrected if I am wrong.
Lord Beecham
My question was whether the mayor would count for the purposes of the instrument as an elected member of a council in order to serve on the GMCA. That appears to be position. If it is, I accept it, but the mayor is not for other purposes a councillor.
Lord Taylor of Holbeach
I take that point. I am sorry to show my ignorance. I am grateful to the noble Lord. Paragraph 1(8) of Schedule 1 to the order states:
“For the purposes of this paragraph, an elected mayor of a constituent council is to be treated as a member of the constituent council”.
Lord Taylor of Holbeach
At least the noble Lord has taught me an interesting lesson. I am grateful to him, and I hope that he is grateful to me.
House of Lords
Royal Assent
Airports: London
(13 years, 7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Spicer
To ask Her Majesty’s Government whether they plan to provide for sufficient capacity in the London airport system to accommodate the forecast expansion of passenger demand.
Earl Attlee
My Lords, the Government are not in the business of predict and provide. We are committed to developing a new policy framework for the whole of UK aviation which supports economic growth and addresses aviation’s environmental impacts. The Department for Transport expects to publish passenger demand forecasts later this year to support the development of the framework.
Lord Spicer
If, as anticipated, Heathrow cannot take the strain, which London airport will? Perhaps I should add that I ask that Question as a former Minister for Aviation.
Earl Attlee
My Lords, the Government have set up the South East Airports Task Force to look at how we can make airports in the south-east better, but not bigger.
Lord Berkeley
My Lords, since the Government claim to be the greenest Government ever and have announced the construction of a high-speed railway line, will they also take forward their airline policy by restricting demand so that the CO2 emissions are reduced with the use of less environmentally polluting means?
Earl Attlee
My Lords, we are indeed restricting demand: we are not authorising a third runway at Heathrow Airport or anywhere else in the south-east.
Baroness Kramer
My Lords, does the Minister agree that, with five airports in London, there is adequate airline capacity? Is not the need for high-speed rail so that we can meet the needs of the domestic market, which is what is driving most aviation growth?
Lord Clinton-Davis
What effect, if any, do the Government estimate there will be on British aviation and employment if capacity in the London area, particularly at Heathrow, is reduced or remains as it is? What consideration, if any, have they given to these issues?
Earl Attlee
My Lords, we have given a lot of consideration to these issues. I have talked about the South East Airports Task Force; there is also a wider, long-term, more strategic study. However, we will not make any significant increase in airport capacity in the south-east.
Lord Clinton-Davis
My Lords, I forgot to declare an interest as president of the British Airline Pilots Association.
Lord Swinfen
My Lords, what proposals are there for the expansion of Manston Airport, which has a trunk road running along its southern boundary and a railway line about a mile away?
Earl Attlee
My Lords, that will be considered in the wider strategy, and no doubt the south-east airport study will look at it as well. I have to say, however, that although Manston has some attractions, it is quite a long way from London.
Baroness McIntosh of Hudnall
My Lords, I should declare an interest as a long-term supporter of the campaign to stop expansion at Stansted Airport. The Minister will therefore get great support from me for his statement that the Government are not in favour of a predict-and-provide policy. However, does he accept that the effect of long-term uncertainty about airport expansion at various points, and certainly at Stansted, has been a blight on the surrounding areas? Will he use his and the Government’s best efforts to prevail on the British Airports Authority not to hang on to property that it owns in those areas, thereby making the blight worse?
Earl Attlee
My Lords, I was delighted to see the noble Baroness, Lady McIntosh, rise, because I anticipated some support from her. The property issues surrounding Stansted are a matter for BAA. She also asked about uncertainty. During my research on this Question, I could not find 1 zeptogram of a suggestion that my right honourable friend the Secretary of State was going to change the policy.
Lord Rotherwick
My Lords, in the Minister's Answer to the Question he referred to the Government bringing forward their proposals for aviation at the end of this year. Will those proposals address the needs of general aviation, and will they bring forward a framework to revise the 1982 aviation Act?
Earl Attlee
My Lords, most of the study relates to commercial aviation, not general aviation. The noble Lord will be aware that a future airspace strategy study is under way, which will improve the planning of flights from the continent to UK airports. It will also impact on general aviation, but I hope not in a negative way.
Lord Davies of Oldham
My Lords, does the Minister hope that his watchword—that this Government do not project or provide—runs right across Government? Does it extend to other Governments? Does he think, for instance, with regard to airports, that the Dutch, French and Spanish Governments are taking the same negative approach to the question of air traffic?
Earl Attlee
My Lords, we do not take a negative approach to the aviation industry at all, but we have maxed out the capacity of the population around Heathrow Airport to tolerate further expansion. We also need to constrain aviation-related emissions.
Lord Kennedy of Southwark
My Lords, will the noble Earl take this opportunity completely to dissociate the Government from the ridiculous plans of the Mayor of London to put an airport in the Thames estuary?
Earl Attlee
My Lords, we do not support any proposed airport in Kent or the Medway.
Lord Brooke of Alverthorpe
My Lords, does the Minister agree that aviation is one of the most successful industries in this country? In the light of what he just stated, what are the Government doing to grow it, or does he propose to reduce it? Can he also explain how much is saved by forcing more and more business from Heathrow to Schiphol, Charles de Gaulle or Frankfurt? What is the saving in green terms?
Earl Attlee
My Lords, I agree with the noble Lord’s first question about the importance of the aviation industry, but we do not want massively to increase the use of aviation, we want to keep it where it is. We must constrain our aviation emissions.
Lord Faulkner of Worcester
My Lords, can the Minister confirm that in all the countries that have constructed high-speed railways, the demand for domestic air transport has declined significantly? Therefore, if the Government are determined to build High Speed 2—as I very much hope they will—they are perfectly entitled to rescale down the projected demand for domestic aviation in the United Kingdom.
Earl Attlee
My Lords, the studies of aviation demand will take the noble Lord’s point into consideration. I understand that domestic aviation in Spain has been drastically reduced because of the construction of a high-speed rail network.
Lord Vinson
Does the Minister agree that in view of the fact that 90 per cent of freight and passengers will always go by road, it might be sensible to finish our motorway system first, and ease the blockages and the huge amount of pollution caused by them, before we get on with any vanity high-speed rail?
Earl Attlee
My Lords, that question is a little wide of the one on the Order Paper, but my understanding is that the strategic road network is largely complete.
NHS: Hospital Patient Maltreatment
Baroness Knight of Collingtree
To ask Her Majesty’s Government what steps they will take to ensure prompt action when widespread maltreatment of patients in NHS hospitals is reported.
Baroness Northover
My Lords, maltreatment of patients in the NHS is totally unacceptable. The Government are determined to tackle this. Patient safety should be at the heart of everything the NHS does. The Care Quality Commission will be conducting unannounced inspections of NHS trusts. We are also seeking to strengthen accountability in the NHS and ensure that patients and their families have a stronger voice.
Baroness Knight of Collingtree
My Lords, I am most grateful to my noble friend for that Answer. Is she aware that, over the past five or six years, I have raised in this House scores of cases of patients receiving appalling treatment in our hospitals? Although every case was properly authenticated, no hospital ever took action, no wrong-doings ever stopped, no culpability was ever admitted and no apology was ever made. Will she ensure that cases raised in this House by your Lordships will be acted upon without waiting years and years for an ombudsman’s report to arrive?
Baroness Northover
My Lords, I am well aware that the noble Baroness has had a remarkable record in raising these cases and she deserves enormous credit for that. Many of these patients have been very vulnerable and often voiceless. The first thing we have to do, therefore, is to ensure that the systems that are in place are working properly. The first duty falls to the individual NHS organisation to investigate such an incident and take action. It is for the Care Quality Commission to intervene where there are serious concerns, but the ombudsman, in her recent report, makes it very clear that we all have a responsibility here, and it must be our responsibility to make sure that patients are treated with care and compassion at every level of the service.
Baroness Wall of New Barnet
Does my noble friend agree that what the noble Baroness, Lady Knight, said is very worrying? The Minister said that the Care Quality Commission is making unannounced visits to hospitals. My own hospital had two visits—one to Chase Farm and one to Barnet—just last week. Fortunately, they each received a very good report. That is the only way to ensure that there are no opportunities to hide away any maltreatment that may be going on.
Baroness Northover
I thank the noble Baroness for calling me her noble friend. She is indeed quite right that unannounced inspections should surely help, though if you read the ombudsman’s reports, what is so striking is the lack of empathy for patients. Clearly, a culture change is required among those who are meting out poor care where that is the case. There is much very good care, but there is clearly a lot of poor care, and we must do everything we can at every level to try to change that.
Baroness Howarth of Breckland
My Lords, perhaps I may raise a more institutional issue about the hospital service. How many elderly and disabled people are languishing in hospital beds because there is no alternative—an alternative either in good residential care with or without nursing or in their own homes with a care package? I understand from a report I heard recently that there are hundreds of old people who could be moved on. It is when they languish in those beds that this kind of poor care develops, and I, like the noble Baroness, Lady Knight, have anecdotally heard of people who say, “Just don’t get old these days”.
Baroness Northover
I thank the noble Baroness for her question. It is clearly in everyone’s interests, especially in this House, to make sure that older people are treated with care and consideration. One thing that comes through from the ombudsman’s report is that this does not apply simply to people who are stuck in hospital, although that is greatly to be regretted and we want to ensure that that does not happen. People in the hospital setting for routine care also are not treated very well. We have to ensure that for whatever reason a person is in hospital they are treated with care and compassion.
Lord Clement-Jones
My Lords, the Minister will have been shocked, as were many of us, by the report from Ann Abraham, the health ombudsman, which reported on some very severe cases of maltreatment in the NHS. However, as the noble Baroness, Lady Knight, said, this sort of maltreatment has been going on for many years in the NHS. Is not fundamental change needed in terms of quality, standards, culture, complaints, inspection and reporting? Can the Minister explain how the new NHS reforms will address these?
Baroness Northover
I thank the noble Lord for that question. I would point out that the cases highlighted in that report occurred under the previous Administration. But I would not make a party political point here. It is something which we all have to address and we have to ensure that, as we change the NHS, we build in far better ways to ensure that the voices of patients and their families are heard.
There will be the new healthwatch organisations at the local level and the national level. Those organisations will report their concerns to the national board, which will talk to the CQC and advise the Secretary of State. We are hoping to put in place far greater accountability and there will be more local accountability. This is something which we all have to tackle. I note that the Royal College of Nursing has responded positively to this. But the Royal College of Physicians and the Royal College of Surgeons have not yet responded.
Baroness Thornton
My Lords, the noble Baroness, Lady Knight, and I have talked about the malnourishment of elderly people. Age UK and Mencap have expressed concern about this issue. It will cost more if people who can no longer cope are taken into hospital because they do not have decent food. Will the Government monitor the results of cuts in the provision of meals to the elderly, the vulnerable and the disabled in the coming years following the cuts that local councils are having to make?
Baroness Northover
I should point out to the noble Baroness that the previous Government put in place arrangements to improve nutrition and to try to cut dehydration. That has not tackled this problem. I do not think that this is a problem of funding; I think it is a problem of culture.
Middle East: Rule of Law
(13 years, 7 months ago)
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Lord Soley
To ask Her Majesty’s Government what action they are taking to promote and support the rule of law in the countries of the Middle East.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, in the Kuwaiti Parliament on 22 February last my right honourable friend David Cameron affirmed that we stand with the people and Governments of the Middle East,
“who are on the side of justice, of the rule of law and of freedom”.
As part of Britain’s long-term approach to, and friendship with, the region, and drawing on UK legal expertise, this Government undertake a range of activities to assist in promoting the rule of law. This includes training and mentoring to help build the skills and capacities of judges, justice ministries, lawyers and the police, and specialist support to develop policy and unlock legislative reform.
Lord Soley
I am sure that the Government and the House will agree that the lack of rule of law and democracy and human rights in the Middle East underpins so much of the instability and conflict in the area. I know that the Minister is aware of the proposal that I made to Zayed University in Abu Dhabi with outreach into Palestine to develop the rule of law in Palestine and Abu Dhabi. We have a very special position in the United Kingdom because of our expertise and history on the rule of law. Will the Minister continue to support the proposal that is now well developed for Palestine and Abu Dhabi to link up on the first postgraduate programme including human rights and international law in the Middle East?
Lord Howell of Guildford
My Lords, I am aware, as I think the noble Lord knows, of the project to set up the postgraduate school of law at Zayed University in Abu Dhabi combining Palestinian and Abu Dhabi endeavours. We welcome that as an excellent initiative and my honourable friend the Under-Secretary of State, Alistair Burt, has also indicated his welcome for it and suggested ways in which we in the Foreign and Commonwealth Office can assist with the project.
Lord Hylton
Can the noble Lord confirm that this country has already assisted in setting up a system of courts in Qatar, and will they offer similar help to Bahrain and other Gulf States? Finally, would Commonwealth legal models provide suitable examples for similar systems in the Middle East?
Lord Howell of Guildford
On the final point from the noble Lord, who knows a great deal about these things, I think the answer is yes. Of course, we are active in offering legal assistance and legal training help in all those countries in the region that wish to accept it, which is most of them. In addition, we have the Arab Partnership Fund, which highlights priority areas for action, including the rule of law and anti-corruption work, throughout the Middle East and north African region. Obviously at the moment there are some problems in the way of carrying on these programmes, but wherever they are wanted and needed, we are pressing to offer them.
Baroness Falkner of Margravine
My Lords, will my noble friend agree that the rule of law must be predicated on an element of justice alongside freedom, and that most of the Middle East countries have used terrorism laws in the aftermath of 9/11 to put on their statute books some of the most repressive and catch-all legislation there is? The noble Lord, Lord Hylton, mentioned Bahrain, which has very repressive anti-terrorism laws. Are we working with these countries to help moderate their attitude towards terrorism and to provide a little more scope for peaceful dissent without dissenters being entrapped by those laws?
Lord Howell of Guildford
The short answer is yes. My noble friend is completely realistic in pointing out that there were some undesirable practices and programmes in the past. Our view is best encapsulated by a quotation from the Prime Minister when he said in Kuwait the other day:
“It is not for … governments outside the region to pontificate about how each country meets the aspirations of its people. It is not for us to tell you how to do it, or precisely what shape your future should take”,
in these countries. He continued:
“But we cannot remain silent in our belief that freedom and the rule of law are what best guarantee human progress and economic success”,
in each country. That is the principle on which we proceed. Where we find obstacles, we will seek to overcome them.
Baroness Symons of Vernham Dean
My Lords, I am delighted to hear that the Prime Minister gave such enthusiastic support to an initiative that was actually begun by my noble and learned friend Lord Falconer of Thoroton when he sat on the Woolsack. Are the Government specifically encouraging the very useful work that the Law Society and the Bar Council have undertaken in a number of countries in the Middle East?
I also agree with the points made by the noble Baroness, Lady Falkner of Margravine, that human rights lie at the heart of the rule of law. In so far as that is concerned, will the Government particularly direct their attention to encouraging the countries of the Middle East to sign up to the protocols against the death penalty and the use of torture, and the protocol for joining the International Criminal Court, as Tunisia has done since the revolution?
Lord Howell of Guildford
My Lords, the answer is yes to all those points, and certainly to the support of the Bar Council. There is also the Justice Assistance Network, a cross-governmental network that draws on UK expertise to provide coaching, mentoring and twinning support for judges, prosecutors and court staff. We are active and positive in all these areas, and we recognise the work done by both the noble Baroness and the previous Government in this area.
Lord Woolf
My Lords, I should disclose that I am the president of the court referred to by the noble Lord, Lord Hylton. In that connection, perhaps I may underline the contribution being made by many law firms in the Middle East. Does the noble Lord agree that what will happen is that those countries will look at the way we observe the rule of law in this country? In those circumstances, is it not critically important to show that we meticulously observe the rule of law and recognise the importance of the European Court of Human Rights in relation to our own situation?
Lord Howell of Guildford
The noble and learned Lord is drawing me into a major and vastly important area on which I am not going to comment today except to say that his contribution to it is of course enormous and that we recognise the value of his opinions. But the broader question of the European Court of Human Rights, how it works and its relationship to the EU as a whole and to this country, is one that no doubt we will debate in this House vigorously in the coming weeks.
Côte d’Ivoire
(13 years, 7 months ago)
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Baroness Kinnock of Holyhead
To ask Her Majesty’s Government what representations they are making to the United Nations and the European Union on the situation in Côte d’Ivoire.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, through the European Union and the United Nations, the United Kingdom offers its support for firm action on Côte d’Ivoire in the UN and the EU, and gives broad support to the work of the African Union. We supported the reinforcement of the UN peacekeeping force and continue to urge a robust interpretation of its mandate. We also supported swift action in the EU to apply strong and appropriate restrictive measures against those who support and sustain Mr Gbagbo’s regime. With our EU partners, we will review and reinforce these measures as necessary.
Baroness Kinnock of Holyhead
I thank the Minister for his detailed response. Does he agree that while the world focuses on Japan and North Africa, we must also respond to the growing humanitarian and security emergency in Côte d’Ivoire? Some 400,000 people have been displaced, and 75,000 of them have already moved into Liberia, one of the poorest countries in the world. How will the UK respond to urgent appeals for aid for Côte d’Ivoire and, indeed, for other countries in the region that are affected such as Liberia, Sierra Leone and Ghana?
Lord Howell of Guildford
The noble Baroness is entirely right. What is happening in Côte d’Ivoire raises broad concerns that affect the global community, not just this country. I have particularly in mind the horrific murder of several women who only the other day were shot down in cold blood in Abidjan. I have been asked how we support these matters. We do it chiefly through the UN and the European Union. Our own Department for International Development is monitoring the situation and provides direct help, particularly to refugees, to whom the noble Baroness specifically referred. So, frankly, our support is not mainly bilateral but through international institutions and the EU, working in support of France which tends to take the lead in these matters. However, the situation is a worry for all those concerned with civil rights and the promotion of peace and stability in Africa. What is happening at the moment is extremely worrying.
Lord Steel of Aikwood
I hope my noble friend understands that I am not advocating that we send a gunboat, given that we have very few gunboats left to send. However, will he consider the successful operation in Sierra Leone a few years ago? Given the support that, importantly, the African Union has given to Mr Ouattara’s successful election, what practical help can the Government offer to try to get rid of the deposed president?
Lord Howell of Guildford
When it comes to detailed help, particularly if force is involved, ECOWAS is the organisation that is bound to take the lead. In principle we support the proposals made by ECOWAS, but we think that the authority of the United Nations is needed before they are taken forward. If there is to be that kind of pressure backing up the views of the African Union High Level Panel, of which I am afraid Mr Gbagbo took not the slightest notice, any such firm intervention should be made through the ECOWAS system.
Lord Hughes of Woodside
My Lords, given that the focus so far has been on mediation between the two parties in Côte d’Ivoire, is it not now time to abandon that since it is clearly not working? Any attempt to broker an agreement between the two candidates, one of whom failed to be elected and one of whom succeeded, is simply futile and fuels the problem?
Lord Howell of Guildford
I think it has been right to try mediation and talk, but the noble Lord may be pointing in the direction in which things develop. Mr Gbagbo has flatly rejected any attempt at compromise and his troops continue to commit violent acts in Abidjan, as I described a moment ago. The lawfully elected president, Mr Ouattara, remains unable to take over his lawful position. Things may go that way, but in the African Union and ECOWAS there is a great wish to see whether it can be done without bloodshed first.
Lord Fraser of Carmyllie
My Lords, some considerable time ago, I was invited by the trading company Trafigura to conduct an independent inquiry into the alleged dumping of slops in Côte d’Ivoire by it. That followed an invitation to which I responded positively to conduct an inquiry led and asked for by the Labour Administration in the Scottish Executive into the cost overrun of the Scottish Parliament. I am delighted to say that a Labour Lord Chancellor had the generosity of spirit to say to me that that was exactly the way to write a report. Subsequent to that, not a single member of the deposed president’s Cabinet responded to me. They were clearly gagged. It seems to me that I was getting dangerously close to the truth that there was widespread corruption in that Administration, and that is why they do not wish to relinquish office. Do I take it from my noble friend’s previous answers that he is telling me that I should just stay silent until democracy is restored to that benighted country?
Lord Howell of Guildford
Perish the thought that I should ask my noble and learned friend to stay silent on these matters. His experience and his skill and expertise in this area and many others in the legal and other fields are very considerable, as we all recognise. He describes an interesting bit of history. Indeed, modern developments confirm that in the matter of Mr Gbagbo we are dealing with a very unsavoury character who is clinging on to power illegally and no doubt using extremely dubious means to do so. That is recognised by the African Union, the United Nations and, certainly, by Her Majesty's Government.
Financial Assistance Scheme (Revaluation and Indexation Amendments) Regulations 2011
(13 years, 7 months ago)
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Lord Freud
That the draft regulations and orders laid before the House on 31 January and 3 February be approved.
Relevant documents: 15th and 16th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 9 March.
Postal Services Bill
Lord Tunnicliffe
( ) The arrangements must ensure that an equal dividend is paid from earnings to all participants in the trust.”
Lord Tunnicliffe
My Lords, we welcome the principle contained in this Bill which earmarks some of the shares for employees in the event that Royal Mail is sold. Introducing the Second Reading of the Bill, the Minister said:
“A commitment to employee shares was not a feature of the previous Postal Services Bill but it is an important addition to this legislation. I am pleased that it has support from all sides of the House”.—[Official Report, 16/2/11; col. 776.]
I am advised that during the debate on the 2009 Bill—I say I am advised because, although I sat through the many hours of the debate, it is now but a fading memory—we accepted representations from noble Lords, including the noble Lord, Lord Hunt of Wirral, to make provision for employee shares within the plans contained in that Bill. Of course, under the 2009 Bill, the Royal Mail would have been in public ownership, so when we said we would allow for employee shares, we were able to do so without a specific clause in the Bill at that time. Since we are all in favour of employee shareholdings in Royal Mail in principle, let me now turn to the amendment.
The benefits of employee share schemes have been widely recognised. They can include motivating employees to become more productive, helping to align the employees’ interests with those of shareholders, remunerating employees in a tax-efficient way, increasing loyalty and reducing staff turnover. Of course, employee share schemes cannot do all that on their own; they have to be part of a wider approach to good industrial relations. Employee shares will not be welcome if they are felt to be a sop, to come at the expense of pay or to be a substitute for the usual channels of interaction among management, unions and staff.
The government position is that at least 10 per cent of the shares of Royal Mail should be put into an employee share scheme. That is why our amendment proposes that 20 per cent of the company be made available for such a scheme. We know that any privatisation of Royal Mail will inevitably entail a lot of change and upheaval. Its success will rely heavily on the good will of the workforce and on improved industrial relations—and on those relations remaining improved. It would therefore be appropriate to give a greater proportion of the company’s shares to the workforce. Since this Bill is designed to achieve complete privatisation, with the Government having no direct say after the date of transfer, it is important to pin down in legislation how things are going to work. We accept the principle of employee shares, but employees need to know a lot more about exactly how the scheme would work.
First, we would like to clarify things by our suggestion that the proportion should be larger than 10 per cent. I will listen with interest to the proposal from my noble friend Lord Clarke about 25 per cent and to the Minister’s response to that—there may be complexities about 25 per cent that we will have to consider. However, we certainly urge the Government to provide for a 20 per cent share. We need to understand whether employees would really have to wait until the last Crown share is sold before being able to apply for any employee shares. We need to know what mechanism is going to be there to prevent shares going to employees one day and being sold within a year or two. If the purpose were to have employees feeling that they have a stake in the company, what long-term purpose would be served by passing shares swiftly through the hands of employees and back out to private institutions or hedge funds, even if the employees make a casual profit from the transactions?
We need to be clear that shares would be held on an equal basis with equal voting rights for each shareholder and an equal distribution of dividend. Would some shareholders be more equal than others? Will employees be able to act cohesively to influence the strategic direction of the company to some extent, albeit from a minority position? We would like to have greater certainty about eligibility criteria: who would be entitled to shares or share options and what would it mean in practice? Last, but not least, what proportion of costs would be borne by whom?
There is still much we would like to know about the scheme. Over the past 20 years in the industrialised world, there has been a significant increase in the proportion of employees who own shares in their own firms. This has happened in the UK, other European Union countries and the USA. By 2004, one-fifth of British workplaces had share ownership schemes, covering one-third of all private sector employees, encouraged by tax allowances. In evidence to the Public Bill Committee in another place, Carole Leslie, policy director of the Employee Ownership Association, said:
“I am a bit disappointed at 10%, because 10% to me is small, which means that you have to put more effort into giving employees that real voice in the company so that they do feel that it is theirs—they do feel that that ownership, if you like, is real and it is not a token”.—[Official Report, Commons, Postal Services Bill Committee, 09/11/10; col. 71.]
George Thomson, general secretary of the National Federation of SubPostmasters, said to the same committee that,
“if Royal Mail Group is privatised, I think there is a case for the postmen and the staff to own 20% of Royal Mail Group; for that to be mutualised as a concept so you do not sell your shares when you leave the company but leave them behind; and for the CWU to be on the board of the new Royal Mail Group. So I see it not just for Post Office Ltd. I see it as let’s do it right within Royal Mail Group. If it is going to be privatised to bring in private capital, there is a case for making it 20% of the shares, which are not sold on”.—[Official Report, Commons, Postal Services Bill Committee, 09/11/10; col. 29.]
An employee share scheme can take many different forms. We believe that it is best if we look at the possibilities now rather than leave it until the Bill becomes an Act, while there is time to design a scheme that will work best for Royal Mail.
The Bill implies some form of trust. However, it is unclear whether these shares would be held in trust, with a percentage of the dividend being paid out annually to each employee, or whether there would be a pot of shares to be handed out to individual employees as shareholders. If there is an offer of shares to employees of Royal Mail, how will this be made most attractive to employees? Will there be an offering along the lines of two or three for the price of one? Perhaps there should be multiple pots of shares for employee benefits, with one pot in the form of a share incentive programme or save-as-you-earn scheme to take advantage of the tax incentives. A further pot of shares could be set up for training, bursaries and so on, which could be held in trust. These rewards could also be linked to transformational targets.
It goes without saying that any structure proposed for the future Royal Mail must be stable, if it is to be genuinely for the good of its customers and its employees. Any change in the status of the ownership of Royal Mail should provide an ideal opportunity for setting up a scheme. I beg to move.
Lord Cotter
My Lords, in one sense I welcome the amendment. Speaking for these Benches and, I think, for the Government as well, I think there is no harm in the Postal Services Bill emphasising the importance of shared ownership. The issue has already been rehearsed, but I welcome the fact that it is being raised again. However, it is not necessary to say that 20 per cent or 25 per cent share ownership should be required. We on these Benches, and I think the Government as a whole, are determined to ensure that as many shares as possible are distributed.
Another issue that I feel strongly about, which I am glad is being rehearsed again—and on which I am sure the Minister will respond, as she has done previously—is that share ownership and the input of the employees into postal services are very important. I know that the Minister has accepted that already, and we on these Benches also think that it is very important.
There is no harm in having a discussion on these issues, but being specific about more than 10 per cent could be counterproductive. Much as we would hope that share ownership will be quite high, we want to ensure that a purchaser feels able to have a level of control of the company that the purchaser considers sufficient and appropriate. I would urge the Government to provide as many shares as possible for the postal services employees. In that sense I welcome the amendment, but we should not be prescriptive beyond the 10 per cent that we have said already. I look forward to the Minister’s response on the various questions when the time comes.
Lord Clarke of Hampstead
My Lords, I declare my usual interest as a former postman. As all Members of this House will know, I am bitterly opposed to the whole idea of selling off Royal Mail in part or whole. I have a dream; I live in hope that the Deputy Prime Minister will wake up one day, have a fit of conscience and resign from the Government, the coalition will fall and we will not have the Bill at all. However, being a realist, I suppose I have to accept that we have got past that stage and we now have to look at share ownership and the protection of employee shareholders. That is my interest.
If the Bill is to proceed, the shares have to be subject to a reasonable code of conduct that does not permit what happened to some members of my union when BT was privatised. I will come back to the vast quantities of shares and share options that were given to the people at the top of BT.
Issuing shares could be a beneficial move—notwithstanding my reservations about the whole thing—but it could have unintended consequences. Workers at Royal Mail will want to know that their shares are not allocated at the expense of their pay and conditions. Receiving shares does not constitute much of a choice if you cannot get a reasonable cost of living increase when circumstances allow. Employees will want to know that their shares will not cut across their other chosen and established means of engagement within the company. They will also want to know that the company is being put on a sound footing for the future. That depends on the regulatory and other frameworks that this Bill and the Government set for Royal Mail in the future. Employee shares would hold little attraction if they turned out to be merely an anvil around the neck of employees as the ship sinks slowly under the water. I hope that during these debates we will receive genuine assurances on these points.
In speaking in favour of Amendment 18, I put my noble friend’s mind at rest in that he will not hear me waxing on about the 25 per cent figure as I do not intend to move the relevant amendment. I will try very hard to convince the Committee that 20 per cent is the right figure. I support most of the points made by my noble friend who moved Amendment 18.
First, if there are to be employee shares, I support the case for employee shareholdings to be held in trust. That is very important. I hope that the Government will not dogmatically reject that idea. If the pattern of the past is followed, employee shares will disappear like ice in a Turkish bath—they will go. They will no longer be owned by employees but will be available on the market for people to buy up. If you have your basic pay and some shares and you are under pressure to pay a domestic bill, you are tempted to dispose of the shares. If that happens, I believe that they should be disposed of back into the employee shareholding trust. I hope that the Government will take that matter into account.
Secondly, I agree that it is quite wrong for the Bill to propose issuing the first employee share only when every single Crown share has been disposed of. That would be unfair and illogical. I understand that 10 per cent is not the maximum proportion of employee shares that have been permitted in a privatisation. A whole string of bus companies were sold 100 per cent to employees. I do not suggest that the 100 per cent figure should apply in this case, but why restrict it to 10 per cent? I believe that the noble Lord, Lord Cotter, talked about the widest possible issuing of shares to staff, or allowing them to purchase them. That is very important. Unfortunately, most of the companies to which I have referred went the same way as the other privatisations, with 10 per cent or fewer employee shares, and they tended to dwindle away over time. What is the case for a bigger share? I do not pretend to be an expert on anything, but we should listen to people such as Carole Leslie, policy director at the Employee Ownership Association, who told the Public Bill Committee in the other place:
“I am a bit disappointed at 10%, because 10% to me is small, which means that you have to put more effort into giving employees that real voice in the company”.—[Official Report, Commons, Postal Services Bill Committee, 9/11/2010; col. 71.]
We have not yet dealt with the representation of employee shareholders, although I am sure we will do so later in our consideration of the Bill.
The general secretary of the National Federation of Sub-Postmasters told the same committee that if Royal Mail Group was privatised, there was a case for its employees to own 20 per cent of the group. That assertion supports the amendment of my noble friend.
Peter Stocks, managing director of the Baxi Partnership, which grew out of a manufacturing company and now advises on employee ownership, also gave evidence to the same Committee. He stated:
“I think that 10% is quite low and I think that there is a danger that if it is just shares and there isn’t a participation culture that goes with it, it won’t change a lot. We see real results in companies where the whole of the company feel that they have a sense of ownership. They feel that they participate in decisions. They discuss decisions and when they make a decision they stick with it. It was interesting watching some of our members through the recession. Employee-owned companies are affected the same as everybody else. They would have gone through an awful lot of agony about how you manage through different times but, because those decisions were made in a very participative way”—
by staff and management looking at the issue together—
“once the decisions were made they were stuck to, and bought into, by everybody. Our members have gone through the recession in a very resilient way and I think that is down to the way you manage the company”.—[Official Report, Commons, Postal Services Bill Committee, 9/11/10; cols. 71-72.]
Let us hope that when the Government get their way with the sale there will be a company with a similar philosophy on these issues.
The staff of Royal Mail—who are mainly postmen and postwomen, but there are many others also—are dedicated people. That has been proved throughout its 350-year history. If those who remain, following the loss of 60,000 jobs in the past couple of years, are to experience the anxiety of a traumatic change of ownership of their company—I cannot get my mind around “company”, because the Post Office is the Post Office and Royal Mail is Royal Mail—and if they are to be invited to take a shareholding in their company, it should be done in a way that is fair and reasonable to them and that gives them the prospect of a real say in the success of their company.
Immediate employment is not the only issue at stake for Royal Mail staff; they also need a final guarantee that they will be able to pay their rent or mortgage. They have a big stake. Working for Royal Mail is the means whereby their children can be educated and have better prospects in life, and they use their hard-earned income for a better life. As I said on Monday, postal workers may not always see eye to eye with management, but they are always acutely aware that a viable and successful Royal Mail is in their own interests.
Employee shareholdings have been encouraged by tax allowances; £900 million a year is spent on tax relief for employee share schemes, according to the Employee Ownership Association. However, 50 per cent of that tax relief is on discretionary rather than all-employee schemes. Therefore, 50 per cent of the tax relief is going to 3 per cent of employee shareholders. The EOA says that this is poorly directed tax relief. I should add that it is grossly unfair.
When British Telecom was sold, and it was promised that a golden share would be retained by the Government, those at the top of BT held thousands of share options, although I do not know the exact figure. Any examination of BT’s annual accounts will show how many share options were given to them.
We should be very careful how we treat this exercise, and there is a good case for equality. A 20 per cent shareholding should be distributed on an equal basis to all employees. This would turn the Government’s plan from a progressive proposal to a truly radical one. It would give employees a real sense that they had a say in the direction of the company and a stake in its success. It would stand a better chance of realising the worthy aspirations that Ministers have expressed in stating the case for employee shares. I look forward to hearing the Minister’s reply. In the mean time, I support the amendment.
Baroness Kramer
My Lords, I will make a couple of comments. I very much support the employee ownership proposed in this Bill, which is a great improvement on the Bill that did not complete its progress through the previous Parliament, because it includes employee ownership and because the amount of ownership proposed is very substantial. The Government have more details on that than I do. For people working in Royal Mail, there are two issues of great concern. One is that they should be part-owners in a way that this share ownership will allow them to be, in order both to have a voice and to benefit from the profits that will flow from their efforts and from the future success of the company. It is also very important that there should be the maximum possible investment in the future of Royal Mail. Those two issues have to be balanced.
By expanding the number of shares that will be distributed to employees, the ownership potential for a private partner is reduced, which will reduce his, her or their willingness to put additional money into Royal Mail. I caution that there is a balance to be achieved here. Ten per cent is enough to provide a real voice and real reward, but potentially up to 90 per cent going out in some form to the private market is a real guarantee that the purchaser, whoever they are, will have to put in serious and large investment to make sure that this the company is very successful in future. That is surely what employees want, too.
The noble Lords, Lord Clarke and Lord Tunnicliffe, raised many issues that underscored the complexities of trying to set up share ownership for employees in an effective way. The more I heard about all those complexities, such as how shares should be distributed between employees, the more it struck me that the Bill is not the place to set up a structure such as that. It is good to have a discussion in this House, but with so many tax and legal issues there is a need for consultation and much greater involvement by many parties, including potential private partners as well as employees. We would be trying to make the Bill do too much by accepting these amendments, as well as some of those that we will debate later.
Lord De Mauley
My Lords, I thank the noble Lords, Lord Tunnicliffe and Lord Clarke, for tabling their amendments, and also thank my noble friends for their contributions. I should perhaps declare an interest; my wife owns and jointly runs a web-based mail order company that uses Royal Mail to deliver its products.
I am delighted that the noble Lords, Lord Tunnicliffe and Lord Clarke, agree with the Government about the attractions of the establishment of an employee share scheme. I say that in the most welcoming and genuine sense. We all agree that this key feature of the Bill will help to improve employee engagement and the culture of the company. We should not lose sight of the fact that the overriding purpose of the Bill is to safeguard the universal service and to secure the future of Royal Mail. A key means of doing that will be by introducing private capital. In deciding on the size of the stake that should go to employees, as my noble friend Lady Kramer said, the Government have had to balance giving a meaningful stake to employees with the imperative of ensuring the private sector investment that the company needs. This is a matter of judgment.
I will put in context the commitment that we are making through Clause 3. The minimum 10 per cent share requirement in the Bill is the largest statutory employee share scheme of any major privatisation. The share is unprecedented, and there is no doubt that it is meaningful. Most major privatisations did not even refer to employee shares in their respective Bills. Furthermore, the share schemes that eventuated offered smaller stakes: 5 per cent in the case of BT and British Gas, and less than that for the other utilities of electricity and water. Only Rolls Royce and BA came close, at 10 per cent and 9.5 per cent respectively. However, we are committed to at least 10 per cent.
I share with my noble friend Lady Kramer experience of advising companies in similar situations. I did that for nearly 20 years, and my experience convinced me that a requirement that employees should own at least 20 per cent, or even 25 per cent, of the shares in the company, as the amendments suggest, would jeopardise getting the investment that the company needs simply by virtue of the substantial size of that stake. We therefore unfortunately cannot accept the increases to the size of the employee share scheme proposed by these amendments. I hope that noble Lords will accept that what is offered is offered in good faith, and that to commit to more would prejudice our ability to achieve a sale.
The requirement to pay equal dividends to all participants of the scheme certainly has attractions. However, Clause 3 is designed to maintain as much flexibility as possible to design the right scheme. We would be ill advised to set in stone the form of an employee share scheme until we have more certainty on the form of the private sector investment. Furthermore, there are other equally sensible methods for determining the allocation of shares and therefore dividend payments. An example of another equally sensible method is length of service, for example. I therefore urge noble Lords not to restrict options at this stage.
The noble Lords, Lord Tunnicliffe and Lord Clarke, asked about the specific route to be followed. The noble Lord, Lord Tunnicliffe, helpfully compared, for example, share trusts against individual ownership. This subject will come up again in subsequent debates on amendments. In brief, some of the benefits of share trusts are that they can be structured to last indefinitely. Depending on their design, they would always keep the capital value of the shares within the trust. Against that, this may not be the appropriate form of scheme to motivate individuals, and we will assess the merits of a share trust and other designs at the appropriate time. Individual ownership clearly offers individuals the opportunity to build up a share pot while they are employed in the business, which they can benefit from when they retire or move on. Individual shares can also be better for employees, in that they offer a greater sense of ownership and can be more tax efficient. The noble Lord, Lord Tunnicliffe, suggested other options, which I found very helpful. This emphasises why it is important at this stage that we keep our options open.
The noble Lord, Lord Tunnicliffe, specifically pointed out some risks of going down the route of issuing shares to employees. As I have said, the exact form of the scheme is still being developed and will be likely to be dependent on the form of the private sector investment. If the share scheme allows for individual ownership of shares by employees, we will obviously explore the most appropriate way of encouraging employees to keep their shares for the long term. Many of the tax efficiencies associated with those schemes relate to a certain holding period, which could be incorporated into the scheme rules. Noble Lords should not assume that employees will automatically sell their shares. In its written evidence to the other place, ifs ProShare noted that two-thirds of BT employees retained their shares rather than selling them off.
The noble Lord, Lord Tunnicliffe, was concerned that there is no guarantee in the Bill that employees will get any shares until the Government have sold their entire holding. Employee shares are an integral part of our policy for Royal Mail, and we have committed to ensuring that there are shares within the scheme at the same time as private capital is introduced. This is the strongest legislative commitment of any major privatisation. The exact sequence of events in such a large and complex sale is difficult to predict at this stage. This means that we need to maintain a degree of flexibility about precisely when during the process the scheme is set up, so as not to complicate that process even further.
The noble Lord, Lord Tunnicliffe, quoted Employee Ownership Association evidence to the Commons Public Bill Committee, saying that 10 per cent was not enough. I might give another quote from evidence to that committee. Alexy Armitage of ifs ProShare said:
“Although they might not hold as much as 10 per cent, or more than that, they like the fact that they own shares in their company and they see that as a benefit and a worthwhile thing to do”.—[Official Report, Commons, Postal Services Bill Committee; 9/11/10; col. 71.]
That is at all levels, not just executives; it goes right through those organisations.
The noble Lord, Lord Clarke, was concerned about how to ensure that management does not get all the shares. I think that was the nub of his concern. He makes a very important point. As I have said, it is too early to get into the specifics, but we imagine that management will be able to benefit from the share scheme as well as other employees. However, the point is to incentivise employees and to give most of the shares to management would simply destroy that purpose; that is absolutely not the intent.
The future ownership of Royal Mail, by both private investors and its employees, will be inextricably linked. Within the important boundaries set by Clause 3, the exact size and form of the scheme will, therefore, be informed by the type and detail of the transaction. It is very important that we keep our options open, for the reasons mentioned by the noble Lord, Lord Tunnicliffe, among other things. I assure noble Lords who have taken part in this debate that their suggestions will be taken into account. I, therefore, ask the noble Lord to withdraw the amendment.
Lord Tunnicliffe
My Lords, I thank all those who have taken part in this important debate and the noble Lord, Lord Cotter, for his general support. I hope that his influence will be, as I think I heard him say, that as many shares as possible go to employees. I accept that this debate is about balance and we are obviously putting our finger on a particular balance. I certainly hope that the eventual situation is closer to our position than the minimum.
I thank my noble friend Lord Clarke of Hampstead for his contribution. I hope that the Government will look back at previous privatisations because they have not been universally successful in properly engaging employees through share ownership schemes. His other point, which supplements my own point, is important: that this must not be seen as in place of a proper relationship between employees, trade unions and the new company but must complement it and make the whole relationship stronger and more meaningful. He referred to the trust solution, and the closer we are to a trust solution than an individual-ownership solution the more comfortable we would be. We hope that the Government are thinking in that way.
The noble Baroness, Lady Kramer, said that this was a great improvement on the previous Government’s contribution. I am sorry that the noble Lord, Lord Hunt of Wirral, is not here to assure me that my recollection and research are correct, but my understanding of our debate is that we took the point on employee share ownership but because our Bill did not have a 100 per cent sale, it left within our discretion an ability to award shares—fairly late in the Bill we were persuaded of that situation—and therefore our advice was that we could bring that forward without the need for a specific clause.
The noble Baroness made the point that there must be a balance between the new owners and the employees, which I take on board—I think it is the same point as the Minister made. However, she said that it would be wrong to introduce too much complexity into the Bill. My reading of the situation is that this will be quite a lengthy process, and we are seeking as much clarity as possible in this area, because we want to create confidence in the workforce. The more that can be done to create that confidence, the better the outcome.
Lord De Mauley
If it helps the noble Lord, I can say that that is a helpful suggestion.
Lord Tunnicliffe
Thank you very much. With that response, I beg leave to withdraw.
Lord Tunnicliffe
“( ) Any employee share scheme will be entitled to have at least one representative from the scheme on the board of any company operating the scheme.”
Lord Tunnicliffe
My Lords, we have just debated the merits of having an employee share scheme, for which there seemed to be general support on all sides of the Committee. We previously debated the merits of there being an employee representative directly appointed to the board of Royal Mail. That, too, garnered some support around your Lordships’ House—I particularly recall the powerful speech by the noble Lord, Lord Cotter. However, despite warm words for the principle by the Minister, on that occasion at least, she refused to incorporate any provision in the Bill on this matter.
The amendment proposes that the employee share scheme should be entitled,
“to have at least one representative from the scheme on the board of any company operating the scheme”.
That person might be an employee or an agent or expert or other representative chosen by the employee share scheme to represent its interests appropriately on the board of Royal Mail. As we have heard, one of the main purposes of an employee share scheme is to secure a greater identification and involvement of the workforce with the company. Given that the employee share scheme, most probably constituted under a trust deed, is the embodiment of this, it would seem a very sensible proposition to cement the relationship by affording the trust representation at the highest level of decision making in the company.
Postal workers already have a major stake in the company, as their livelihoods depend upon its viability. They are what my noble friend Lord Myners called “high-conviction” stakeholders—the sort of people who should make up the shareholder representation on the board—because, as well as being employees of the company, they have a cash stake in its success. I understand that where these schemes have worked successfully, an example being a Norwegian airline, employees go around switching lights off in offices and storerooms where they are not needed. That is the sort of personal involvement we would want to see.
Employee shareholders with a minimum of 10 per cent shares in what would be one of the country’s major private companies—a privatised Royal Mail—should be encouraged to take part in the work of the board of the Royal Mail. Postal workers have over many decades secured comprehensive negotiating rights on matters of national and local significance. This has meant that people in the workforce have some influence over their own working lives. They have made the workplace a better, safer, more amenable and rewarding place. Royal Mail management, for its part, fully accepts that the workforce has a say in workplace relationships. Sometimes there are conflicts but in most cases these are resolved by the usual pattern of industrial relations that has been established in the industry. The modernisation agreement in March last year has improved relations and allowed the company to go forward positively.
If there is to be an employee share scheme—and undoubtedly there will be one with the enthusiasm for it in all parts of the House—it is only right that it should be introduced with employee involvement and an employee voice. Placing a member on the board to represent the employee share scheme would be a benefit to both the workforce and the employer. Of course, one representative on the board would not be able to outvote the rest of the board, but that representative could ensure that he represents the viewpoint of the employee share scheme and the employees when a decision is debated and voted on in the new company. The workforce would see that there was someone who reflected the experiences and concerns at the highest level and the employer could have an immediate expression of the wider, long-term concerns of the workforce. I beg to move.
Baroness Turner of Camden
I support the amendment, which is rather similar to something that I put forward in a previous sitting in Committee. I got the impression then that there was general agreement on all sides of the House that staff representation is a good thing that everyone could support. Everybody seems to agree that the involvement and commitment of the staff are very necessary, indeed essential, for the new company to make progress and for the future of Royal Mail. For that reason, it is necessary to state clearly in the Bill that staff representation is essential. Indeed, rather than just “at least one representative”, I would suggest that it will probably be necessary to have more than one representative, but staff representation will certainly be necessary for the success of the scheme and of the company. Therefore, I hope very much that the general agreement around this idea commends it to the Government. If they do not accept this wording, I hope that they will accept something very similar before the Bill leaves this House.
Viscount Eccles
My Lords, I do not think that any of us could possibly disagree with the thinking behind the remarks of the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Turner. However, I am back with my noble friend Lady Kramer in questioning whether it would be sensible to include such a provision in the Bill. The problem is that we are faced with an enormous quantum of uncertainty about what will happen to Royal Mail and the Post Office when the Bill is enacted. If we were to accept the amendment, we would be piling one uncertainty on top of another. There may well be a share scheme and an entirely separate agreement between the board and the principal shareholder—which is quite likely to be the outcome—as to what the representation on the board should be. That might indeed include employees. Whether they should be people who are also on a trust holding shares on behalf of the employees, if such a trust were formed, is a matter for speculation. While nobody can quarrel with some of the thinking behind this amendment, and indeed some other amendments, it is very difficult to believe that it would be sensible at this stage to put the matter on the face of the Bill.
Baroness Donaghy
My Lords, I was pleased to see the role that ACAS played in helping the company and the union come together to draw up the modernisation agreement in March 2010. That was a culmination of many years’ work and has received praise from the chief executive of Royal Mail, Moya Greene, as well as from Richard Hooper, Ministers, the Opposition and the trade union involved.
Making Royal Mail into a private company is bound to cause anxiety and create disruption for employees and management alike. In those circumstances, measures to improve the atmosphere of co-operation and cohesion are to be welcomed. The proposal for employee shares, if gone about in the right way, could help that process. Assurance on the issue of pension rights, continuity of employment and recognition rights would also be helpful. The proposal for employee shareholders to have representation on the company board is interesting and enlightened. I hope that the Government will consider it seriously.
Deutsche Post has been held up as a shining example of a postal service company. Richard Hooper showered the company with praise for its modern attitude, heavy investment in up-to-date technology and overall efficiency. I readily acknowledge that Deutsche Post, although 20 per cent of the company is owned by a state-owned bank, has been passed from public ownership to private control, but it has a statutory duty to maintain a certain number of post offices. My point is that Deutsche Post has not one, two or three but 10 employee representatives on its supervisory board. If it is good enough for Deutsche Post—a shining example of a modern, go-getting privatised post operator—and for Post Danmark and many other European companies, to have employee representation on the board, why would it be so bad to cater for employee representation on the board in the Government's plans to privatise Royal Mail?
The noble Baroness, Lady Kramer—in a debate on a previous amendment—and the noble Viscount, Lord Eccles, questioned the need to include so much in the Bill. Building trust is an important element in this process. Positive statements from the Government at this stage would give an indication of their intent. Keeping all options open, as has been urged from the government Benches, will not give the reassurance required. I very much support Amendment 20.
Baroness Wall of New Barnet
I, too, support the amendment. In my experience, where employees have a stake in the business—such as being shareholders—the greater the influence they have in that business, the bigger the responsibility they take. It is a win-win situation. The presence of employees on the board means that they react differently. The evidence from when that has happened where I have been involved as a trade union official is that their ownership of the business and its success has been reinforced. The whole workforce engages in the business as a result of that recognition.
Baroness Kramer
This discussion is expressing general agreement, as the noble Viscount, Lord Eccles, said, that it would be advantageous to have employees represented. I think that the noble Baroness, Lady Donaghy, hit the problem on the head. I am sure that she states accurately that Deutsche Post employees are on the advisory board. Under a European structure, that is exactly where you want them because that board influences policy, but it is not the board that we would recognise under British law. There are so many complexities that I do not know how we could possibly write an appropriate clause that could sit in this Bill and yet work under the six or eight potential structures and options that may arise. Therefore, although this discussion may be crucial for expressing the intention of this House, and, hopefully, of the Government, I cannot see any way that we could encode it so that it would make any sense on the face of the Bill. That is one of the problems we face when we start getting into so much detail.
Lord Clarke of Hampstead
My Lords, when the Government consider the arguments we have heard about what should or should not be on the face of the Bill, will they take time to look back in history at the industrial democracy experiment that put Post Office workers—it was the Post Office then and not just Royal Mail—on local, regional and national boards? Representatives, for instance from London as in my own experience, were a conduit in decision making on very important issues like modification or improvement of services and the early days of mechanisation. That gave comfort to people. At regional level the situation was even better, but at national level not only were there two representatives—I will not name them now—on the board, but they were accountable to the rest of the workforce. The point I am making is that those people gave their time as board members—and they included women—without any share ownership. They were pleased to be part of the decision making and the understanding of why certain decisions had to be made. This was introduced in 1975, and that is why I am advising my friends on the other side to look at the history. It was only a matter of weeks after the change of Government in 1979 that the then Prime Minister—the noble Baroness who is a member of this House—decided that the scheme should be abandoned. We got the feeling then that boards were not the place for working people. I think what we have heard today shows that there are places for working people on boards.
I understand the complexities about putting things on the face of the Bill, but I believe it could be done and any prospective owner would welcome the chance of getting people in the position where they could be that vital link between the people doing the work and those who get the profit at the end of it.
Lord Brooke of Alverthorpe
I understand why the noble Viscount, Lord Eccles, should be concerned about the uncertainty, but the one thing we know is that whoever buys this company will know perfectly well—it will be on the face of the Bill—that 10 per cent of the shares will be owned by the employees. That is definite, and similarly—I will be speaking later in subsequent amendments about how this might be handled—if a trust fund is established, the most appropriate way in which that would be contained within the new structure of the company would be to put an employee representing the trust directly on the board.
I see no great difficulty in drafting words to that effect, which should be considered in the light of previous experience. When we dealt with the campaign against NATS being formed back in 2001—I will also speak about that later—it would have been highly advantageous and beneficial had there been more on the face of the Bill than proved to be the case at that time. I am sure that would have convinced many of the employees about what was going to happen and the way things would go.
The success or failure of this venture, whoever buys it, is going to depend primarily on the employees’ contribution to the way the company will operate—and, yes, on capital too. That means that the new owners will have to manage the company in a way that, up to the last two years, we have not seen for a good many years within the Royal Mail. They will know broadly what they are taking on board, and I am sure that they would be very anxious to motivate and involve the employees as far as they can. Therefore, I do not see any great problem in finding a form of words to ensure that we have at least one representative.
Times are a-changing and I am surprised that there is a lack of radical approach, particularly from my noble friends on the Lib Dem Benches, on these issues. We have a recently commissioned report from my noble friend Lord Davies of Abersoch about the desperate need for more women non-executive directors on boards. There is also a desperate need to have the workforce better represented in many companies than we currently have, particularly people who are low paid by comparison with those on the board with substantial incomes accruing from companies. These changes will come as night follows day, so I hope that the Government will be bold and will be prepared to look at this proposal very favourably.
Baroness Howe of Idlicote
Having listened to all the debate on this issue, I must admit that I have a great deal of sympathy with what is behind the amendment. I also think that times have changed considerably. The atmosphere for putting workers of both sexes on a board was rather different and there was total hostility. I understand the Government’s difficulty about putting this in the Bill, but it would be helpful if the Minister would go away and think about a possible wording that would reassure everyone on this matter. For the well-being of those who are involved, it is important that they are represented—whatever the form, or in whosever hands, the Royal Mail ends up in.
Lord De Mauley
My Lords, I thank the noble Lord, Lord Tunnicliffe, for moving his amendment and all noble Lords who have contributed to this debate. While the idea of an employee share scheme representative on the board may well have merits, it is for Royal Mail and its shareholders to decide how it will structure its board, just like any other company would. Thanks to this Bill, Royal Mail’s shareholders will include its employees in the future.
The noble Lord, Lord Clarke, spoke from his experience of the vital importance of effective employee engagement and communication. The Government wholeheartedly agree with him on that. The employee’s shareholding is not the only way to create that engagement. I understand that there are a number of initiatives that Royal Mail is following at the moment which also contribute helpfully to that—for example, the world class mail initiative.
As we have already discussed, in the debate on Amendment 4 on Monday, we ask noble Lords to accept that it is not appropriate to impose the composition of a company’s board through legislation. In fact, I am not aware of a single precedent where such an imposition has been made by statute. Furthermore, if this amendment were passed, it would mean that in the future a fully independent Royal Mail, which had no government shareholding, would be obliged to request new legislation if the company or the employee share scheme were ever to want to change the way its views were represented to the board.
I am grateful to the noble Baroness, Lady Donaghy, for her recognition that the scheme will enhance the modernisation agreement concepts regarding fostering better relations between the company and its employees. She raised the fact of employee representation on the boards of some European companies. Of course, my noble friend Lady Kramer is absolutely right that their corporate structures are very different to the typical United Kingdom board structure. The noble Baroness also gently questioned the Government’s commitment to the concept. Perhaps I may tactfully say to her that, as the noble Lord, Lord Tunnicliffe, admitted in the debate on the previous amendment, the previous Government had to be pushed quite hard even to agree to contemplate an employee share scheme in the 2009 Bill; we are embracing this concept wholeheartedly.
Richard Hooper’s reports for both this and the previous Government stated clearly that Royal Mail must be freed of the “spectre of political intervention”. I ask noble Lords to accept that specifying the composition of the board in statute will not help with achieving this objective. I would therefore ask the noble Lord to withdraw his amendment.
Lord Tunnicliffe
My Lords, I thank all noble Lords who have participated in this debate, and I thank my noble friend Lady Turner for reminding us how modest this amendment is in providing for only “at least one representative”.
As so often happens, the noble Viscount, Lord Eccles, probably lighted upon the essence of the debate, which is the extent to which such a provision should be on the face of the Bill. It is about whether there is uncertainty for the new owner or not. We disagree on that point. We want the new owner to know that there is going to be at least one employee representative on the board—I have to admit that we want to discourage an owner who would have difficulty with that. We want to take away the uncertainty so that, when Government are negotiating for either a trade sale or some other form of disposal, the new owner cannot resile from this provision. We believe that any owner who would have difficulty with it would not be good for the interests of the Royal Mail in the long term.
My noble friend Lady Donaghy, whose chairmanship of ACAS was so important to a period of change in that direction, pointed out that, while the European structures are different, nevertheless the acceptance of significant board-level presence is part of their legal structure. There is significant employee representation, and large, successful European companies manage with that. Under the structure of our company law, the only way we can sensibly introduce such a requirement into the new structure is by including a provision about who should be on the board. It is a change of attitude, but we are living in a changing world.
I concur with my noble friend Lord Clarke of Hampstead that there was an important initiative in the 1970s on moving towards industrial democracy. I was involved in that on one side of the fence, many of my noble friends were on the other side, and we were starting to make some progress. In many ways I wish we had built on this so that we might not be having this debate now. We would probably be taking the involvement of the workforce for granted in the management of major companies, whether in the private or public sector, because we would have had years of experience of it working. I think that this is the time to set this down.
When I was on the government Benches, I always got a sense from my civil servants that, when they had run out of ideas, they scribbled on a piece of paper “Not appropriate”. Another one that they would come up with was, “It is unprecedented”. Of course, all law is about setting precedents, and we think that this is an occasion when this chance should be seized.
Clearly, I am not going to press the amendment today. We will read the Minister’s words with great care, but we may come back to the issue because I think it is an important marker of the style and the character of company that we hope Royal Mail will become. With that, I beg leave to withdraw the amendment.
Lord Tunnicliffe
Lord Tunnicliffe
My Lords, this repeats an amendment already discussed in the Public Bill Committee of the other place, because we still do not really understand why the Bill is drafted as it is, so in that sense this is essentially a probing amendment. The current draft gives rise to concerns that the employee share scheme could be designed for people other than employees of Royal Mail. Do that on a wide scale and all the benefits of introducing such a scheme, which we have been through in previous discussions, will be dissipated. Of course we accept the narrow definition in the Bill of the employees of Royal Mail only, which could exclude former employees, but who else do the Government have in mind by the use of the term “or include”? Could it be other public servants, customers or competitors? Surely the scheme has to be centred on and be for the benefit of the employees of Royal Mail, whoever it is owned by.
The fault-line here, as in so many issues raised by this side of the Committee—some with the support of other Benches—is that the answer is, “It will be all right on the night. Royal Mail is going to be sold to a wonderful company with all the virtues and none of the faults of big business”. I hope I will be forgiven for saying that, at the end of the day, it will be an average company because in the long term we are all average. We feel that this is the time for the Government to give a more specific response to this probing amendment in order to allay our fears. I look forward to hearing what the Minister has to say and I beg to move.
Lord De Mauley
My Lords, as the noble Lord, Lord Tunnicliffe, has explained, Amendment 21 relates to the scope of the employee share scheme. The words “or include”, which through his amendment he seeks to remove, allow the employee share scheme to encompass those employees of Royal Mail who work for its subsidiaries, even if those subsidiaries do not fall strictly within the definition of a Royal Mail company in Clause 2. Royal Mail has a number of subsidiaries that do not themselves directly provide the universal service, but would nevertheless be considered to be part of the overall company infrastructure and play an essential role. An example would be Royal Mail Estates Ltd, which oversees Royal Mail’s property portfolio. It is clearly our intent that those who work for any Royal Mail company be able to be part of the employee share scheme, but without the words “or include” in subsection (4), there would be significant legal doubt over whether the Government could extend employee shares to the employees of other group companies not strictly falling within the definition of a Royal Mail company.
We do not wish to create a situation where some staff in the group are barred by statute from being members of the employee share scheme. It would mean that they would not have the same incentives to engage with the business they work for and share in its future success. I do not believe that that is what the noble Lord, Lord Tunnicliffe, wants, and I therefore ask him to withdraw his amendment.
Lord Tunnicliffe
My Lords, it would be unprecedented for someone to rise from these Benches and say that they were wholly satisfied with the answer, and therefore I will not set that dangerous precedent. I will say that I like what I have heard, and I will study the noble Lord’s words with great care, but in the mean time I beg leave to withdraw the amendment.
Lord Brooke of Alverthorpe
My Lords, I shall speak also to Amendment 21ZB. They are tabled in the name of my noble friend Lady Dean of Thornton-le-Fylde, who regrettably and unavoidably cannot be here today. She sends her apologies. My noble friend is currently a partnership director of National Air Traffic Services. Had she been here, she would have been able to give us the benefit of her current experience and no doubt update us on the prospects facing NATS employees, who may be moving towards 100 per cent privatisation in due course. As many noble Lords know, I was previously a partnership director of NATS, so both of us have some experience of a reasonably successfully scheme for handling employee share ownership.
There are a variety of ways in which shares can end up in the hands of employees when privatisations take place. Since the first in 1982, when 90 per cent of the shares in British Aerospace eventually went to employees, there has been a range of offerings—nine or 10 privatisations. The majority were done through institutional public offerings in which employees picked up individual shares and as owners of shares were no different from people in the market. In 2001, when the public/private partnership for NATS was formed, we saw a novel approach adopted. It involved only 5 per cent of the shares. As is often the case when we come to legislation, there is an untold story. It is that had the unions been more willing to participate in planning for the change in 2001, they would have ended up with 10 per cent of the shares rather than the 5 per cent that was eventually the case. When reference is made to the Labour Government not offering shares in the Bill introduced by my noble friend Lord Mandelson, I suspect that had it had a different reception in the other place there is a distinct possibility that shares would have been on offer to the employees, probably in excess of the 10 per cent currently being considered by the Government. I hope that when we look at the 10 per cent and the way the offering is structured we use those untold stories usefully.
These amendments are, to a degree, based on the experience that the noble Baroness, Lady Dean, and I have had in running the trust scheme within NATS. A direct offering to employees could happen with an IPO, so that the shares disappear all over the place afterwards. It is difficult to conclude that employees have been greatly motivated by what has happened with previous share offerings, although I would not deny that entirely. This amendment seeks to engage the employees more with the company. Paragraph (a) proposes that all shares should be held for the benefit of employees in a trust. I know that this may not be entirely acceptable to all the employees. Some of them might want to get their hands on the shares and to dispose of them at the appropriate point. However, I believe that in the best interests of the company and its employees it would be far better if they are retained in a trust holding, so that while employees are working with Royal Mail they get a return on the investment of those shares during the period they hold them.
Paragraph (b) states that,
“a dividend of equal amount shall be paid in respect of each share held by or for the benefit of any employee”.
The argument behind this is that all employees should be treated the same whether they are a postman or the CEO. There should not be differentiation in the way that shares are allocated. An equal dividend should be paid out in equal shares on an equal footing.
We then move on to Paragraph (d). In the NATS scheme, the shares are evaluated each year by an independent company because they are not on the market. The shares have changed in value over the years while they are being held by an individual. When employees then come up to retirement, they know what the value of their share is at the end point, and they then get the money in lieu of their shares, which then go back into the trust. The 5 per cent stake that the employees have within NATS is maintained at 5 per cent on a continuing basis, and the employees maintain their continuing interest in the company. Similarly, this amendment is seeking to establish an arrangement whereby they would not cash them in and sell them to other people but the shares would be retained within the company. When they left the company, the shares would then go back into the trust and be reallocated to new employees who would be joining the company in subsequent years.
The Government already have plenty of experience with such a model in the light of what has happened since 2001 with NATS. I hope, as I mentioned earlier, that we might reach a better arrangement, whereby a representative or representatives of those employees with the shares would find their way to have more influence in the company than they might under the present arrangement with NATS, but that is not covered in this part of the amendment. I hope that the Government are going to be prepared—in the light of the experience with NATS—to look at this very favourably indeed. The amendments are intended to be constructive, not destructive. I hope we might find ways in which we could put more in the Bill than we did when we dealt with the NATS PPP float, where it would have given greater confidence to the employees about the way in which it was going. I believe it would be helpful to anybody who is prospectively looking to purchase the company.
As an aside, for those people concerned—and I am one of them—that Royal Mail may eventually end up in foreign ownership, in the way that so many of our privatised utilities have over the years, this in a sense could be seen as a form of a golden share in retaining a significant British interest in it too, as the employees would be based in Britain. I see the noble Lord, Lord De Mauley, is going to respond—he responded with great comforts on Amendments 18 and 19, although a little less so on Amendment 20. I hope when he comes to respond to Amendments 21ZA and 21ZB he will revert back to what he did previously and be very comforting.
Lord Razzall
My Lords, the amendment is extremely constructive. However, I have a concern, which is the one echoed by my noble friend Lady Kramer. For those of us who argued long and hard during the last Bill for an employee share structure—which was resisted by the then Government—I am worried that we should be too prescriptive at present as to the form that the employee share scheme should take. Those of us who have had experience in the private sector in employee share schemes know that there are a lot of ways to skin that particular cat—this may well be one of them, but, having fought and won the battle to get at least 10 per cent held by an employee share scheme, I am worried that we will overcomplicate the Bill.
Lord Young of Norwood Green
My Lords, a number of noble Lords have drawn attention to the umpteen privatisations of the 1980s and 1990s which contained an element of employee shareholding. However, time after time, the shares held initially by employees found their way into the hands of institutional or speculative shareholders. They may have started out as employee shares but they did not stay as employee shares for long. What can be done about this? I do not intend to reiterate the very cogent points made by my noble friend Lord Brooke in relation to the experience of the National Air Traffic Services scheme. However, I will respond to the point made by the noble Lord, Lord Razzall, about being too prescriptive. If there are viable alternatives, no doubt the Minister will deal with that in his reply, and I await it with interest.
The amendment proposes that all shares held for the benefit of employees would be held in trust. That may be difficult to accept for some employees who would rather be able to cash in the shares; I speak from my BT experience. I will not go into the details of that, but certainly a lot of cashing in went on at the time.
Lord Young of Norwood Green
No. Sorry to disappoint the noble Lord; I see that he is returning to his previous night’s form. There needs to be some return on the investment that the employee can anticipate.
The amendment proposes that a dividend of equal amount would be paid in respect of each share held by or for the benefit of any employee. When paying a dividend, it is important that all shares are equal and everyone is on an even footing, regardless of where they are in the company. That is an important principle.
The amendment proposes that no employee eligible to receive shares under the scheme would be permitted under the rules of the scheme to dispose of those shares to any other person. If we are serious about a stake in the company being held by employees, that is an important point. To prevent seepage turning into a flood of shares out of the scheme, as we have seen in the past, it is important to ring-fence the shares in the proposed scheme.
The amendment proposes that, on leaving employment, shares held by employees could be disposed of only by way of a transfer for consideration to the trust. It is fair that employees who leave employment and leave the scheme would be able to capitalise on their shareholding—that is one of the incentives of the scheme. To maintain the integrity of the scheme, though, they should dispose of the share back into the scheme.
The amendment proposes that the consideration payable under paragraph (d) would be an amount equal to what the market value of the shares would have been. To achieve a fair result for departing employees, a fair price for the share would be established in the absence of an open market. That would not be very difficult if other shares in the company were being traded. If this is not the perfect formulation of our ideas or improvements could be made, I hope that the Minister will take this away, give it serious thought and come back with an improved proposal to meet the same objectives.
It is a shame that the noble Lord, Lord Hunt, is not in his seat. In a wistful diversion down memory lane last week he reminded us of the “Tell Sid” campaign, conducted to boost interest in the privatisation of British Gas. We were told that Sid was the name of an uncle of the late Lord Walker of Worcester, who was the Secretary of State responsible for the sale. It is a bit ironic that the British Gas share advertisements featured a series of people so anxious to alert Sid to the share flotation that one of them was a postman who got knocked off his bike in the excitement. The mind boggles. If the postmen or postwomen of Britain are to be induced to fall over in the excitement at 100 per cent privatisation of Royal Mail—somehow I doubt it—perhaps the Government should address some of the questions raised in this amendment. They are serious; they make a constructive contribution and improvements so that a good idea becomes a very good scheme. I support the amendment.
Lord Christopher
My Lords, I apologise for having been diverted to another meeting. There are two issues that concern me on which I would be grateful if there were some comment. There is an assumption that there will be a market in these shares, and I am not at all clear that that will necessarily be the case. If there is not, how is it proposed to deal with that situation?
I may have missed the point on the other issue. Assuming that something like the amendment goes through, we have an employee share scheme of this nature and shares are sold back, will we reach a position where all the shares are in the hands of this trust, or whatever it may be called? How will we deal with that situation?
Viscount Eccles
My Lords, both the possibilities outlined by the noble Lord, Lord Christopher, could indeed happen. Again, that reinforces the difficulty of Parliament setting down conditions that will need to be thought through in circumstances that may be very different from those that we in this Committee envisage.
Lord De Mauley
My Lords, Amendments 21ZA and 21ZB relate essentially to the design of the employee share scheme. As the noble Lord, Lord Brooke of Alverthorpe, explained, their broad thrust would be to ensure that shares are placed within an employee share trust. His proposal is helpful and constructive. I thank him and, in her absence, the noble Baroness, Lady Dean, for raising the issue. I know that they both have a wealth of experience in this area.
As the noble Lord explained, an employee share trust certainly has attractions, particularly for its ability to deliver the Government’s objective to ensure a long-standing employee stake in Royal Mail. The Minister for Postal Services has been clear in the other place that he sees these attractions; certainly, he does not discount the matter. However, like my noble friend Lord Razzall, we believe that it is important to keep options open on the design of the scheme until we have reached a firm decision on the form of the transaction. After all, individual share ownership has its own merits, giving the employees a very real sense of ownership.
As I have said, the design of the scheme will in part depend on the type of sale we undertake. For example, individual share ownership could be more appropriate if Royal Mail were floated. In that case, the question of the noble Lord, Lord Christopher, is answered because there would be a public market in the shares. It could also make sense—I think that the noble Lord, Lord Tunnicliffe, touched on this earlier—to have some combination of a trust and individually held shares. I spoke about this area more generally at some length in the debate on Amendments 18 and 19, as I did about the risks of recipients cashing in their shares early, and I am sure that noble Lords would prefer me not to repeat myself.
As I said when we discussed Amendments 18 and 19, paying equal dividends to each employee is a laudable objective. However, there are other sensible methods of allocating shares, and therefore dividends, to employees. I mentioned that in some schemes shares are allocated depending on length of service.
As regards restricting the sale of shares to anyone but an employee share trust, I can again understand the noble Lord’s concerns to ensure that the employees’ stake cannot be diluted by shares being sold to third parties. However, again this would place an undesirable restriction on the design of the scheme and would prevent us allocating shares to individual employees, if we thought that was appropriate at the time.
As I said earlier, it is in fact very unusual for a Government to commit themselves to an employee share scheme on the face of legislation. For example, I believe that—the noble Lord, Lord Brooke, will correct me if I am wrong—there is no similar commitment in the Transport Act 2000 to create the NATS employee share trust. I hope that all noble Lords welcome this upfront commitment to employee shares at Royal Mail but accept that it would not make sense to go even further and prescribe the particular detail of the scheme in legislation. For these reasons, I ask the noble Lord to withdraw the amendment.
Lord Brooke of Alverthorpe
My Lords, I am grateful to all who have contributed to the debate. I am grateful to the noble Lord, Lord Razzall, for contributing but not for what he said. I am grateful to the noble Lord, Lord Young, for his support. I say to the noble Lord, Lord Christopher, and the noble Viscount, Lord Eccles, that I accept the Minister’s view that in many respects the form of the transaction will determine the structure of the offering to employees. However, as I said, I do not think that we will get an IPO. I believe that in earlier debates, the noble Viscount, Lord Eccles, said that he would be very surprised if we did, in which case we are talking about a different kind of structure whereby we sell direct to a company or group of companies, which in turn could create the trust advocated in these amendments. In the event that no market could be used as the yardstick for determining what the dividend or the annual growth in the value of shares should be—although one hopes that they will grow in value—we could turn to a mechanism based on the experience of using independent valuations of what NATS shares would fetch if they were put on the open market.
I recognise that there are problems with being too precise in advance, but, as I have said previously, the more that could be put in the Bill, the more encouraging and supportive it will be to staff who will go into this with disquiet and anxieties. It would also be better for prospective purchasers to know what they are buying into and plan accordingly. However, the Minister’s response has provided more comfort than I perhaps anticipated, given his earlier response to Amendment 19. I beg leave to withdraw the amendment.
Lord Whitty
“( ) No disposal of the Crown’s interest in a Post Office company may be made before—
(a) the Secretary of State commissions and publishes an independent assessment of—(i) the current financial position of that Post Office company; and(ii) the projected financial position of that Post Office company in the subsequent reporting period; and(b) the Post Office company is profitable for two successive financial years, excluding payments from government for services of general social and economic interest.”
Lord Whitty
My Lords, I support the other amendments in the group. We move on to the future of Post Office Ltd. After debating the potential conditions for a minority mutual share in Royal Mail, we are now talking about the possibility of the complete mutualisation of Post Office Ltd, or sub-companies thereof.
In many respects, that is an entirely different proposition, because more than 90 per cent of the outlets of the post office network are already owned by small businesses. It is not clear how the Government intend to mutualise the overall arrangements. I take for my text the useful publication, Securing the Post Office Network in the Digital Age, produced by the noble Baroness’s department. It refers in general terms to the Government’s belief that,
“a mutually-owned Post Office Ltd could be ideally suited for the economic and social role that the Post Office network provides”.
The report also talks about the possibility of basing the mutual on a combination of employees, communities and franchisees—sub-postmistresses and sub-postmasters. However, it is clear from the text that the Government do not have a clue how this will be delivered and are therefore, rightly, seeking advice from Co-operatives UK and other bodies that are experienced in mutualisation.
Given the premise of the Bill—as noble Lords will know, my basic instincts are in roughly the same territory as that of my noble friend Lord Clarke of Hampstead—and given that Royal Mail is to be privatised, and Post Office Ltd and Royal Mail are to be separated, we should explore the prospect of potential mutualisation in that area. However, in order to achieve a mutualised Post Office Ltd, we need to ensure that there is a viable, sustainable and profitable post office network. Although the Government in this document and in other pronouncements have indicated their commitment to that, it is built on somewhat feeble ground.
I quote from the final paragraph of the report, which states:
“We are committed to the future of the Post Office network. It is uniquely important to communities across the country but is on a worrying trajectory of decline. As we have set out in this policy statement, we are dedicated to turning the Post Office around. This will involve a major refresh of the network and its products, and the Post Office turning the size of its network to its advantage”.
That, as an introduction to a prospectus, is not hugely upbeat. It suggests that there are a number of question marks over the future of the network, some of which we have touched on in earlier debates, and some of which arise from other aspects of government policy.
The Government claim that they are committed to preserving the current network, more or less. However, there are at least four aspects of government policy that undermine that commitment. The Post Office potentially has a fantastic national network and is a very good front office of government in almost every community. It can provide a range of financial and other services and can be a major part of the logistical network for post, parcels and digital services. However, at the moment there are a number of question marks over it. Only last week, for example, we saw a continuation of the regrettable trend, admittedly started under the previous Government, of taking away government business from the post office network; I refer to the decision of the DWP to take a major benefits contract away from the Post Office. That is another blow to the sustainability of the network resulting directly from a government decision.
As we heard in the debate the other night, there is an almost incomprehensible reluctance on the part of the Government to commit themselves to a long-term inter-business agreement between Royal Mail and the post office network within the new structure. As I said then, I am not committed to the IBA being in exactly the form it is now. Clearly there are legal difficulties, to which the Government have referred. However, unless there is a stable relationship between Royal Mail and the post office network, another substantial part of the potential income of the network will begin to look extraordinarily uncertain.
In addition, we have had the rather lukewarm response of the Government to proposals for the Post Office to extend its services. In particular, I am surprised that the Government so precipitously rejected what we were working towards under the previous Government—and which was greatly supported by my former organisation, Consumer Focus—namely, the extension of Post Office financial services, and in particular the provision of those services to people who are outside the main banking system. We have seen positive moves towards being able to use the Post Office in the mainstream banking system: RBS recently signed up to that. Now one can access the majority of major high street banks via the Post Office. The problem with the financial services market is that roughly 20 per cent of the population are excluded from it; they do not have basic banking facilities and do not have access, physically and in terms of credit, to those financial services. The Post Office could very simply bridge that gap at a point that would be close to most families.
I am surprised that the Government have abandoned that proposition. There have been more encouraging words about providing additional services, but it is very strange that they have closed the door on the provision of a banking service. Another Commonwealth country, New Zealand, has made a recent and spectacular success of using the Post Office as a banking system throughout the country. We should look at such examples for this country.
Therefore, there are dark clouds over the future of the network. Noble Lords will recognise that that means there is some uncertainty as to whether we could successfully mutualise the network and Post Office Ltd. In the same document, the Government indicated that for a mutualised Post Office Ltd to be successful, it must be able to build on solid foundations, and that mutualisation will be an option only if the network is financially viable. It is not specified how it can be made viable, how the assessment will be made or how the conditions of financial viability will be determined.
The amendment proposes an independent assessment of the financial position of Post Office Ltd, including its future commercial viability. It proposes also that, before we moved to mutualisation, whatever that may mean, we would need to have seen two years of profitable operation of post office Ltd prior to the decision in principle being taken. That is exclusive of the subsidy which the Government have for the next few years committed to the post pffice network. There is no commitment beyond that, and therefore any assessment of financial viability would have to be on the basis of excluding the government subsidy. Both the assessment of the network’s viability and of the proven profitability of that network would have to be established before mutualisation could go ahead.
I am not opposed to the mutualisation of Post Office Ltd. I can see many major advantages, not least to consumers and vulnerable consumers, particularly in rural areas and the outer suburbs. I am not at all opposed to the Government’s concept, given the premise of the Bill. However, in order for it to work we need to have established, effectively and robustly, that there is a viable company and a viable network.
I hope that the amendment would provide the means whereby we made that assessment, and would make it clear in the Bill that such an assessment needed to be made before we took the next step. I beg to move.
Lord Borrie
My Lords, I support my noble friend Lord Whitty. He has made a powerful speech not only on the merits of mutualisation, which are largely supported in principle by Her Majesty’s Government, but on the real difficulties of moving to it with any great speed at present.
I have a guilt complex about mutualisation because in the 1990s I was a non-executive director of the Woolwich Building Society, a splendid body with advertisements which many people remember to this day; “I’m with the Woolwich”, they said. I am afraid that I was one of those who followed the lead given by the executive directors, who I of course realise were going to benefit directly as a result. The building society gave up its position as a building society and became a limited company. Not long after that, it was taken over by one of the four leading banks. So, as I said, I have a guilt complex, which has led me—I hope not too far in the opposite direction—to be generally in favour of the idea of mutuality.
I was unable to take part at Second Reading, but I notice that, in principle, there were several voices favouring the creation of a mutual to run the post office network, including the noble Baroness, Lady Wheatcroft, from the Conservative Benches, who is not in her seat today, and others. We all know that the Secretary of State, Dr Vince Cable, had indicated even before our Second Reading that the Post Office was “ideally suited” to the co-operative style of structure, where employees—sub-postmasters, sub-postmistresses —and individuals in communities would all have a greater say in how post offices are run.
When the National Federation of Sub-Postmasters spokesman, Mr George Thomson, addressed the Public Bill Committee in another place on 9 November last, he was “very supportive” of the concept of mutualisation of the post office network and particularly attracted, he said, by the John Lewis model. “However”, he added, expressing it rather more strongly than my noble friend Lord Whitty, the Post Office,
“has to be worth mutualising”.—[Official Report, Commons, Postal Services Bill Committee, 9/11/10; col. 29.]
He then expressed great doubt that it was because it was, he said, a “basket case” at the moment.
At Second Reading, Peers who favoured mutualisation were just as doubtful, although their language about the immediate prospects might have been less extreme. My noble friend Lady Kennedy of The Shaws, who had another meeting this afternoon but who hoped to be in the Chamber for these discussions, said that mutualisation would not now make “economic sense”.
As my noble friend Lord Whitty has said, Co-operatives UK has been asked by the Government to consider the options. Will they go for a producer co-operative along the lines of John Lewis, which I have already mentioned, or a consumer co-operative like the Co-op shops, or will it be some form of hybrid? The intention behind this amendment is to unravel that over a period of time and come up with a suitable solution, but I am sure, like the many who spoke on this subject at Second Reading, that my noble friend Lord Whitty is just as much in favour, in principle, of a mutual set-up as they were.
Lord Young of Norwood Green
My Lords, I shall speak to Amendments 21C and 22ZA to 22ZD, and comment on the other amendments in the group, Amendments 21A and 22. This is a large group of amendments and I ask the Committee to bear with me.
Generally, this Bill pumps questions on issues of accountability, considering the enormous step that it proposes for one of our most cherished institutions and the number of vague answers that we have to questions about the sale of Royal Mail and the future of the post office network. With proposals relating to the disposal of shares in Royal Mail, to the nationalisation of the pension scheme, to the regulatory regime and to the mutualisation of Post Office Ltd, greater accountability to Parliament should be built into the Bill before it receives Royal Assent.
The Bill instructs the Secretary of State to lay a report before Parliament once he has taken a final decision on the transfer of the Post Office Counters business to a mutual body. Once again, there is no promise of an oral Statement, no debate, no chance to amend and no vote. These amendments offer the House an opportunity to scrutinise the Government’s later proposals in detail, including their plans for mutualisation. Several years may elapse between the Bill receiving Royal Assent and the transfer to a mutual organisation, but it is important that Parliament is able to scrutinise and approve the proposal when it comes into effect. Are we being denied the opportunity to scrutinise fully because to do so might cause real difficulties for the Government, or will the cold forensic light of parliamentary scrutiny undermine the foundations on which this Bill was laid?
We will not know the answer to that unless Parliament is able to consider future important actions and their implications more fully. So many questions remain unanswered. We are asked to take a leap in the dark about how Royal Mail will be sold, about what sort of Royal Mail will emerge in the private sector, and about what obligation a privatised Royal Mail will be under to utilise the post office network. A great deal of concern has already been expressed about the nature and continuity of an inter-business agreement. In the case before us, of Post Office Ltd, we are also asked to take a leap in the dark about the type of mutual body or range of mutual bodies that might end up owning our post office network.
What will the rules be? What will be the extent of the mutual? Who will be eligible to be a member? Are all to be equal or will some be more equal than others? How will the board be constituted? Could the mutual sell off assets? Could the owner sell on to another mutual, such as a building society, store group or a mutual set up for that purpose? Could mutualisation end in disintegration? How will a mutually owned Post Office ensure that it is on a sound commercial footing? What tests would a potential owner have to pass?
It might be far fetched, but what is to stop Rupert Murdoch’s family or someone else associated with a communications company setting up a mutual body as a vehicle for running the Post Office? Is the Minister setting a timescale by which the Government intend to complete the mutualisation process, or is this an open-ended process? Who will be accountable for the success of the Post Office when it is in mutual hands? There is a provision for an annual report, but what about a Secretary of State annual report? I hope that the Minister will take the opportunity to make clear whether the Secretary of State will be responsible. If he will not be, who will be? What are the safeguards to prevent a mutually owned Post Office Ltd from suffering commercial decline or even catastrophic financial collapse?
Lord Cameron of Dillington
My Lords, the profitability of post offices, touched on by the noble Lord, Lord Whitty, and the need for a sustainable business plan, as set out in the last amendment, is important to me. It will come as no surprise that I come at this from the perspective of rural post offices, and it is here that I wish to probe the Government’s plans. Amendment 22ZD, on a sustainable business plan, seems to me the best place to raise all my questions. Although I considered spattering them into a whole series of amendments that we have yet to come to, I hope that your Lordships will allow me to put them all under this one umbrella.
Rural post offices are a key thread in the web of rural communities. If you can imagine a web on an old barn door, you cut a key thread and the web collapses. It is the village shop that is the key, but the post office represents the cornerstone of viability to that shop as it can greatly increase the footfall in these shops. Research shows that it can increase the footfall by 15 per cent or more. Quite apart from the invaluable services that local shops provide—particularly to those in rural areas without transport, which includes the very old, the young and the poor—it is the footfall in those shops that is the key benefit to the community. It is a place where old Mrs Jones can meet up with the young Master Smith. That seems a strange request, but the old and the young have different groupings in rural villages and it is really important for the sustainability of that community that there is a cross-fertilisation between the groups within it. That can only happen in a village shop.
I am keen to probe the Government on how they intend to keep the current network of rural post offices profitable and the sort of sustainable business plan they have to ensure that they can keep to the promise that they made in the November document, referred to by the noble Lord, Lord Whitty, which states:
“We will maintain the network at around its current size”.
That document sets out how the new flexible service will attract new customers, and claims that it has already done under the new post office local programme. I have my doubts that this will be enough in the long run to give the much needed boost of confidence to potential sub-postmasters to pick up the gauntlet to invest in a new business in a rural area that will probably give a very limited return, that requires a huge degree of skill in accounting, stocktaking and people skills and that involves very long hours. Somehow this vital job needs to be made more attractive. A post bank, as mentioned by noble Lord, Lord Whitty, would be a sure way to give that confidence. I endorse all his words on the subject, especially with reference to the huge success of such a scheme in New Zealand. A firm commitment in this area would give confidence to potential sub-postmasters.
How are the Government going to ensure, in that crucial plank of their sustainability plan, that government departments will deliver their services through post offices? There is no way in which that will happen if there is a cheaper route. Once the £1.34 billion that the Government are putting in has run out, in four years’ time post offices will once again start to close. I suspect that most of those closures will be in rural areas. The noble Lord, Lord Whitty, has already referred to the DWP's reluctance to use post offices and to its closing down the contract on the green giros, which brought about £15 million per annum into the post office chain.
The trouble is that the DWP and other departments will always follow the cheapest route. Of course, the cheapest route might be the internet. It is not necessarily cheaper for a lot of people, because it ignores the cost of owning a computer and accessing the training if you happen not to be part of the computer age. Some people in remote rural villages find that difficult. As an aside, I put in a plea, vis-à-vis long-term sustainability, that the Government use part of the £1.34 billion to equip post offices, where necessary, as mini-internet cafes and to pay sub-postmasters to help the digitally excluded in rural areas to access government services via the internet. That would be a helpful service for the Government to invest in.
It is typical that where post offices are most threatened—in remote rural areas—internet broadband connections are all too often non-existent. To put it the other way around, post offices are essential in the delivery of services where no broadband exists.
My question remains: how will the Government persuade their departments to use the Post Office? Local government services are another possibility, but under the current cuts and financial stringency how can the Government twist enough arms to make local authorities deliver through post offices as opposed to the cheaper option of using their sparse and increasingly rare local authority offices? I say that that is the cheaper option, but it is not really cheaper; it is certainly not cheaper to the consumer, who has to pay increased transport costs to get to the outlet. We should bear in mind that all too often the consumers who want to access those facilities are those who can least afford such costs.
All the recent trends in this area seem to be for the Government to reduce their use of post offices for the delivery of government services. What are the Government going to do to reverse that trend? How will they maintain the network at its current size? Do they have a sustainable business plan? I hope that the noble Baroness will be able to answer me.
While we are discussing Clause 4 and the possible mutualisation of the Post Office, do the Government intend in the near future to introduce a majority of sub-postmasters on to the board of Post Office Ltd as a trial run to see whether sub-postmasters running the Post Office company helps? I think it would. I realise that that is a bit of a googly to throw at the Minister, so I would be happy for her to answer that question in writing.
Baroness Donaghy
My Lords, in supporting the amendments, I want to deal with the potential political fallout of getting it wrong. The Government gave a reassurance in an earlier debate that there would be no programme of closures. We all know that you do not need a programme to have a continuing and worrying number of post office closures. The Government may well succeed in being hard-headed—and, dare I say, hard-hearted?—about the role of employees and in their business-first approach to Royal Mail. However, when it comes to the Post Office, the potential fallout is another matter. There was a huge loss of good will for the previous Government, my Government, because of the number of post office closures. As noble Lords know, 900 post offices are up for sale, and a significant proportion would not be considered financially viable unless there was an inter-business agreement with teeth. It might sound strange coming from me, but I would like to praise the Daily Mail’s post office campaign, which has been one of the most effective for any political party in its dedication and coverage.
I do not think we should underestimate the amount of political capital which will be used up by any Government who fail to ensure a successful future for the Post Office. It may be more valued by the older person, but it is the older person who votes. So in supporting these amendments, we are looking for an assurance from the Government that whatever pattern falls out—whether it is a mutualisation or whatever—a very strong effort will be made to have an inter-business agreement which protects the future for sub-postmasters and for as many post offices as possible.
Lord Razzall
The noble Lords, Lord Whitty, Lord Cameron and Lord Young, have raised some extremely relevant and interesting points on this important issue, and I find myself very split. The noble Lord, Lord Whitty, confined his remarks primarily to Amendment 21A, and I find that difficult to accept as somebody who, as the noble Baroness will be aware, has argued strongly for the mutualisation of the Post Office. I am concerned that we should put in the Bill—it is exactly the same argument we had on the previous provisions—restrictions that would be likely to slow down the mutualisation of the Post Office. I am sure the noble Baroness will deal with that in her remarks.
Everything that the noble Lord, Lord Cameron, says is entirely correct. I know, as does the noble Baroness, that the Ministers in her department are convinced that they will have a package that will provide financial security for the Post Office. Whether there is a constraint of coming out with detail before the Budget or before it is finalised I do not know, but I think that before this Bill is passed, it would be extremely helpful if noble Lords could be made aware in more detail of the exact package that the Minister’s colleagues in the department are confident could secure the future of the Post Office.
I hope that the Minister will reflect on the remarks of the noble Lord, Lord Young, because these are extremely important issues. Having made the point endlessly in debates on Bills in opposition about the importance of Parliament sanctioning important decisions, I think the principle is important that, before any significant mutualisation of the Post Office takes place, Parliament needs to have a final say. I hope the noble Baroness will take that point back for consideration.
Baroness Howe of Idlicote
My Lords, I sympathise with these amendments. They reflect a number of concerns that those of us who spoke at Second Reading raised. I was certainly one of those as far as mutualisation was concerned. I had a great deal of sympathy, too, for the concept of banking in local post offices, but that has clearly been firmly ruled out by the Government. That does not mean, however, that they should not be thinking of ways in which they could satisfy the concerns. There should be some return to Parliament for an assurance that the route down which the Government are going will be in the best interests of those concerned. I thought the comments made by my noble friend Lord Cameron about rural areas were extremely important. The post offices are important for the sustainability of those local areas.
I hope that when the Minister replies she will feel able to give more assurance than we have had so far on this issue. I commend the amount of money available and the way in which the Government have thought through this Bill in order for it to be sustainable for the future. However, despite all the money—we will no doubt hear details after the Budget of other ways in which the Post Office and postal services will be helped—it would be in everyone’s interest if the Minister could say that there will be a hard look at reassurance on some of the many important points that have been made in this group of amendments.
The Archbishop of York
My Lords, under Amendment 21A, one of the greatest regrets about the manufacturing base of this country is that companies in the public interest were disposed of without the kind of assurance that is being asked for here. If we look at steel, coal-mining and our car manufacturing bases, public interest in those companies was disposed of in the hope that the people who took them on would make them more viable, but when they took them over they explained that these businesses were not viable. Before we knew where we were our car manufacturing base and our steel industry were not about any more.
It worries me that if you get rid of any public interest—in the case of the Post Office, it is the Crown’s interest—before you are quite certain that whatever company is created will be viable at least through some financial times, you will be in real difficulty. It would be very easy for whoever takes these organisations on to say “By the way, when we looked at the books, they were not what we thought they were”. Then someone else buys it and takes it on, and before you know where you are the Royal Mail and those other places are not about.
Although it is difficult to put it in the Bill, the assurance that this amendment seeks is absolutely necessary. As long as there still is Crown interest in the Post Office, there is a chance that we may do it properly. As soon as that goes—before there is the assurance sought in this amendment—I am afraid that we may end up with what happened to British Steel, coal-mining and the car industry.
Baroness Wilcox
My Lords, here we are on day three eventually at the issue of the Post Office and all the concerns that have been expressed today. The noble Lord, Lord Whitty, raised a number on the future of the post office network, as did the noble Lord, Lord Cameron, the noble Baroness, Lady Howe, and the most reverend Primate. These will be covered by a number of amendments that follow and I ask noble Lords if I may respond to those points in those debates.
On the future relationship between the Royal Mail and the Post Office, I hope that my commitment to the noble Lord on Monday to consider his amendment to include information on that relationship in the Clause 2 report provides him with some comfort. This group of amendments relates to the circumstances in which the Secretary of State can transfer his interest in the Post Office to a relevant mutual and the information which should be furnished to Parliament in connection with that transfer. This Government believe that mutualisation of the Post Office could be ideally suited to the particular economic and social role it plays up and down the country. We understand that sub-postmasters, sub-postmistresses and other stakeholders would highly value the opportunity to have more of a say in how this well loved institution is run.
We envisage that a mutual Post Office Ltd could allow communities to tailor services to their needs and give those who know the Post Office best a greater stake in the future of the institution that they value so dearly. Indeed, the many community-run post offices across the country demonstrate that this can work. Clause 7, which we will discuss in due course, ensures that any mutual must act for the public benefit. No Post Office mutual will exist solely for the financial benefit of its members.
Clauses 4 and 7 work together to set clear parameters within which a transfer to mutual ownership could be made, but they do not oblige such a transfer to be made. That is because developing the appropriate model for a mutual Post Office must not come from the top down.
Amendments 21A and 22ZD seek to ensure that Post Office Ltd is on a secure financial footing before any move to a mutual model may be made. The network must of course be on a secure financial footing before any move to a mutual model is made. Indeed, it would not be in the interest of any Post Office Ltd stakeholders to take on the running of a company that was not in a suitable position to sustain itself. Nor indeed would the Government consider handing over control of the Post Office if they were not satisfied that the company could flourish in the absence of the levels of subsidy that are currently provided.
The £1.34 billion in funding that we are providing to the network over the next few years will do more than just guarantee that at least 11,500 post offices will remain working. It will ensure that the network can be modernised, offer an improved customer experience and so be in a better position to compete for new business. We believe that the Post Office could be in a financial position that would allow for the possibility of mutualisation by the end of this Parliament. I hope that goes some way to answering the question put by the noble Baroness, Lady Donaghy. This funding will ensure that the Post Office services across the United Kingdom on which so many people rely, particularly the most vulnerable in our communities, are protected exactly as the noble Lord, Lord Cameron, so eloquently explained is needed.
Whether or not this move to a mutual structure happens, we envisage that the Government would still need to provide a small amount of subsidy to ensure that offices remain open where they might not otherwise survive, such as in rural or deprived urban areas; yet Amendment 21A would not permit a mutual to operate in these circumstances.
However, it is important that there is transparency about improvement in the financial position of the Post Office, as, for example, the noble Lord, Lord Whitty, seeks under his amendment. That is why this Bill introduces, at paragraph 17 of Schedule 12, a new requirement that the annual accounts of the Post Office be laid before Parliament every year.
We aspire to a vibrant and flourishing Post Office in the future, which does not simply rely on government handouts, but which can provide a wide range of services across a nationwide network. The markets in which the Post Office operates are highly competitive. It would not be in the interests of the Post Office, the future members of the mutual or the Government if the business plan being relied on to continue fostering that vibrant and flourishing Post Office were published, as envisaged by Amendment 22ZD.
I turn to Amendments 21C, 22ZA, 22ZB and 22ZC. These amendments all seek to require a further parliamentary approval process prior to any transfer of the Secretary of State’s interest in the Post Office to a relevant mutual. Amendments 21C and 22ZB do this as stand-alone amendments, while Amendments 22ZA and 22ZC combine to the same effect.
Clause 5 introduces an important means by which Parliament can hold the Secretary of State to account for a decision to move towards a mutual ownership model for the Post Office. However, we do not believe it would be appropriate for Parliament to have a veto right over any subsequent move to mutual ownership that is within the statutory parameters being debated today. The reason is that developing the appropriate model for a mutual Post Office must not come from the top down. I am grateful to the noble Lord, Lord Borrie, for his observations. He may be interested to know that, subject of course to the strict statutory parameters set out in Clause 7, the interests of all of the Post Office’s stakeholders—for example, sub-postmasters, staff, business partners and customers—must come first.
Co-operatives UK, the national trade body for co-operatives, is talking to those stakeholders and will shortly report to Ministers on some potential options for a mutually owned Post Office, and before any final decision is taken by the Secretary of State, there would of course also be a public consultation. But since, at the conclusion of that process, the ultimate decision to transfer the Post Office to a relevant mutual will rest with the Secretary of State, Parliament must be informed swiftly and in appropriate detail of the decision. Clause 5 sets out those requirements. It specifies the details that must be included in the report and also requires the Secretary of State to lay it before Parliament as soon as reasonably practicable after he has made the relevant direction or authorisation.
Lord Whitty
My Lords, I am grateful to the noble Baroness for some of the reassurances she has given, which were the basis for tabling the amendments in the first place. I am also grateful to all noble Lords who have indicated that they too need some reassurance to the effect that mutualisation will not be pursued until there is a clear and robust Post Office Ltd or Post Office network if not absolutely in place, at least in prospect. I thank particularly my noble friend Lord Young for the complementary amendments which, in addition to the assessments that I have proposed, would require a report to Parliament and a parliamentary process. I shall come back to that in a moment.
I say to the noble Baroness and the noble Lord, Lord Razzall, that I am not attempting to slow the process down. I think that it will take time to get to a position whereby we are able to mutualise, and some of what she said indicates that. Nor am I am not trying to restrict flexibility because I recognise that a range of different options is available, some of which may not be a single option because different parts of the network may be dealt with differently. As I say, I am not trying to be restrictive in this respect. However, there are some deep worries. As the noble Lord, Lord Cameron, indicated, there are particular worries in rural areas. The other areas that are particularly an issue are what I would call the remoter suburbs, those areas between the inner city and Surrey or Cheshire, where again the post office is an important focus and social element for those who are somewhat cut off from the economic and social mainstream. There are substantial parts of the country where the post office is a major institution, and there are anxieties. That has been demonstrated through reactions to the reduction in the number of post offices over the past few years. As my noble friend Lady Donaghy indicated, it has become a social and political issue.
The Minister said that we do not want to institute a parliamentary veto here. I think that when the Bill is considered in another place, she will find that Members of Parliament from all political parties may not want to regard it as a veto, but they will want a pretty strong reassurance that the time is right for mutualisation to take place, and therefore a report to Parliament along the lines proposed in the amendments tabled by my noble friend Lord Young is necessary.
Obviously I will not press the amendment tonight, but the problem is that the noble Baroness has to be completely convincing. The noble Lord, Lord Razzall, slightly mysteriously referred to a package that he hopes Ministers will come forward with. I have some inkling about that in relation to the Ministers in the noble Baroness’s department, Ed Davey and Vince Cable, and, indeed, the noble Baroness herself. I am not attempting to split the coalition—not tonight anyway—but there is a different sort of split between Ministers in BIS, who I think are genuinely committed to the future of the Royal Mail and the post office network, and other departments which are not prepared to make any sacrifices in relation to the network. As the noble Lord, Lord Cameron, and other noble Lords said, we have just had yet another example—we had some significant ones under the previous Government—of a department taking a silo view of what is in its most cost-effective interest helping to destroy the interests of government and society as a whole, particularly in rural and underprivileged areas. I think the split is not between Ministers or parties but between different Whitehall departments. We need to get some coherence there in parallel with setting up the terms of the mutualisation. We need greater clarity that the Government as a whole are behind the objective of making the post office network work. Only at that point can we clearly be reassured that this mutualisation is likely to work.
I think the main points have registered with Ministers, and I suspect these debates will go on in another place. Ministers in the noble Baroness’s department will need to ensure that the network that they envisage over the next few years will be robust, will be sustainable for a long period of time and will meet the social and economic needs of a large proportion of our population. If they can do that, godspeed to mutualisation. I beg leave to withdraw the amendment.
“( ) Before making any direction under subsection (2), the Secretary of State shall give full consideration to the creation of a Post Bank and shall, following consultation with relevant persons, lay a report before Parliament.”
Lord Stevenson of Balmacara
My Lords, in earlier contributions many noble Lords, particularly the noble Lord, Lord Cameron of Dillington, expressed concern at the removal of government services from the post office. Particular concern has been expressed over the recent loss of the green giro account to PayPoint, which took away another source of business from the post office.
The post office network is a unique national resource. It has as many social and community functions as it has business activities. It is woven into the fabric of all our lives. Communities, businesses and individuals all depend on it, and I believe it should be protected and grown. I welcome the Government’s commitment that there will be no closure programme for post offices, but we are seeing the loss of many hundreds of post offices across the country. It is therefore paramount that we take action to ensure that there are no further closures of post offices by looking to build and strengthen the business.
We suggest “a cunning plan”. A post bank based on the post office is in many people’s view one of the best ways of strengthening the post office by building up and extending its current financial services and thus securing the future of the network. As both bank and post office branches have closed in many local communities, particularly the poorest, many people and small businesses have seen their direct access to postal services and essential financial services disappear. Establishing a post bank would ensure the provision of financial services based on a return to basic banking principles under which bankers are situated in and understand their local community and its needs. With its network of branches throughout the country and the high levels of trust that it enjoys, the post office is ideally placed to house a post bank. The proposal also builds on the central idea that post offices are there in great numbers, and it seems sensible to build on what we have rather than to think of other ways to use the service.
A post bank would hugely increase post office custom and would enable the Government to increase the work they pass to the post office. It would enable the post office to build up its business profitably. It would also enable the Post Office card account to be embedded in a trusted bank and would thus remove the threat that it could again be put out to tender. The post bank would be an economic driver, lending at small margins and supporting local enterprise in local communities. The current banking crisis surely provides an opportunity for a radical redesign of retail banking, including combating financial exclusion and creating an accessible and trusted banking system.
One way of doing this would be to put in place a universal banking obligation, similar to the universal service obligation placed on Royal Mail, to create a post bank in the model of the post office with statutory obligations to provide a service. A post bank would allow every local post office to offer current accounts, access to credit and direct debit facilities and to expand its present savings capacity. It would not be shareholder driven and would be able to act in the best interests of local communities and local businesses. It would be localism in action.
Baroness Turner of Camden
I rise to support my noble friend in respect of this amendment. It is very important to accept that post offices have an important social role. One of the social roles they perform is that they are a point of access for—often not very well paid—people, including elderly people, who do not use banks because they do not know how to use them, are too concerned about them or are anyway not interested in speculative investment. Some people simply want somewhere safe to put their savings so that the savings are readily available when they need them, and they know that the savings are going to be safe because they trust the Post Office.
For those reasons, along with the excellent case made by my noble friend on the Front Bench, the Government really ought to look very seriously at what is proposed here. I am sure it would be popular with a very large number of the less well paid members of the public. People want to have somewhere safe where they can put their savings. We are hoping that people will save more and we have been saying for a long time that people are not saving enough. Well, some people do save, but they do not always know where to put their savings or where to go for financial advice or assistance. This would be an excellent idea, so I hope the Government will be prepared to accept what has been suggested in this amendment.
Baroness Kramer
My Lords, I have long been a fan of the equivalent of a post bank—as you know, it was Liberal Democrat policy. All of the arguments were made very strongly about the advantages that a post bank would bring to the financially excluded and those who are looking more for vanilla banking as well as to improving access for small businesses. It is hard to do anything other than come up with a list of absolute positives for a post bank.
Obviously, my colleagues in the other place were very eager to seize the opportunity for a post bank as part of the restructuring of Royal Mail, but then they came across the contract between the Post Office and the Bank of Ireland—although I do not know how much they know about it because obviously the contract will be confidential. However, I notice that the three names down on this amendment are those of the noble Lords, Lord Young, Lord Stevenson and Lord Tunnicliffe, and—I am sorry if I get their histories slightly wrong—I think it must have been on their watch that the contract with the Bank of Ireland was signed. That contract hidebounds the Post Office and makes it virtually impossible for it to provide the kind of comprehensive service and range of financial services without buying out that contract. Without breaching any confidentiality, perhaps they could tell us how many hundreds of millions of pounds would have to be paid to Bank of Ireland to buy out the contract so that a post bank could be put in place. I do not have access to that information, but perhaps, having been on the watch when that contract was originally put in place, they could give us a sensible estimate of what that amount of money could be. I am rather afraid it is such a large sum that it would have been difficult even in a time of prosperity and exceedingly difficult in a time of deficit. I greatly regret that.
I am glad that we had some discussion—there will be other opportunities—about bringing on board the credit unions. This House will be well aware that the Minister, Ed Davey, and others are committed to financing the technical platform that would make it possible for the post office to be used as the face of the credit unions. Credit unions are far more fragmented than a coherent bank would be, but at least that would open up the opportunity. I will also have a few words later to say about at least providing access to current accounts in the various high street banks. I wonder if they would give us an indication of what they think the cost would be for the Government to buy out that Bank of Ireland contract to make this very attractive proposition possible.
Lord Clarke of Hampstead
The noble Lord, Lord Stevenson, said he had “a cunning plan”. Well, I wish it was cunning—it is not original. In fact, it was the Conservative Government of the 1970s that abandoned National Girobank. I was one of those who agitated for many years for the creation of Girobank. By copying the arrangements in the Netherlands, it was possible to introduce a simple banking system that brought cheque books and bank accounts to many thousands of people who never thought they would have a bank account. I mention National Girobank because one day, when I get enough money, I am going to ask a student or someone to do the proper research on what happened to our people’s bank, as it was in those days.
As I said in the debates on the previous Postal Services Bill a couple of years ago, only one paper in this country covered the story of what I considered the give-away of a national asset. Reference has been made to the shock that you get when you find you have got to buy out a contract, but if you had the figures on what happened at Girobank, you would start to worry even more. I know this because when it was announced that it was going to be abolished—and it was really abolished because it was so successful—Co-operative Bank, Unity Trust and a consortium of trade unions got together to try to buy the bank when it was put up for sale. First, they were told, “You need £200 million to buy Girobank”. That was the easy bit, because that was gathered together. Then the rules were changed, and Girobank was to be sold only to an established finance house—which the consortium was not—but the consortium established itself as a finance house. Then they were told, “You cannot buy it unless you have an alternative computer system that will be there if this system goes down”. So the dice were quite loaded from the start. The £200 million that was mentioned at the time of the sale of Girobank actually paled into insignificance, because the actual figure—I am quoting from memory as I have no notes here—was £118 million when it was sold to the Alliance & Leicester. The Alliance & Leicester obviously grabbed it because, at the time, there were thousands of people waiting to open an account with National Girobank. Political dogma said, “This has got to stop. It’s too successful and we’re going to do away with it”.
What has happened since? Alliance & Leicester of course has been swallowed up by Santander. If anybody thinks that the service they are getting from Santander is anything like what they got from National Giro in the beginning, and to some extent with the Alliance & Leicester, they are dreaming, because the rapacious way in which these banks work frightens me.
There is a demand for a people’s bank, so I welcome the comments from the noble Baroness, Lady Kramer. I ought to declare another interest: I am a member of the St Albans District Credit Union. During my years as a councillor in Camden, I saw what happened when people were at the mercy of loan-sharks, when people were threatened on their doorsteps with an extortionate amount of interest week on week. Of course there is a chance to get a link between the growth of credit unions and a people’s bank—or post bank, post office bank or Royal Mail or whatever—but the important thing to is to have a simple banking system, which allows people to have confidence in where they are putting their money. At the back of it all, despite all my criticism of what has gone on in the last few years, I still believe in the brand name of the Post Office. The Post Office has a good reputation and I hope that the Minister and her colleagues will go into one of those dusty offices, pick up the box file that says National Girobank and check what I have said about the way it was virtually given away. Incidentally, the punchline was that, within two years of trading, Alliance & Leicester cleared the amount that it paid for the bank.
Lord Young of Norwood Green
My Lords, I shall respond to the noble Baroness’s request for information. It was a substantial sum. I am not saying that to be evasive; I cannot remember the precise amount. The only thing that I would say about our arrangement with the Bank of Ireland was that it enabled a large amount of business to be generated. We should not forget that aspect of it. As an original member of Girobank when it was first formed, I concur absolutely with the regretful history of its sad demise that my noble friend Lord Clarke has recounted. For a period we had a successful people’s bank, which unfortunately disappeared as the result of another privatisation.
Baroness Wilcox
I thank the noble Lord, Lord Stevenson, for tabling this amendment. The Government are clear that the wide range of financial services that the Post Office offers—personal loans, credit cards and savings products, for example—are an important part of its total product suite. The Government made clear in the coalition agreement that we would look at the case for developing new sources of revenue for the Post Office, including the creation of a post office bank. We have looked at the different options and arguments for such a bank very carefully and have come to the conclusion that, particularly in the financial climate that we are experiencing, it is just not a viable option. My noble friend Lady Kramer spoke further on this and gave us her views, and I think that she felt the same.
Setting up and capitalising a new bank would be very expensive as well as creating a much more volatile and risky balance sheet for the company. Instead, we are committed to ensuring that the Post Office continues to offer wide access to existing banking facilities. For that reason, we were extremely pleased that in November last year the Royal Bank of Scotland reached agreement with the Post Office to allow RBS customers, including NatWest customers, access to their current and business accounts at the post office. That will mean that almost 80 per cent of all current account holders will be able to withdraw money free of charge at the post office, while many can also pay money in and check their balances.
In response to points raised by the noble Lord, Lord Stevenson, on financial inclusion, supported by the noble Baroness, Lady Turner, the Post Office already offers a range of services to help people on lower incomes, including the Post Office card account and the ability to access all basic bank accounts.
The noble Lord, Lord Clarke of Hampstead, will be heartened to know that we are extremely supportive of a stronger link-up between the Post Office and credit unions. Recent announcements by the Department of Work and Pensions on credit union funding open up excellent opportunities for the Post Office to provide access to credit union services to many more people. This builds on existing co-operation between the two sectors, which is already strong. Maintaining the large branch network and increasing access to bank accounts at the post office, as I have said, is an important step towards financial inclusion.
Financial services are clearly an area with significant potential for growth. As I have said, though, the creation of a post bank would not be in the best interests of the post office network. Instead, we strongly believe that funding for the Post Office will be best spent modernising and maintaining the network. The funding that we have provided to the network will mean that the Post Office is better placed to compete for new business.
Lord Lea of Crondall
I may have misheard the Minister, but did I hear her say that all these desirable things are dependent on the maintenance of a wide network? Is it part of the Government’s guarantee that that wide network will be there?
Baroness Wilcox
Yes, that wide network will be there.
We strongly believe that funding for the Post Office will be best spent modernising and maintaining the network. The funding that we have provided to the network will mean that the Post Office is better placed to compete for new business and to further develop its offer to both local and national government, in its ambition to become a front office for the Government. As part of this strategy, we will of course also support the Post Office in expanding its financial services offering, but at this time we believe that that is best done by offering access to the existing high street banks through the post office network.
The noble Lord, Lord Stevenson, asked a number of further questions on credit unions. It would be best for me to deal with those concerns when we discuss credit unions specifically in the later amendment under Clause 11. I hope that it is possible at the moment for the noble Lord to withdraw his amendment.
Lord Stevenson of Balmacara
I thank the Minister for her reply. I suspect that I made a mistake in trying to bring a touch of levity to the debate by quoting “Blackadder”—it was picked up by only a couple of people, one of whom used it to beat me over the head with. I suppose that that is the risk of quoting Blackadder, who seemed to have a singularly unsuccessful way of making his plans come to fruition. I should probably never use that again, so I will not.
We are delighted that the Minister has confirmed that she has looked so hard at the question of a post bank—given the coalition agreement, it would have been rather hard not to do so. I am surprised, given the way that the coalition agreement seems to permeate so much of the business in this House, that my proposal has not been given more of a favourable wind, but there we are. It got a lot of support in the speeches that my noble friends and others on both sides of the House made, and I still think that it is a good idea.
My amendment was an attempt to express the frustration that came out in the intervention that the Minister took. In some senses, we seem to be underplaying the capacity of the existing network to do so much more for society. These post office branches exist. In most cases they are active, vibrant places. People use them—I quoted the figures in my address. We need a complete rethink about the way in which the Government do business. We should take the post office network and use it to achieve more than it is currently capable of doing, given the single use that we are making of it.
How do we save our declining post offices? We use the brilliant brand. We use the securely established places that these post offices inhabit in wonderful locations, with huge footfall, in every part of our country. They are used and valued by people but we do not use them properly to achieve the further output of government. They are places that people go to for their services. People use them for transactions and pick up more information to learn—
Baroness Wilcox
If the noble Lord will bear with me, I must intervene. We do believe that there is an exciting future, so much so that we are supporting 11,500 post offices. The previous Government closed them, but we are not closing any.
Lord Stevenson of Balmacara
I am afraid that the Minister did not quite get my point; I was in the middle of a wonderful peroration which, had she heard it to the end, would have made it clear.
I am talking not about post offices qua post offices but about post offices as an engine for doing more for the whole of government. That is what I am trying to argue the case for. The post bank would therefore be one of a number of things that, if it were located in post offices, used and built on, would be able to sustain the network and perhaps to build back to the numbers that we want to see. However, given that this is not the time to make that sort of speech or to make these sorts of arrangements and that the amendment is framed very narrowly, I beg leave to withdraw the amendment.
Lord Young of Norwood Green
My Lords, I shall also speak to Amendment 21E. By nature these are somewhat technical probing amendments to see whether there is a loophole in the disposal of “any part”. That is the basis of those amendments. I am trying to set the world record for brevity in moving an amendment. I look forward to the Minister’s reply.
Baroness Wilcox
My Lords, Amendments 21D and 21E refer to the circumstances in which a relevant mutual could dispose of its interest in the Post Office. I understand that these are probing amendments.
Clause 4(4) makes clear that the only people who can own an interest in the Post Office are relevant mutuals, the Secretary of State, the Treasury, a nominee of either the Secretary of State or the Treasury or a company that is wholly owned by the Crown. The clarification envisaged by Amendment 21D is not required to achieve this.
Amendment 21E seeks to ensure that any disposal made by a relevant mutual would be a disposal of its entire interest in the Post Office. While in practice we would expect only one relevant mutual to own the Post Office at any one time, we believe this amendment to be unnecessarily restrictive. For example, there may be circumstances in which different stakeholder groups form separate corporate bodies, each taking an interest in the Post Office. Provided the Secretary of State was satisfied that each body met the conditions set by Clause 7, it would seem overly restrictive to rule out the possibility.
We will debate Clause 7 shortly, but I shall briefly summarise the strict safeguards that are put in place under it. The Secretary of State must be satisfied that the conditions in Clause 7(2) to 7(4) will continue to be met before there can be any transfer to a Post Office mutual. Those conditions ensure that the Post Office mutual must continue to act for the public benefit by promoting the use by the public of Post Office services, that its members have a clear interest in it so doing, and that disposals that might jeopardise that will be prevented.
I hope that I have sufficiently reassured the noble Lord, and I ask him to withdraw the amendment.
Lord Young of Norwood Green
My Lords, I thank the Minister for her reply. I will certainly reflect on those measured words. In those circumstances, I beg leave to withdraw the amendment.
Lord Stevenson of Balmacara
My Lords, this amendment seeks to embed employee involvement in the operation of a mutualised Post Office by including representatives from the workforce, particularly the sub-postmasters, on the board of the mutualised entity. We on these Benches are not opposed to the principle of the mutualisation of the Post Office, but for that mutualisation to work effectively for those running the business it is logical for them to have a direct say in the operational management of the business at board level.
Mutualisation is not a new concept; its origins date back to the establishment of the Co-operative movement in the 19th century, which has many facets and is still going strong today. We on these Benches all support the Co-operative endeavour and can trace the roots of the Labour Party to it, but surprisingly, and somewhat disappointingly, mutuality is still not a particularly common concept today. The John Lewis Partnership is considered to be an outstanding example of how a mutualised business can operate. In that respect, the John Lewis Partnership is admirable, but there are very few other mutualised entities of a similar size to the one which the Government propose in this Bill. Indeed, in the financial services sector, where there is a history of mutualisation, the tide has rather been flowing the other way and only a few building societies have survived as mutuals. I understand that the Government’s mutuals task force is looking at how government can stimulate the transfer of assets of NHS bodies and local government to mutual status.
Understandably, public sector workers have been hesitant to jump into new and untested structures. Recently, the Trades Union Congress claimed that a ballot at a south-east Sussex PCT showed that 90 per cent of staff were opposed to being “spun out” as a mutual—those are their words. The TUC stated with regard to that case:
“The moves towards mutuals are being driven by management rather than bottom-up. That makes a nonsense of the model because it relies on a buy-in from staff. You can't force mutuals”.
Now there is potentially a new kid on the block—the Post Office. It is indeed an interesting idea and there is clearly an opportunity to establish that business as a thriving mutual. All of us want the post ffice network to prosper, and, we hope, one day be free of subsidy, but at a level that provides coverage for the whole of the UK. I understand that the Minister has said that the minimum number of post office branches required to sustain a universal obligation is 11,500; indeed, she said that only a few minutes ago. We welcome that and look forward to receiving more detail about how that number is to be sustained. That is an important point to make in respect of this amendment. While we welcome the mutualisation of the post office network, we want to understand in more detail how this might work in practice.
In one respect mutualisation might be a straightforward share of any profits made among the members of the mutual, primarily its workforce. That is a common form of mutualisation, particularly in the Co-op, but given that the post office network relies on a significant subsidy that far exceeds its profits at present, such concepts as profit share might not appeal to the workforce if it means sacrificing their collective bargaining rights. Perhaps in this case a more attractive mutualisation model will be one that extends the participation of the workforce in the day-to-day running of the business beyond simply being the passive recipients of profit share schemes. That kind of model may also assist organisations such as the TUC to overcome their scepticism.
The logic is equally strong for the participation of a sub-postmaster representative on the board. After all, sub-postmasters run their own businesses. They know what works and what does not. There is disquiet among members of the postmasters’ federation about this Bill—a disquiet reinforced by the decision by the DWP to announce the cancellation of the green giro contract during the passage of this Bill.
As I have suggested, mutualisation can take a number of forms. My own party when in government looked at industrial democracy concepts for the Post Office way back in the 1970s and the party opposite did the same in the 1980s. Both those schemes ultimately came to nothing because quite simply employees in such businesses are always loath to give up their collective bargaining rights. Who can blame them? Therefore, in order to make the offer of mutualisation more attractive we would expect to see the Government bring through a package of measures that give the employees, managers and agents of the Post Office a real and genuine say in how the business is run. That should include direct participation on the board of Post Office Ltd.
The amendment is not prescriptive; it would leave the decision on who is elected or appointed, and how they are elected or appointed, to the employees and sub-postmasters to decide. The employees, for example, might decide to nominate an outside expert or elect one of their own trade union officials. That is a matter for them to decide. The board would benefit significantly from the input of two people directly representing the interests of the core of the workforce, and that would make the prospect of mutualisation more attractive to those who may be hesitant to embrace the concept of democratic ownership. I beg to move.
Baroness Wilcox
My Lords, I thank the noble Lord, Lord Stevenson, for this amendment. The Government are very keen to see sub-postmasters, sub-postmistresses and staff of Post Office Ltd—the very people who know the network best—involved in the running of the business. That is why this Bill contains provisions that enable the mutualisation of Post Office Ltd.
We believe that mutualisation could help to ensure that sub-postmasters, sub-postmistresses, staff and communities could in the future all have a say in how the Post Office is run. Co-operatives UK is seeking the views of the Post Office’s major stakeholders and will soon report back to my department on proposals for a mutual Post Office. The work that Co-operatives UK is carrying out seeks to address questions such as who the members of a mutual might be and which stakeholders should play key roles in how the Post Office is run in the future. A mutual Post Office must be established with the best interests of the company, the sub-postmasters and sub-postmistresses and the wider public, who are its customers at heart. It must be allowed to develop organically, with the willingness and participation of its members. We believe that it simply would not work if government imposed a rigid top-down structure.
Indeed, it is by no means clear at this stage that the selection of sub-postmaster and sub-postmistress and employee representatives to the board by election would necessarily be the best option for the Post Office network. There is an obvious reason for this; the mutual has not been designed yet, so we cannot know its governance structure. Enshrining its governance in legislation now and then trying to develop the mutual within these requirements goes completely against our commitment to ensuring that the mutual is developed by the people who know it best.
The Government strongly believe that the Post Office and its key stakeholders should be allowed to form their own mutual governance structure as appropriate. In the light of this, and in view of the work that is being carried out on the mutualisation of the Post Office, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Stevenson of Balmacara
I thank the Minister for her positive remarks. I am certainly interested in seeing Co-operatives UK’s report because that will obviously help us to progress this debate. I have little further to say. There are dangers in not specifying a little more what the Government really want out of mutualisation, but I accept that it is early days and that there is plenty of time for that. I beg leave to withdraw the amendment.
Lord Whitty
“Counter access to postal, government and other services
(1) For the purpose of ensuring continued universal counter access through a Post Office company to services specified in subsection (2), the location and geographical distribution of counter access points shall be governed by the following access criteria—
(a) 99.7% of the total population shall be located no more than 3 miles from a counter access point;(b) 93.2% of the total population shall be located no more than 1 mile from a counter access point;(c) 99.8% of the total population in deprived urban areas shall be located no more than 1 mile from a counter access point;(d) 99.1% of the total population in urban areas shall be located no more than 1 mile from a counter access point;(e) 99.2% of the total population in rural areas shall be located no more than 3 miles from a counter access point; and (f) in each postcode district, 95% of the population in that postcode district shall be located within 6 miles of a counter access point.(2) The access criteria specified in subsection (1) relate to, but are not limited to, the provision of counter access to the following services—
(a) postal collection and delivery services as specified by the universal postal service order;(b) postal service products;(c) processing social benefit and tax credit payments;(d) processing of national identity and licensing scheme applications;(e) payment facilities for essential utility services;(f) cash and banking facilities; and(g) government savings instruments.(3) Within six months of the commencement of this Act, the Secretary of State shall determine and publish—
(a) the process by which the number of counter access points to services specified in subsection (2) and access criteria specified in subsection (1) shall be reviewed;(b) the frequency at which the number of counter access points to services specified in subsection (2) and access criteria specified in subsection (1) shall be reviewed.(4) In undertaking a review described in subsection (3), the Secretary of State shall consult—
(a) the Post Office company;(b) bodies able to represent the interests of consumers using counter access to the services outlined in subsection (2); and(c) such other persons as the Secretary of State considers it appropriate to consult.(5) Following a review established under subsections (3) and (4), the Secretary of State may by order amend the access criteria specified in subsection (1).
(6) The power in subsection (5) to amend the access criteria in subsection (1) shall be subject to the procedure in section (Super-affirmative procedure).”
Lord Whitty
My Lords, we have reached this amendment slightly quicker than I had thought we would. Although the amendment looks complicated, it is, in essence, an amendment to probe how the Government intend to fulfil the commitment made in the paper to which I previously referred—and to which the noble Baroness referred twice—that they will maintain a network of approximately the present size. The noble Baroness stated that even more precisely in her reply to my noble friend Lord Lea.
I have tabled the amendment from the perspective that my previous organisation, Consumer Focus, and its predecessor, Postwatch, have been through two alleged rationalisations of the post office network, the first of which was based on no objective criteria at all. It worked from where sub-postmasters were finding it difficult to maintain a post office, were retiring, or had some other reason for not wanting to continue. The second round of rationalisation worked on substantial and clear issues of access that were specified in crude distance terms, but nevertheless gave rationality to the assessment of whether one post office or another should change.
I must say, having inherited this situation at three-quarters of the way through, that I found it difficult for a consumer organisation to be forced to choose between the post offices in any particular town. Nevertheless, the criteria against which we operated— access to post offices among different populations, distance to travel to a post office, and so on—are reproduced in the paper from which I quoted earlier, but which I unfortunately gave to Hansard for verification. However, the document includes a table that sets out the current criteria.
My concerns are twofold. Those criteria would arithmetically allow for a network that is significantly smaller, particularly in towns and suburbs, than the current network, and I therefore need to square the assurance given by the Government that they are looking for and are in effect subsidising for the next few years a network at its current size, with the fact that theoretically, using the same criteria, they could reduce it to a size of between 7,000 and 8,000. I hope that the Government reaffirm their commitment to retaining a network of the current size.
The calculations in proposed new subsection (1) in the amendment, according to my former colleagues in Consumer Focus—I did not do the arithmetic—would sustain a network of roughly the present size. In other words, the first four criteria are considerably more stringent than those used in the previous round of rationalisation and specified in the Government’s document on the future of the network. This would not mean that every post office would need to remain open. There would obviously be temporary closures and what the Post Office somewhat euphemistically calls business-as-usual closures. There would also be movements of sites within particular areas. However, one would arrive at roughly the same number of post offices, were these criteria to be followed.
It would be interesting to know whether the Government intend to tighten up the criteria or to add different criteria that would produce figures similar to those in the amendment, or whether their commitment to the current size of the network is irrespective of particular criteria because they envisage that the moves they claim to be making to improve the volume of post offices’ business—to sustain and inculcate a different sense of purpose through mutualisation—will mean that we will end up with a network of roughly the current size.
I see that the noble Lord, Lord Skelmersdale, is once more in his place. When we were discussing the IBA, he raised a pertinent question as to whether any failure to commit to the IBA—and, I would add, to direct other government work to the post office network; an earlier debate today demonstrated that we were moving away from that—threatens the Government’s commitment to the size of the network. There is a circle to be squared, and I am not entirely clear how the Government intend to square it.
One option would be to reassure consumers, sub-postmasters and the staff of the post office network that the criteria would be tighter. Another option would be a more detailed way of reassessing those criteria. In fact, proposed new subsections (3) to (6) in the amendment would allow the Government systematically to assess the criteria of access and the nature of services provided.
Another dimension that has been mentioned is that part of Post Office Ltd’s plan is to reduce the range of services provided in some post offices. There was the experiment of Post Office essentials outlets that provided a reduced range of services. Some have worked and some have not. That is not necessarily entirely consistent with the government commitment to maintain the network broadly as it is, but it may mean that different gradations of post office outlets appear within the total. It would also be useful to know about that.
Although I do not expect the Government to accept the amendment, it gives them options in adopting criteria that would sustain more or less the present network or having a process whereby they redefined the criteria for access and the services provided. It would be useful to know what the Government’s strategy was in this respect. Obviously, we take great heart from the reassurance that the present network will remain in place, but the question of how that will happen and how we square that with certain other developments that were referred to earlier remains. I will be interested to hear the Minister’s comments. I beg to move.
Lord Young of Norwood Green
My Lords, I speak to my noble friend Lord Whitty’s “omnibus” amendment and to Amendments 22C and 22E.
They all seek to introduce new clauses to strengthen access criteria to prevent the further erosion of the post office network, to ensure the provision of a wide range of services at all post office branches, and to ensure a fair distribution of the Post Office's proposed new main post offices.
Amendment 22A writes into the Bill the current level of access to post offices in the UK. As part of the 2007 changes to the post office network that included an investment of £1.7 billion and incorporated the Network Change Programme, resulting in the closure of 2,500 post offices, the Government introduced a series of distance-based access criteria. These remain applicable but are not included in Royal Mail's licence and are not set out in law. The minimum access criteria introduced by the previous Government state that 99 per cent of the total UK population should be within three miles of their nearest post office; 90 per cent of the population should be within one mile; 99 per cent of the total population in deprived urban areas across the UK should be within one mile; 95 per cent of the total urban population across the UK should be within one mile; 95 per cent of the total rural population across the UK should be within three miles; and 95 per cent of the population of the postcode district should be within six miles.
Baroness Wilcox
My Lords, these amendments seek to strengthen the current access criteria so that they match current post office network coverage, and to enshrine them in legislation, as well as to provide mechanisms to review these criteria. They also seek to specify the services which should be provided across the network and in which locations a full range of services is to be provided.
On Amendment 22A in the name of the noble Lord, Lord Whitty, the Government are committed to maintaining a nationwide post office network. The Post Office is required to provide a network of at least 11,500 branches. This is a legally binding commitment to a minimum number of post offices. The Government have made a commitment that there will be no programme of post office closures.
Post Office Ltd is also legally obliged to ensure that precisely the same access criteria introduced by the previous Government are maintained. The previous Government, of course, had the opportunity to put these criteria into legislation in their 2009 Postal Services Bill, but they did not see the need to do so. Indeed, during debate on the 2009 Bill, the noble Lord, Lord Tunnicliffe, observed that the access criteria were “very stringent”. By legally obliging the Post Office to maintain these criteria in return for the £1.34 billon of funding over the duration of the spending review period, this Government have introduced another safeguard to ensure that these stringent access criteria will still be met. In fact, Post Office Ltd continues to exceed these criteria. Last year’s report by Postcomm on the post office network, from which I believe the criteria in this amendment are derived, demonstrates this fact.
The amendment seeks to press the metaphorical pause button, to prevent any changes in the post office network from today’s position. However, this is unrealistic; 97 per cent of post offices are privately owned and operated, and there will always be changes in the network where, for example, sub-postmasters retire or move on to pastures new. It is not through regulation that we will save the post office network. To ensure that the Post Office has a vibrant future, it must be allowed to develop, to modernise and to evolve. It must focus on its customers, reaching out to new customers and winning back those who have drifted away. Major modernisation is needed in order to address the underlying economics of the network. That is what our £1.34 billion funding package will achieve.
The noble Lord, Lord Young, raised the issue of the new Post Office local model. I will come back to that in detail later this evening during the debate on Amendment 24EA in the name of the noble and gallant Lord, Lord Bramall, which will be moved by the noble Viscount, Lord Tenby.
The Post Office’s access criteria are the strongest that we know of in Europe, when you consider our safeguards for rural, urban and urban deprived areas. In Germany, for example, the requirement is for a post office every 80 square kilometres, whereas we mandate that 95 per cent of the rural population must be within three miles of the nearest post office. The £1.34 billion that we are providing will ensure that our network continues to thrive in the future.
Subsection (2) of the proposed new clause in the amendment of the noble Lord, Lord Whitty, seeks to ensure that certain services are provided across the network. Let me reassure the noble Lord that the Government are absolutely committed to maintaining the network, and supporting Post Office Ltd as it seeks to win new business from government and other sources. The Post Office is determined to become a front office for government, by developing and applying services in a number of ways. There is continued progress on this agenda. For example, the Department for Work and Pensions has recently announced plans for three new pilots, opportunities to support the universal credit reforms, and funding set aside for credit unions that will increase opportunities for the Post Office to deliver credit union services to many more people.
An important part of restructuring the network will be for the Post Office to ensure that services are tailored to meet the needs of its customers up and down the country. We cannot, and should not, expect the Post Office to provide all its 170 services at all branches across the entire network, as this amendment seeks to achieve. In smaller branches, for example, it makes far better commercial sense for sub-postmasters and sub-postmistresses to focus on the key services that most people need to use, most of the time. Of course, the services offered by the Post Office on behalf of local authorities may differ from area to area. Amendment 22C, in the names of the noble Lords, Lord Young, Lord Stevenson and Lord Tunnicliffe, does indeed take this fact into account. That amendment seeks a register of access criteria to be issued by the Secretary of State setting out the minimum location and geographical distribution of post offices which provide the full range of services provided by post offices.
Lord Whitty
My Lords, I am extremely grateful to the noble Baroness for giving such a detailed answer, including a good number of commitments, which are reassuring. I think she overcharacterised this amendment as too rigid. It does not say that every post office should have the whole range of services, nor does it say that the access criteria can never be altered. By this amendment, I was trying to establish whether the commitment to the 11,500 post offices is an absolute commitment or whether there is some headroom in the criteria. The noble Baroness has made it absolutely clear on several occasions tonight that the commitment is to a network of 11,500, although that is not to say that one or two might change location and quite a few might change the services that they offer and the sub-postmaster or mistress who runs them might change. You need that flexibility.
My remaining anxiety is that, although I recognise that different levels of post office would have different gradations of services, we have to allow some flexibility and some change over time as the market develops, particularly in the growth businesses. It is also important that there is some criterion for the distance to main post offices which cover the whole range of services. I think the noble Baroness said that in addition to the general criteria in relation to post office outlets, there would be some criteria about the maximum distance that people were from a main post office, or a post office—different terms are used—which offered pretty much the whole range of services. If she said that, that is more reassurance.
We have a number of things on the record, including the Government’s very clear commitment to the size of the network. I hope that within that there is not a serious diminution in the range of services which a large part of the network offers, and I certainly hope that the distance to main post offices is taken up. Subject to that, I shall be happy to withdraw the amendment at this stage.
“Closure of post offices
(1) Where any company or any other person proposes to close a post office, it shall at the earliest opportunity begin consulting representatives of the employees affected and community and other groups with an interest in the proposed closure, including consultation on that company or person’s plans for alternative provision of services provided by the post office.
(2) No decision to close may be made within the period of six weeks from the start of the consultation required by subsection (1).
(3) No decision to close a post office in a rural or a deprived urban area or an outreach service shall be taken within 16 weeks of the start of the consultation required by subsection (1).”
Lord Young of Norwood Green
My Lords, as all noble Lords will be aware, post offices continue to provide a lifeline to residents in rural and urban deprived areas not only through access to postal services, but also as the shopfront for government services, as a means of benefit collection, and often as the only source of cash withdrawal in an area.
Amendment 22B aims to ensure that proper consultation procedures are followed when a post office closure is considered. It is not intended to prevent all post office closures; it simply aims to strengthen the opportunity for stakeholders to have input into the consultation process. It also provides for a longer consultation process for potential closures in rural and urban deprived areas. Rural and urban deprived areas clearly suffer disproportionately when a post office closes. Post offices have closed in vast numbers in recent years, both through formal closure programmes and through natural wastage when sub-postmasters close their businesses and post offices are not replaced.
Over the past 10 years, the post office network has declined from 17,845 in 2000-01 to 11,905 in 2009-10. This is, in large part, due to two major closure programmes, the Urban Network Reinvention programme from 2003 to 2005 and the Network Change programme from 2007 to 2009. Between them, these programmes resulted in the closure of 4,854 post offices. That means that more than 1,000 post offices have closed outside of those programmes as sub-postmasters leave, often because their post offices have ceased to be viable, and the Post Office is unable or unwilling to provide a replacement.
Approximately 11 per cent of the post office network is in urban-deprived areas. As Consumer Focus clearly states:
“Urban offices play an even more important role in urban deprived areas, particularly as they provide free access to cash, plus pensions and benefit payments”.
The 2003-04 Urban Network Reinvention programme was an attempt by Post Office Ltd to reduce the size of the network with a view to developing a more commercially viable network. It further hoped to manage the so far unplanned decline in network size that was arising from sub-postmasters' decisions to close their businesses. At the time of the programme, there were serious concerns over the fate of post offices in urban deprived areas. The Government stated that they would not close post offices in urban deprived areas unless there was another branch within half a mile or unless there were exceptional circumstances to justify the closure.
The Post Office was heavily criticised at the time due to its lack of adequate consultation. As the then Trade and Industry Committee concluded in its report on the programme:
“Post Office Ltd and Postwatch paid insufficient attention to the need to ensure that adequate consultation procedures were in place before the network reinvention programme began. Although improvements have subsequently been made, and while we understand that sub-postmasters could appreciate a speedy conclusion to consultations over the future of their branches, we think that it is vital that all stakeholders should be given the time and opportunity to present their views on closure proposals. A twelve week consultation period would have satisfied this requirement. It was inconsistent of the Government to allow a company of which it is the sole shareholder to ignore guidelines for consultation which it encourages other organisations to follow”.
Equally, the 2007-09 Network Change programme was an attempt to reduce the size of the network with a view to making it economically viable. Over an 18-month period, more than 2,500 post offices were closed and a further 500 were replaced by outreach services. Outreach services provide postal services to communities where a post office is not deemed to be viable. These are often in the form of a mobile post office, a van which visits communities at certain designated times each week and provides a core range of post office services. There are now 772 outreach services in the UK, making up 6 per cent of the post office network.
The Network Change programme was also heavily criticised due to the difficulty stakeholders had in influencing closure decisions. Research into the programme by Consumer Focus found that,
“consumers were not convinced by the UK Government’s reasons for the closure programme. Furthermore, they were very unhappy with the nature of area consultations on closures, as there was little scope to alter decisions and Post Office Ltd had not been seen to respond to concerns raised”.
The Post Office's code of practice for the Network Change programme closure consultations included a six-week consultation process. Many stakeholders felt that the consultation processes were inadequate. This was, in large part, because the criteria for closures and the decision to close 2,500 post offices had already been made prior to the consultation process. This meant that opportunities for preventing individual closures were very limited.
Post offices are still closing every week. More than 150 post offices closed on a long-term temporary basis in 2010 alone. There is no guarantee that they will reopen and many are likely to stay closed indefinitely. As Consumer Focus has said:
“Since the last programme of post office closures finished we have continued to see a dwindling in the overall number of branches”.
According to the National Federation of Sub-Postmasters, 900 post offices, an unusually high number, are currently up for sale. Many sub-postmasters are retiring or leaving the business because of the low levels of revenue generated in sub-post offices and the Post Office is struggling to find alternative premises and service providers.
It is vital that adequate protections are in place to protect rural and urban deprived communities from these closures. I urge support for Amendment 22B which ensures consultation ahead of any post office closure, planned or unplanned, and provides additional protection to rural and urban deprived post offices. I beg to move.
Baroness Wilcox
My Lords, I thank the noble Lord, Lord Young, for his Amendment 22B. An annual report on the Post Office network laid before Parliament is an important means of achieving transparency around the Post Office network. The statutory requirement in Clause 11 to lay such a report before Parliament already goes further than the current requirement in the Postal Services Act 2000, which requires only information about the number and location of post offices and their accessibility. Neither Government nor Post Office Ltd can ensure that no post offices close during the reporting period, nor can they ensure that there is always time to carry out a consultation before an office closes. For example, a sub-postmaster or sub-postmistress may retire or move away, or the premises may be damaged by fire or flooding. After all, 97 per cent of post offices are privately owned and privately operated businesses.
Lord Young of Norwood Green
My Lords, I welcome some of the assurances that the Minister gave. Unless I missed it, she did not address the period of consultation but perhaps she can address that in writing. There may also be an opportunity in a further contribution. In the circumstances, I will obviously take into account what she has said and, for the time being, I beg leave to withdraw the amendment.
Employment and Support Allowance (Limited Capability for Work and Limited Capability for Work-Related Activity) (Amendment) Regulations 2011
(13 years, 7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Kirkwood of Kirkhope
That a Humble Address be presented to Her Majesty praying that the regulations, laid before the House on 10 February, be annulled. (SI 2011/228)
Relevant document: 23rd Report from the Merits Committee.
Lord Kirkwood of Kirkhope
My Lords, this is an important debate. I start by declaring my own interest as a director of the Wise Group in Glasgow. I have no pecuniary interest but the purpose that I am afforded by being a director of the Wise Group is that, four times a year, I get to go on a wet Friday to Glasgow after a six-hour train journey. Nevertheless, it is very fulfilling and important work. The group does an excellent job for the communities that it serves in Glasgow and I am pleased to be associated with it. That explains my interest in this important subject.
The background to this debate is, quite simply, that after considerable consultation the disability organisations—most of which colleagues will know well, as we have been working with them for many years—have concluded through the Disability Benefits Consortium that these regulations imperfectly achieve their policy objective. That is a clear steer that the disability community would like the House to consider annulling these regulations and we owe them nothing less than to do that.
I start by acknowledging the work of the Minister, who has brought drive and commitment to this policy area since he wrote his original report those few years ago. I am absolutely at one with him in trying to discourage inactivity and encourage sustaining work. I think we both understand that Carol Black’s work changed the game of active labour markets and I stand four-square with him in trying to make sure that we can develop and deliver schemes that enable people to get out of inactivity and into work. That work has to be productive and sustainable, but if they can do that then the well-being of the client group that we are seeking to serve will improve.
I am founding the evidence for this evening’s debate on the excellent work that has been done, as I say every time we talk about the subject, both by the Social Security Advisory Committee and by the Merits Committee, which looked at this in very great detail in its 23rd report. These are complicated regulations but if any colleagues are looking for a quick summary of exactly where this subject’s importance lies and of its importance to the individuals concerned, they should look at appendix 1 of that report and the evidence that was laid out there compellingly. The Social Security Advisory Committee report that was produced, which was done with formal reference to these regulations, also repays careful study and is worth reading.
I start with a concern that is new to me and disturbing if true. I would like to hear the Minister’s view on it. The SSAC says, in its conclusions at paragraph 19:
“The Committee is concerned that there is a disagreement of substance between the Department and the external stakeholders who participated in the review as to whether the”,
work capability assessment,
“in its present form could be said to be working satisfactorily”.
If that is true and the stakeholder community is talking past the department and neither party tries to get back into some sort of meaningful communication, it is in no one’s interests. I do not know what happened in the past but that is the first time I have ever seen an SSAC report saying anything so stark. I do not know whether it is true but I would like an assurance that the Minister will redouble any of the efforts which I know he has been making to ensure that that gap is expeditiously closed. It would be inimical to the interests of the client group that we are trying to help if the pressure group community does not have confidence in its channels of communication with the department. I hope that he can give us that reassurance.
The other evidence which is the core of the debate is the Social Security Advisory Committee’s view at paragraph 4.3. I will quote another sentence which encapsulates a whole load of evidence that I do not have time to go into. Perhaps other colleagues might pursue that, particularly on mental health, learning disability and fluctuating conditions. After a very big consultation—I think it had 400 responses—the committee noted that the department is undertaking an ongoing programme of review but concluded, among other things:
“There appears to be a widespread perception that, overall, rather than simplifying, streamlining and refining the test, these amendments”,
in these regulations,
“will make it harder in practice for claimants to demonstrate that they are incapable of work or that they have limited capacity for work or work-related activity”.
That is the core of my concern, which the department now has to address. As I say, I am absolutely indebted to the Social Security Advisory Committee and the Merits Committee, as we all are. Indeed, Richard Tilt, the chairman of the former committee, is an extremely wise man and his experience will, I hope, be available to us for some time to come.
Briefly stated, this is one of the biggest changes that I have ever seen in social security since I started studying this policy area when I was elected to another place in 1983. Why? Because in April we will open the door to a national reassessment of 2.6 million people. We have a model which arguably does not work for employment and support allowance claimants yet. It is a work in progress, but I am absolutely persuaded that Parliament is trying its best to get on top of it. However if in April we are really considering taking on an extra 10,000 or 11,000 new cases each week—it might be each month, but whichever—it is a very big increase and raises questions about capacity. We have to consider the capacity of the Atos Healthcare medical professionals who do these functional capability assessments for work capability assessments, and it raises questions about capacity for jobseeker’s allowance as well.
There is a huge difference between a customer making an application de novo for employment and support allowance and somebody in Glasgow who has been unemployed for 10 years, who has been on incapacity benefit, and who gets a letter asking him to call at the Atos Healthcare professional centre to have his benefit assessed. He will know that if he does not get the continuing levels of support that he currently enjoys he could be £30 per week worse off at a stroke.
I go back to where I came in. I am absolutely in favour of ensuring that everybody who can contribute to the world of work should do so. There is no doubt in anybody’s mind that there are people who need a wake-up call, to use the expression of my American friends. Indeed, there are people who swing the lead, do not play the game and act in bad faith. I know all these things. However, to take 2.6 million over three years and put them through a process where the model has not been absolutely rigorously road-tested to everybody’s satisfaction is not safe. That is the case that the disability organisations have been making to me.
If that is not hard enough we have the deficit reduction programme, which I also support. We cannot ignore the fact that this country is now poorer than it was a while ago. There are also regional and spatial dimensions because labour markets vary. The labour market in Reading is very different from that in downtown Glasgow, which must be borne in mind. On top of that, the work programme, which again I support, is still in gestation. We do not know the detail of how the work programme will serve the client group that we are seeking to help. I think that the identified concerns about the functional capability assessment—it is not a medical assessment—are well founded. If anybody has any doubt that there are problems around it, I point out that the successful appeal rate against decisions on the current scheme is high, suggesting that attention must be paid to these provisions, particularly for mental health and fluctuating condition clients.
There are advantages in the regulations. I certainly welcome the chemotherapy and residential drug changes. They are not to be diminished in any way because they will help substantially the group that they are designed to serve. The biggest complaint comes from the disability stakeholder pressure group community. Professor Harrington has published his phase 1 report, which is truly an excellent piece of work. It offers a series of recommendations which really deal in a much more real-world way with the kind of problems that people face. The complaint is that we are not waiting for the totality of the Harrington work to be put in place. He is already starting on the second annual independent assessment, where he will look at the descriptors for fluctuating circumstances and the like. The results of that will be available probably in late 2011. We should not be opening the gate to the national reassessment of incapacity benefit claimants until we see what Professor Harrington can come up with. That is what the disability organisations say and it is a prima facie valid claim.
Colleagues will know this because we spent a lot of time on the Welfare Reform Act 2007, when the previous Government sensibly required a five-year annual set of reviews. Some of the complaints that the disability groups make is that this will be a piecemeal change, which is the legislators’ fault. We rightly felt that it was not safe to do it without getting independent reviews. The previous Government were right to do that and this Government were right to get Professor Harrington on the case. He brings hope to the whole situation—he certainly does to me.
Lord McKenzie of Luton
My Lords, the House should be indebted to the noble Lord, Lord Kirkwood, for giving us the chance to debate the regulations this evening. Like me, and other noble Lords I see present, he has been involved in issues concerning the employment and support allowance and the WCA for a long period. The noble Lord congratulated the former Government on insisting on the annual reviews. If memory serves, that may have been an amendment that he pressed on us at the time.
I start by explaining my understanding of the rationale of why the work capability assessment and the employment and support allowance were introduced. It was part of the journey which recognised the importance of work for people's route out of poverty, their self-esteem, well-being and health. The concept was that, for the vast majority, work, or good work, is good for you and that, as a society, we should support people to get into or closer to the labour market. I think that that is common ground between the previous Government and the current one.
As we know, the work capability assessment was designed to focus on a person's capability, rather than their incapacity, as a building block to help them progress, where appropriate, towards work. The switch from incapacity benefit to employment and support allowance was more than just semantics. Although support via Pathways was available before, the introduction of the WCA signalled a determined change to support those who could towards the labour market.
The approach seeks to identify three groups of people: those considered capable of work; those who could work at some point with the right support—the work-related activity group; and those who cannot or should not be expected to work. The concept is to make those determinations by reference to application and a range of descriptors with the objective of determining an individual's functional capability.
There is nothing in the documents that we have received from the stakeholders that calls into question that fundamental approach; and I doubt whether we will hear it called into question by noble Lords this evening. Indeed, the first independent review of the WCA by Professor Malcolm Harrington concluded that the principles underpinning the new assessment remain valid. He stated his belief that the system is not broken or beyond repair; that, at least, is reassuring.
We should acknowledge and welcome the fact that the introduction of WCA has been subject to review—the internal DWP review began in March 2009—and it is the recommendations from that review which, I understand, are reflected in the regulations. Professor Harrington’s independent review, the first required under the Welfare Reform Act 2007, was responded to by the Government in November 2010. It was accepted as a vital contribution to the continuing development of the WCA, and the recommendations were accepted in full.
Although most of the recommendations were to do with process and covered customer experience, the Atos assessment, the decision-making process and the appeals process, there were important recommendations concerning descriptors—in particular, the need for further work to review the mental, intellectual and cognitive descriptors and how they are working for those with fluctuating conditions—issues which were raised at the start of the process and which have continued as the ESA has progressed. We support the recommendations, but that raises the question of how they sit alongside the outcome of the internal review, which has caused some of the challenges about which we will hear tonight.
The Government's response to Professor Harrington's report indicated that they would await a further report on mental health descriptors in late December and early January. Where does that report rest? Why is it considered appropriate to proceed with the current changes to the descriptors without the benefit of that report?
The criticism of the regulations has come from a range of sources, as we have heard from the noble Lord, Lord Kirkwood. They variously cover the points that the review has been carried out too early with limited evidence; that recommendations from the statutory review—Professor Harrington’s review—are still being worked on; and that changes to descriptors will make it more difficult to identify those with limited capability for work, those who should be in the work-related activity component.
The noble Lord, Lord Kirkwood, referred to the Social Security Advisory Committee. It recommended that certain changes be postponed, stating:
“The Committee recommends that the Department does not proceed with the remaining proposed changes to the descriptors until these have been reconsidered in the light of the findings of the independent review of the WCA and the experience of the trial of the migration of IB customers to ESA”.
Why has the department not taken that path?
Mind, and others, has raised concerns about the regulations regarding mental health descriptors. They extend to the simplification of the assessment, reducing the mental function descriptors by a third, from 10 to seven questions. Is that at the expense of comprehensiveness rather than in unison with it? There are deep concerns about how well the WCA descriptors record the impact of mental health issues. The simplification of the descriptors will exacerbate the problem.
Assessment of an individual's awareness of hazards will now simply focus on the need for supervision, rather than the significance and frequency of the risk posed. Ability to get about and cope with change will no longer be assessed in terms of frequency, which will impact negatively on people with variable or fluctuating conditions. The loss of the propriety behaviour descriptor means that the assessment fails to capture the significant distress caused to people with depression, anxiety and paranoia by misinterpreting or overreacting to the behaviour of others.
The National Autistic Society has expressed similar concerns about reducing the 10 mental health descriptors to seven. It states:
“This reduces opportunities for people to score sufficient points to receive the benefit. Five descriptors which specifically address the needs of people with autism have been reduced to 2. The lower-scoring elements of several descriptors have been removed, and many have been simplified. This makes it much harder to represent the complexity of needs many people with autism experience, and barriers to employment they face, through the assessment”.
It has raised many other points.
Doubtless, noble Lords will also have read the brief from the Disability Benefits Consortium, referred to by the noble Lord, Lord Kirkwood. It asserts:
“An individual who ‘cannot mount or descend two steps even with the support of a handrail’ could now be classed ‘fit for work’ … Someone unable to stand at a workstation for more than ten minutes could now be deemed ‘fit for work’… The descriptors for turning star headed sink tap have been removed, consequently there is no functional assessment for the ability to turn or rotate the hand, despite this representing a form of manual dexterity vital in many workplaces … The changes remove all lower-level descriptors in some categories, for example, there are now no six point descriptors within manual dexterity, making it hard for people with multiple impairments to qualify”.
The noble Lord may not be able to deal with each of those points tonight, but those are genuine, practical, real issues raised by people who know. If they are right, that clearly undermines the thrust of the assessment, which we agree that we should be making.
We should have common cause in getting the descriptors and the process right. The Government must convince us that they have not jumped the gun on these changes and answer the searching questions raised by the various lobby groups, which will doubtless be raised further tonight.
We look forward to receiving the Minister’s reply on these issues. The noble Lord, Lord Kirkwood, has initiated a very important debate, because these issues have run with the WCA and the employment and support allowance from day one. I believe progress is being made and certainly can be made, but there is some way to go yet.
Baroness Browning
My Lords, I begin by declaring an interest as the named carer of an adult in receipt of severe disablement allowance. I also associate myself with the words of my noble friend Lord Kirkwood of Kirkhope. I concur both with his concerns and with his support for the need to enable as many people with a disability as possible who have not worked or have not worked for a long time to be assisted into appropriate work through an appropriate process that takes account not just of what they cannot do but of what they can do.
Among the many disability charities which consider this statutory instrument to be premature due to the as yet incomplete recommendations of the Harrington report is, as the noble Lord, Lord McKenzie of Luton, has mentioned, the National Autistic Society, of which I am a vice-president. I would like to focus on the concerns for people on the autistic spectrum. In order to qualify for the ESA in a work-related activity group, people have to be assessed to have gained more than 15 points. The way in which it is currently proposed to change the descriptors, as we have already heard, has a detrimental impact on people on the autistic spectrum. I remind the Minister that it was only last Thursday at Oral Questions that I asked him to confirm that the Government accept that autism is a communication disorder.
The descriptors take no account of communication difficulties, verbal or non-verbal, due to mental impairment. This is a major omission. Communication and comprehension are essential in the workplace, and it is a critical area of impairment for people with autism. Making oneself understood is covered only by a physical descriptor, descriptor 6. Unless guidance clearly states that this covers people who find it difficult to communicate due to a non-physical disability such as autism or a learning disability, these needs will not be recognised in the assessment. Noble Lords will understand my concern that already I am looking at areas where autistic people should be given a point on that descriptor scale, but getting them to reach the 15 points, if appropriate, is already excluding those areas where they will be in some considerable difficulty. Understanding and comprehension impairments are covered only due to a sensory impairment under descriptor 7, where the emphasis is on aids used by those with hearing or visual impairment.
The wording of the descriptor itself is vague; it is based on an ability to complete “two sequential personal actions” in the context of planning, organisation, and problem-solving. People on the autistic spectrum—even those with honours degrees and high IQs—always struggle with planning, organisation and problem-solving. It is too broad to be meaningful and leaves too much scope for interpretation to accompanying guidance. For people with autism, this may vary from turning on the tap and wetting their hands within the process of washing their hands, or getting ready for work and then making their own way to the workplace. For many, doing that unassisted will be a major challenge.
The National Autistic Society is also very concerned about changes to descriptor 17. It has been simplified to make the wording clearer, but it has become overly simplistic. Someone who frequently has uncontrollable episodes of aggressive or disinhibited behaviour, particularly when under pressure or in an environment with which they are really not familiar—that sort of behaviour would be unreasonable in any workplace due to cognitive impairment or mental disorder—cannot realistically be assessed as not having limited capability for work. As the proposals stand, we do not believe that employers would accept as employees people who the descriptors would deem as capable for work, but showed those sorts of behavioural problems in the workplace.
People with autism may exhibit behaviour which does not meet the minimum criteria set out in this new descriptor 17, but which would cause disruption in the workplace. For example, people will flap, hum or spin. I know of one person who, in a stressful situation in the workplace, would make cat noises as a sort of comforter in order to exclude the distress going around him. There is a limit to how long those working with people like that will put up with somebody making cat noises on a continuous basis in a busy office. These are all regarded as individual or rather quirky, but they are very real parts of their disability.
I say to my noble friend that there is genuine concern about the speed with which these changes are being brought in, ahead of what Professor Harrington is saying.
I mentioned that I am the named carer for a person on severe disablement allowance. This allowance, which comes within this legislation, is a very old disability benefit; it was something often given to young adults and adolescents who, having come out of full-time education, were at that time assessed and deemed not able to apply for paid employment. I would not even want to exclude them from the new opportunities for employment as disabled people, but—and I particularly refer to learning disability, mental health and autism—many of them are now getting on a bit because they were awarded this some years ago. Some of them will be in their 30s and 40s or even older and for many of them, getting the support they have been given to date to enable them to live as independently as possible or to be as socially integrated as possible has not been an easy journey. It has been a long journey and there has been a lot of input to get these people where they are today. But their situation is always going to be fragile, and there is nothing that I can see in the way these assessments are made to take account of what is at the moment a sustainable situation, as far as independent living is concerned. We must not put too many demands on them, however, and ensure that the process associated with it does not give them some form of detriment as a result. As my noble friend Lord Kirkwood mentioned, they might lose money, which is a very important part of their life and allows them to be able to plan and be secure with their finances.
There is another form of detriment. People may find that their self-confidence is shattered after it has taken years to build up; they may find that they can no longer cope with independent living of one sort of another as a result of being put through a process which undermines that stability. You cannot put a price on that detriment. I say cautiously to my noble friend who I know is sympathetic to these issues, please do not let this Government cause detriment to those vulnerable people.
Baroness Hollins
My Lords, I am very pleased to follow the noble Baroness, Lady Browning. I, too, will begin by declaring a personal interest. My 38 year-old son, who has a learning disability, was well described by the noble Baroness towards the end of her speech. He is always being assessed for what he cannot do and not for what he can do, which is incredibly demoralising for him. We his family spend our time trying to help him succeed and he would really like a job.
Some years ago, when I was consulted as president of the Royal College of Psychiatrists on the development of a work capability test, I suggested that the focus should be on capability, not lack of capability, from the point of view of the person being assessed. Although this is called a work capability assessment, it is an assessment of incapability.
I understand that, as my son is in receipt of severe disablement allowance, he may be required to undergo a work capability assessment. I tried out the online work capability self-assessment to see how he would fare. I will not go into the details but, of the three possible outcomes that we have heard about, he fell into the third category and would not be required, according to my assessment, to undertake any work-related activity. Perhaps that is a relief to me, in that his finances might not change, but I am sure that it would be a huge disappointment to him if that was the case.
So far that might be fine, except that the assessor may come to a different decision, in part perhaps because of my son’s lack of insight or understanding of his difficulties. He might then have to undergo an appeal and not everyone has the stomach for, or the capability for, an appeal. My reaction to trying out the test was that there is some sensitivity in the mental, intellectual and cognitive descriptors but probably insufficient sensitivity in the questions which relate to the type of complex difficulties that my son faces in his wish to be part of the workforce. They are difficulties which would require focused and sustained support to enable him to obtain work-related activity. The last thing that I or any parent in my position wants is for my son to fail yet another assessment, especially one which emphasises what he cannot do.
Another concern is that, if the assessment finds that he is capable, he is then given insufficient support, which would do terrible things to his self-worth and self-esteem. I question whether this assessment has been adequately road-tested and would want to avoid even one disabled person and his or her family having to face unnecessary appeals or loss of income through being unwilling to face yet another appeal. Even participating in the process of this assessment could be detrimental to the person’s mental heath.
My noble friend Lord Rix shares my concerns and has asked me to express his support to the noble Lord, Lord Kirkwood, today and to give his apologies as he is unable to contribute to this debate owing to family illness. He believes that many people with a learning disability will be denied vital support to help get them into work if they are not found eligible for employment and support allowance. That mirrors my concern. My noble friend believes that the crude indicators used in the regulations must be changed to more accurately reflect an individual’s capabilities.
For example, my noble friend is deeply concerned about the merging of the three descriptors—“memory and concentration”, “execution of tasks” and “initiating and sustaining personal action”—into one. They have been replaced with just one descriptor, “Initiating and completing personal action”. According to the regulations, this,
“means planning, organisation, problem solving, prioritising or switching tasks”.
The removal of the descriptor titled “execution of tasks” means that the time taken to complete a task will not be included as part of the assessment. This is particularly relevant to people with a learning disability and is likely to be a significant barrier to employment.
The current system already fails to meet the needs of people with a learning disability. My noble friend Lord Rix suggests that these regulations do not effectively assess limited capability for work, which means that the additional barriers and support needs of people with a learning disability are not being fully recognised in the assessment.
With less than 7 per cent of people with a learning disability who are known to social services being in any form of paid employment, the barriers to finding a job, combined with deep-rooted prejudice and discrimination, are already significant. Is it too much to ask that a coalition Government who claim to put fairness at the heart of their decisions should seek to tackle some of these barriers instead of perhaps making them even more difficult to overcome? For this reason alone, I and my noble friend Lord Rix, call for these regulations to be annulled.
Baroness Thomas of Winchester
My Lords, the DWP is in the middle of doing a very large jig-saw. The picture on the box is of a lot of people scurrying to work. In one corner older people are still going out to work, and in another corner people with disabilities are going about their business with the replacement DLA. But at the moment the pieces of the jig-saw are all jumbled up on the table, perhaps with the Minister frantically trying to find the straight edges. Are these regulations the pieces with the straight edges or not? I am very grateful to my noble friend Lord Kirkwood for giving us the opportunity to discuss these regulations because there are some disturbingly divergent views, as we have heard most movingly this evening.
The Merits Committee has said that the regulations may imperfectly achieve their policy objective, which is not something that it says at all frequently. In particular, it encourages the House to seek further information from the DWP on the rationale for putting these regulations forward now. It will not be disappointed, as all noble Lords have raised this matter. This is a recurring theme in all the evidence that we have been sent, from the CAB to the disability benefits consortium.
There is puzzlement that the DWP wants to bring in these changes now for several reasons. The principal reasons are: that the data from the migration trials from incapacity benefit in Aberdeen and Burnley have not yet been evaluated; that we are expecting more changes to the descriptors and to the work capability assessment as a whole once Professor Harrington has published his second-year review; and that the bar is thought by some groups to have been raised so high that there is now hardly any difference between those in the employment group of ESA, which comprises the limited capability for work people, and the support group, which is the limited capability for work-related activity people.
The Social Security Advisory Committee is more forthright because looking at DWP regulations and commenting on them is its job. It says, as we have heard, that apart from a few changes which it welcomes, the department should not proceed with the remaining proposed changes to the descriptors in the WCA until they have been reconsidered in the light of the findings of the Harrington report into the WCA and the migration trial of IB claimants. Why is it that the DWP believes that the changes to many of the descriptors are improvements, when the disability and other lobby groups say, as we have heard this evening, the exact opposite; namely, that the changes represent a tightening of the screw, making it harder for claimants to claim ESA?
I believe that the answer may lie in the different interpretations of the purpose of the work capability assessment. It was set up to replace the personal capability assessment as a test of a person’s capability for work rather than their incapacity. As Professor Harrington says in his review,
“the WCA was designed to be a first positive step towards work for most people”.
However, he also says that it is not working as well as it should, which is borne out by the fact that 40 per cent of appeals against a decision that an individual is capable of work are currently upheld. This surely shows that something is seriously wrong with the assessment. In particular, Professor Harrington says that there are clear and consistent criticisms of the whole system and much negativity surrounding the process.
The wider interpretation of the purpose of the WCA is not just whether it looks at someone’s theoretical capability of work but whether it works in the real world of work. This is where the Social Security Advisory Committee report and the lobby groups diverge quite strongly from the DWP. The SSAC tries to be fair. I think that it is worth quoting two sentences from the report in full, which states:
“The Committee recognises that the assessment of capability for work is a contentious and emotive issue and has always advocated a positive approach to the assessment of capability that looks at what the individual is able to do and their adaptation to their health condition or disability, rather than focusing solely on what a health condition or disability prevents the individual from doing. However, the Committee also recognises the complexity of many individual cases and the significance of the factors that may determine capability in the real world but which cannot be easily measured by a test that scores functional capability”.
I would contend that this is why there are such divergent views between the SSAC, the Merits Committee and the lobby groups on one side and the DWP on the other. The DWP is obviously not prepared to wait until the migration trials have been evaluated to change the descriptors or for Professor Harrington’s task group to report on the mental, intellectual and cognitive descriptors, which will report to the Minister later this year.
However, there is a way forward, bearing in mind that the recommendations from Professor Harrington’s first report have been accepted in full by the Minister—here I echo my noble friend Lord Kirkwood. There are five recommendations, which can be summarised as follows: that more empathy should be built into the process, with JCP managing and supporting the claimant; that the transparency of the Atos assessment should be improved; that there should be better understanding by Atos of mental disabilities; that decision-makers should be better empowered; and that there should be better communication of feedback between Jobcentre Plus, Atos and the First-tier Tribunal to improve the quality of decision-making on all sides.
Professor Harrington’s full report is very instructive on all these matters. For example, he says that the language and logic used in the LiMA computer system,
“is not very intuitive or accessible to claimants who receive their final report”.
He goes on to say:
“The Atos Training and Development handbook encourages”,
healthcare professionals,
“to use open questioning and not to rely on the LiMA system”.
However, in practice this hardly ever happens. He also sheds light on the fact that claimants are expecting a medical examination, which looks at their illness or impairment, rather than an assessment of their functional capability. It does not help when the Atos healthcare professional conducting the assessment does not look at the claimant at all, but rather at the screen, nor does it help when the healthcare professional has poor knowledge of some of the less common health conditions, such as Parkinson's disease. Another key part of Professor Harrington's report was that the Jobcentre Plus decision-makers rarely make a decision that disagrees with the evidence provided by the Atos assessment because they lack the confidence to do so. In other words, the decision-makers are often just decision stampers.
The DWP says it is working to implement these recommendations as quickly as possible. I think the whole House would like to know how the department is getting on with this implementation, because this is not just an extremely important matter but, I believe, the key to the whole reputation of the work capability assessment when the migration from incapacity benefit is rolled out nationwide. Therefore, I would be grateful if the Minister would tell us what steps are being taken to implement the current Harrington proposals.
The Merits Committee report is, as usual, an absolute model of clarity. It states, as has been stated already today, why it is so important that the work capability assessment is got right. Those who are deemed to be fit for work and are on JSA will receive £65.45 a week, those who are found to have limited capability for work, and therefore on the work-related activity group of ESA, will receive up to £91.40, while those in the support group of ESA will receive up to £96.85. The difference in the levels is substantial.
Before I finish, I unequivocally welcome the change in Regulation 35 which allows claimants awaiting chemotherapy to be placed in the support group. However, in general, it is difficult not to agree with the SSAC's view that, in removing some of the subtleties in the descriptors, about which we have heard so graphically today,
“the test's relevance to the real world has not been enhanced”.
The Countess of Mar
My Lords, I am grateful to the noble Lord, Lord Kirkwood, for tabling this prayer today, and I echo his core concerns. I declare my interest as chairman of Forward-ME and that one member of Forward-ME is a member of Professor Harrington's task group looking at fluctuating conditions.
There has always been a problem with the descriptors for the work capability assessment, particularly for people with mental illnesses and for those with what are termed “fluctuating conditions”. During the progress of the Welfare Reform Bill four years ago, I raised concerns about the ability of Atos medical staff to discern the difficulties encountered by people with ME/CFS when, on the day of the assessment—which is not, as some claimants think, a medical examination—those being assessed might have been able to perform a number of tasks on a one-off basis but they were frequently unable to repeat the tasks on a consistent basis. There seemed to be no room for detailing pain, muscle weakness, fatigue and other disabling symptoms that occur intermittently and often severely. As a result, the assessor has awarded very few points and the decision-maker has then considered them fit for work. In every case that I have encountered, people with ME/CFS who have appealed to the medical tribunal have succeeded in their appeals and their benefits have been reinstated.
When Professor Harrington published his An Independent Review of the Work Capability Assessment last November, the hopes of ME/CFS sufferers were raised. Other noble Lords have quoted from his report, and I am sure that the Minister knows it off by heart, so I will not repeat it all. The Secretary of State for the Department for Work and Pensions, as others have said, accepted all of Professor Harrington's recommendations on behalf of the Government. Under “A programme for work for year two” in that report, Professor Harrington wrote:
“This programme focuses on: the descriptors, particularly in assessing fluctuating conditions”.
He had already set up a task group to look at mental, intellectual and cognitive descriptors, and I am aware that that group has reported to him. In the new year the task group to review the descriptors for fluctuating conditions started work. They are due to report to Professor Harrington in April this year. I understand that the mental conditions report will be published in the summer and that for fluctuating conditions in the autumn.
I am aware that the internal review of the operation of the regulations was required by statute. I am also aware that all of the disability organisations involved disowned the report, which they say was flawed. They rejected the recommendations because of, among other things, the negative effect that they would have on disabled people and their families. As other noble Lords have mentioned, the Social Security Advisory Committee was unhappy with the part of the regulations that relate to the descriptors. It recommended that they be deferred until Professor Harrington's independent review of the WCA was complete and the evidence of the outcome of the trial of migration of incapacity benefit claimants to employment support allowance or jobseeker’s allowance was available. As we have heard, the House of Lords Merits of Statutory Instruments Committee accepted that the internal review found that the performance of the WCA was not working satisfactorily and it commended the DWP for wanting to revise it. However, the committee also highlighted some of the flaws in the current statutory instrument. These have already been discussed.
Like the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Thomas of Winchester, I am pleased that the regulation that applies to claimants undergoing or likely to undergo chemotherapy is to be amended, as well as that which applies to drug or alcohol rehabilitation claimants. However, in the light of the conclusions of several reports and the views of a great many experts in mental health and fluctuating illnesses, and the fact that Professor Harrington has been asked to review the descriptors for both these conditions and will be reporting on both by the autumn, I cannot understand why the Government insist on making changes which all the experts, except the DWP, regard as draconian and premature.
We keep hearing about the Prime Minister’s ambition that we should all be happy, and that any government measures should include a happiness score. Has the Minister measured the happiness of the thousands of claimants who are terrified that their benefits are going to be severely reduced, who will go through months filled with anxiety and apprehension as they wait in an ever-lengthening queue to appeal to a first-tier tribunal, or who become totally demoralised because they are forced to apply for jobs knowing that no employer will take them on? Has he calculated the cost of the increased financial burden that will fall on the Department for Constitutional Affairs, which will have to cope with the anticipated increase in the number of appeals following decisions that are likely to be seen as unreasonable?
In order to improve the fairness and effectiveness of the WCA, Professor Harrington recommended building empathy into the process, better training for decision makers, accounting for the particular difficulties in assessing mental, intellectual and cognitive impairments, and empowering and investing in decision makers so that they are able to take the right decision. Would the Minister kindly tell the House whether these recommendations have been implemented?
How are decision makers to come to the “right decision” if they are not given all the information because of the limitations of the descriptors to be used according to these regulations? Are they free to ignore the Atos report if the claimant’s statement and any accompanying medical evidence conflicts directly with the findings of the Atos doctor? I am particularly concerned about people with ME/CFS who have frequently been denigrated and who feel defeated by a system that refuses to recognise their illness. The additional stress these regulations will impose on them will not help to improve their condition. Like many others, I am deeply unhappy about these changes. They are going to prove hugely costly, both financially and emotionally, to claimants and I suspect to the DCA, but then that is another department, is it not? Why can the DWP not wait until Professor Harrington reports later this year? Why the urgency?
Lord Low of Dalston
My Lords, many speakers have already gone over the new regulations in great detail, and I do not wish to repeat what others have said and go into all the ramifications. I propose just to talk about the impact of the new regulations on blind and partially sighted people, which is likely to be quite serious and which illustrates that the regulations as we have them at the moment are not fit for purpose. I think that other speakers have been unduly kind about the regulations. The noble Lord, Lord McKenzie, said that he was in favour of them. I have to say that I am not in favour of them as they stand. I am more with the Social Security Advisory Committee, which has said that they are not yet fit for purpose in a number of respects, that they were being rushed through prematurely, and that the department should take them back to await the second phase of Professor Harrington’s review. There should be more mature reflection on some of the points that have been made about the regulations and further consultation with the stakeholders who have been so critical of them, about which we have heard.
As has been stated by the noble Baroness, Lady Thomas, these regulations fundamentally undermine the structure of the employment and support allowance where claimants with limited capability for work are put into either the work-related activity group or the support group. The new descriptors make the limited capability for work test, the gateway to the benefit, unreasonably difficult to pass for many disabled people, certainly for blind and partially sighted people. By setting such a high threshold for eligibility for the ESA, they transform the limited capability for work test into a limited capability for work-related activity test, which large numbers are bound to fail. This in effect erodes the distinction between the two tests, undermining the intention of the Welfare Reform Act 2007 that there should be two distinct groups of claimants, one moving towards work—the work-related activity group—and the other with no conditionality—the support group. Under these regulations, the number of disabled people able to qualify for the work-related activity group will drop dramatically, as whole groups are largely excluded by the eligibility threshold.
The Merits Committee, in its first report of this Session, stated that the department itself estimates that 23 per cent will be found fit for work and will be required to make a new claim for jobseeker’s allowance, with its obligation to participate in activities to improve job prospects. The Social Security Advisory Committee believes that the DWP has underestimated the support required by this vulnerable group of claimants. It has also said a number of other things: first, that the current descriptors are also inadequate for measuring the capacity of those with mental health conditions, sensory disabilities or fluctuating conditions; and, secondly, that there needs to be a closer correlation between the tests and normal work situations. For example, someone who needs to be accompanied to familiar places by a helper is not sufficiently adapted to their condition to be capable of work, yet this would score only nine points under the proposed new descriptors and would therefore not enable that person to get through the gateway and qualify for the benefit.
The disability organisations that have made submissions to the Merits Committee have also made a number of other points. The perspective on work skills needs to be wider. Someone might be able to pack boxes all day, but not be able competently to find their way to the factory canteen; or again, people with a limited capability for work—blind people are actually instanced for this—may be able to work, but in a very circumscribed set of jobs. There is an insufficient supply of those jobs in a depressed job market.
I wish to concentrate on the impact of the regulations on the situation of blind and partially sighted people, and in doing so I declare my interest, although at my time of life I am not likely to be applying for employment and support allowance. However, I am a vice-president of the RNIB, which has had a certain amount to say about these regulations. Those who know about these things are clear that the new regulations will have a disastrous impact on blind and partially sighted people, who will in all likelihood fail to qualify for the ESA if the regulations come into force. This is deeply concerning, they say, considering that many blind and partially sighted people have limited capability for work and so should be able to qualify for the ESA, where limited capability for work can be demonstrated—which, I repeat, will be very difficult to do under the new regulations.
A person of working age who loses their sight will need to learn new skills such as independent mobility and how to use a computer using screen magnification or speech output software, as well as new everyday living skills such as cooking, dressing, cleaning and so on. It is not appropriate to require someone in this position to end up claiming jobseeker’s allowance, yet that will be the impact of these regulations. Under the proposed limited capability for work test, a blind person’s difficulties in performing most work-related activities would be ignored and only extreme difficulties in navigation and maintaining safety would be assessed. A visually impaired person would be considered to have a limited capability for work only if they were unable to navigate around unfamiliar surroundings without being accompanied by another person.
The RNIB says that it does not believe that Atos has the specialist knowledge and expertise in a medical test centre environment to carry out functional assessments of the mobility of people with sight loss. It says:
“For example, we are unclear how they would determine whether or not a person is unable, due to sight loss, to navigate a familiar route without support, when they will be assessed in an unfamiliar environment at the test centre, under conditions of limited time for the assessment to be completed”.
The department’s internal review stated that it was the department’s intention to continue to work with experts and specialist disability organisations to refine the descriptors related to sight loss. However, this has not happened, despite requests to meet officials. For that reason, the department really ought to look further at the regulations before it has these discussions with interested organisations that it says in its internal review it is its firm intention to have.
For many blind and partially sighted people, the regulations, if brought into force, could see them denied the ESA. This is due to the high qualifying threshold being put in place around limited capability for work and the failure properly to assess the effects of sight loss. The regulations will seriously undermine the distinction between the work-related activity group and the support group, and force people who should be eligible for the ESA on to the JSA, which is not the appropriate benefit for people with limited capability for work. I do not believe that this is either appropriate or that it was the intention behind the Welfare Reform Act 2007.
Lord McKenzie of Luton
My Lords, I did not want to interrupt the noble Lord, but I think he said that I had said I was in support of these regulations. I am not and I do not believe I said that—if I did it was certainly not my intention. I tried to play back some of the concerns that have been raised with us. I certainly support the concept of the ESA and of the WCA, but I do not support these particular regulations.
Baroness Murphy
I will be very brief because the debate has gone on for quite some time now. Other noble Lords have eloquently described the present difficulties with these regulations. However, I sympathise in some ways with the difficulties that the Government have, because we all share the intention that we should get more people who are currently receiving disability support into work; and what the Government are trying to do—and the previous Government were trying to do—is exceptionally difficult to get right. The development of those descriptors and an assessment tool is going to take more than the time allowed.
I am not saying that you should not pilot, try or try to revise the assessment tool, which is actually what the Government have tried to do. That seems perfectly legitimate, so I am not entirely in support of withdrawing these regulations, because unless we continually try to improve them, we will never get to the point at which they are adequate. However, I return finally to what the noble Baroness, Lady Thomas of Winchester, has said, because it is not the descriptors or the work capacity assessment that are the real problem. The real problem, which I think Professor Harrington described so beautifully, is that the process is,
“mechanistic, impersonal and lacks empathy”.
Here we have a population of worried, anxious people with a profound range of difficult disabilities to try to assess accurately, and there needs to be a culture change within Jobcentre Plus, Atos Healthcare and the healthcare assessments themselves. That is the fundamental problem. We could work on these descriptors. I know that the Government are doing so with extra help from specialists in the mental health field. I ought to declare an interest here as a psychiatrist. The work that is going on is essential, but unless we can change the culture of these assessments to make them more user-friendly we will not get people back into the work that would help them to lead better, fulfilled lives.
Baroness Finlay of Llandaff
As president of MS Cymru, I want to flag up the problem for people with fluctuating conditions. All the difficulties around the assessments have been clearly laid out and I will not repeat them, but there is a real problem for people who have an assessment and then, possibly a week later, dramatically deteriorate. It is the fluctuating nature of conditions such as MS that is causing a lot of anxiety to people out there. The provision for those on chemotherapy is greatly welcomed, but I ask the Minister to explain how the second part of Professor Harrington’s review, which he is doing in conjunction with the MS Society, will be incorporated. How will the Government handle the possibility of quite a lot of appeals or even challenges when the next phase is rolled out?
Baroness Wilkins
My Lords, most of the points that I wanted to make have been made, so I will be brief. I emphasise the serious concerns that have been expressed by disability organisations, most particularly that these changes are premature. As we have heard, the second phase of the independent review led by Professor Harrington is still under way, and the advice on refining the mental, intellectual and cognitive descriptors has not yet been seen by Ministers, so in all likelihood we will be faced with two major, costly and confusing changes to the WCA to be made in a single year.
I emphasise that the cost of these changes has not been covered. The cost of people having to go to tribunals when their assessment needs to be overturned is enormous in terms of stress, worry and consequent ill health, but it is also a waste of time and money for the country. As the CAB has pointed out, the current WCA assessment routinely fails to identify disabled people’s genuine needs and inappropriately allocates them to jobseeker’s allowance, only to have that decision overturned on appeal. Currently 40 per cent of cases are overturned on appeal, which must cost the state a considerable amount.
According to the Welfare Reform Bill documents, almost £20 million was spent in 2009-10 on appeals to the tribunal service and, according to figures from the Disability Alliance, that means that roughly £8 million was spent on appeals to rectify the failings in the current WCA. There is now a nine-month backlog for appeals in some areas. If the new descriptors go ahead as planned, these changes could lead to even greater pressure on the system, especially since, as the noble Lord, Lord Kirkwood, pointed out, new ESA claimants will be joined by an estimated 10,000 people per week being migrated off incapacity benefits from April 2011.
The Government’s expert independent body, the Social Security Advisory Committee, has recommended that these plans are not implemented now. I urge the Government to follow their advice.
Baroness Masham of Ilton
My Lords, I thank the noble Lord, Lord Kirkwood of Kirkhope, for bringing up this matter. He understands these matters so well and I support what he has said. This is a complex matter. Disability is complex, as it differs in so many ways.
There is great concern from many disability groups, as has been said, as well as the national AIDS group, which has not been mentioned. HIV is a very complex condition. People with it have to live on drugs for the rest of their lives. On some days they are better than on other days, and some drugs work in different ways on different people. This is a complex matter.
I hope that the Minister will get these regulations right. I have two questions for him. Who will be doing the assessments? Will these people be adequate? This is of great concern to many people, and this debate has illustrated how very complex the whole matter is.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, this is an important opportunity to discuss the regulations. A lot of points have been raised and I will try to deal with as many as possible. However, I take this opportunity to lay out the position coherently. I take the criticism of the noble Lord, Lord Kirkwood, that communication has been less than perfect. I shall try to describe what is happening to reinforce that communication programme and I commit to ensure that it is maintained.
There is still a lot of misunderstanding about the assessment and what we are doing to make it fairer and more effective. The first point to make is that these regulations seek to take the first step in improving the work capability assessment. They were developed in conjunction with technical experts and with considerable input from specialist disability groups. As noble Lords have acknowledged, they will ensure that individuals awaiting, or between courses of, certain chemotherapy will be placed in the support group without face-to-face assessment. They will expand the support group to cover people with severe disability due to mental health problems and communication problems—that includes people with autistic spectrum disorder, about whom the noble Baroness, Lady Browning, was concerned—and they will ensure that the descriptors take account of someone’s adaptation to a condition or disability so that we can provide them with the right support.
Before proceeding to debate the finer points of the regulations, I would like to put the reform into a context. The legislation before us today is part of a far broader commitment by the Government to tackle worklessness and intergenerational poverty. This is a very real and very urgent problem for us all, especially given that there are now 2.6 million working-age people claiming incapacity benefits, of whom some 850,000 have been claiming for a decade. This is a massive brake on the economy, costing the taxpayer billions of pounds every year, but that is not the most important point. The true cost of this level of inactivity is paid for by individuals left languishing on long-term benefits without hope or opportunity for a better life. I echo what the noble Lord, Lord Kirkwood, said about the scourge of inactivity. If we abandon these people, we fail in our duty as Members of this House. For too long, too many people have had to pay for our failure to act.
Before the recession, there were 63 consecutive quarters of economic growth—that is the longest growth period the economy has enjoyed, as historians can best work it out—and the economy created 4 million additional jobs. Yet under the previous Government—I am not being political—just over half those jobs went to foreign nationals. The result was that, even before the recession hit, we still had 4 million inactive people. Millions of people were without jobs in a growing economy, yet the system was trapping them. That is why we were sucking labour from abroad. The system offered too few people the opportunity to escape and to make a better life for themselves. We must not fail them again, because the country cannot afford it, and neither can the individuals, their families or our society.
Studies have shown that welfare dependency, social isolation and lack of purpose in life have a debilitating affect on individuals. Decades ago, the late Aaron Antonovsky argued that the purpose in life—what he called coherence—was crucial to understanding human health and well-being. More recently, Waddell and Burton’s excellent review of the issue, written four and a half years ago, reinforced the evidence that showed that work is generally good for you. There is ample evidence that prolonged periods of inactivity and unemployment contribute to declining mental health. That is why the welfare reforms that we are introducing are so important, and that is why the regulations are such an essential element in transforming the lives of millions of people at risk of being abandoned to welfare dependency.
These reforms are the key to providing the lost with a path out of the cycle of dependency and poverty, and helping them on to the path to new opportunities. That is why we are embarking on a large-scale re-evaluation of those on incapacity benefits through the work capability assessment that will take in some 1.5 million people—not the 2.6 million on incapacity benefit who the noble Lord, Lord Kirkwood, mentioned —over the next three years. It is also why we are introducing the universal credit to make sure that work pays, and why we are introducing the largest welfare-to-work programme that this country has ever witnessed.
This is designed not to badger or bear down on the vulnerable but to give them a road map to a better life. It is only by tackling welfare dependency and starting to dismantle the benefits trap that we can help people escape the huge social costs of worklessness, social exclusion and intergenerational poverty. Many noble Lords will know how difficult it is to wrestle with the issue of child poverty without this kind of route.
Those who cannot work will of course continue to get the support they need. However, for those who can make the journey back towards the workplace, we will offer them structured support to become work-ready. This will provide real help for many of those who have previously been abandoned by the system—those who were simply labelled as incapacitated and largely ignored, whether they wanted to work or not.
The work capability assessment was introduced in October 2008 as a key part of the assessment process to determine entitlement to employment and support allowance. It replaced the personal capability assessment and represented a significant and overdue change in assessing an individual’s ability to work. It was developed in conjunction with technical experts, along with considerable input from specialist disability groups.
However, it was clear from the outset that, unlike the PCA, the WCA should be subject to an ongoing process of review, evaluation and refinement. Indeed, it was this House that passed the amendment that introduced the requirement for an independent review of the WCA for the first five years after its introduction—a point made by the noble Lord, Lord Kirkwood. It was the only amendment from this House that made its way into the original legislation for the work capability assessment, and it received support from all sides. That was slightly before my time, but I know many noble Lords will remember it well.
The Countess of Mar
The noble Lord said that the department worked with disability groups. Why have those groups unanimously dissociated themselves from the internal report?
Lord Freud
My Lords, I am pleased to answer that question. I am rather surprised by the actions of the groups. I have seen a lot of correspondence and a lot of internal work. There was very full engagement by both sides, and a lot of correspondence about fine-tuning the regulations. At the end of the process there seemed to be real agreement. Therefore I am genuinely surprised that, after the passage of some months, the consensus seems to have been significantly eroded. Income elements may have come to the fore, whereas the technical analysis that was the subject of the interplay between the department and the groups was perhaps easier to get to grips with.
I will go back to describing the system. The wider system that we inherited, after the measures that the internal reviews described, contained flaws that we as a new Government have looked to put right as quickly as possible. In June we launched the first of the five annual independent reviews of the work capability assessment—the first of the reviews that this House legislated for. It was carried out by Professor Malcolm Harrington, a highly respected occupational physician. He reported last November. He did not consider that the work capability assessment was broken but felt that it was not working as well as it should and made a series of recommendations to improve its fairness and effectiveness. We have fully endorsed his review, as the noble Baroness, Lady Thomas, pointed out, and we have committed to implementing his recommendations as quickly as possible.
The first key element of those recommendations—I am borrowing, again, from the description of the noble Baroness, Lady Thomas—is that we empower Jobcentre Plus decision-makers to make the right decision. They will have clear responsibility for the decisions they make and will be given the support that they need to ensure that those decisions are independent and considered. I hope that that is one of the reassurances for which the noble Lord, Lord Kirkwood, was looking.
The second recommendation is to ensure that individuals are treated with compassion by clearly explaining everything to them, helping them to fully understand the process they will go through and ensuring that they know that they can provide additional evidence, including medical evidence, for consideration at any time. I hope that that is the second of the reassurances for which the noble Lord, Lord Kirkwood, was looking.
The third major change is to improve the transparency of the Atos assessment by ensuring the audio recording of assessments in the Atos pilot. The other element involving the Atos process is that we will account for the particular difficulties in assessing mental health conditions by ensuring that Atos employs “mental health champions” at every centre.
Nearly all these changes will be in place for the start of the reassessment, with the remainder completed in time for the summer. We have also appointed Professor Harrington to conduct the second independent review. He will now examine the assessment in more detail, particularly focusing on mental health descriptors and fluctuating conditions.
I shall now respond to the questions of the noble Baroness, Lady Finlay, on fluctuating conditions. The fact that conditions fluctuate is now embedded in the descriptors. We just want to make sure in this next piece of work that we get that absolutely right. We look forward to Professor Harrington’s recommendations following the second review in due course.
The regulations before us today are part of this improvement process. They come from the internal review undertaken and fully supported by the previous Government. That review suggested a number of changes to clarify and improve the technical descriptors; noble Lords have made these points so I will go through them quickly. The changes include placing individuals awaiting or between courses of chemotherapy in the support group; expanding the support group to cover people with certain communication problems and severe disability due to mental health conditions; greater provision for individuals who are in residential rehabilitation due to drug or alcohol misuse; ensuring the descriptors take account of someone’s adaptation to a condition or disability; and simplifying the language of the descriptors to ensure fair, consistent and transparent applications. These changes will improve the work capability assessment. They will increase the number of people with severe disabilities who are provided with unconditional support in the support group. They will ensure that we do not deny employment support to individuals who, with our help, can get back to work.
The internal review consulted a range of experts and groups and, as I described just now, tried to reach consensus. Significant concerns were expressed by the groups around the descriptors. I will not go into those because I am short of time, but I can respond to the noble Countess, Lady Mar, on fluctuating conditions. It must be possible for all the descriptors to be completed reliably, repeatedly and safely, otherwise the individual is considered unable to complete the activity.
The Department for Work and Pensions has undertaken rigorous testing of these changes to understand their effects. The department modelled the impact of the changes on data from almost 60,000 assessments, and a panel of experts was brought together to examine the changes in significant detail. Where any issues were identified during this process, further refinements were made to the descriptors. From this analysis we expect the changes to increase the number of new claimants who are put in the support group, specifically, those who are awaiting or are between courses of chemotherapy, and some whose limited capability relates to certain mental functions and communication difficulties.
I have run out of time, but I hope that the House will indulge me for two more minutes as this is really important. We are committed to the principle of continuous review and refinement of the work capability assessment. As part of that principle, we have reviewed in detail the working of the work capability assessment and consulted in depth with specialist disability groups to improve the assessment. The addendum to the original report shows how far such concerns were taken on board in these regulations. We are committed to taking Professor Harrington’s review to improve the sensitivity of the process. Of the 17 recommendations that he made, we will have 15 in place in time for April and the other two in a couple of months. I hope that that is a final reassurance for the noble Lord, Lord Kirkwood, and the noble Countess, Lady Mar.
The changes that we are making in the regulations will improve the work capability assessment. They will expand the support group to cover people with severe disability due to mental health conditions and communication problems. They will ensure that the descriptors take account of someone’s adaptation to a condition or disability and accepting these regulations means that we can make these important improvements now. We remain committed to the principle of continuous improvement to the work capability assessment. I trust that the noble Lord, Lord Kirkwood, will feel able to withdraw his Prayer to Annul these important regulations.
Lord Kirkwood of Kirkhope
My Lords, I am grateful to the Minister. It has been a long but excellent debate. I thank all noble Lords who have participated. I shall certainly look carefully at the record tomorrow to ensure that we learn the lessons that have been laid in front of the House during the debate. I am pretty sure that the Minister will do the same—that he will take the opportunity of reflecting very carefully on what he has heard and the tone in which some of these powerful speeches have been made.
Knowing the Minister as I do, I know that he will also take away from the debate the fact that he may have some work to do to reconnect the department properly with the disability community and the pressures groups that represent it. I hope he will take that commitment on personally and not leave it to his senior officials, very highly regarded as they may be. I hope that he will personally invest time to make that connection good, otherwise it will fall foul of broken communications in future if it is not put right.
Reflecting on the debate, I think the Minister has got an amber light; he did not get a red light, but he still can in future if he does not complete the commitments he made—speaking for myself, I am willing to accept them—but he has not got a green light. I hope I am reflecting the tone of our excellent debate in seeking the leave of the House to withdraw this Prayer.
Postal Services Bill
“Increased use of post office accounts
The Secretary of State shall give due consideration to how the use of post office accounts, and the facilities available in respect of them, may be extended and shall lay a report before Parliament within three months of the commencement of this Act.”
Lord Stevenson of Balmacara
My Lords, the purpose of this amendment is to require the Secretary of State to give full consideration of how more use can be made of Post Office card accounts and to extend the services available in respect of them. The Post Office card account was launched in April 2003 as an alternative for those who could not or did not want to open a basic bank account when the direct payment of benefits was introduced. The contract for that account is extremely important to the post office network, being worth around £1 billion to post offices between 2003 and 2010.
There were, it is fair to say, some issues around the Post Office card account contract. Suffice it to say that the matter was resolved in November 2008, not least because of the intervention by my noble friend Lord Mandelson. He was able to announce then that the Post Office card account had been saved for the Post Office. On 13 November 2008, Richard Bates, head of community services at Consumer Focus, said:
“Post Office card account users will be delighted that they can continue to access their money in an environment they trust and that is within easy reach. The decision is good news for consumers and provides a bedrock for the viability of the post office network”.
He went on to say:
“Consumer Focus thinks the Post Office Limited is in a strong position to play a much more expanded role in financial services. … Today's decision is a good step in the right direction. People tell us they need the option to deposit money, pay bills and make savings in their Post Office card account. The Government must now provide and promote these services”.
It is interesting, given some of our recent debates, that there was a particular cheer at the news in Northern Ireland, where 190,000 people have their pensions and benefits paid into a Post Office card account using nearly 500 Post Office outlets.
In many ways, the Post Office card account has been a major success. Around 4.3 million people now receive benefits via such accounts, of whom approximately 40 per cent are pensioners. The account plays a central role in service provision in a whole host of areas, providing great benefit to communities across the country. Each week, 6.5 million visits are made to the post office network with a view to withdrawing funds from the Post Office card account, and it has been calculated that those under 65 who hold such an account are 28 times more likely to be “unbanked”. These same people—those in receipt of state benefits and tax credits—are also the most likely to use high-cost credit, while those without bank accounts are the least likely to hold any other financial product.
We have heard already today that the Government are looking for ways to extend appropriate, inclusive and functional services to Post Office customers. We welcome that commitment. The National Federation of Sub-Postmasters, in its Six Steps to a Sustainable Post Office Network, emphasised that:
“The Post Office card account … reminds vital for the post office network and”—
I stress these words—
“its functionality should be increased”.
That is what this amendment is about.
Post Office card account customers are some of the least well served by financial services in society. They make up 20 per cent of visits to Post Office branches each week and spend as much as £2 billion in the network each year. It should be a priority for the Government, in seeking to protect and grow the network, to find ways to develop that account. A robust Post Office card account must be an essential part of the portfolio of financial services that the Government are now proposing for the Post Office, not least because it will provide valuable bridges to financial inclusion and much needed committee support. Before the Government transfer the Post Office to a mutual, we think it sensible to require the Secretary of State to give full consideration to how more use can be made of the Post Office card accounts and to extend the services available in respect of them. I beg to move.
Baroness Kramer
My Lords, I shall speak briefly on my very short Amendment 23A, which I put before this House partly to have the excuse to name and shame and, perhaps more importantly, to give the Secretary of State in his annual report to Parliament the opportunity to name and shame. My decision to put forward this amendment came through a conversation with Age UK, which was careful to point out to me that in 2006, when it did its survey of older people,
“44% … used the post office to collect their pension, 43% for access to cash and 56% used it to pay their bills”.
That demonstrates what an important role the Post Office played in the financial life of older people.
Age UK welcomed the Government’s announcement, as did I, last November that their ambition is for all UK current accounts to be accessible through the post office network. Of course, the significant majority of high street banks are now going along with providing that service, but there are two major exceptions. Here is my opportunity to name them: HSBC and Santander. They do not make their standard current accounts accessible at post offices. Age UK has pointed out that older people could say, “This is very inconvenient”. Perhaps they are in deprived areas or in rural communities where there are no easily accessible bank branches. They could transfer their accounts to one of the banks that use the Post Office, but the reality is that switching accounts is complex and difficult. There are endless forms to fill out and I know from experience that it frequently goes wrong. To put that additional burden on older people is unacceptable.
We had a good discussion not long ago when in every part of this House there was real concern for the post office network, but even more for the communities to see more financial services available through the Post Office with its trusted name and accessibility and to keep people out of the hands of loan sharks. There were endless reasons, and it is important to provide the Secretary of State with the little reminder that there is a mechanism that can be used to name and shame. I hope that it will not be needed and that the banks will have fallen into line, but if they have not they ought to hear themselves declared on at least one of the Floors of Parliament.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, for clarity I confirm that when we have said that we will write to noble Lords, we will of course put copies of these letters in the Library.
I thank noble Lords for tabling the amendments. As I said earlier, the Government are clear that the wide range of financial services offered by the Post Office—for example, personal loans, credit cards and savings products—are an important part of its total product suite.
I shall begin with Amendment 22D, and attempt to ease the noble Lord’s concerns about access to and use of Post Office accounts such as the Post Office card account, which can be used by people to collect their benefits through the Post Office. The Government are absolutely serious about protecting the post office network, and we fully support the Post Office as it seeks to develop the services that it offers. The Post Office card account is currently available across the network and will remain accessible at all post offices, including the new post office local model. The Post Office is a valued partner of the Department for Work and Pensions to deliver benefits through this account. One of the things that people most like about the Post Office card account is its simplicity. The Post Office card account remains a simple product, aimed at those who are unable or unwilling to open a basic bank account. Those who want additional features have a very wide choice of basic bank accounts, and many current accounts, which are readily accessible at post office counters.
That brings us to Amendment 23A in the name of my noble friend Lady Kramer. I know that my noble friend has a great deal of experience in the banking industry and I always value her contribution to our debates. The Government have been absolutely clear in their ambition for all UK current accounts to be accessible through the post office network, making post offices the convenient place for everyone to access their cash. In November last year the Royal Bank of Scotland reached agreement with the Post Office to allow RBS customers, including NatWest customers, access to their current and business accounts at post offices. As I mentioned in the debate on Amendment 21B in the name of the noble Lord, Lord Young, this will mean that almost 80 per cent of all UK current account holders will be able to withdraw money free of charge at post offices, and many can also pay money in and check their balances.
Of course, this is excellent progress, but I agree with my noble friend that we must continue to strive to ensure that all the UK’s major banks provide access to their current accounts through post offices. All the UK’s major banks, as well as the Nationwide Building Society, provide at least one basic bank account that is accessible at post offices, but we would encourage HSBC and Santander also to offer access to their current accounts through the Post Office. With a network larger than all of the high street banks combined, and 20 million customer visits each week, the Post Office offers unparalleled access to their customers.
We therefore continue to support the Post Office’s ambition to ensure access to 100 per cent of UK current accounts. However, it is not necessary to include that stipulation in the Bill. Clause 11(2)(b) already requires the Post Office to provide details of the services provided at post offices, and we would fully expect that to encompass the financial services that it sells over its counters. Although the decision to allow customers access at the post office is ultimately a commercial one for the banks to make, the Government have made clear our commitment to encourage those arrangements to be put in place.
Amendment 24, in the name of the noble Lord, Lord Kennedy, who is not here, is about credit unions. Let us remember that co-operation between the Post Office and credit unions is already strong, and the Government support it becoming even stronger. The Department for Work and Pensions recently announced a significant package of support for the credit union sector, which includes funding set aside for a shared credit union and banking platform, subject to a feasibility study. That would open up opportunities for the Post Office to provide credit union services such as banking transactions, bill payments and low-cost credit services to many more people.
We made clear in our policy statement, published last November, that we support an even stronger link between the Post Office and credit unions, and we have demonstrated clear progress against that aim. I fully recognise the worthy intentions behind the amendments, and I hope that noble Lords and the noble Baroness will be reassured about the good work that is already under way in those areas. Placing those obligations or reporting requirements in legislation would simply increase bureaucracy. We will continue to encourage co-operation between credit unions and Post Office Ltd, and to support the Post Office in its provision of financial services. I hope that the noble Lord will feel able to withdraw his amendment tonight.
Lord Stevenson of Balmacara
I thank the Minister for her words. I thank the noble Baroness, Lady Kramer, for joining the debate in speaking to a complementary amendment. I am sorry that my noble friend Lord Kennedy was unable to speak to his amendment; but that did not seem to matter, as the Minister answered the points that I think that he would have made. We will tell him that in future it is almost unnecessary to be here, because the force of his personality was such that she felt that she had to answer his points.
The Minister gave us some positive words about the Post Office card account and picked up the point that we want to do all we can to ensure that access to the banks is improved and made available to as many people as need it. We will study what she said, but at this stage I beg leave to withdraw the amendment.
“( ) the locations where post office services are, at the time of the report, not being provided but which are identified in the Post Office plan as outlet locations”
Lord Young of Norwood Green
I shall also speak to Amendments 24C and 24D. All the amendments are an attempt to strengthen Clause 11, which relates to an annual report on the postal network being produced.
Clause 11 requires the Secretary of State to lay a report before Parliament and to give copies to Scottish Ministers, Welsh Ministers and the offices of the First Minister and Deputy First Minister in Northern Ireland. Amendment 24A requires the report to contain information on locations where Post Office services are not being provided at the time of the report but which are identified in the post office plan as outlet locations. This form of reporting would be an important development; it would enable stakeholders to distinguish between the Post Office’s intended network and that which they are actually able to achieve.
A major concern has been the number of sub-postmasters leaving the business, as they are unable to make a sufficient living from their post offices. We have heard that more than 900 post offices, which is believed to be an unusually high number, are up for sale. Likewise, we know that more than 160 post offices closed on a long-term temporary basis in 2010. Many more will have closed on a short-term basis. It is important that these changes in the network are clearly reported and that an accurate picture of service levels around the country is reported.
Amendment 24C requires the report to include the number and locations where Post Office services have ceased to be delivered since the last report and the reasons for this service reduction. As things currently stand, post offices close and services are reduced without explanation or justification to the public. Closures as part of a national closure programme went through a form of public consultation, which allowed for some degree of accountability and understanding of the criteria for closure. However, when individual post offices close, no such indication is given.
Not only are post offices continuing to close but the Post Office is preparing to undergo another significant round of change through its new model for the network. Under current proposals, 4,000 main offices will be identified that will continue to provide the full range of services, and 2,000 sub-post offices will be transformed into what is known as “local” or “essential” post offices. These will provide a reduced service; the remainder of the post office network is expected eventually to be developed along this “essentials” model. I would welcome a clarification of that aspect.
It is important that the impact of these changes is properly monitored. The amendment seeks not to change the Post Office’s plans but to ensure that a clear understanding of the shape of the network is achieved. While these changes are not closures, they constitute a major change in service provision. Likewise, the introduction of outreach services as replacements for post offices—often in the form of a van servicing a community a number of set times a week—constitutes a significant reduction in service levels in most areas. It is important that we monitor these changes. At the time of the network change programme between 2007 and 2009, it was envisaged that 500 post offices would be replaced by outreach services. There are now 772 outreach services, which make up 6 per cent of the network.
It is on these grounds—the importance of understanding what is happening to the post office network during closure programmes and understanding programmes where the models are changing—that we seek to strengthen the terms of this Bill. I trust that the House will support the amendment.
Baroness Wilcox
I ask for clarification so that I do not answer a question that has not actually been asked. Is the noble Lord, Lord Young, speaking to Amendment 24EZA as well?
Baroness Wilcox
My ball, I think. An annual report on the post office network laid before Parliament is an important means of achieving transparency around the post office network. The statutory requirement in Clause 11 to lay such a report before Parliament already goes further than the current requirement in the Postal Services Act 2000, which requires only information about the number and location of post offices and their accessibility. This Government have made a commitment that there will be no further programme of post office closures. We are committed to creating a sustainable future for the Post Office, and Post Office Ltd is legally obliged to maintain a network of at least 11,500 branches over the spending period and to ensure that they uphold the access criteria. These commitments should mean that noble Lords have far less reason to worry about post office closures than in previous years. While we agree that there should be an annual report on the post office network, an annual report on its own is only an annual report.
Other means of monitoring the post office network are already in place and have already been put before Parliament. For example, a comprehensive list of all post offices in the country, which is broken down by parliamentary constituency, is placed in parliamentary Libraries each summer. Equally, Schedule 12 ensures that Post Office Ltd’s annual accounts must also be laid before each House of Parliament on an annual basis.
My department monitors Post Office Ltd’s compliance with the access criteria on a monthly basis, and Post Office Ltd also publishes details of the monthly changes in the network currently subject to local consultation on its website. On a quarterly basis, the Post Office sends reports on the number of post offices and their geographical distribution to the parliamentary Libraries. Data is also provided to Consumer Focus on a quarterly basis to enable it to scrutinise the results independently. All these measures ensure that the information that Parliament receives on the post office network is as thorough and as up to date as possible. Finally, should the Secretary of State feel that it is necessary to obtain further information from Post Office Ltd, Clause 11(4) allows this to happen.
This provision ensures that the Post Office’s report must include such other information as the Secretary of State requires. I believe that this obviates the need for any separate report from the Secretary of State as would be required under Amendment 24EZA. A further report would be an unnecessary duplication. For all those reasons, I believe that including in the Bill the various requirements set out in Amendments 24A, 24C and 24D would simply add unnecessary bureaucracy.
The Post Office plays a vital social role in communities up and down the country and the reporting procedures in the Bill reflect that, but we should not forget that these are requirements not faced by any of the Post Office’s competitors. There is an importance balance to be struck here, as the greater the reporting requirements imposed on the Post Office, the greater the cost and therefore impact on the Post Office’s competitiveness. I hope that, with those reassurances, the noble Lord will withdraw his amendment.
Lord Young of Norwood Green
I thank the Minister for her detailed response, which I will study carefully. In the light of the comments made, I beg leave to withdraw the amendment.
“( ) the use of the network by the universal service provider, and any changes in the preceding year”
Lord Young of Norwood Green
My Lords, Amendment 24B would strengthen reporting requirements on the Post Office to reflect also on the use of the network by the universal service provider and how this may have changed in the preceding year. Once again, Clause 11 requires the Post Office to send a report to the Secretary of State each year about its network of post offices. As I have previously said, the network must give details of the number and location of post offices in England, Wales and Northern Ireland. It must also give details of the postal services, the services provided under arrangements with a government department and other services provided by the Post Office. It must further give details of the accessibility.
I will not repeat what I said on the previous amendment, but the reporting arrangements in Clause 11 are important and wide ranging. However, they can be helpfully strengthened by Amendment 24B to reflect the challenges that the Post Office will face following separation from Royal Mail. It is vital that due consideration is given as to how the universal service provider—currently Royal Mail but following the successful passage of this Bill potentially one or more alternative postal operators—will use the post office network when it ceases to be part of an integrated company.
Many stakeholders have grave concerns regarding the risk to the post office network from the proposals in the Bill to separate Post Office Ltd from Royal Mail. The Post Office is dependent on Royal Mail business for its survival. One-third of its revenue and one-third of sub-postmasters’ pay is generated from selling Royal Mail products and services. If the two businesses are forced to separate, a privatised Royal Mail will be, or could be, likely to look elsewhere for retail outlets to sell its products. There is no guarantee it will use post offices to the same extent.
The Bill does not safeguard the inter-business agreement through which Royal Mail guarantees use of the Post Office as its retail arm. When it comes to be renegotiated a privatised Royal Mail will look to reduce costs, possibly by using other outlets such as supermarkets or high street chains instead of post offices. The Government will not undertake to extend the current five-year IBA to 10 years. It is on those grounds that we believe that Clause 11 needs strengthening as per the amendment. I beg to move.
Lord Skelmersdale
I am rather surprised that the noble Lord did not seek to group this amendment with the amendments that have just been discussed because, to a great extent, he is covering the same point, although I noticed that he brought the inter-business agreement into his comments towards the end. On that basis, I rather hope that the Minister will to a great extent repeat the answer that she gave to the last group of amendments and in particular her reference to Clause 11(4), which gives the Secretary of State the power to ask the reporters preparing the Post Office report to produce information on any subject relating to the post office network that he believes is necessary at a particular time. This is likely to vary from year to year. I therefore do not think that it is particularly suitable to put this in primary legislation.
Baroness Wilcox
I thank the noble Lord, Lord Young, for moving the amendment and my noble friend for pointing out that it is very similar to the amendments that I spoke to just now. I will see if I can again convince the noble Lord that my response will be a good answer for him to take away and think about.
As we have discussed, the annual report is an important means of achieving transparency around the Post Office network. It is, of course, also right that an annual report on the Post Office network should give details of the postal services that the Post Office provides. That is why we have included this requirement specifically in Clause 11(2)(b). This section requires the annual report to contain details of,
“the postal services … that are provided at … post offices”.
We would expect this to include any postal services that the Post Office provides on behalf of the universal service provider. The income that the Post Office receives from mail and the services that it provides for Royal Mail are, of course, vital and sub-postmasters highly value the footfall generated by mails customers. Indeed, Royal Mail and the Post Office are natural partners and we envisage their relationship continuing for years to come. There is an overwhelming commercial imperative for the two businesses to work together. Indeed, the chief executive of Royal Mail, Moya Greene, commented on the strength of the network and said that it would be “unthinkable” that there would not always be a strong relationship between Royal Mail and the Post Office.
However, we know that the projected decline in letter volumes means that postal services will not be a growth area for the Post Office, despite potential opportunities in parcels. That is why the Post Office is developing new revenue streams, as detailed in our policy statement. We should all be clear that the majority of the Post Office’s income already comes from other sources, in particular financial services, government services and telephony.
The latest Postcomm report on the network of post offices in the UK contains a breakdown of the percentage of Post Office Ltd’s revenue derived from mails, including postal services, as well as financial services, government services and telephony. This information is shown on an annual basis from 2003-04, which allows you to see the change not only since the preceding year but over several years. This information, currently included in the Postcomm report, is exactly the type of information that we would wish to be included when the responsibility for the report transfers to a Post Office company. However, I understand that the continuing relationship between the Post Office and Royal Mail is an important issue for noble Lords and, as such, I would be happy to take this suggestion away to consider. For the time being, therefore, I ask the noble Lord to withdraw the amendment.
Lord Young of Norwood Green
I thank the Minister for her reply and her willingness to take the issue away. This is clearly a charm offensive—she supplies the charm and I will endeavour not to be offensive! In light of her comments, I beg leave to withdraw the amendment.
Lord Young of Norwood Green
In response to the noble Lord, Lord Skelmersdale, there was no intention on our part to have these amendments dealt with separately. We did not have a request to group them, but I must admit that although they cover different areas, they are associated with one another. I shall keep this contribution brief.
Amendment 24E aims to strengthen reporting requirements for the Post Office to ensure that the level of access to post offices and post office services for both small and medium-sized businesses is monitored. Given the importance of that relationship, which has been recognised by all sides of the Committee, we are focusing on this particular aspect. The amendment seeks to strengthen Clause 11 by recognising that medium-sized businesses as well as small ones are highly dependent on post office services and therefore should be included. Small and medium-sized enterprises account for 99 per cent of all businesses in the UK. They provide 59.8 per cent of private sector employment and 49 per cent of private sector turnover. SMEs are indeed the backbone of the UK economy, and hence it is our view that this amendment would make an important contribution towards strengthening Clause 11. I await with interest the Minister’s response. I beg to move.
Lord Skelmersdale
The noble Lord is of course absolutely right. As the director of an SME myself, I sympathise exactly with the words he has just enunciated. It therefore occurs to me to ask my noble friend why Clause 11(3)(c) only refers to small businesses. It seems illogical.
Lord Young of Norwood Green
I suspect that the noble Lord is right. I shall need to check it, but I tend to agree with him at the moment. However, I do not want to delay the Committee.
Baroness Wilcox
My Lords, I agree with the aim of the noble Lord, Lord Young, that the annual report on the post office network should provide information about the accessibility of the company’s post offices to small and medium-sized businesses. I do not know that I can answer the question put by my noble friend Lord Skelmersdale; I surely will, but not immediately.
Lord Skelmersdale
My Lords, does that mean that my noble friend is, for the second time, going to take this away and look at it rather more favourably than some of the other things we have heard over the past couple of days?
Baroness Wilcox
Yes.
We know that businesses value the post office network. According to research by the Federation of Small Businesses, almost 20 per cent of small businesses visit the post office every day and nearly half visit twice a week. So I share the concern and I agree with the intention of the amendment. But, as was pointed out by my colleague the Minister for Postal Affairs in the other place, Clause 11 already encompasses what I think noble Lords want it to cover.
First, we should be clear that there is no universally recognised definition of what constitutes a small or medium-sized business. In the United States, the term “small businesses” generally refers to businesses with fewer than 100 employees, while “medium businesses” refers to those with fewer than 500 employees. In the United Kingdom, SME statistics define a small business as one with 10 to 49 employees and a medium business as one with 50 to 250. If we are going to be very technical here, and one can often be very technical when it comes to legislation, it could even be argued that since the UK SME statistics define a “small business” as a business with between 10 and 49 employees and a “micro business” as one with between one and nine employees, both micro businesses and sole traders could be excluded from the definition in Clause 11(3), but that is not the Government’s intention. After all, 95 per cent of SMEs have fewer than 10 employees and we know that post offices play a particularly valuable role for this group.
We therefore intend the term “small business” here to include all businesses with fewer than 250 employees in line with the broader UK statistical definition of an SME. I am quite happy to make that commitment to your Lordships, and of course if the Secretary of State was not satisfied that the Post Office was providing broad enough information to meet this requirement, he could direct the Post Office under the powers of Clause 11(4) to provide any additional information he felt necessary. I do hope that this clarification will reassure the noble Lords, and I would ask the noble Lord, Lord Young, to withdraw his amendment.
Lord Young of Norwood Green
I thank the Minister for that. Was it edification, clarification or education? I will study carefully the comments that she has made and in the circumstances I beg leave to withdraw the amendment.
Lord Lea of Crondall
“Operating methods of post offices
(1) A company which is engaged in the provision of post offices shall not require changes to be made to the operation of any post office in relation to any of the matters listed in subsection (2) unless the conditions in subsection (3) have been satisfied.
(2) These matters are—
(a) the terms on which any sub-postmaster operates a post office;(b) the required opening hours of any post office;(c) the services offered by any post office; and(d) the physical conditions in which the services are provided.(3) The conditions for the purpose of subsection (1) are that—
(a) there has been consultation with representatives of the employees affected by the proposed changes and any sub-postmaster affected, as well as with relevant consumer groups;(b) a report has been submitted to the Secretary of State by the company proposing the changes, including the proposed timescale for the introduction of the changes.”
Lord Lea of Crondall
My Lords, I am moving this amendment on behalf of the noble and gallant Lord, Lord Bramall, who is unable to be present. We believe there is feeling among sub-postmasters that Post Office Ltd will now have too free a hand to implement changes in what are now styled as post office locals, which may result in them losing a significant amount of revenue. That would throw into question the whole viability of many such sub-post offices and their associated shops.
This amendment is in three proposed subsections. The first subsection sets out the relationship between the second and the third, which concludes that there has to be consultation with representatives of the employees affected by the proposed changes and any sub-postmaster affected as well as with relevant consumer groups. Under subsection (3)(b) of the proposed new clause, the company would have to submit to the Secretary of State a report proposing the changes, including the proposed timetable for the introduction of the changes. The matters concerned are: first, the terms under which the sub-postmaster operates the post office; secondly, the required opening hours of any post office; thirdly, the services offered by any post office; and fourthly, the physical conditions in which the services are provided, such as how the staff operate on one counter and so on.
It is apparent that there are worries about the contract to be negotiated so far as sub-postmasters are concerned. We understand that the payment of commission rather than a guaranteed annual sum is one of the features that is likely to lead to a substantial loss of income—perhaps the Minister would like to comment on that.
I have of course looked at the BIS booklet about the pilots, which is very well set out but neatly sidesteps the question of what happens if the sub-post districts are fewer and further apart. Individual examination of the pilots does not quite reveal what is a plausible scenario: that they would be much further apart. For example—this is simple arithmetic from school—doubling the radius of a catchment area from three miles to six miles will not just double the area concerned, because r2 means that you are going from nine square miles to 36 square miles.
Finally, page 16 of the booklet—this is in connection with the pilots—says this is a way in which you can implement the Government’s big society reforms at the local level. It is too late at night to play around with the concept of the big society, but surely that is particularly grotesquely inappropriate when the number of sub-postmasters is likely to fall. I am reminded of George Orwell’s Nineteen Eighty-Four, which after all has some similarities of concept to the big society, with Big Brother and so on. In that book he introduced “doublethink”, whereby words often mean precisely the opposite—this is a mixture of George Orwell and Lewis Carroll, I guess—of their natural meaning. So the big society now has big wide spaces with fewer services. I beg to move.
Viscount Tenby
My Lords, I support the amendment in the name of my noble and gallant friend Lord Bramall and others. In doing so, I confess that I will be singing from the same song sheet as my noble friends Lord Cameron and Lady Howe. On the basis that a good song bears singing again, I make no apology for returning to the theme.
The Government have stated that they will not add to the 5,000 or so closures to the network so sadly seen in recent years, but I suggest that they are being a little disingenuous. There is more than one way to skin a cat. Let me explain. Conditions can be created that may make it difficult for some sub-postmasters to continue to trade profitably. For example, there may be the withdrawal of the ability to offer road tax renewals, as the Minister referred to earlier, or to facilitate the postage of packages over a certain weight. It has just been announced, for good measure, that the contract in respect of pension and benefit cheques has been awarded to Citibank, which is to subcontract to Paypoint, a company that works through newsagents and garages. This is a decision that has been described as “bitterly disappointing” by the National Federation of SubPostmasters, while the spokesman for Consumer Focus has been quoted as saying that,
“Government has committed to making the Post Office the ‘front office’ for public services. The decision … seems out of step with that”.
Most of these sub-post offices combine retail outlets with postal counter services, certainly in the suburbs but mainly in rural communities. They provide a lifeline for the increasingly large element in our population of the elderly and often infirm. It is no good talking to such citizens about electronic gadgetry and the like. They want to be able to access the outlets without recourse to a car, and to experience tried and trusted procedures when they get there. The lifeline that the retailer needs to maintain is a viable business. What is additionally important from their point of view is that, arising from these services, these shoppers also buy the often-quoted packet of cornflakes and more besides. These sub-post offices are the very outlets that the Post Office should be seeking to support with the introduction of new products and services. They are indeed the jewel in the crown, and this amendment seeks to protect that jewel properly.
Lord Rowe-Beddoe
My Lords, I support the amendment in a general way. During the course of today, your Lordships have understood that many of these amendments are interrelated and we have seen much repetition. I am greatly relieved to have heard the Government’s response to many of the amendments. My concern at Second Reading was that I wanted a definition of “programme of closure”—“programme” being the operative word—and what that means. Now we know that we are talking about a network of 11,500; the Government have made themselves clear, and the Minister has repeated that on a number of occasions.
The amendment tries, as many have done previously, to provide a safeguard. I am convinced that the government commitment is there, but we are talking about a few years from now. What safeguards do we require? Subsections (3)(a) and (3)(b) of the amendment suggest that there should be consultation, which always goes back into the Secretary of State’s report—we know all that. We are not trying to take away a commercial responsibility from the company running the Post Office; rather, we seek to mix the commercial responsibility with preserving the intention of the Bill, particularly this part of it.
The amendment concerns—this has been said very eloquently by noble Lords all round the Committee—the importance of our post office network in terms not only of the business itself but of its great social importance to the community. That is where the many amendments to the Bill are headed. They all seek some form of safeguard while realising that a Government cannot safeguard something which will make the business—be it Royal Mail or Post Office Ltd—a commercially unviable proposition. I support the amendment, specifically subsections (3)(a) and (3)(b). I hope that the Minister will understand these concerns. This is a common theme; that is all I can say. I have listened very carefully to the speeches made today and their common theme is that of seeking safeguards.
Lord Young of Norwood Green
My Lords, while the main focus of the Bill is to sell off Royal Mail, the plans for the Post Office in terms of separation, mutualisation and reorganisation over the next four years to get it into a position to be mutualised are significant for postal services and people throughout the UK.
Separation and mutualisation are provided for in the Bill, as has been discussed. While there is markedly little detail provided on how mutualisation is to take place or the form of mutual the Post Office may become, the transformation of the network—this is just as significant as the closure programmes which have been seen in recent years—to prepare for this is not covered at all in the Bill. There are no safeguards or parliamentary scrutiny of the proposals which will fundamentally alter the post office network, and it is unclear how Post Office Ltd plans to proceed. Furthermore, Consumer Focus, which has previously monitored closure programmes, is now to be abolished and it is highly uncertain that Citizens Advice, which is to take over its responsibilities, will have the expertise or resources properly to monitor the wide range of changes being planned for the Post Office.
Alongside this, the Bill also means that annual reports on the post office network will be compiled no longer by Postcomm, or Ofcom under the new regulatory regime, but by Post Office Ltd. It is not clear what impact this will have on the extent or quality of information produced. It should also be noted—other amendments deal with this point—that there is no requirement for this annual report actually to be published. In light of these changes, there is clearly cause for concern that the transformation will take place under the radar and without proper scrutiny. Yet it is clear that a fundamental programme of change is planned.
In the Department for Business, Innovation and Skills paper Securing the Post Office Network in the Digital Age, published in November last year, the Government outlined that, in the spring, Co-operatives UK would be tasked with reporting on the options for mutualisation, covering who the members of the mutual should be and their relationship to it. The paper comments on the transformation of the network. The reduction in the number of main post offices gives the greatest cause for concern, with about 2,000 sub-post offices being converted to the local model. That latter commitment worries us. The local model is also referred to as Post Office essentials. As we have said, “essentials” is used because it offers a slimmed down provision of services. These are likely to be offered on the counter of other shops, not through dedicated post offices.
For those reasons, we support the amendment. I will listen with interest to the Minister’s response.
Baroness Wilcox
My Lords, this is the final and possibly the most emotional and serious amendment that I have spoken to tonight, because I too come from a small village—St Mawes in Cornwall. We too have a post office, and local people are worried. The fact that the Bill is called the Postal Services Bill is, in a way, distracting, because it is very good news for post offices. The very good news is that, unlike in the past few years, during which there have been post office closures all over the country, this Government have made an absolute commitment that there will be no programme of closures for post offices, that 11,500 post offices will stay open and that £1.34 billion of investment will be made in them. We should say that loud and clear. Royal Mail is one thing, but the post offices around our country are completely different.
The amendment seeks to restrict Post Office Ltd’s ability to make changes to post office branches. It is an attempt to protect sub-postmasters or sub-postmistresses from having change imposed upon them by Post Office Ltd—the parent company that contracts with sub-postmasters. In particular, the amendment reflects concerns held by some noble Lords regarding the post office local model. The noble and gallant Lord who originally tabled the amendment has been to see me and my team at least three times to obtain clarification and understand what is actually going on here. That is what this is about. In order to ensure that I address these concerns and communicate the position fully, I apologise to your Lordships in advance for the length of my answer at this late hour.
For those noble Lords who are not familiar with this local model, let me explain. It is a new sub-post office model which Post Office Ltd has been testing over the past two years in more than 50 locations across the country. The model involves the establishment, at little cost, of a post office counter in an existing and viable outlet. It differs from what we might consider to be a typical sub-post office, because it does away with the impersonal, screened-off—in our case—“fortress” counter at the back of the post office, which requires separate staff and always has a long queue. Instead, it provides open-plan access to post office services alongside the retail till. That will mean that instead of staff having to close the shop for the few hours that the post office opens, the model that we are considering means that the hours when the shop is open are those during which you will be able to use the post office counter.
These changes provide a much more flexible lower-cost operating model for the retailer. The cost of setting up the office is limited to the inclusion of a new counter that is not required to be manned by separate staff. We envisage that this model is particularly suitable for the many smaller post offices across the country where sub-postmasters are struggling to make a living. We do not deny that this process will involve changes, but moving to more flexible models that focus on the customer is the only way to enable the post office network to thrive across the country.
Noble Lords on the opposite Benches may remember that this model was in fact first piloted under the previous Government in September 2008 under the name Post Office essentials. This amendment seeks to hamper the introduction of post office locals by placing an obligation on Post Office Ltd to consult employees, sub-postmasters, sub-postmistresses and consumer groups, and then report to the Secretary of State before any changes, including relatively minor ones, are made to private businesses. The amendment would result in Post Office Ltd having to consult and report before changes were made to increase opening hours, take on new services, or even change a post office till—let alone change the model. The amendment would also limit the Post Office’s ability to react quickly to developments in its highly competitive markets, and would subject even minor decision-making to government scrutiny.
We cannot just shut our eyes and hope for the best when it comes to the Post Office network. Instead, we must and will enable the Post Office to compete so that it can put its customers first and do well. Additional bureaucracy will damage our shared objective of ensuring that the network is maintained at its current size.
The local model is right for consumers and for sub-postmasters and sub-postmistresses. Customer satisfaction with the Post Office local pilots has been excellent.
Lord Young of Norwood Green
I hesitate to intervene at this late hour, but there is an area that I would like the Minister to address. She said that this was right for sub-postmasters, but is there not a price to be paid? At the moment, they have a guaranteed income. Changing to the local model would mean that they would work on a commission-only basis. That is a significant factor, which is why a great deal of concern has been expressed by sub-postmasters. Because of the lateness of the hour, I will not go into the argument about the quality and types of service. With due respect to the Minister, who always addresses things fairly, she gave the worst-case scenario for a sub-post office. I would welcome some acknowledgement of the change in income stream for sub-post offices, and of the fact that we are talking about a commission-only basis for the essential/local model.
Baroness Wilcox
I will come to that. We are talking about a pilot scheme over a fairly long period, during which we will all learn.
Some noble Lords may be concerned that the model will not create real post offices or offer enough services. However, the model is not designed to replicate a main post office, or a Crown post office, where the entire suite of Post Office products is available. Just as a local or express supermarket offers only the essentials that you use on a day-to-day basis, so a local post office will offer a range of services that one frequently needs.
The local model that is being tested through pilot branches offers the vast majority of existing post office services, and 97 per cent of transactions by volume. One can post letters, pick up one’s pension and deposit and withdraw cash. Post Office Ltd is studying the results of the pilots to see how the model can be improved further and to determine on the locations where it will be most viable before it is introduced more widely. The noble Lord, Lord Rowe-Beddoe, expressed concern that changes in future would not be appropriately thought through. I reassure him that piloting will continue for the next two years, with the major rollout not starting until 2014. We expect that by 2015 around 2,000 out of the network of around 11,500 branches will have converted to the Post Office local model. This change will not be rushed through, but I believe that it is the best way of securing the future of the network.
I recently visited a Post Office local pilot and was very impressed. Mr and Mrs Patel in Dagenham told me that, although the inclusion of a post office counter in their convenience store had taken a bit of getting used to, they were now delighted with it. As a result of the post office services they now offer, they receive an extra 30 to 50 customers a day, who often purchase other items from their shop. Mr and Mrs Patel pointed out that one of the best features of the local model is that the opening hours are vastly extended compared with a typical post office. Their post office is open seven days a week, for 10.5 hours a day, except on Sundays, when it is open for three and a half hours. Many customers come in on their way to or from work, when a typical sub-post office would not be open. In all that time, the increased footfall boosts the sales of the other items they offer.
It is envisaged that the local model will play an important role primarily in urban areas. However, there is nothing to prevent a local model being established in an existing and viable rural retail outlet, should Post Office Ltd decide that this is the best way of serving its customers. Remote rural areas will continue to be served by traditional post offices or by outreach services, which will ensure that communities will still be able to access post office products and services where a traditional post office is not viable.
I hope that noble Lords will understand this Government's commitment to a vibrant future for the Post Office network, and will appreciate that subjecting to consultation even the most minor decisions that the Post Office has to make will simply prevent post offices from being free to operate on a competitive and commercial basis. I fear that the added bureaucracy of consultation and reporting obligations may achieve little except to distract Post Office Ltd and the sub-postmasters and sub-mistresses from the work that they need to do.
I therefore thank the noble and gallant Lord, Lord Bramall, and now the noble Lord, Lord Lea, for tabling and moving the amendment and giving me the opportunity to try to assuage some of the concerns around Post Office local. I ask the noble Lord, Lord Lea, to reflect on what I have said today and withdraw the amendment.
Lord Lea of Crondall
My Lords, I hope that reflection can be mutual. Then, when we come to Report stage, we will see if there has been any degree of accommodation of what is widely felt in the Committee.
One of the problems of the relationship in the new model between the Post Office and what are currently called sub-postmasters is that there is currently little transparency over what that relationship is. My noble friend Lord Young put a question to which I may have missed the answer. Is it not the case that there is widespread talk that it will be based on a straight commission basis rather than a minimum for the year, which is a sort of salary? The sub-postmasters in thinly populated areas are not dinosaurs. Generally, their surname probably is Patel and they are fairly sharp businesspeople, but they do have these problems. They are the heart and soul of the community, along with the school, the church, the cricket ground and whatever. That is life.
I am glad that the noble Baroness has today started to tease out, I hope, the ambiguities of her repeated statement that “we have no programme of closures”. Well, of course we are not talking about a programme of closures of sub-post offices; it is not the Government who will do that. Let me put it as kindly as I can: that is not the answer to the question. We are trying to see the circumstances in which there could be any protection, against any criteria, when a community sees a post office about to close.
There are generalisations about the model, and how it will be wonderfully sparkling and new. There is a broadly continuous counter in the post office in the shop I go into. Two out of the four staff have the necessary “competences” to deal with the post office side, and will also sell you a lettuce or half a dozen eggs. I may sound like a dinosaur for a minute, but in what sense does that need to be modernised?
I am very grateful for the support that we have received from the Cross Benches, which suggests to me that the next step should be to see whether there can be something to reassure the many sub-postmasters. I know that they are a disparate group. Having been a trade union official for 35 years, I am not unfamiliar with that. We are trying to look at it from a local perspective, in the spirit of the big society; how about that as a conciliatory way to end?
On this occasion, therefore, I hope that there can be further consideration before Report. Unless there is, I predict that colleagues will wish to press the point further and, maybe, divide the House at that stage. Meanwhile, I beg leave to withdraw the amendment.